Lord Abbett
Developing
Growth Fund
Semi-Annual Report For the Six Months Ended July 31, 1997
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A portfolio of small companies with big growth potential
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Lord Abbett Developing Growth Fund
A Tradition of
Performance
[GRAPHIC: Magnifying Glass and Maps of the Constellations]
"Lord Abbett Developing Growth Fund is a model citizen in a rough
neighborhood...In fact, this Fund, relative to its peers, is something of a
standout."
Morningstar Mutual Funds, July 15, 1997
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Do Small-Cap Stocks Have a Place in Your Portfolio?
Just as there are different types of investors--with unique goals, strategies
and time horizons--there are different types of securities to help them achieve
their objectives. Look at equities: "large-cap" stocks (companies with market
capitalizations in excess of $5 billion) behave differently than "small-cap"
stocks (companies with market capitalizations of $750 million or less).
Year-to-year volatility is higher for small-cap stocks, but, as the chart below
illustrates, small stocks have provided double-digit average annual returns each
of the last six decades.
[The following table was represented as a bar graph in the printed material.]
Average Annual Returns During Each Decade(1)
Small-cap stocks Large-cap stocks
1940s 20.7% 9.2%
1950s 16.9% 19.4%
1960s 15.5% 7.8%
1970s 11.5% 5.9%
1980s 15.8% 17.6%
1990s* 15.6% 14.4%
*1990-1996
Lord Abbett Developing Growth Fund invests in stocks of small, developing
companies. These securities offer unusual growth potential and, not
surprisingly, entail more investor risk. However, when used as part of a
diversified portfolio of securities, these stocks can provide investors with the
growth potential necessary to achieve their goals.
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Average Annual Total Returns
SEC-required average annual rates of total return at the Class A share maximum
sales charge of 5.75% for the periods ended 6/30/97 were:
[The following graph was represented as a bar graph in the printed material.]
1 year 12.50%
5 years 21.46%
10 years 12.30%
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
(1) Source: (C) Computed using data from Stocks, Bonds, Bills, & Inflation 1997
Yearbook(TM), Ibbotson Associates, Chicago (annually updates work by Roger G.
Ibbotson and Rex Sinquefield). Used with permission. All rights reserved. This
chart does not represent past or future performance of Lord Abbett Developing
Growth Fund.
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Report to Shareholders
For the Six Months Ended July 31, 1997
[PHOTO: Robert S. Dow]
/s/ Robert S. Dow
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Robert S. Dow
CHAIRMAN
AUGUST 12, 1997
"...your Fund continued to feature companies that are leaders in their fields
and have good earnings prospects."
Lord Abbett Developing Growth Fund completed the first half of its fiscal year
on July 31, 1997, with net assets of $407 million. Below is an overview of
class-specific data for the period.
Six Months Ended July 31, 1997
------------------------------
Class A Class B Class C
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Net asset value $14.72 $14.61 $14.61
Capital gains $ 0.21 $ 0.21 $ 0.21
Total return* +16.9% +16.4% +16.5%
Throughout the period, your Fund continued to feature companies that are leaders
in their fields and have good earnings prospects. While the sector allocation of
your portfolio continues to be well diversified, many of the best performers
over the period were in the technology and energy sectors.
Over the past six months, we added a significant number of holdings of software
and service companies that deal with year 2000 compliance, sometimes known as
the "millennium bug." We consider this to be a very exciting area, particularly
because of the long-term growth potential associated with information technology
outsourcing. We see great opportunity in this sector because, while historically
the strategic building of computer systems had been done internally by data
processing managers, we foresee a shift toward the outsourcing of these tasks
and have positioned the portfolio to take advantage of this trend.
Our outlook through 1997 is for the economy to grow at a rate averaging less
than 21 1/42%, with inflation averaging about 3% or less. Should the economy
show signs of rapid growth or if inflation picks up, we believe the Federal
Reserve Board would move to raise short-term interest rates again, in the hopes
of maintaining a moderate economic environment.
As the economy continues to grow, we foresee expanded opportunity for the
creation of new markets, products and services. We believe your portfolio
remains positioned to have superior earnings growth relative to the economy and
the S&P 500, an index of larger companies.
Thank you for your continued confidence in Lord Abbett Developing Growth Fund.
We look forward to maintaining our relationship in the coming years and helping
you achieve your financial goals.
* Total return is the percent change in net asset value, assuming the
reinvestment of all distributions.
Figures are not annualized.
1
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Focus on. . .Performance
The Benefits of Long-Term Investing
For over 20 years, Lord Abbett Developing Growth Fund has enabled investors to
participate in the growth potential of small company stocks. During this period,
Developing Growth Fund shareholders realized returns well above inflation.
[The following table was represented as a line chart in the printed material.]
Growth of a $100,000 Fund Investment: 2/1/77-7/31/97
2/01/77 7/31/97
The Fund $100,000 $1,837,514
Inflation (Consumer $100,000 $274,359
Price Index)
The Fund's results reflect the reduced sales charge of 3.75% applicable to Class
A share investments of $100,000. For the Fund investment, both dividends and
capital gains were reinvested.
The Fund Versus the Benchmarks
As shown in the charts below, over the last 3- and 5-year periods ended 7/31/97,
Lord Abbett Developing Growth Fund consistently outperformed the Lipper Average
of Small Cap Funds (a benchmark consisting of funds that invest primarily in
companies with market capitalizations less than $1 billion). Furthermore, over
these periods, the Fund outpaced large company stocks (as measured by the
unmanaged S&P 500 Index). Historically, small companies have experienced wider
swings in earnings and stock prices than large companies. While there is no
assurance of the Fund's future performance or that this pattern will continue,
historically, long-term investors in small company stocks have been rewarded
with strong returns (see charts on inside front cover).
Impressive Total Returns
[The following table was represented as a bar graph in the printed material.]
