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LORD ABBETT DEVELOPING GROWTH FUND
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JULY 31, 2000
[GRAPHIC OMITTED]
A portfolio of small companies
with large growth potential
[LOGO]
<PAGE>
LORD ABBETT DEVELOPING GROWTH FUND
A TRADITION OF
PERFORMANCE
"Lord Abbett's Developing Growth Fund's manager is sticking to his strategy."
Morningstar, May 19, 2000
--------------------------------------------------------------------------------
Do the Stocks of Small
Companies 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 pursue
their objectives. Look at equities: stocks of large companies behave differently
than stocks of small companies. Year-to-year volatility is higher for small-cap
stocks,(1) but, as the chart below illustrates, small company stocks have
provided double-digit average annual returns during each of the last six
decades.
Average Annual Returns During Each Decade(1)
[BAR CHART GRAPHIC OMITTED]
Summary of Bar Chart Data:
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 15.2% 18.2%
Lord Abbett Developing Growth Fund invests in stocks of small, developing
companies. These stocks offer unusual growth potential and, not surprisingly,
entail more investor risk. However, when used as part of a diversified
portfolio, small-cap stocks may provide investors with added growth potential to
help them achieve their goals.
--------------------------------------------------------------------------------
Average Annual
Total Returns
The average annual rates of total return, computed using the SEC-required
formula and reflecting the deduction of the Class A share maximum sales charge
of 5.75% for the periods ended 6/30/00, were:
[BAR CHART GRAPHIC OMITTED]
Summary of Bar Chart Data:
1 year 2.70%
5 years 18.36%
10 years 16.00%
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) Used with permission.(C)1999 Ibbotson Associates, Inc. All rights reserved.
(Certain portions of this work were derived from copyrighted works of Roger
G. Ibbotson and Rex Sinquefield.) This chart does not represent past or
future performance of Lord Abbett Developing Growth Fund.
<PAGE>
REPORT TO SHAREHOLDERS
For the Six Months Ended July 31, 2000
[PHOTO]
/s/ Robert S. Dow
-----------------
Robert S. Dow
Chairman
"As the small cap market
stabilizes, we believe we will
begin to see earnings growth and
price appreciation among the
stocks of small companies on a
wider scale."
-----------------------------------
======================
DALBAR
HONORS COMMITMENT TO:
INVESTORS
1999
=====================
Lord, Abbett & Co. is proud to
announce we have received a
DALBAR award for providing
consistently good service to
shareholder the 1999 Key Honor
Award for Mutual Fund Service.
DALBAR, Inc. an independent
research firm and evaluator of
mutual fund service, presents
the award to financial services
firms that provide consistently
solid service to clients.
-----------------------------------
Lord Abbett Developing Growth Fund completed the first half of its fiscal year
on July 31, 2000, with net assets of $2.6 billion. Below is an overview of
class-specific data for the period.
Six Months Ended July 31, 2000
-----------------------------
Class A Class B Class C Class P Class Y
-------------------------------------------------------------------------------
Net asset value $17.36 $16.89 $16.91 $17.27 $17.52
Capital gains $ 0.72 $ 0.72 $ 0.72 $ 0.72 $ 0.72
Total return* -7.99% -8.24% -8.18% -8.03% -7.87%
After quite a good run in recent years, small cap growth stocks (as measured by
the Russell 2000 Growth Index) and the Developing Growth Fund declined over the
last 6 months. The Russell 2000 Growth Index was down -6.6% for the period, and
the Fund was down nearly 8%. Volatility and jittery investors led to a slowdown
in trading volume, driving small cap growth stock prices lower during the
period, hurting the performance of many small company stocks.
The performance of the technology-heavy Russell 2000 Index dropped in April and
May as investors in small company stocks continued to show intolerance for any
earnings shortfall, or reported company problem, no matter how slight. In
addition, uncertainty around the Federal Reserve's activities and their
potential influence on the economy, led investors to retreat from the stocks of
companies that had previously led the small company market's performance (e.g.,
technology, Internet). Instead, investors sought the safety in the stocks of
more established firms that exhibited earnings history and other strong
fundamentals. In June, the picture changed once again when the Russell 2000
Index, led primarily by the performance of technology and biotechnology stocks,
came storming back.
It is important to note, however, that approximately 60% of the stocks in the
Russell 2000 Index have market capitalizations (defined as a stock's price per
share multiplied by the number of shares outstanding, commonly known as market
cap) of $1.2 billion or above. This makes many of the Russell 2000 Growth's top
performing companies much larger than those small companies on which the
Developing Growth Fund focuses. In addition to size, many of these same
companies do not possess the fundamental characteristics, such as earnings
history and reasonable valuations that are in keeping with our investment
philosophy.
During the market's down period in April and May, we took the opportunity to
make select additions to the Fund from across many industries, in companies
where we believed the fundamentals and prices were attractive. The Fund's
performance kept pace with the Index through May due to our lower exposure to
faltering technology issues. However, in June, the resurgence of investors'
enthusiasm, especially for the stocks of biotechnology companies, hurt the
Fund's performance since our exposure to these companies was lower than the
Russell 2000 Growth Index.
As we move into the latter months of 2000, we believe that market volatility is
likely to continue in the short term, and liquidity and earnings shortfalls will
continue to be concerns for small company investors. However, we will continue
to look for companies with earnings histories and reasonable valuations. As the
small company market stabilizes, we believe that we will begin to see earnings
growth and price appreciation among the stocks of small companies on a wider
scale. However, regardless of market conditions, we will continue to execute our
disciplined investment approach, remaining focused on finding the highest
quality companies possible for the portfolio.
* Total return, which is not annualized, is the percent change in net asset
value (NAV), assuming the reinvestment of all distributions.
The portfolio is actively managed and subject to change. Please note the
Developing Growth Fund is currently closed to new investors.
1
<PAGE>
FOCUS ON. . .PERFORMANCE
THE BENEFITS OF LONG-TERM INVESTING
Lord Abbett Developing Growth Fund has enabled investors to participate in the
growth potential of exciting small companies. During the past 10 years, the Fund
has outperformed its benchmarks, the Russell 2000 Index(1) and the Russell 2000
Growth Index.(2)
GROWTH OF A $10,000 FUND INVESTMENT: 7/31/90 - 7/31/00
-------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Summary of Graphic Data:
Developing Russell Russell 2000
Growth 2000 Index/1 Growth Index/2
7/31/90 10,000 10,000 10,000
1990 8,656 8,301 8,360
1991 13,535 14,604 15,119
1992 13,120 17,293 16,294
1993 14,775 20,557 18,471
1994 15,691 20,183 18,022
1995 22,855 25,925 23,616
1996 27,927 30,203 26,275
1997 36,522 36,957 29,677
1998 39,544 36,014 30,042
1999 54,635 43,671 42,988
7/31/00 47,778 43,549 39,785
The Fund's results reflect a Class A share investment of $10,000 at Net Asset
Value with dividends and capital gains reinvested. 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.
(1) The Russell 2000 Index measures small company stock market performance,
does not reflect the deduction of fees or expenses, is unmanaged and is not
available for direct investment.
(2) The Russell 2000 Growth Index measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher forecasted
growth values, and does not reflect the deduction of fees or expenses, is
unmanaged and is not available for direct investment.
The Fund Versus the Benchmarks
As shown below, for the last 3- and 5-year periods ended 7/31/00, Lord Abbett
Developing Growth Fund outperformed the Russell 2000 Index and the Russell 2000
Growth Index. Both indexes are unmanaged and broadly measure small company stock
performance. While historically long-term investors in small company stocks have
been rewarded with strong returns (see charts on inside front cover), there is
no assurance of the Fund's future performance or that this pattern will
continue.
