SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1998 FOR
THE LORD ABBETT DEVELOPING GROWTH FUND, INC.
<PAGE>
SUPPLEMENT EFFECTIVE DATE: JUNE 8, 1998
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LORD ABBETT DEVELOPING GROWTH FUND
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Is Your Future Worth $5.00 A Day?
What Can $5.00 A Day Buy? Lunch?
A Commute To And From Work?
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It Could Have Built A Sizable Nest Egg!
Investing even a small amount of money on a regular basis can, over the
long term, help build a substantial portfolio. While, historically, investing in
small companies has provided investors with strong returns, many investors are
put off by the higher level of risk associated with these companies. One
solution: a systematic investment plan. "Dollar-cost averaging" may help
investors better tolerate the ups and downs of the small-cap market. In fact,
dollar-cost averaging can actually make market volatility work to the benefit of
investors. Using a systematic investment plan involving a fixed-dollar amount
each month, investors buy more shares when the price is low and fewer shares
when the price is high, thereby reducing the average share cost over time. And,
as the graph on the right illustrates, long-term investors didn't need to commit
a lot of money to build a large portfolio.
The Benefits of A Regular Investment Plan in
Lord Abbett Developing Growth Fund(1)
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Amount Invested Total Value
$250 $236
2050 2191
3850 4756
5650 8534
7450 10931
9250 16416
11050 22188
12850 18808
14650 23447
16450 25174
18250 26868
20050 29469
21850 35433
23650 34796
25450 56496
27250 56546
29050 65551
30850 71423
32650 106101
34450 131502
36250 173943
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(1) Investment assumes an initial minimum investment of $250 on 12/31/77 and
investments of $150 per month (approximately $5 per day) beginning on 1/31/78
through 12/31/97. All investments were made at the applicable Class A share
maximum sales charge of 5.75% for account values up to $50,000 and at the
applicable reduced sales charges thereafter under rights of accumulation. The
Fund issues additional classes of shares with distinct pricing options. For a
full discussion of the differences in pricing options, please consult the Fund's
prospectus. Periodic investment plans do not always return a profit and do not
protect against losses in a declining market. In addition, since periodic
investment plans involve continuous investment in securities regardless of
fluctuating price levels, investors should consider their financial ability to
continue their purchases through periods of low price levels.
Average annual rates of total 1 Year: +41.60%
return assuming the Class A share 5 Years: +24.11%
maximum sales charge of 5.75% for 10 Years: +16.25%
the periods ended March 31, 1998:
Past performance is no indication of future results. The investment return and
principal value of an investment in the Fund will fluctuate so that shares, on
any given day or when redeemed, may be worth more or less than their original
cost.
Systematic Investing Isn't The Only Way
To Earn Impressive Returns...
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By The Numbers...
Portfolio Manager Stephen McGruder and his research team focus on companies
considered to be in unique new markets, "niche" companies. Since joining Lord
Abbett in 1995, McGruder's efforts have provided investors with returns that
outpaced the benchmarks.
Average Annual Rates of Total Return (as of 12/31/97)
[The following table was depicted as a bar chart in the printed material.]
Developing Average Small Russell 2000
Growth Fund(2) Growth Fund(3) Index(4) S&P 500(5)
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1 Year 30.8% 14.4% 22.4% 33.4%
3 Years 32.5% 21.2% 22.4% 31.1%
5 Years 22.7% 15.2% 16.4% 20.2%
Percentage Rankings
According to Lipper Analytical Services, Inc., Lord Abbett Developing Growth
Fund ranked in the top percentiles versus its peers for the following periods
ended 12/31/97.(6)
1 year: Top 18% (84th out of 466 small growth funds)
3 years: Top 2% (5th out of 282 small growth funds)
5 years: Top 3% (4th out of 138 small growth funds)
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All total returns shown above are based on changes in net asset value and
reflect the reinvestment of all distributions. Past performance is no
indication of future results.
(2) Class A share performance at net asset value.
(3) Source: Morningstar, Inc.
(4) Source: Frank Russell. The Russell 2000 Index is an unmanaged index of
small-capitalization companies. An investor cannot invest directly in an
index, such as the Russell 2000.
(5) The S&P 500 is an unmanaged index consisting of 500, primarily large
market capitalization stocks publicly traded in the U.S. and is widely
followed by the investment community. Performance results do not reflect
transaction costs or management fees. An investor cannot invest directly
in an index, such as the S&P 500.
(6) Source: Lipper Analytical Services, Inc. Lord Abbett Developing Growth
Fund was ranked 29 out of 56 funds within the Lipper Average of Small
Growth Funds for the 10 years ended 12/31/97. Lipper rankings are updated
monthly.
[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
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800-426-1130
LORD ABBETT DISTRIBUTOR LLC
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The GM Building o 767 Fifth Avenue o New York, NY 10153-0203
Taking Stock
Lord Abbett Developing Growth Fund seeks to identify and invest in fast-
growing companies with
o superior management;
o a strong infrastructure; and
o unique products.
Below are the Fund's top ten holdings as of 12/31/97:
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Percent of
Holding Net Assets
Plantronics, Inc. 3.95%
Information Management Resources 3.53%
Orbital Sciences Corp. 2.84%
McGrath RentCorp 2.54%
Ames Department Stores 2.14%
Technitrol, Inc. 2.12%
Computer Learning Centers 1.95%
CellStar Corp. 1.79%
Vintage Petroleum, Inc. 1.73%
Computer Products 1.62%
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To learn more about how Lord Abbett Developing Growth Fund may fit into
your financial plan, speak to your investment professional.
The Fund's portfolio is managed continuously and its holdings are subject
to change. There can be no assurance that the Fund will continue to hold these
companies' stocks or, if it does, whether the holdings will increase, decrease
or remain constant in absolute or relative amount. Small-capitalization
companies typically have a higher risk of failure and historically have
experienced a greater degree of market volatility than companies with larger
market capitalization.
For more complete information about the Fund, including charges and
expenses, call your investment professional or Lord Abbett Distributor llc at
800-874-3733 for a prospectus. An investor should read the prospectus carefully
before investing. If used after 3/31/98, this piece must be accompanied by Lord
Abbett's Performance Quarterly for the most recently completed calendar quarter.
LADG-6-398
(4/98)