Lipper Average of Unmanaged S&P
The Fund Small Cap Funds 500 Index
-------- --------------- ---------
3 Years 35.4% 24.0% 30.7%
5 Years 24.2% 19.4% 20.6%
Returns represent the percent change in value for Class A shares over the 3- and
5-year periods ended 7/31/97 and reflect the reinvestment of all distributions.
The Fund's results do not include the effect of sales charges. For performance
at the Class A share maximum sales charge, see the inside front cover.
2
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Focus on. . .Small, Growing Companies
The Fund invests in companies that have passed through the initial, formative
years and are in the "developing growth" phase. These companies have not yet
matured, nor have they settled into the slower growth rate of more established
businesses. Because it is arithmetically easier to grow from a small base than a
large one, developing growth companies can offer better opportunity for
appreciation over the long term. The stock prices of these companies can
fluctuate sharply, which is why owning an actively-managed portfolio, such as
Lord Abbett Developing Growth Fund, makes sense for investors who want to
participate in the aggressive growth potential of small companies with the
benefits of diversification and experienced management. The actual growth of a
company cannot be foreseen, and it may be difficult to determine in which phase
a company is presently situated. There is no fixed correlation between the
business growth of a company and the market value of its stock. The illustration
below is not a representation of the performance of the stocks in which the Fund
invests.
[The following table was represented as a line chart in the printed material.]
<TABLE>
<CAPTION>
Four Phases of Business Growth
1. Formative Phase 2. Developing Growth Phase 3. Established Growth Phase 4. Maturity Phase
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<S> <C> <C> <C>
Companies are in their An evolving period, often Competitive forces and Companies' growth patterns
infancy, a high-risk characterized by a dramatic regulations tend to slow tend to resemble the Gross
period. rate of growth; not without companies' progress. Domestic Product.
risk.
</TABLE>
Invest in the Future. . .Today
One hundred years ago, if you wanted to go from San Francisco to Paris, you
would have to travel first by train to New York, then board a ship to France,
and then another train to Paris. This could take as long as a month.
Today, you could jet directly from San Francisco to Paris in 10 hours, or travel
faster than the speed of sound aboard an SST. Of course, you could also take a
train, hop a bus or take a scenic drive cross-country before boarding a
transatlantic flight--or cruise ship--to any major European destination.
Times have changed. We all have more choices than ever before. This applies to
transportation, as well as technology, education, medical and health care,
communications, retail purchasing, entertainment and business.
To keep pace with the rapidly changing world around us, Lord Abbett Developing
Growth Fund invests in companies that are leaders in their field, innovators,
choice-makers. These small, growing companies are creating products and services
that will offer choices to fit all our different lifestyles and needs.
Investing in Lord Abbett Developing Growth Fund is investing in the future.
Invest in the future, today.
3
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Important Information
Investments in common stocks are subject to market fluctuations, providing the
potential for gain and the risk of loss. Lord Abbett Developing Growth Fund
invests in small-cap companies, which typically have a higher risk of failure
and historically have experienced a greater degree of illiquidity and market
volatility than large-cap companies.
Results quoted on the previous pages represent past performance and reflect
appropriate Rule 12b-1 Plan expenses from commencement of the Plan. Tax
consequences are not reflected. The Fund's current sales charge structure has
changed from the past. The S&P 500 is an unmanaged index consisting of the
common stocks of 500 companies widely followed by the investment community.
Performance figures for the unmanaged S&P 500 do not reflect transaction costs
or management fees. An investor cannot invest directly in an index, such as the
S&P 500. The Fund issues additional classes of shares (Class B and C) with
distinct pricing options. For a full discussion of the differences in pricing
alternatives, please call 800-874-3733 and ask for the Fund's current
prospectus. If used as sales material after 9/30/97, this report must be
accompanied by Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
Statement of Net Assets
July 31, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
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<C> <S> <C> <C>
Investments in Common Stocks 99.71%
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Banking .05% *Net.Bank, Inc., Atlanta, GA-Provider of banking services over the Internet 17,000 $199,219
=========
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Business Equipment General Binding Corp., Northbrook, IL-The leading vendor of office
and Supplies .45% binding and laminating systems and related supplies 70,000 1,837,500
=========
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Business Services
11.14% APAC TeleServices, Inc., Deerfield, IL-Provides outsourced telephone-based
customer service and sales solutions to major corporations nationwide 30,000 515,625
*ATC Communications Group, Dallas, TX-Provides inbound and outbound
contract telemarketing services 554,900 2,393,005
*Butler International Inc., Montvale, NJ-Provides skilled engineers and
technical personnel on a contract basis 308,000 4,042,500
Computer Language Research, Inc., Carrollton, TX-Provides tax and
accounting information software and services to accounting firms, banks,
corporations and partnerships under the trade name "Fast-Tax" 120,000 1,170,000
Computer Task Group Inc., Buffalo, NY-Provides computer-related
professional services to commercial clients, including systems analysis,
programming and design projects 120,000 5,385,000
*Employee Solutions, Phoenix, AZ-Provides employee payroll, human
resources and benefits outsourcing services to employers throughout the
U.S. 200,000 1,025,000
G & K Services, Inc., Minneapolis, MN-A lessor of work garments and
related textile products 145,000 4,911,875
*Interim Services, Fort Lauderdale, FL-Provides temporary personnel to the
business and health care industries 35,000 1,594,688
M/A/R/C Inc., Irving, TX-Offers market research, database marketing and
counseling services for companies in the pharmaceutical, retailing,
telecommunications and financial services markets 177,000 3,794,437
McGrath Rent Corp., San Leandro, CA-A lessor of relocatable modular
offices and electronic test equipment 550,000 11,275,000
Precision Response Corp., Miami, FL-Provider of telephone-based marketing
and customer service solutions to large corporations 200,000 2,275,000
*Rush Enterprises Inc., San Antonio, TX-Operates a regional network of truck
centers offering the retail sale of "Peterbilt" and used heavy-duty