IMPRESSIVE TOTAL RETURNS
[GRAPHIC OMITTED]
Summary of Graphic Data:
3 Years 5 Years
------- -------
The Fund 11.9% 17.0%
Russell 2000 Index(1) 7.7% 12.3%
Russell 2000 Growth Index(2) 11.0% 12.1%
The Fund's total returns represent the percent change in Net Asset Value for
Class A shares over the 3- and 5-year periods ended 7/31/00 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.
(1) The Russell 2000 Index measures small company stock market performance,
does not reflect the deduction of fees or expenses, is unmanaged and is not
available for direct investment.
(2) The Russell 2000 Growth Index measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher forecasted
growth values, and does not reflect the deduction of fees or expenses, is
unmanaged and is not available for direct investment.
2
<PAGE>
FOCUS ON. . .SMALL, GROWING COMPANIES
The Fund seeks to invest in companies that have passed through their initial,
formative years and are now in the "developing growth" phase, as illustrated in
the graph below. These companies have not yet matured, nor have they settled
into the slower growth rate of more established businesses. Since it is
arithmetically easier to grow from a small base than a large one, developing
growth companies may offer better opportunity for appreciation over the long
term. However, the stock prices of these companies can fluctuate sharply. That's
why Lord Abbett Developing Growth Fund makes sense for investors who want to
participate in the aggressive growth potential of a diversified, actively
managed small company stock portfolio.
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.
FOUR PHASES OF BUSINESS GROWTH
[GRAPHIC OMITTED]
* The Gross Domestic Product or "GDP" represents the output of goods and
services for the U.S. economy. GDP generally grows at a more steady pace as
compared to companies in the earlier phases of business growth.
A PROGRAM OF REGULAR INVESTMENT CAN HELP
PROMOTE SMALL-CAP PEACE OF MIND
Investing even a small amount of money on a regular basis can help you build a
substantial portfolio over the long term. Historically, investments in small
companies have provided investors with strong returns, but you may be
uncomfortable with the higher daily level of price volatility associated with
the small-cap market and, consequently, with professionally managed small-cap
stock portfolios such as the Lord Abbett Developing Growth Fund.
One solution: a systematic investment plan. "Dollar cost averaging" may help you
better tolerate the ups and downs of small-cap stock prices. In fact, dollar
cost averaging may actually make market volatility work to your benefit. Using a
systematic investment plan which involves a fixed-dollar amount each month
allows you to buy more shares when the price is low and fewer shares when the
price is high, thereby reducing the average share price over time as compared
with a single purchase at the higher price.
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.
For additional information regarding the benefits of a regular investment plan
in Lord Abbett Developing Growth Fund, please contact your investment
professional.
IMPORTANT NOTE: Lord Abbett Developing Growth Fund is closed to new investors.
3
<PAGE>
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 the securities of small-cap companies. Small-cap companies typically
have a higher risk of failure; historically, such companies' securities have
experienced a greater degree of illiquidity and market volatility than large-cap
companies and their securities.
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 Russell 2000 is an unmanaged index that measures
small company stock market performance and is widely followed by the investment
community. Performance figures for the unmanaged Russell 2000 do not reflect
deduction of transaction costs or management fees. An investor cannot invest
directly in an index, such as the Russell 2000. The Fund issues additional
classes of shares 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 September 30, 2000,
this report must be accompanied by Lord Abbett's Performance Quarterly for the
most recently completed calendar quarter.
Statement of Net Assets (unaudited)
July 31, 2000
<TABLE>
<CAPTION>
Investments Shares Value
===================================================================================================================================
<S> <C> <C>
Common Stocks 97.35%
===================================================================================================================================
Advertising .06% Cobalt Group, Inc. - Provides Internet marketing and data aggregation
services 250,000 $ 1,546,875
----------------------------------------------------------------------------------------------------------------------=============
Aerospace/Defense 1.47% Moog, Inc. Class A - Manufactures precise motion control components
and systems 250,000 7,250,000
++ +Orbital Sciences Corp. - A space and information systems company
that designs, manufactures, operates and markets a broad range of
affordable space-technology productsand satellite-based services 2,070,350 31,184,647
Total 38,434,647
----------------------------------------------------------------------------------------------------------------------=============
Air Transportation 1.65% ++Frontier Airlines, Inc. - A low-fare, full-service commercial airline 918,000 16,466,625
+*SkyWest, Inc. - A regional airline that provides passenger and
freight service in the United States 593,600 26,489,400
Total 42,956,025
----------------------------------------------------------------------------------------------------------------------=============
Apparel .16% +Cutter & Buck, Inc. - Designs and markets upscale sportswear
and outerwear 480,800 4,146,900
----------------------------------------------------------------------------------------------------------------------=============
Biotechnology .51% Albany Molecular Research, Inc. - Offers a variety of chemistry
research and development services 240,000 13,290,000
----------------------------------------------------------------------------------------------------------------------=============
Broadcasting .37% Crown Media Holdings, Inc. Class A - Owns and operates pay
television channels 150,000 2,409,375
+Salem Communications Corp. Class A - A radio broadcasting company 601,000 7,287,125
Total 9,696,500
----------------------------------------------------------------------------------------------------------------------=============
Building Materials .49% Elcor Corp. - Manufactures laminated fiberglass asphalt residential
roofing shingles and related roofing products 666,100 12,780,794
----------------------------------------------------------------------------------------------------------------------=============
Business Services 11.46% +Acxiom Corp. - Provides information management solutions using
customer, consumer and business data 1,225,000 26,107,812
Aegis Communications Group, Inc. - Provides inbound and outbound
contract telemarketing services to a variety of companies
in various industries 3,014,900 2,411,920
Butler International, Inc. - Provides skilled engineers and
technical personnel on a contract basis 462,000 3,349,500
CDI Corp. - A staffing and outsourcing service provider to
Fortune 500 customers 250,000 4,968,750
+CheckFree Holdings Corp. - Provides electronic commerce
services, financial application software and related products 299,600 18,200,700
Corporate Executive Board Co. - Provides best practices research
and analysis focusing on corporate strategy, operations
and general management issues 600,000 38,400,000
+Emerge Interactive, Inc. - A business-to-business electronic commerce
company combining content, community and transaction services 231,100 5,286,412
Etinuum, Inc. - Designs, builds and operates e-commerce and other
associated direct-consumer initiatives 365,300 1,255,719
First Consulting Group, Inc. ADR - Provides consulting,
integration and management services 400,000 2,875,000
4
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
*G & K Services, Inc. Class A - A lessor of work garments and
related textile products 859,780 $ 25,847,136
Jupiter Communications, Inc. - Provides research on Internet commerce 367,100 8,764,513
Labor Ready, Inc. - Provides temporary workers to the light
industrial, construction and small business markets 607,900 3,039,500
Management Network Group, Inc. - Provides management consulting
services to the global telecommunications industry 107,200 2,566,100
*McGrath Rentcorp. - A lessor of relocatable modular offices and
electronic test equipment 419,020 6,337,678
+MemberWorks, Inc. - Provides membership service programs 443,000 14,508,250
Modis Professional Services, Inc. - Provides business services,
including consulting, outsourcing, outplacement, training and
professional staffing services 705,400 5,378,675
Multex.com, Inc. - Provides online investment research and
information services designed to meet the needs of institutional
investors, investment banks, brokerage firms, corporations and
individual investors 414,600 10,002,225
NCO Group, Inc. - Provides account receivable management
and other outsourced services 255,000 6,311,250
On Assignment, Inc. - Places professional employees on both
long- and short-term assignments through its Lab Support,
Healthcare Financial Staffing and Enviro-Staff divisions 600,000 16,537,500
