SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1998 FOR
LORD ABBETT DEVELOPING GROWTH FUND, INC.
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FUND
FACTS
SUPPLEMENT EFFECTIVE DATE: JUNE 4, 1998 -----------
Lord Abbett
Developing
Growth Fund
1977 9426
1978 12774
1979 16591
1980 22529
1981 24274
1982 31453
1983 39216
1984 30433
1985 34988
1986 35134
1987 35401
1988 36624
1989 41794
1990 39114
1991 61158
1992 59284
1993 66764
1994 70901
1995 103276
1996 126190
1997 165029
Small companies with big growth potential
[LOGO](R)
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Lord Abbett Developing Growth Fund
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INVESTMENT OBJECTIVE: Lord Abbett Developing Growth Fund is designed to provide
long-term capital appreciation. The Fund primarily invests in the stocks of
small companies.
How the Fund Compares Against Inflation: (1)
Growth of $10,000: 12/31/77 - 12/31/97
(2)
9426 10000
12774 10902
16591 12351
22529 13897
24274 15137
31453 15717
39216 16312
30433 16957
34988 17601
35134 17794
35401 18583
36624 19404
41794 20306
39114 21546
61158 22206
59284 22850
66764 23478
70901 24106
103276 24718
126190 25539
165029 26087
(1) Total return is the percent change in value, assuming the reinvestment of
all distributions. The maximum sales charge of 5.75%, applicable to Class
A share investments of $10,000, has been deducted from the Fund
investment. The Fund issues additional classes of shares with distinct
pricing options. For a full discussion of the differences in pricing
alternatives, please call Lord Abbett Distributor llc at 800-874-3733 and
ask for the current prospectus.
(2) Includes estimated CPI for 12/97.
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SEC RETURNS:
Average annual compounded returns at the Class A share maximum sales charge of
5.75% for periods ending 12/31/97:
1 year 5 years 10 years 20 years
+23.30% +21.26% +15.95% +15.05%
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.
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The Fund's Investor Advantage
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o Investors participate in an actively-managed mutual fund of small
company stocks. Small stocks, on average, have provided better
long-term returns than large company stocks;
o Extensive fundamental research helps uncover small, dynamic
companies, many highly specialized, which we believe are positioned
to exploit fast-growing sectors in the economy;
o A proven record: the Fund produced better returns than the average
small company growth fund and the unmanaged S&P 500 over the last 3
and 5 years, respectively. (3)
(3) Source: Lipper Analytical Services, Inc. See "The Fund's Performance" to
the right.
Minimum Initial Investment:
$1,000; $250 for IRAs
Quotron Symbols:
A Shares - LAGWX
B Shares - LADBX
C Shares - LADCX
THE FUND'S INVESTMENT STRATEGY
Lord Abbett Developing Growth Fund focuses on:
o Companies with above-average, long-term growth rates, strong
management and a proven commitment to growth;
o Companies with exciting prospects, many in unique new markets, with
tremendous potential (many have patents, copyrights or special
licensings);
o Companies with undervalued assets that, despite having a strong
proprietary position, are overlooked by investors.
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The Fund's Manager
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photo is a
pick-up
STEPHEN J. MCGRUDER
Portfolio Manager
"The small capitalization stock universe historically has provided strong
returns. Fundamental analysis can give investors the edge in this sector of the
market."
Stephen J. McGruder, who leads the Fund's research team, has over 25 years of
experience investing in the small-cap arena. He has been portfolio manager for
the Developing Growth Fund since 1995.
The Fund's Performance
Average Annual Total Returns
For Periods Ending 12/31/97
[The following table was depicted as a bar chart in the printed material.]
3 years 5 years
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The Fund(4) 32.5% 22.7%
Unmanaged S&P 500(5) 31.1% 20.2%
Lipper Small-Cap Funds Average(6) 23.1% 16.7%
The Fund: Something To Talk About...
Morningstar Mutual Funds says: "Lord Abbett Developing Growth Fund can't seem to
do any wrong these days...it has become a superstar in its category...[T]he Fund
[is] one of the best offerings in the small-growth category...resilience,
combined with the fund's high returns, makes it an outstanding small-growth
choice."
November 21, 1997
Value Line Mutual Fund Survey says: "Lord Abbett Developing Growth Fund has
posted impressive returns since McGruder took the helm in 1995...Aggressive,
long-term investors should consider this small-cap-growth offering."
November 25, 1997
(4) Fund performance is at net asset value. For performance at the maximum
5.75% sales charge applicable to Class A share investments, see SEC
Returns.
(5) The S&P 500 is an unmanaged index consisting of the stocks of 500
companies 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.
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Portfolio Profile
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When you invest in the Fund, you become an owner of a well-diversified portfolio
of more than 130 small companies that the Fund's manager believes offer
substantial growth potential. The Fund's portfolio is managed continuously and
its holdings are subject to change. Investments in common stocks are subject to
market fluctuations, providing the potential for gain and the risk of loss.
Small-cap companies typically have a higher risk of failure and historically
have experienced a greater degree of market volatility than average. Below is a
snapshot of the portfolio on 12/31/97:
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Top 5 Sectors
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Computer Software and Services
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Energy
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Specialty Retail
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Electronic Components
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Business Services
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The Fund's Top 10 Holdings
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COMPANY NAME % OF NET
ASSETS
Plantronics, Inc. 3.95%
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Information Management Resources 3.53
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Orbital Sciences Corp. 2.84
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McGrath Rentcorp 2.54
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Ames Department Stores 2.14
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Technitrol, Inc. 2.12
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Computer Learning Stores 1.95
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CellStar Corp. 1.79
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Vintage Petroleum, Inc. 1.73
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Computer Products, Inc. 1.62
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TOTAL 24.21%
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The Fund's Investment Manager
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LORD ABBETT & CO.
o Experienced Management
Founded in 1929, Lord, Abbett & Co. was one of the nation's first mutual
fund managers. Lord Abbett manages over $25 billion in a family of mutual
funds and separately-managed accounts.
o A Complete Family
The Lord Abbett Family of Funds consists of 28 mutual funds.
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For more complete information about any Lord Abbett mutual fund, such as Lord
Abbett Developing Growth Fund, including charges and expenses, call your
financial adviser 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.
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
[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD ABBET DISTRIBUTOR LIC
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The GM Building 767 Fifth Avenue New York, NY 10153-0203 800-426-1130
LADG-12-1297
(1/98)