trucks, after-market parts, service and body-shop facilities 96,800 713,900
Simon Transportation, Salt Lake City, UT-Provider of
temperature-controlled transportation services for the food shipping
industry 16,000 334,000
</TABLE>
4
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Statement of Net Assets
July 31, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
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<C> <S> <C> <C>
*Snyder Communications Inc., Bethesda, MD-A leading provider of value-added,
outsourced marketing solutions primarily for Fortune 500 companies 55,000 $ 1,705,000
*SOS Staffing Services, Salt Lake City, UT-Offers a full range of staffing
services through its 87 offices nationwide 175,000 2,821,875
*SPS Transaction Services Inc., Riverwoods, IL-A provider of transaction
processing services and credit card programs 30,000 650,625
*Trident International, Brookfield, CT-Designs, manufactures and markets
proprietary impulse inkjet technology to industrial OEMs worldwide 49,000 735,000
Total 45,342,530
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Capital Equipment 2.76% Fluke Corp., Everett, WA-Designs and sells electronic test and measurement
instruments and systems 74,100 4,019,925
*LeCroy Corp., Chestnut Ridge, NY-Develops, manufactures and markets
principally high-performance digital oscilloscopes and related products 95,500 3,247,000
*Photon Dynamics Inc., Milpitas, CA-A leading worldwide supplier of test,
inspection and repair systems for the flat panel display industry 237,900 1,635,563
*Semitool Inc., Kalispell, MT-Designs, manufactures, markets and services
equipment used in the fabrication of semiconductors 20,000 307,500
*Ultratech Stepper Inc., Santa Clara, CA-A manufacturer of photolithography
equipment that reduces the production cost of integrated circuits 80,000 2,035,000
Total 11,244,988
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Communications 1.16% *Educational Development Corp., Tulsa, OK-A marketer of non-fiction,
instructional children's books for retail trade outlets, home party plans,
and public and school libraries 133,000 856,187
*IWERKS Entertainment Inc., Burbank, CA-A creator of interactive
"virtual reality" systems and attractions 510,000 2,550,000
*Lancit Media Productions Ltd., New York, NY-Acquires, develops and
produces movies and television programs for children and family audiences 290,000 870,000
*West Coast Entertainment Corp., Philadelphia, PA-Owns, operates and
franchises video specialty stores 130,000 455,000
Total 4,731,187
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Computer Software *Allin Communications Corp., Pittsburgh, PA-Provides customized
and Services 12.47% interactive television digital imaging and other communications and
media services 250,000 812,500
*Alphanet Solutions, Inc., Cedar Knolls, NJ-Provides information
technology products, services and support 275,000 4,228,125
*BTG Inc., Vienna, VA-An information technology company that provides
systems solutions primarily to the government sector 280,000 3,605,000
*CACI International Inc., Arlington, VA-Provides information technology
products and services including the development and integration of
systems, software and simulation products 80,000 1,145,000
*Caere Corp., Los Gatos, CA-A world leader in optical character recognition
technology and a leading developer of desktop forms
processing and document management products 230,000 1,739,375
*Complete Business Solutions, Farmington Hills, MI-A leading provider of
information technology services to large and midsize organizations 50,000 1,375,000
*Computer Horizons Corp., Mountain Lakes, NJ-A leading provider of
information technology solutions and staffing to large corporations 60,000 2,400,000
*Computer Learning Centers, Inc., Fairfax, VA-Provides education and
training in computers and information technology 225,000 10,771,875
*Data Dimensions Inc., Bellevue, WA-A leading provider of year 2000
services 95,000 2,226,562
*GSE Systems, Inc., Columbia, MD-A designer, developer and supplier of
high-fidelity, real-time simulation software and services 41,000 205,000
*Information Management Resources, Clearwater, FL-A leading provider of
application software outsourcing and year 2000 services worldwide 465,000 14,647,500
*INTERSOLV, Rockville, MD-A leading provider of open client/server software
solutions available for object-oriented development, enterprise
client/server development, software configuration management and data
warehousing 200,000 2,525,000
*Mastech Corporation, Oakdale, PA-Provides information technology services
worldwide 100,000 2,475,000
*Micro Focus Group ADR, United Kingdom-Develops and markets software tools 40,000 1,080,000
*Phoenix Tech Ltd., San Jose, CA-The world's largest supplier of
standards-based compatibility software to the PC industry 115,000 1,523,750
Total 50,759,687
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</TABLE>
5
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Statement of Net Assets
July 31, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
===================================================================================================================================
<C> <S> <C> <C>
Consumer Products
7.72% *Advanced Lighting Technologies, Inc., Twinsburg, OH-Designs, markets and
manufactures metal-halide lighting products, including lamps, lamp
components and lamp production equipment 135,000 $ 3,408,750
*Armor Holdings, Jacksonville, FL-Manufactures and distributes products
and services for the law enforcement, military and security markets 270,000 2,903,575
Dreyer's Grand Ice Cream, Oakland, CA-Ice cream manufacturer and
distributor 73,600 3,109,600
Excel Industries Inc., Elkhart, IN-Manufactures and designs window
systems for the automobile, light truck/van, bus, heavy truck and
recreational vehicle industries 105,000 2,119,688
Matthews International Corp., Pittsburgh, PA-A leading designer,
manufacturer and marketer of custom-made identification products 175,000 7,021,875
Northland Cranberries Class A, Wisconsin Rapids, WI-Grows cranberries
through its properties in central and northern Wisconsin and Massachusetts,
and manufactures and markets a branded line of juice products 88,000 1,617,000
*O'Gara Company, Fairfield, OH-A leading provider of vehicle
armoring systems for military, commercial and governmental
clients worldwide 330,000 4,331,250
*Polymer Group Inc., North Charleston, SC-Major global
manufacturer of non-woven materials 80,000 1,085,000
Robert Mondavi Corp. Class A, Oakdale, CA-Produces and markets wines 60,000 2,805,000
*Security First Network Bank, Atlanta, GA-An FDIC-insured financial
institution that executes traditional banking services over the Internet 205,000 1,575,938
*Steiner Leisure, Nassau, Bahamas-Provides spa services aboard cruise
ships worldwide 50,000 1,437,500
Total 31,415,176
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Data Processing Equipment and *Advanced Digital Info Corp., Redmond, WA-A leading provider of automated
Components 1.47% data libraries for computer network and workstation markets and
microelectronic components for aerospace and medical applications 68,800 1,229,800