Pegasus Systems, Inc. - Provides global electronic commerce
and transaction processing solutions 1,070,565 10,906,381
RailWorks Corp. - Provides integrated rail system services 700,000 6,475,000
SOS Staffing Services, Inc. - Offers a full range of staffing
services through its 87 offices nationwide 292,670 768,259
Strategic Distribution, Inc. - Provides proprietary industrial
supply procurement solutions to industrial sites, primarily
through its In-Plant Store program 1,348,500 2,444,156
+Student Advantage, Inc. - Serves college students through
its national fee-based membership program and web site 1,249,900 10,624,150
Sykes Enterprises, Inc. - Provides information technology
outsourcing services 651,300 8,181,956
TeleTech Holdings, Inc. - Provides customer-care management
solutions to Fortune 500 and international companies 1,850,000 57,350,000
Total 298,898,542
----------------------------------------------------------------------------------------------------------------------=============
Cable Services .74% Cable Design Technologies Corp. - Designs and manufactures
specialty electronic data transmission cables and network-
structured wiring systems 550,000 19,387,500
----------------------------------------------------------------------------------------------------------------------=============
Capital Goods 1.53% Dionex Corp. - Manufacturer of analytical instruments 180,000 4,680,000
Flow International Corp. - Designs, manufactures and sells ultra-
high-pressure waterjets for cutting metallic and non-metallic materials 628,070 6,437,718
*JLG Industries, Inc. - Leading manufacturer of self-propelled
aerial work platforms 252,120 2,568,472
++LeCroy Corp. - Develops, manufactures and markets
principally high-performance digital oscilloscopes and related products 520,500 7,807,500
National Instruments Corp. - Supplies computer-based
instrumentation hardware and software products 425,000 18,354,688
Total 39,848,378
----------------------------------------------------------------------------------------------------------------------=============
Chemicals 2.13% *H. B. Fuller Co. - Manufactures and markets adhesives, sealants,
coatings, paints and otherspecialty chemical products worldwide 160,000 6,180,000
*OM Group, Inc. - Produces metal carbonxylates and metal salts
and powders 1,038,520 49,264,792
Total 55,444,792
----------------------------------------------------------------------------------------------------------------------=============
Communications
Equipment 1.66% EMS Technologies, Inc. - Produces microwave components
and subsystems for application in space 250,000 4,093,750
+Sawtek, Inc. - Supplies electronic signal processing components 737,000 39,245,250
Total 43,339,000
----------------------------------------------------------------------------------------------------------------------=============
Communications
Services 1.21% Clearnet Communications, Inc. Class A - A wireless communications
company 877,500 24,679,688
+Netro Corp. - Provides intelligent broadband wireless access systems
to communications service providers worldwide 125,000 6,757,812
Total 31,437,500
----------------------------------------------------------------------------------------------------------------------=============
Computer Services 3.96% Cambridge Technology Partners, Inc. - Provides management
consulting and systems integration 2,600,000 24,456,380
CIBER, Inc. - Provides management consulting for business
technology solutions 547,600 6,400,075
5
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
Corillian Corp. - Provides Internet financial solutions 240,800 $ 2,648,800
+Cyberian Outpost, Inc. - An Internet-only retailer of consumer
technology and related products for the home office 725,000 2,854,688
Diamond Technology Partners, Inc. - Develops digital
strategies which leverage information technology 349,950 31,167,422
+Fatbrain.com, Inc. - An Internet bookstore 550,000 3,162,500
IGate Capital Corp. - Creates, acquires and builds electronic
services companies in existing and emerging segments
within the market 1,258,910 11,880,963
Manhattan Associates, Inc. - Provides information technology
solutions for distribution centers 400,000 15,225,000
Renaissance Worldwide, Inc. - Provides integrated business
and technology consulting services 1,390,900 2,607,938
SCB Computer Technology, Inc. - Provides information technology
management and technical services 391,460 179,406
Switchboard, Inc. - An Internet-based local merchant network,
interconnects consumers, merchants, and national advertisers 157,100 1,158,612
*Technology Solutions Co. - A provider of consulting and systems
integration services 300,000 1,500,000
Telocity, Inc. - Provides subscriber-based broadband services
and applications designed for the residential market 900 3,600
Total 103,245,384
----------------------------------------------------------------------------------------------------------------------=============
Computer Technology .75% +Cray, Inc. - Designs, develops and markets high performance
vector processor and general-purpose parallel computer systems 600,000 2,306,280
InFocus Corp. - Develops, manufactures and markets data/video
projection products and services 494,880 17,320,800
Total 19,627,080
----------------------------------------------------------------------------------------------------------------------=============
Computer: Hardware 1.21% Insight Enterprises, Inc. - A direct marketer of microcomputers,
peripherals and software 581,980 26,916,575
++MicroTouch Systems, Inc. - Manufacturer of touch- and pen-sensitive
input screens known as touchscreens 565,000 4,590,625
Total 31,507,200
----------------------------------------------------------------------------------------------------------------------=============
Computer: Software 8.59% +Activision, Inc. - Publishes and distributes CD-based and cartridge-
based entertainment software 675,550 5,911,063
+Agency.com, Inc. - An Internet professional service firm, providing
an integrated set of strategy, creativity and technology services 100,000 2,156,250
AppNet, Inc. - Provides consulting, interactive marketing, electronic
business application development, electronic business integration
and electronic business outsourcing 100,000 3,312,500
CyberSource Corp. - Develops and provides real-time e-commerce
transaction services 350,800 3,025,650
eCollege.com - Provides technology and services that enable colleges
and universities to offer an online environment for distance
and on-campus learning 650,000 3,168,750
eLoyalty Corp. - A global business/management consulting and
systems integration organization focused on building customer loyalty 205,000 3,042,979
Exchange Applications, Inc. - Provides customer optimization software
and solutions 420,000 9,240,000
IMRglobal Corp. - A leading provider of application software
outsourcing and Year 2000 services worldwide 350,070 4,594,669
Landmark Systems Corp. - Manufactures software products which
allow corporate customers to improve the performance of their
computer system and keep critical business applications
working at peak efficiencies 378,800 1,432,356
+Lionbridge Technologies, Inc. - Provides globalization and multi-
lingual Internet services to technology companies worldwide 550,000 4,262,500
Manugistics Group, Inc. - Provides supply chain optimization
solutions for enterprises and evolving eBusiness trading networks 197,700 10,972,350
Mercator Software, Inc. - Provides electronic business
integration software 100,000 2,050,000
National Computer Systems, Inc. - Provides software,
services and systems 729,200 52,411,250
Netopia, Inc. - Provides Internet and electronic commerce
infrastructure, enabling small- and medium-size
businesses to connect to the Internet
and conduct business and electronic commerce on the Web 226,500 12,231,000
Optio Software, Inc. - Provides products and services that help
organizations make the transition from paper-intensive
commerce to electronic business, or eBusiness 123,800 557,100
Phoenix Technologies Ltd. - The world's largest supplier of
standards-based compatability software to the personal
computer industry 521,700 8,868,900
Primus Knowledge Solutions, Inc. - Provides web-based problem
resolution software for customer support 165,500 4,406,437
6
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
Project Software & Development, Inc. - Develops, markets and
supports enterprise asset maintenance software used by
businesses, government agencies and other organizations 306,700 $ 5,405,588
++ +RadiSys Corp. - Designs and produces embedded computer solutions 937,720 57,669,780
RAVISENT Technologies, Inc. - Designs, develops, licenses and
markets modular software solutions 481,100 2,225,088
+Register.com, Inc. - Provides Internet domain name registration
services worldwide 100,000 2,709,380
+ScanSoft, Inc. - Develops and markets digital imaging software
products for scanning, editing, organizing and communicating
paper documents and photos 1,168,342 2,154,189
THQ, Inc. - Develops, publishes and distributes interactive
entertainment software 500,000 8,250,000
The 3DO Co. - Develops and publishes branded interactive
entertainment software products 700,000 4,506,250
Verity, Inc. - Develops, markets and supports knowledge
retrieval software products for corporate intranets and extranets,
online publishers and e-commerce providers, original
equipment manufacturers and independent software vendors 215,500 7,852,281
+Virage, Inc. - Provides software products and application services
allowing media and entertainment companies, enterprises and
consumers to deploy, manage and distribute their video content
over the Internet and intranets 97,500 1,602,656
Total 224,018,966
----------------------------------------------------------------------------------------------------------------------=============
Construction/Home
Building .32% ++Crossmann Communities, Inc. - Single-family home builders
in the Midwest 559,280 8,389,200
----------------------------------------------------------------------------------------------------------------------=============
Consumer Products 1.24% *Dreyer's Grand Ice Cream, Inc. - Ice cream manufacturer and distributor 157,400 3,748,087
*Educational Development Corp. - A marketer of non-fiction, instructional
children's books for retail trade outlets, home party plans and public
and school libraries 133,000 457,187
Horizon Organic Holding Corp. - Produces, processes and markets a
line of organic dairy products 428,520 5,008,328
*Matthews International Corp. - A leading designer, manufacturer and
marketer of custom-made identification products 450,000 12,600,000
Meade Instruments Corp. ADR - Designs and manufactures telescopes
and accessories for amateur astronomers of all skill levels 392,400 7,087,725
Twinlab Corp. - A leading manufacturer of brand name
nutritional supplements 620,000 3,487,500
Total 32,388,827
----------------------------------------------------------------------------------------------------------------------=============
Data Processing Equipment Advanced Digital Information Corp. - A leading provider of automated
& Components 1.65% datalibraries for computer networks and workstations markets and
microelectronic components for aerospace and medical applications 1,795,200 25,132,800
*Ampex Corp. Class A - A leading innovator in the fields of magnetic
recording image (MRI) processing and high-performance digital storage 1,107,500 1,592,030
MICROS Systems, Inc. - Designs, manufactures and markets
point-of-sale electronic information systems and related peripheral
equipment and software 716,620 16,303,105
Total 43,027,935
----------------------------------------------------------------------------------------------------------------------=============
Drugs 3.21% +Corixa Corp. - Conducts biotechnological research 480,000 16,380,000
+ICOS Corp. - A bio-pharmaceutical company that develops products for
chronic and acute diseases 618,500 28,219,062
+ILEX Oncology, Inc. - Focuses on the accelerated development of drugs
for the treatment and prevention of cancer 250,000 9,125,000
XXX +Kos Pharmaceuticals, Inc. - Develops prescription pharmaceutical
products primarily for the treatment of chronic cardiovascular
and respiratory diseases 349,680 5,157,780
Noven Pharmaceuticals, Inc. - Develops transdermal and transmucosal
drug delivery systems and technologies 291,200 8,262,800
PathoGenesis Corp. - Develops drugs to treat chronic infectious diseases,
primarily lung infections 482,400 12,693,150
Sicor, Inc. - A vertically integrated specialty pharmaceutical company
that develops, manufactures and markets multi-source
injectable pharmaceuticals 400,000 3,775,000
Total 83,612,792
----------------------------------------------------------------------------------------------------------------------=============
Electronics 3.93% +American Xtal Technology, Inc. - Uses a proprietary crystal growth
technique to produce semiconductor substrates for a variety of
electronic and opto-electronic applications 200,040 7,126,425
*Analogic Corp. - Manufactures high-precision medical, industrial
diagnostic and measurement instruments and equipment 350,915 16,142,090
Artesyn Technologies, Inc. - A manufacturer of power supplies and
measurement control systems for industrial equipment 707,410 24,051,940
7
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
*SLI, Inc. - Manufactures and distributes a variety of miniature
lighting products 1,137,450 $ 12,298,678
*Technitrol, Inc. - A worldwide manufacturer of electronic components,
electrical contacts and assemblies, thermostatic and clad-metal
materials and components and related items 247,550 27,292,388
Xircom, Inc. - Develops, manufactures, sells and supports
communications solutions 452,230 15,460,613
Total 102,372,134
----------------------------------------------------------------------------------------------------------------------=============
Electronics: Universal Electronics, Inc. - Manufactures and markets pre-programmed
Equipment/Components .15% universal remote controls primarily for home entertainment equipment
----------------------------------------------------------------------------------------------------------------------=============
and the subscription broadcast market 200,000 3,825,000
----------------------------------------------------------------------------------------------------------------------=============
Electronics:
Semiconductor 2.23% *Dallas Semiconductor Corp. - Develops, manufactures and markets
complementary metal oxide silicone integrated circuits and
semiconductor-based subsystems 60,000 2,512,500
*Helix Technology Corp. - Designs, manufactures and services
products based on cryogenic (ultra-low temperatures)
and vacuum technologies 125,000 4,062,500
+NVIDIA Corp. - Designs, develops and markets three dimensional
(3D) graphics processors and related software 600,000 36,000,000
Omnivision Technologies, Inc. - Provides integrated single chip
semiconductor imaging services 25,000 568,750
+*Pioneer Standard Electronics, Inc. - Distributes electronic components
and computer systems 200,000 2,700,000
Rudolph Technologies, Inc. - Designs, develops, manufactures and
supports process control metrology systems used in semiconductor
device manufacturing 80,000 3,000,000
Semitool, Inc. - Designs, manufactures, markets and services equipment
used in the fabrication of semiconductors 680,000 9,307,500
Total 58,151,250
----------------------------------------------------------------------------------------------------------------------=============
Energy Equipment & Service Core Laboratories N.V. - A provider of petroleum reserve analysis and
environmental testing 1,226,710 24,457,531
5.30% ++Edge Petroleum Corp. - An oil and gas exploration company 485,000 1,333,750
Evergreen Resources, Inc. - Explores, develops, operates
and acquires oil and gas properties 702,580 19,233,128
++EXCO Resources, Inc. - An independent energy company that
acquires, explores and develops natural gas properties 623,700 5,691,262
+Harken Energy Corp. - An oil and gas exploration and production company 750,000 562,500
Louis Dreyfus Natural Gas Corp. - Acquires, develops and explores
natural gas and oil properties 970,000 25,220,000
Seitel, Inc. - An operator of a seismic database and a provider of
corollary geophysical services to the petroleum industry 561,860 6,461,390
Stone Energy Corp. - An independent oil and gas company that
acquires and exploits oil- and gas-producing properties located
primarily in the Gulf Coast Basin 400,000 19,200,000
Superior Energy Services, Inc. - Provider of oil field products
and services in the Gulf of Mexico 812,510 8,125,100
TransMontaigne, Inc. - A holding company which operates
through its subsidiaries primarily in the mid-continent and
Rocky Mountain regions of the United States 500,000 2,687,500
*Vintage Petroleum, Inc. - Independent energy company engaged
in the exploitation and development of oil and gas properties 1,399,960 25,199,280
Total 138,171,441
----------------------------------------------------------------------------------------------------------------------=============
Entertainment .70% +American Classic Voyages Co. - Owns and operates United
States-flag cruise lines 555,000 10,267,500
Cinar Corp. Class B - An integrated entertainment and education
company 500,000 2,665,000
Hollywood.com, Inc. - Operates an Internet movie site with various
pages of information, such as movie trailers, reviews and showtime listings 237,500 2,256,250
Take-Two Interactive Software, Inc. - Develops, markets, distributes
and publishes interactive entertainment software 300,000 2,981,250
Total 18,170,000
----------------------------------------------------------------------------------------------------------------------=============
Environmental
Services .46% Eco Soil Systems, Inc. - Develops, markets and sells proprietary
biological and traditional chemical products that provide solutions
for a variety of turf and crop problems in the golf and
agricultural industries 700,000 1,268,750
Ionics, Inc. - Develops and manufactures systems, and provides
related services for water treatment 350,000 10,718,750
Total 11,987,500
----------------------------------------------------------------------------------------------------------------------=============
Financial
Services 2.23% Catellus Development Corp. - An owner, developer and manager
of real estate assets 300,000 5,175,000
++Federal Agricultural Mortgage Corp. Class C - A federally chartered
instrumentality of the United States 625,000 9,335,937
*Metris Companies, Inc. - An information-based direct marketer
` of consumer credit products, extensive service plans and enhancement
products and services to moderate income consumers 558,200 16,362,237
8
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