*Ampex Corp., Redwood City, CA-A leading innovator in the fields
of magnetic recording image processing and high-performance digital
storage 550,000 2,853,125
*Micros Systems Inc., Beltsville, MD-Designs, manufactures and markets
point-of-sale electronic information systems and related peripheral
equipment and software 30,000 1,338,750
*Storage Computer, Nashua, NH-A leading worldwide provider of
high-performance storage systems 45,000 534,375
Total 5,956,050
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Electronic Components 11.81% *AdFlex Solutions, Inc., Chandler, AZ-A leading supplier of flexible
circuits 165,000 4,310,625
*Altron Corp., Wilmington, MA-A manufacturer of electronic
interconnect products employing printed circuit technology 169,500 2,987,437
Analogic Corp., Peabody, MA-A leading manufacturer of high precision
medical and industrial diagnostic and measurement instruments and
equipment 45,000 1,642,500
*Ault Inc., Minneapolis, MN-The largest independent manufacturer of
external power conversion products 180,000 1,597,500
*Chicago Miniature Lamp, Inc., Canton, MA-Manufactures and distributes
a variety of miniature lighting products 60,400 1,691,200
Computer Products, Inc., Boca Raton, FL-A manufacturer of power
supplies and measurement control systems for industrial equipment 480,000 12,900,000
Dallas Semiconductor Corporation, Dallas, TX-Develops, manufactures and
markets complementary metal-oxide silicon integrated circuits and
semiconductor-based subsystems 66,200 2,585,938
*Merix Corp., Forest Grove, OR-Manufacturer of interconnect solutions
for use in sophisticated electronic equipment 65,000 1,137,500
Molex, Inc. Class A, Lisle, IL-Designs, manufactures and distributes
electrical and electronic devices 170,312 6,152,520
PMC-Sierra Inc., San Jose, CA-Supplies integrated circuits for the PC and
communications markets 50,000 1,637,500
Technitrol Inc., Trevose, PA-A worldwide manufacturer of electronic
components, electrical contacts and assemblies, thermostatic and
clad-metal materials and components 360,000 11,430,000
Total 48,072,720
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Energy 12.77% *American Oilfield Divers, Houston, TX-Provides sub-sea services and
related products to the oil and gas industry 105,000 1,561,875
*Core Laboratories N.V., Amsterdam, The Netherlands-A provider of
petroleum reservoir analysis and environmental testing 144,000 3,636,000
</TABLE>
6
<PAGE>
Statement of Net Assets
July 31, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
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<C> <S> <C> <C>
*Dailey Petroleum Services Co., Conroe, TX-Provides directional drilling
services and designs, manufactures and rents technologically advanced
downhole tools for oil and gas drilling and workover applications 300,000 $ 2,625,000
Dawson Geophysical Co., Midland, TX-A provider of seismic data services
to oil and gas drillers 120,000 2,235,000
*Dawson Production Services, San Antonio, TX-Provides a range of
workover, liquid and production services for oil and gas wells
in Texas and Louisiana 342,600 6,166,800
*Edge Petroleum, Houston, TX-An oil and gas exploration company 220,000 2,777,500
Friede Goldman International, Inc., Jackson, MS-An oilfield services
provider offering a range of design, engineering, construction, conversion,
retrofit and repair services for offshore drilling rigs 50,000 1,437,500
*Global Industries Ltd., Lafayette, LA-Provides pipeline construction,
derrick and diving services to the offshore oil and gas industry 60,000 1,683,750
*Gulf Island Fabrication, Houma, LA-Designs offshore drilling and
production platforms used in the development and production of
offshore oil and gas reserves 40,000 1,420,000
*Harken Energy Corp., Irving, TX-An oil and gas exploration and
production company that explores and conducts production
activities in the four corners area of the southwest 652,200 3,913,200
*Mallon Resources Corp., Denver, CO-A Denver-based oil and gas
exploration and production company with operations primarily in
the Delaware and San Juan Basins of New Mexico 100,000 787,500
*Nuevo Energy Co., Houston, TX-An independent oil and gas company,
engaged primarily in the acquisition, development, production and
exploration of oil and gas properties 40,000 1,712,500
*Panaco Inc., Kansas City, MO-Explores for and produces natural
gas and oil in Louisiana, Texas and Oklahoma 450,000 1,940,625
*Seitel Inc., Houston, TX-An operator of a seismic database and a
provider of corollary geophysical services to the petroleum industry 100,000 4,093,750
*Stone Energy Corp., Lafayette, LA-An independent oil and gas company
that acquires and exploits oil and gas producing properties located
primarily in the Gulf Coast Basin 120,000 3,487,500
*Superior Energy Services, New Orleans, LA-Provider of oilfield
products and services in the Gulf of Mexico 185,000 1,040,625
*Tuboscope Inc., Houston, TX-Provides oilfield tubular coating and
inspection services, oilfield solids control services and coiled
tubing equipment to the international petroleum industry 69,000 1,664,625
Veritas DGC Inc., Houston, TX-Provides seismic data acquisition and
processing services to the petroleum industry 46,000 1,155,750
Vintage Petroleum Inc., Tulsa, OK-Independent energy company engaged
in the exploitation and development of oil and gas properties 241,000 8,660,938
Total 52,000,438
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Environmental Services Met-Pro Corp., Harleysville, PA-A manufacturer of environmental treatment
and Equipment .50% systems, specialty pumps and filtration equipment 128,340 2,053,440
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Industrial and Capital Goods *Dionex Corp., Sunnyvale, CA-A manufacturer of analytical instruments 40,000 1,825,000
5.84%
*Durakon Industries, Inc., Flint, MI-A leading manufacturer of pick-up
truckbed liners 115,000 1,078,125
*Flow International Corp., Kent, WA-Designs, manufactures and
sells ultra-high pressure waterjets for cutting metallic and non
metallic materials 160,000 1,610,000
JLG Industries, Inc., McConnellsburg, PA-A leading manufacturer of
self-propelled aerial work platforms 390,800 4,323,225
Kuhlman Corp., Savannah, GA-Manufactures electrical and industrial
products 60,000 1,860,000
*Orbital Sciences Corp., Dulles, VA-A space and information systems
company that designs, manufactures, operates and markets a broad range
of affordable space-technology products
and satellite-based services 281,000 5,303,875
Park-Ohio Industries, Cleveland, OH-Manufactures plastic containers
for food products and industrial products for the airline,
automotive, rail and trucking industries 280,000 4,217,500
*Superior Services Inc., West Allis, WI-Provides solid waste collection,
transfer, recycling and disposal to customers primarily in Wisconsin and
parts of Minnesota, Illinois and Michigan 30,000 787,500
*Utilx Corporation, Kent, WA-Installs, replaces and renovates
underground utilities with "Flowmole," "Revalt" and "CableCure"
services 250,000 1,109,375
X-Rite, Inc., Grandville, MI-A developer, manufacturer and marketer
of instruments for color measurement and control 82,500 1,660,313
Total 23,774,913