+Net.B@nk, Inc. - Provider of banking services over the Internet 117,270 $ 1,224,006
S1 Corp. - Provides Internet-based financial services solutions 1,023,540 26,036,299
Total 58,133,479
----------------------------------------------------------------------------------------------------------------------=============
Financial:
Miscellaneous .48% Marchfirst, Inc. - A global Internet professional
services firm that helps companies build
business models, brands, systems and processes 606,313 12,543,100
----------------------------------------------------------------------------------------------------------------------=============
Food .44% Northland Cranberries, Inc. Class A - Grows cranberries
on its properties in central and northern Wisconsin and
Massachusetts and manufactures and markets a branded line
of juice products 573,000 895,313
Smithfield Foods, Inc. - Produces and markets fresh pork
and processed meats 370,000 10,521,875
Total 11,417,188
----------------------------------------------------------------------------------------------------------------------=============
Healthcare .21% InfoCure Corp. - Provides healthcare practice management software
products and services to targeted healthcare practice
specialties, as well as larger medical practices 500,000 2,484,400
SurModics, Inc. ADR - Provides surface modification solutions to the
medical device industry 70,000 3,115,000
Total 5,599,400
----------------------------------------------------------------------------------------------------------------------=============
Healthcare
Management +MedQuist, Inc. - Provides electronic transcription and health
Services .11% information management solutions to the healthcare industry 138,392 2,975,427
----------------------------------------------------------------------------------------------------------------------=============
Healthcare
Products 4.32% ++ +ATS Medical, Inc. - Manufactures and markets a pyrolytic carbon
bileaflet mechanical heart valve 1,214,610 16,169,496
Advance Paradigm, Inc. - Provides health benefit
management services 700,000 17,281,250
Apria Healthcare Group, Inc. - Provides comprehensive
home healthcare services 1,104,000 16,491,000
*Arrow International, Inc. - Supplies disposable catheters
and related clinical products 676,610 23,089,316
+Columbia Laboratories, Inc. - International pharmaceutical company 302,150 1,907,322
Hanger Orthopedic Group, Inc. - A professional practice
management company 933,000 3,790,313
++Orthofix International N.V. - An international
corporation that develops innovative products in
the medical device market; a leading producer of
external fixation devices, limb lengthening and
bone reconstruction
equipment 659,580 13,109,152
+SonoSite, Inc. - Designs and develops miniaturized digital ultrasound
imaging devices 450,000 13,500,000
Theragenics Corp. - Produces and sells implantable radiation devices
used in the treatment of prostate cancer 1,003,540 7,463,829
Total 112,801,678
----------------------------------------------------------------------------------------------------------------------=============
Healthcare
Services 1.63% ++HealthCare Service Group, Inc. - Provides operational services to
nursing home and retirement complexes 848,350 4,029,663
*Hooper Holmes, Inc. - Provider of health information to the
insurance industry 1,856,360 22,740,410
++Matria Healthcare, Inc. - Provides obstetrical home healthcare
services that assist physicians
in the management of high risk pregnancies 2,016,000 7,434,000
Renal Care Group, Inc. - Provides dialysis and ancillary services
to patients with chronic kidney failure 250,000 5,796,875
+US Oncology, Inc. - Provides comprehensive management
services for oncology 511,800 2,559,000
Total 42,559,948
----------------------------------------------------------------------------------------------------------------------=============
Hospital
Supplies .92% Barr Laboratories, Inc. - Develops, manufactures and
markets generic and proprietary prescription pharmaceuticals 255,000 13,770,000
+Maxim Pharmaceuticals, Inc. - Develops drugs, therapies, and
vaccines for cancer and infectious diseases 210,000 10,224,375
Total 23,994,375
----------------------------------------------------------------------------------------------------------------------=============
Instrumentation .10% +Therma-Wave, Inc. - Develops, manufactures, markets
and services process control metrology systems for use
in the manufacture of semiconductors 115,000 2,573,125
----------------------------------------------------------------------------------------------------------------------=============
Leisure 1.36% +Bally Total Fitness Holding Corp. - Operates fitness centers in the
United States and Canada 465,000 10,113,750
+Championship Auto Racing Teams, Inc. - Owns, operates and
sanctions the open-wheel motorsports series in North America 463,330 11,554,292
Steiner Leisure Ltd. - Provides spa services aboard
cruise ships worldwide 697,490 13,513,869
The Harvey Entertainment Co. - Develops animation and licensing
opportunities based on the Harvey Classic characters 140,200 280,400
Total 35,462,311
----------------------------------------------------------------------------------------------------------------------=============
9
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
Media .89% +Dendrite International, Inc. - Supplies sales force software products 450,000 $ 12,199,230
FVC.COM, Inc. - Provides a high quality, cost-effective Internet video
networking solution 650,000 3,087,500
Regent Communications, Inc. - A radio broadcasting company that
acquires, develops and operates radio stations in
small and mid-sized markets 1,181,200 7,936,247
Total 23,222,977
----------------------------------------------------------------------------------------------------------------------=============
Metals & Minerals 1.24% Stillwater Mining Co. - Explores for, develops, extracts, processes and
refines platinum, palladium and associated metals from J-M Reef
located in Stillwater and Sweet Grass counties, Montana 1,229,300 32,269,125
----------------------------------------------------------------------------------------------------------------------=============
Office Supplies .30% Pharmaceutical Product Development, Inc. - Provides global contract
and consulting research and development services for the pharmaceutical
and biotechnology industries 370,000 7,908,750
----------------------------------------------------------------------------------------------------------------------=============
Oil: Crude Producers .15% +Forest Oil Corp. - Produces and markets natural gas in North America 300,000 3,862,500
----------------------------------------------------------------------------------------------------------------------=============
Printing .36% Documentum, Inc. - Develops, markets and supports a family of
client/server and Web software products 200,000 9,375,000
----------------------------------------------------------------------------------------------------------------------=============
REIT .24% *Healthcare Realty Trust, Inc. - Healthcare facility real
estate investment trust 320,000 6,360,000
----------------------------------------------------------------------------------------------------------------------=============
Radio & TV Broadcast .49% ValueVision International, Inc. Class A - An integrated direct marketing
company that markets its products directly to the consumers through
various forms of electronic media 817,600 12,723,900
----------------------------------------------------------------------------------------------------------------------=============
Railroad Equipment .21% *Wabtec Corp. - Provides value-added, technology-based products and
services for the rail industry on a worldwide basis 541,577 5,449,619
----------------------------------------------------------------------------------------------------------------------=============
Restaurants .93% Buca, Inc. ADR - Owns and operates "Buca di Beppo" restaurants 300,000 4,218,750
+CEC Entertainment, Inc. - Owns and franchises Chuck E. Cheese's restaurants 400,000 11,150,000
+P.F. Chang's China Bistro, Inc. - Owns and operates 28 full-service Chinese
restaurants 300,000 8,831,250
Total 24,200,000
----------------------------------------------------------------------------------------------------------------------=============
Retail 8.78% Alloy Online, Inc. - An Internet destination, providing community,
content and commerce to boys and girls between the ages of 10 and 24 325,000 3,575,000
Ames Department Stores, Inc. - The nation's fifth largest discount
department store chain, with 303 stores in 14 Northeastern states 510,000 3,633,750
Cost Plus, Inc. - Operates 70 retail stores, specializing in the sale
of casual home living and entertainment products 300,045 9,995,249
+Gerald Stevens, Inc. - Retails and markets flowers and floral-related
merchandise and gifts 250,000 375,000
iGo Corp. - Provides hard-to-find, model-specific accessories and
services for mobile electronic devices 750,000 2,765,625
+Kenneth Cole Productions, Inc. Class A - Develops, sources and
markets a broad range of footwear, handbags and accessories 452,385 19,537,378
Pacific Sunwear of California, Inc. - Operates a nationwide mall-based
specialty retail chain of stores specializing in casual apparel, footwear
and related accessories catering to teenagers and young adults 1,170,850 17,709,106
++Quiksilver, Inc. - Designs, arranges, manufactures 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 1,353,750 18,106,406
++Shoe Carnival, Inc. - A retailer of family footwear, operating primarily
in the Midwestern and Midsouthern regions of the United States 753,540 4,709,625
+Stage Stores, Inc. - Owns and operates apparel stores primarily in
the central region of the United States 1,302,930 130,293
++ +Tarrant Apparel Group - Designs, merchandises and manufactures
casual apparel 920,040 7,360,320
+The Children's Place Retail Stores, Inc. - Retails value-priced
apparel and accessories for newborn to 12 year old children 900,000 23,175,000
The Sirena Apparel Group, Inc. - Designs, manufactures and
markets branded and private label swimwear and resortwear
for each principal segment of the women's market 330,000 1,650
The Timberland Co. Class A - Designs, develops, makes and
markets boots, shoes, apparel and accessories 1,400,000 45,937,500
++Tropical Sportswear International Corp. - Produces high quality
casual and dress men's apparel 940,000 16,273,750
Tuesday Morning Corp. - A closeout retailer of upscale house
furnishings, gifts and related items 450,000 4,373,460
Vans, Inc. - Designs, manufactures and distributes casual and
active casual footwear and apparel, performance footwear,
snowboard boots and snowboarding outerwear 666,600 9,999,000
10
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
+Whole Foods Market, Inc. - Owns and operates a chain of 87
natural food supermarkets in 19 states and the District of Columbia 744,600 $ 33,274,313
+Wild Oats Markets, Inc. - A natural foods supermarket chain 600,035 6,075,354
+Zany Brainy, Inc. - Retails toys, games, books and multimedia
products for children 760,000 2,042,500
Total 229,050,279
----------------------------------------------------------------------------------------------------------------------=============
Retail: Specialty 1.19% +Ann Taylor Stores Corp. - Retails women's apparel, shoes and
accessories primarily under the Ann Taylor brand name 1,100,000 31,075,000
----------------------------------------------------------------------------------------------------------------------=============
Security Services 1.09% ++Armor Holdings, Inc. - Worldwide manufacturer and distributor of
products and services for the law enforcement, military and
security markets 1,190,000 17,478,125
++Cornell Corrections, Inc. - Provides privatized correctional, detention
and pre-release services in the United States 712,980 4,589,809
Identix, Inc. - A leading designer, developer, manufacturer and marketer
of products for the capture and comparison of fingerprints for security,
anti-fraud, law enforcement and other applications 340,000 4,653,750
Kroll-O'Gara Co. - A leading provider of vehicle armoring systems for
military, commercial and governmental clients worldwide 345,200 1,801,530
Total 28,523,214
----------------------------------------------------------------------------------------------------------------------=============
Services 1.33% +Iron Mountain, Inc. - Provides records and information management
services to customers in the United States, Canada, Europe,
Mexico and South America 992,590 34,740,650
----------------------------------------------------------------------------------------------------------------------=============
Synthetic Fibers .02% *Polymer Group, Inc. - Major global manufacturer of non-woven materials 71,800 551,962
----------------------------------------------------------------------------------------------------------------------=============
Technology 2.27% Coherent, Inc. - Designs, manufactures and sells lasers, laser
systems, precision optics and related accessories 610,000 36,523,750
+Internet Pictures Corp. - Provides global visual content and
infrastructure for electronic commerce and new media web sites 248,505 2,749,087
Microvision, Inc. - Develops, manufactures and markets virtual
retinal display (VRD) technology, which projects images
directly onto the eye's retina 45,000 1,665,000
Proxicom, Inc. ADR - Provides internet solutions to Global
1000 companies 151,400 6,254,712
Three-Five Systems, Inc. - Designs and manufactures display
modules for use in the end products of original equipment
manufacturers 459,999 12,046,224
Total 59,238,773
----------------------------------------------------------------------------------------------------------------------=============
Telecommunication
Equipment ++Comtech Telecommunications Corp. - Designs, develops and
5.43% manufactures technology electronic products and systems 530,000 7,618,750
++Plantronics, Inc. - Leading supplier of communication headset
products and services to users and providers worldwide 971,100 134,011,800
Total 141,630,550
----------------------------------------------------------------------------------------------------------------------=============
Telecommunications 2.27% +ADC Telecommunications, Inc. - Supplies voice, video and data
systems for telephone, cable television, Internet, broadcast, wireless
and private networks 105,264 4,414,509
Boston Communications Group, Inc. - Develops, markets and provides
specialized roaming services, teleservices and prepaid wireless services
to the wireless telephone industry 577,500 8,373,750
++CellStar Corp. - An integrated wholesale distributor of cellular
telephones and related products 3,005,000 7,043,119
+GST Telecommunications, Inc. - A facilities-based integrated communications
provider, offering voice, data and Internet services throughout the
Western United States 500,000 45,000
Lexent, Inc. - Provides outsourced local telecommunications network
services for established and emerging communications companies,
including local exchange carriers, internet service providers and carriers 79,400 2,114,025
Lightbridge, Inc. - Develops, markets and supports a network of
integrated products and services 500,000 11,000,000
+MGC Communications, Inc. - A diversified telecommunications company 400,000 18,000,000
+TALK.com, Inc. - A nationwide provider of telecommunications services
to more than 215,000 small- and medium-sized businesses in the U.S. 1,624,500 8,325,563
Total 59,315,966
----------------------------------------------------------------------------------------------------------------------=============
Utilities .35% +Independent Energy Holdings plc ADR - Generates and markets
electricity in the United Kingdom 820,100 9,174,869
----------------------------------------------------------------------------------------------------------------------=============
11
<PAGE>
Statement of Net Assets (unaudited)
July 31, 2000
Investments Shares Value
===================================================================================================================================
Wholesale .87% +MSC Industrial Direct Co., Inc. Class A - Direct marketer
of metalworking and repair supplies 1,250,000 $ 22,734,375
-----------------------------------------------------------------------------------------------------
Total Investments in Common Stocks (Cost $2,218,070,233) 2,539,169,702
===================================================================================================================================
Short-Term Investment 2.58 Principal Amount
===================================================================================================================================
Prudential Funding Corp. 6.60% due 8/1/2000 (Cost $67,340,000) $67,340,000 67,340,000
Total Investments 99.93% (Cost $2,285,410,233) 2,606,509,702
-----------------------------------------------------------------------------------------------------
Other Assets, Less Liabiliies .07%
-----------------------------------------------------------------------------------------------------------------------------------
Other (See Note 5) 272,820,586
-----------------------------------------------------------------------------------------------------------------------------------
Cash 547,908
-----------------------------------------------------------------------------------------------------------------------------------
Receivables for: Securities sold 77,086,072
Capital stock sold 6,531,739
Dividends and interest 182,770
Total Other Assets 357,169,075
----------------------------------------------------------------------------------------------------------------------=============
Payables for: Collateral on securities loaned 272,820,586
Securities purchased 69,008,376
Capital stock reacquired 9,139,306
Other 4,370,535
Total Liabilities 355,338,803
-----------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 1,830,272
===================================================================================================================================
Net Assets 100.00% $2,608,339,974
===================================================================================================================================
Class A Shares - Net asset value ($1,506,222,558 / 86,739,575 shares outstanding) $17.36
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $18.42
Class B Shares - Net asset value ($321,055,107 / 19,003,982 shares outstanding) $16.89
Class C Shares - Net asset value ($266,886,263 / 15,783,028 shares outstanding) $16.91
Class P Shares - Net asset value ($167,358,873 / 9,690,001 shares outstanding) $17.27
Class Y Shares - Net asset value ($346,817,173 / 19,800,488 shares outstanding) $17.52
+Securities (or a portion of securities) on loan. See Note 5.