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</TABLE>
7
<PAGE>
Statement of Net Assets
July 31, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
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<C> <S> <C> <C>
Measurement and *Identix Inc., Sunnyvale, CA-A leading designer, developer, manufacturer
Control Systems 2.71% and marketer of products for the capture and comparison
of fingerprints for security, anti-fraud, law enforcement and
other applications 200,000 $ 1,975,000
*In Focus Systems, Wilsonville, OR-Manufactures and markets liquid
crystal displays thatallow personal computer information to be
displayed on overhead projections 180,000 4,050,000
*LTX Corp., Westwood, MA-A supplier of linear, digital, mixed-signal
and discrete semiconductor test equipment 538,000 3,833,250
*Thermedics Detection Inc., Chelmsford, MA-Develops, manufactures
and markets high-speed systems used for product quality assurance
in a variety of industrial processes 98,900 1,155,894
Total 11,014,144
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Medical Services 5.29% *Arbor Health Care Company, Lima, OH-Provider of health information
to the insurance industry 122,000 4,681,750
*Counsel Corp., Toronto, Canada-A management and business development
company that operates within the health and real estate sectors 212,500 3,293,750
Health Care Service Group, Inc., Huntingdon Valley, PA-Provides
operational services to nursing homes and retirement complexes 288,900 3,466,800
Hooper Holmes, Basking Ridge, NJ-Provider of health information to
the insurance industry 90,000 2,452,500
*Horizon Health Corp., Denton, TX-A manager of mental health programs
for general acute care hospitals in the U.S. 237,500 6,026,562
*Ovid Technologies Inc., New York, NY-Provides electronic information
retrieval services to the biomedical, healthcare and academic markets 8,500 82,875
*Physician Computer Network, Morris Plains, NJ-Develops and markets
highly functionalpractice management and clerical information
software products for physician practices 200,000 1,525,000
Total 21,529,237
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Medical/Health Care 6.43% Arrow International, Inc., Reading, PA-Develops, manufactures and
markets a broad range of clinically advanced, disposable catheters
and related products 109,100 3,245,725
*ATS Medical Inc., Minneapolis, MN-Manufactures and markets a
pyrolytic carbon bileaflet mechanical heart valve 280,000 1,645,000
*Hologic, Waltham, MA-Manufacturer of x-ray systems 169,000 3,633,500
Life Technologies, Inc., Gaithersburg, MD-A supplier of products for
life science research and biotechnology manufacturing 135,000 3,746,250
*Maxxim Medical Inc., Sugarland, TX-Develops, manufactures and
distributes physical therapy equipment and disposable hospital
products 259,000 4,791,500
Orthofix International N.V., New York, NY-International corporation
that develops innovative products in the medical device market; a
leading producer of external fixation devices, limb lengthening and bone
reconstruction equipment 267,200 2,839,000
*Ostex International Inc., Seattle, WA-Develops products used in the
diagnosis of osteoporosis, osteoarthritis and other skeletal diseases
which are caused by the breakdown of bone, cartilage and other connective
tissue 310,000 833,125
*Physio-Control International Corporation, Redmond, WA-Designs,
manufactures, markets and services an integrated line of non-invasive,
emergency cardiac defibrillator and vital sign assessment devices,
disposable electrodes and data management software 140,000 2,030,000
*Protocol Systems Inc., Beaverton, OR-Designs, manufactures and
markets patient monitoring instruments and systems 247,400 2,164,750
*Resound Corporation, Redwood City, CA-Designs, develops,
manufactures and markets hearing devices 39,500 197,500
*Thermedics Inc., Waltham, MA-Develops, manufactures and markets
explosives and drug-detection devices, product quality assurance
systems and other biomedical products 65,000 1,044,063
Total 26,170,413
===========
- -----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 1.51% *Catellus Development Corp., San Francisco, CA-An owner, developer
and manager of real estate assets 300,000 6,150,000
===========
- -----------------------------------------------------------------------------------------------------------------------------------
Retail 11.78% *Amazon.Com, Seattle,WA-Retails books over the Internet 30,000 862,500
*Ames Department Stores, Rocky Hill, CT-The nation's fifth largest
discount department store chain with 303 stores in 14 northeastern
states 800,000 11,700,000
*CellStar Corp., Carrollton, TX-An integrated wholesale distributor
and retailer of cellular telephones and related products 525,000 15,750,000
</TABLE>
8
<PAGE>
Statement of Net Assets
July 31, 1997
<TABLE>
<CAPTION>
Shares or
Principal
Investments Amount Market Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
*Designer Holdings Ltd., New York, NY-Develops, sources and markets
designer sportswear lines for men, juniors, women and petites under
the "Calvin Klein Jeans," "CK/Calvin Klein Jeans" and "CK/Calvin
Klein Jeans Khakis" labels 150,400 $ 1,090,400
*Kenneth Cole Productions, New York, NY-Develops, sources and
markets a broad range of footwear, handbags and accessories 230,000 3,507,500
*New West Eyeworks, Tempe, AZ-A specialty retailer of eyewear 140,000 1,120,000
*Quiksilver, Inc., Costa Mesa, CA-Designs, arranges manufacture,
and distributes casualwear, snowboardwear and swimwear
for young men, boys and juniors under the "Quiksilver" label, and junior
swimwear and sportswear under the "Raisin" label 90,000 3,330,000
*Sirena Apparel Group, Inc., South El Monte, CA-Designs,
manufactures and markets branded and private label swimwear and
resortwear for each principal segment of the women's market 230,000 646,875
*Stage Stores, Houston, TX-Owns and operates apparel stores
primarily in the central region of the U.S. 220,000 6,421,250
*Tarrant Apparel, Los Angeles, CA-Designs, merchandises and
manufactures casual,moderately priced apparel 221,000 3,536,000
Total 47,964,525
============
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications 3.85% *Active Voice Corp., Seattle, WA-Develops PC-based call processing
systems and computer telephone integration products 100,000 1,262,500
*Plantronics, Inc., Santa Cruz, CA-A leading supplier of
communication headset products and services to users and providers
worldwide 262,000 14,410,000
Total 15,672,500
============
---------------------------------------------------------------------------------------------------
Total Investments in Common Stocks (Cost $272,803,747) 405,888,667
===================================================================================================================================
Other Assets, Less Liabilities .29%
===================================================================================================================================
Corporate Obligation Ford Motor Credit Co. 5.76% due 8/1/1997 (Cost $2,500,000) 2,500M 2,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (1,301,049)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 1,198,951