++Affiliated issuer (holdings represent 5% or more of the
outstanding voting securities of underlying investments).
Affiliated issuers have a total cost of $312,768,362 and
total value of $400,403,341.
*Income producing security.
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
12
<PAGE>
STATEMENT OF OPERATIONS (unaudited)
Investment Income Six Months Ended July 31, 2000
===================================================================================================================================-
<S> <C>
Income Dividends $ 4,705,809
Interest 2,539,111
Securities lending 770,178
Total income 8,015,098
---------------------------------------------------------------------------------------------------------------------
Expenses Management fee 7,137,342
12b-1 Distribution plan-Class A 2,875,614
12b-1 Distribution plan-Class B 1,758,796
12b-1 Distribution plan-Class C 1,468,486
12b-1 Distribution plan-Class P 393,620
Shareholder servicing 2,313,804
Registration 108,169
Directors' fees 49,302
Reports to shareholders 46,215
Professional 39,509
Other 331,500
Total expenses before reductions 16,522,357
---------------------------------------------------------------------------------------------------------------------
Expense reductions (35,278)
---------------------------------------------------------------------------------------------------------------------
Net expenses 16,487,079
---------------------------------------------------------------------------------------------------------------------
Net investment loss (8,471,981)
------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
===================================================================================================================================-
Net realized gain from investment transactions 88,761,241
===================================================================================================================================-
Net change in unrealized appreciation of investments (310,275,462)
===================================================================================================================================-
Net realized and unrealized loss on investments (221,514,221)
===================================================================================================================================-
Net Decrease in Net Assets Resulting From Operations $(229,986,202)
===================================================================================================================================-
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
July 31, 2000 January 31,
Increase (Decrease) in Net Assets (unaudited) 2000
===================================================================================================================================-
<S> <C> <C>
Operations Net investment loss $ (8,471,981) $ (15,032,329)
Net realized gain from investment transactions 88,761,241 166,079,323
Net change in unrealized appreciation of investments (310,275,462) 365,192,815
Net increase (decrease) in net assets resulting from operations (229,986,202) 516,239,809
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain from investment
transactions:
Class A (60,267,777) (47,584,340)
Class B (13,726,842) (10,846,801)
Class C (11,455,005) (8,384,959)
Class P (6,119,282) (3,577,192)
Class Y (12,868,236) (6,657,438)
Total (104,437,142) (77,050,730)
---------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 452,444,036 1,687,911,437
Net asset value of shares issued to shareholders in reinvestment of distributions 101,307,453 74,545,000
Total 553,751,489 1,762,456,437
---------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (523,669,578) (633,167,138)
---------------------------------------------------------------------------------------------------------------------
Increase in net assets derived from capital share transactions 30,081,911 1,129,289,299
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (304,341,433) 1,568,478,378
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 2,912,681,407 1,344,203,029
---------------------------------------------------------------------------------------------------------------------
End of period (including accumulated net investment loss of
$8,840,392 and $368,411, respectively) $2,608,339,974 $2,912,681,407
---------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS
Class A Shares
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
July 31, 2000 January 31,
Per Share Operating Performance: (unaudited) 2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.55 $16.25 $14.27 $12.80 $11.49 $9.58
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment loss (.05)(a) (.11)(a) (.07)(a) (.10)(a) (.03) (.02)
Net realized and unrealized gain
(loss) on investments (1.42) 4.10 2.10 3.16 3.12 4.80
Total from investment operations (1.47) 3.99 2.03 3.06 3.09 4.78
-----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (.72) (.69) (.05) (1.59) (1.78) (2.87)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.36 $19.55 $16.25 $14.27 $12.80 $11.49
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) (7.99)%(c) 25.33% 14.24% 24.38%(c) 28.35% 50.22%
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses .53%(c)(e) 1.20%(e) .98%(e) 1.06%(c) 1.10% 1.03%
Net investment loss (.25)%(c) (.64)% (.46)% (.72)%(c) (.67)% (.52)%
-----------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Share
-----------------------------------------------------------------------------------------------------------------------------------
Six Months August 1, Six Months August 1,
Ended Year Ended 1996(d) to Ended Year Ended 1996(d) to
Per Share July 31, 2000 January 31, January 31, July 31, 2000 January 31, January 31
Operating Performance: (unaudited) 2000 1999 1998 1997 (unaudited) 2000 1999 1998 1997
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.09 $15.98 $14.12 $12.75 $12.14 $19.11 $16.00 $14.13 $12.75 $12.14
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment loss (.10)(a) (.21)(a) (.17)(a) (.20)(a) (.05) (.10)(a) (.21)(a) (.17)(a) (.19)(a) (.05)
Net realized and
unrealized gain (loss)
on investments (1.38) 4.01 2.06 3.14 2.28 (1.38) 4.01 2.07 3.14 2.28
Total from
investment
operations (1.48) 3.80 1.89 2.94 2.23 (1.48) 3.80 1.90 2.95 2.23
-----------------------------------------------------------------------------------------------------------------------------------
Distributions from
net realized gain (.72) (.69) (.03) (1.57) (1.62) (.72) (.69) (.03) (1.57) (1.62)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $16.89 $19.09 $15.98 $14.12 $12.75 $16.91 $19.11 $16.00 $14.13 $12.75
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) (8.24)%(c) 24.55% 13.37% 23.48%(c) 19.43%(c) (8.18)%(c) 24.45% 13.43% 23.55%(c) 19.43%(c
-----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses .85%(c)(e) 1.79%(e) 1.72%(e) 1.76% .93%(c) .85%(c)(e)1.79%(e) 1.72%(e) 1.71%(c) .93%(c)
Net investment loss (.57)%(c) (1.24)% (1.19)% (1.39)%(c) (.73)%(c) (.57)%(c) (1.24)% (1.20)% (1.34)%(c) (.73)%(c
-----------------------------------------------------------------------------------------------------------------------------------
14
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
Class P Shares Class Y Shares
---------------------------------------------- --------------------------------------------------
Six Months January 5, Six Months December 31,
Ended Year Ended 1998(d) to Ended Year Ended 1997(d) to
July 31, 2000 January 31, January 31, July 31, 2000 January 31, January 31,
Per Share Operating Performance: (unaudited) 2000 1999 1998 (unaudited) 2000 1999 1998
-------------------------------------------------------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.46 $16.19 $14.26 $14.38 $19.70 $16.30 $14.27 $14.12
-------------------------------------------------------------------------------- --------------------------------------------------
Income (loss) from
investment operations
Net investment loss(a) (.06) (.12) (.10) (.01) (.01) (.05) (.03) -(f)
Net realized and unrealized
gain (loss) on investments (1.41) 4.08 2.08 (.11) (1.45) 4.14 2.11 .15
Total from investment operations (1.47) 3.96 1.98 (.12) (1.46) 4.09 2.08 .15
-------------------------------------------------------------------------- --------------------------------------------------
Distributions from net
realized gain (.72) (.69) (.05) - (.72) (.69) (.05) -
-------------------------------------------------------------------------- --------------------------------------------------
Net asset value, end of period $17.27 $19.46 $16.19 $14.26 $17.52 $19.70 $16.30 $14.27
------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) (8.03)%(c) 25.24% 13.89% (.83)%(c) (7.87)%(c) 25.88% 14.59% 1.06%(c)
------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses .58%(c)(e) 1.25%(e) 1.17%(e) .08%(c) .36%(c)(e) .81%(e) .72%(e) .06%(c)
Net investment loss (.30)%(c) (.70)% (.70)% (.05)%(c) (.07)%(c) (.26)% (.22)% (.02)%(c)
------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
July 31, 2000
Supplemental Data for AllClasses: (unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $2,608,340 $2,912,681 $1,344,203 $553,086 $330,358 $197,602
Portfolio turnover rate 19.07% 50.13% 30.89% 33.60% 42.35% 50.12%
------------------------------------------------------------------------------------------------------------------------------------
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering respective class shares.