===================================================================================================================================
Net Assets 100.00% $407,087,618
===================================================================================================================================
Class A Shares-Net asset value ($378,479,342 / 25,713,780 shares outstanding) $14.72
Class B Shares-Net asset value ($17,456,556 / 1,195,235 shares outstanding) $14.61
Class C Shares-Net asset value ($11,151,720 / 763,161 shares outstanding) $14.61
</TABLE>
*Non-income producing.
See Notes to Financial Statements.
9
<PAGE>
Statement of Operations
Investment Income Six Months Ended July 31, 1997
================================================================================
Income Interest $ 156,670
Dividends 415,463
Total income $ 572,133
-----------------------------------------------------------------------
Expenses Management fee 968,820
12b-1 distribution plan-Class A 422,276
12b-1 distribution plan-Class B 53,891
12b-1 distribution plan-Class C 33,297
Shareholder servicing 341,968
Reports to shareholders 60,766
Directors 19,784
Registration 30,000
Professional 30,000
Other 4,070
Total expenses 1,964,872
-----------------------------------------------------------------------
Net investment loss (1,392,739)
-----------------------------------------------------------------------
Realized and Unrealized Gain on Investments
================================================================================
Realized gain from investment transactions
Proceeds from sales 88,912,402
Cost of investments sold 53,236,686
-----------------------------------------------------------------------
Net realized gain 35,675,716
-----------------------------------------------------------------------
Unrealized appreciation of investments 23,677,736
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments 59,353,452
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $57,960,713
================================================================================
See Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Year Ended
Ended July 31, January 31,
Increase (Decrease) in Net Assets 1997 1997
==================================================================================================================
<S> <C> <C> <C>
Operations Net investment loss $ (1,392,739) $ (1,805,761)
Net realized gain from investment transactions 35,675,716 41,698,179
Net unrealized appreciation of investments 23,677,736 22,855,477
Net increase in net assets resulting from operations 57,960,713 62,747,895
---------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain from investment transactions:
Class A (5,235,299) (37,450,454)
Class B (123,462) (528,216)
Class C (78,177) (352,262)
Total (5,436,938) (38,330,932)
---------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 73,096,715 125,237,965
Net asset value of shares issued in reinvestment of net
investment income and realized gain from investment transactions 5,168,662 36,371,582
Total 78,265,377 161,609,547
---------------------------------------------------------------------------------------------------
Cost of shares reacquired (54,059,702) (53,270,295)
---------------------------------------------------------------------------------------------------
Increase in net assets derived from capital share transactions 24,205,675 108,339,252
---------------------------------------------------------------------------------------------------
Increase in net assets 76,729,450 132,756,215
---------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 330,358,168 197,601,953
---------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $(1,664,576) and $(271,837), respectively) $ 407,087,618 $ 330,358,168
===================================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Shares
- --------------------------------------------------------------------------------------------------------------------------
Six Months Year Ended
Ended July 31, January 31,
Per Share Operating Performance: 1997 1997 1996 1995 1994 1993
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.80 $11.49 $ 9.58 $10.65 $10.11 $10.86
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment loss (.05)(a) (.03) (.02) (.04) (.05) (.02)
Net realized and unrealized gain (loss) on
investments 2.18 3.12 4.80 (.22) 1.62 (.24)
Total from investment operations 2.13 3.09 4.78 (.26) 1.57 (.26)
-------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income -- -- -- -- -- (.02)
Dividends from net realized gain (.21) (1.78) (2.87) (.81) (1.03) (.47)
-------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.72 $12.80 $11.49 $ 9.58 $10.65 $10.11
- --------------------------------------------------------------------------------------------------------------------------
Total Return(b) 16.85%(c) 28.35% 50.22% (2.74) 16.41% (2.31)%
==========================================================================================================================
Ratios to Average Net Assets:
Expenses .56%(c) 1.10% 1.03% 1.31% 1.34% 1.31%
Net investment loss (.38)%(c) (.67) (.52) (.38) (.51) (.25)%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------------------- -------------------------------------
Six Months August 1, 1996(d) Six Months August 1, 1996(d)
Ended July 31, to January 31, Ended July 31, to January 31,
Per Share Operating Performance: 1997 1997 1997 1997
================================================================================== =====================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.75 $12.14 $12.75 $12.14
- ---------------------------------------------------------------------------------- -------------------------------------
Income (loss) from investment operations
Net investment loss (.09)(a) (.05) (.09)(a) (.05)
Net realized and unrealized gain on investments 2.16 2.28 2.16 2.28
Total from investment operations 2.07 2.23 2.07 2.23
--------------------------------------------------------------------------- -------------------------------------
Distributions
Dividends from net realized gain (.21) (1.62) (.21) (1.62)
--------------------------------------------------------------------------- -------------------------------------
Net asset value, end of period $14.61 $12.75 $14.61 $12.75
- ---------------------------------------------------------------------------------- -------------------------------------
Total Return(b)(c) 16.44% 19.43% 16.52% 19.43%
========================================================================================================================
Ratios to Average Net Assets(c):
Expenses .92% .93% .89% .93%
Net investment loss (.73)% (.73)% (.70)% (.73)%
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended July 31, Year Ended January 31,
Supplemental Data for All Classes: 1997 1997 1996 1995 1994 1993
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $ 407,088 $ 330,358 $ 197,602 $ 127,579 $ 143,693 $ 151,068
Portfolio turnover rate 26.45% 42.35% 50.12% 17.57% 16.29% 17.22%
Average commissions per share paid on equity transactions $ .051 $ .046 $ .053 $ .059 n/a n/a
===============================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads.
(c) Not annualized.
(d) Commencement of offering respective class shares.
See Notes to Financial Statements.
11
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Developing Growth Fund, Inc. (the "Company") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The financial statements have been prepared in conformity with
generally accepted accounting principles, which require management to make
certain estimates and assumptions at the date of the financial statements. The
following is a summary of the significant accounting policies followed by the
Company:
(a) Market value is determined as follows: Securities listed or admitted to
trading privileges on any national securities exchange are valued at the last
sales price on the principal securities exchange on which such securities are
traded, or, if there is no sale, at the mean between the last bid and asked
prices on such exchange, or, in the case of bonds, in the over-the-counter
market if, in the judgment of the Company's officers, that market more
accurately reflects the market value of the bonds. Securities traded only in the
over-the-counter market are valued at the mean between the bid and asked prices,
except that securities admitted to trading on the NASDAQ National Market System
are valued at the last sales price if it is determined that such price more
accurately reflects the value of such securities. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Directors.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income. Therefore, no federal income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are calculated on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Net investment income (other than
distribution and service fees) and realized and unrealized gains or losses are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day.
(d) A portion of the proceeds from sales and costs of repurchases of capital
shares, equivalent to the amount of distributable net investment income on the
date of the transaction, is credited or charged to undistributed income.
Undistributed net investment income per share thus is unaffected by sales or
repurchases of shares.
2. Management Fee and Other Transactions with Affiliates
The Company has a management agreement with Lord, Abbett & Co. ("Lord Abbett")
pursuant to which Lord Abbett supplies the Company with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and the supervision of the
Company's investment portfolio. The management fee is based on average daily net
assets for each month at the annual rate of 0.75% of the Company's first $100
million of average daily net assets and 0.50% of such assets over $100 million.
The Company has Rule 12b-1 plans and agreements (the "Class A, Class B and Class
C Plans") with Lord Abbett Distributor llc ("Distributor"), an affiliate of Lord
Abbett. The Company makes payments to Distributor which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, the Company
pays Distributor (1) an annual service fee of 0.15% of the average daily net
asset value of shares sold prior to June 1, 1990 and 0.25% of the average daily
net asset value of shares sold on or after that date, (2) a one-time
distribution fee of up to 1% on certain qualifying purchases and (3) a
supplemental annual distribution fee of 0.10% of the average daily net asset
value of Class A shares serviced by certain qualifying institutions. Pursuant to
the Class B Plan, the Company pays Distributor an annual service and
distribution fee of 0.25% and 0.75%, respectively, of the average daily net
asset value of the Class B shares. Pursuant to the Class C Plan, the Company
pays Distributor (1) a service fee and a distribution fee, at the time such
shares are sold, not to exceed 0.25% and 0.75%, respectively, of the net asset
value of such shares sold and (2) at each quarter-end after the first
anniversary of the sale of such shares, a service fee and a distribution fee at
an annual rate not to exceed 0.25% and 0.75%, respectively, of the average
annual net asset value of such shares outstanding.
Distributor received $109,523 representing payment of commissions on sales of
Class A shares after deducting $695,521 allowed to authorized distributors as
concessions. Certain of the Company's officers and directors have an interest in
Lord Abbett.
3. Distributions
Net realized gain from investment transactions is distributed to shareholders
annually. Accumulated undistributed net realized gain at July 31, 1997 for
financial reporting purposes aggregated $35,461,183.
Income and capital gains distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gains amounts in accordance with generally
accepted accounting principles.
4. Capital
The Company has authorized 955 million shares of $.001 par value capital stock
designated Class A, 20 million shares of $.001 par value capital stock
designated Class B and 25 million shares of $.001 par value capital stock
designated Class C. Paid in capital amounted to $240,206,091 at July 31, 1997.
Transactions in shares of capital stock were as follows:
Six Months Ended Year Ended
July 31, 1997 January 31, 1997
---------------- ------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------- ------------------------------
Sales of shares 4,634,484 $ 58,554,447 8,862,837 $ 114,151,161
Shares issued to
shareholders in
reinvestment of
realized gains
from investment
transactions 397,488 4,974,120 2,999,455 35,526,973
Total 5,031,972 63,528,567 11,862,292 149,678,134
- --------------------------------------------- ------------------------------
Shares reacquired (4,221,348) (52,610,977) (4,153,205) (52,746,393)
Increase in shares 810,624 $ 10,917,590 7,709,087 $ 96,931,741
- ----------------------------------------------------------------------------
August 1, 1996
Six Months (Commencement of
Ended offering Class B shares)
July 31, 1997 to January 31, 1997
- ------------------------------------------- ---------------------------
Class B Shares Amount Shares Amount
- ------------------------------------------- ---------------------------
Sales of shares 695,637 $ 8,597,954 548,162 $ 6,897,730
Shares issued to
shareholders in
reinvestment of
realized gains
from investment
transactions 9,292 118,142 43,297 511,339
Total 704,929 8,716,096 591,459 7,409,069
- ------------------------------------------- ---------------------------
Shares reacquired (70,744) (790,154) (30,409) (389,040)
Increase in shares 634,185 $ 7,925,942 561,050 $ 7,020,029
- -----------------------------------------------------------------------
12
<PAGE>
Notes to Financial Statements
August 1, 1996
Six Months (Commencement of
Ended offering Class C shares)
July 31, 1997 to January 31, 1997
- ------------------------------------------- ---------------------------
Class C Shares Amount Shares Amount
- ------------------------------------------- ---------------------------
Sales of shares 470,602 $ 5,944,314 330,830 $ 4,189,074
Shares issued to
shareholders in
reinvestment of
realized gains
from investment
transactions 6,041 76,400 28,220 333,270
Total 476,643 6,020,714 359,050 4,522,344
- ------------------------------------------- ---------------------------
Shares reacquired (61,748) (658,571) (10,784) (134,862)
Increase in shares 414,895 $ 5,362,143 348,266 $ 4,387,482
- -----------------------------------------------------------------------
5. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments)
aggregated $110,031,962 and $88,912,402, respectively. As of July 31, 1997, net
unrealized appreciation for federal income tax purposes aggregated $133,084,920,
of which $158,696,491 related to appreciated securities and $25,611,571 related
to depreciated securities. For federal income tax purposes, the identified cost
of investments owned at July 31, 1997 was substantially the same as the cost for
financial reporting purposes.
6. Directors` Remuneration
The Directors of the Company associated with Lord Abbett and all officers of the
Company receive no compensation from the Company for acting as such. Outside
Directors' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on net assets of each fund. Directors' fees payable at July
31, 1997, under a deferred compensation plan, were $295,838.
Our Management
Board of Directors
Robert S. Dow
E. Wayne Nordberg
E. Thayer Bigelow*+
Stewart S. Dixon*
John C. Jansing*
C. Alan MacDonald*+
Hansel B. Millican, Jr.*
Thomas J. Neff*+
* Outside Director
+ Audit Committee
Officers
Robert S. Dow, Chairman and President
Stephen J. McGruder, Executive Vice
President and Portfolio Manager
Kenneth B. Cutler, Vice President
and Secretary
Stephen I. Allen, Vice President
Zane E. Brown, Vice President
Daniel E. Carper, Vice President
Daria L. Foster, Vice President
Robert G. Morris, Vice President
Robert J. Noelke, Vice President
E. Wayne Nordberg, Vice President
John J. Walsh, Vice President
Paul A. Hilstad, Vice President
and Assistant Secretary
Thomas F. Konop, Vice President
and Assistant Secretary
Keith F. O'Connor, Vice President
and Treasurer
A. Edward Oberhaus III, Vice President
Donna McManus, Assistant Treasurer
Joseph Van Dyke, Assistant Treasurer
Lydia Guzman, Assistant Secretary
Robert M. Hickey, Assistant Secretary
Investment Manager and
Underwriter
Lord, Abbett & Co. and
Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Custodian
The Bank of New York
New York, NY
Transfer Agent
United Missouri Bank of
Kansas City, N.A.
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Debevoise & Plimpton
New York, NY
Copyright (c) 1997 by Lord Abbett Developing Growth Fund, Inc.
767 Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Developing Growth Fund, Inc., is to be distributed only if preceded
or accompanied by a current prospectus which includes information concerning the
Fund's investment objective and policies, sales charges and other matters. There
is no guarantee that the forecasts contined within this publication will come to
pass.
All rights reserved. Printed in the U.S.A.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Growth
- ---------------------------------------------------------------------------------------------------------------------------
Income
- ---------------------------------------------------------------------------------------------------------------------------
Growth & Income Tax-Free Money
Growth Funds Funds Balanced Fund Income Funds Income Funds Market Fund
<S> <C> <C> <C> <C> <C> <C>
Developing Growth Global Fund- Affiliated Fund Balanced Series Bond-Debenture - National U.S. Government
Fund Equity Series Fund - California Securities
- Connecticut Money Market
International Mid-Cap Growth & Global Fund- - Florida Fund*+
Series Value Fund Income Series Income Series - Georgia
- Hawaii
Research Fund- Research Fund- Limited Duration - Michigan
Small-Cap Series Large-Cap Series U.S. Government - Minnesota
Securities Series* - Missouri
- New Jersey
U.S. Government - New York
Securities Series* - Pennsylvania
- Texas
- Washington
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your financial adviser provides value in helping you identify and under
stand your investment objectives and, ultimately, offering fund recommendations
suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Developing
Growth Fund.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your financial adviser or Lord Abbett Distributor LLC
at 800-874-3733 for a prospectus. Read it carefully before investing.
When you invest in a family of funds, you benefit from:
Diversification. You and your financial adviser can diversify your investments
between equity and income funds.
Flexibility. As your investment goals change, your financial adviser can help
you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 28
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your financial adviser to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or
Statement Inquiries:
800-821-5129
For Literature:
800-874-3733
For More Information:
800-426-1130
Visit Our Web Site:
http://www.lordabbett.com
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ There can be no assurance that this Fund will be able to maintain a
stable net asset value of $1.00 per share. This Fund is managed to
maintain, and has maintained, its stable $1.00 per share price.
[LOGO] LORD, ABBETT & CO. -----------------
(R) Investment Management BULK RATE
A Tradition of Performance Through Disciplined Investing U.S. POSTAGE
PAID
PERMIT NO. 2405
NEW YORK, N.Y.
-----------------
LORD ABBETT DISTRIBUTOR LLC LADG-3-797
- ------------------------------------------------------------
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (9/97)