(e) The ratios for 1999 and 2000 include expenses paid through an expense offset arrangement.
(f) Amount less than $.01.
See Notes to Financial Statements.
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 accounting principles generally accepted
in the United States of America, which permit 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)
Security valuation is determined as follows: Portfolio 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 reflects the market value of the bonds more accurately. Securities traded
only in the over-the-counter market are valued at the mean between the last 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.
Short-term securities are valued at amortized cost (which approx i
mates market value) if the maturity is 60 days or less at the time of purchase,
or market value if the maturity is greater than 60 days. 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 dis tribute 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) along with 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.
2. Management Fee and Other Transactions with Affiliates The Com pany 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
related 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. On July
31, 2000, the management fee payable was $1,070,480.
The Company has Rule 12b-1 plans and agreements (the "Class A, Class B, Class C
and Class P 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) an
annual distribution fee of 0.10% of the average daily Net Asset Value of Class A
shares. 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. Pursuant to the Class P Plan,
the Company pays Distributor an annual service and distribution fee of 0.20% and
0.25%, respectively, of the average daily Net Asset Value of the Class P shares.
Class Y does not have a Plan. On July 31, 2000, the 12b-1 fees payable were
$2,170,919.
Distributor received $82,597, representing payment of commissions on sales of
Class A shares after deducting $613,267 allowed to authorized dealers as
concessions. Certain of the Company's officers and directors have an interest in
Lord Abbett.
The Company along with certain other funds managed by Lord Abbett (the
"Underlying Funds") has entered into a Servicing Agreement with the Alpha Series
of Lord Abbett Securities Trust pursuant to which the Underlying Funds will pay
a portion of the expenses of the Alpha Series in proportion to the average daily
value of shares owned by the Alpha Series. Other expenses include approximately
$174,128 accrued pursuant to this Servicing Agreement.
3. Distributions Net realized gain from investment transactions is distributed
to shareholders twice a year. Accumulated net realized gain on July 31, 2000 for
financial reporting purposes totaled $84,346,061.
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 gain amounts in accordance with accounting
principles generally accepted in the United States of America.
4. Capital The Company has authorized 1 billion shares of $.001 par value
capital stock designated as follows: Class A-895 million shares, Class B-20
million shares, Class C-25 million shares, Class P-30 million shares and Class
Y-30 million shares. Paid in capital amounted to $2,211,734,836 on July 31,
2000. Transactions in shares of capital stock were as follows:
-------------------------------------------------------------------------------
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
Class A Shares Amount Shares Amount
-------------------------------------------------------------------------------
Sales of shares 14,136,950 $271,738,713 58,432,866 $ 986,611,558
Shares issued to
shareholders in
reinvestment of
distributions 2,893,569 58,652,655 2,758,541 46,297,955
Total 17,030,519 330,391,368 61,191,407 1,032,909,513
-------------------------------------------------------------------------------
Shares reacquired (19,406,570) (376,489,401) (26,498,985) (444,560,815)
Increase (decrease) (2,376,051) $ (46,098,033) 34,692,422 $ 588,348,698
-------------------------------------------------------------------------------
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
-------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
-------------------------------------------------------------------------------
Sales of shares 794,618 $14,806,592 8,603,561 $139,812,675
Shares issued to
shareholders in
reinvestment of
distributions 653,838 12,926,381 620,420 10,205,850
Total 1,448,456 27,732,973 9,223,981 150,018,525
Shares reacquired (1,464,669) (26,860,762) (2,533,652) (41,518,036)
Increase (decrease) (16,213) $ 872,211) 6,690,329 $108,500,489
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
-------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
-------------------------------------------------------------------------------
Sales of shares 1,032,279 $ 19,303,835 10,236,907 $166,790,981
Shares issued to
shareholders in
reinvestment of
distributions 546,641 10,818,021 474,086 7,867,443
Total 1,578,920 30,121,856 10,710,993 174,658,424
Shares reacquired (1,623,658) (29,861,906) (3,122,165) (51,382,164)
Increase (decrease) (44,738) $ 259,950) 7,588,828 $123,276,260
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
-------------------------------------------------------------------------------
Class P Shares Amount Shares Amount
-------------------------------------------------------------------------------
Sales of shares 3,877,569 $ 74,921,522 7,183,500 $123,901,578
Shares issued to
shareholders in
reinvestment
of distributions 301,261 6,079,445 209,735 3,538,760
Total 4,178,830 81,000,967 7,393,235 127,440,338
Shares reacquired (2,483,492) (46,250,631) (2,836,163) (48,311,912)
Increase 1,695,338 $ 34,750,336) 4,557,072 $ 79,128,426
Six Months Ended Year Ended
July 31, 2000 January 31, 2000
-------------------------------------------------------------------------------
Class Y Shares Amount Shares Amount
-------------------------------------------------------------------------------
Sales of shares 3,769,652$ 71,673,374 15,525,460 $270,794,645
Shares issued to
shareholders in
reinvestment
of distributions 627,738 12,830,951 381,945 6,634,992
Total 4,397,390 84,504,325 15,907,405 277,429,637
-------------------------------------------------------------------------------
Shares reacquired (2,328,482) (44,206,878) (2,804,864) (47,394,211)
Increase 2,068,908 $ 40,297,447 13,102,541 $230,035,426
-------------------------------------------------------------------------------
5. Portfolio Securities The Company may lend its securities to member banks of
the Federal Reserve System and to registered broker-dealers approved by the
Company. The loans are collateralized at all times by cash and/or U.S. Treasury
securities in an amount at least equal to the market value of the securities
loaned. As of July 31, 2000, the value of securities on loan was $263,274,211.
These loans were collateralized by cash of $272,820,586. Income from securities
lending totaling $770,178 is accounted for in the same manner as other dividend
and interest income on the Statement of Operations.
Purchases and sales of investment securities (other than short-term invest
ments) totaled $596,403,643 and $521,885,700, respectively, during the six
months ended July 31, 2000. As of July 31, 2000, net unrealized appreciation for
federal income tax purposes totaled $321,099,469, of which $793,264,791 related
to appreciated securities and $472,165,322 related to depreciated securities.
For federal income tax purposes, the identified cost of investments owned on
July 31, 2000 was substantially the same as the cost for financial reporting
purposes.
6. Expense Reduction The Company has entered into an arrangement with its
transfer agent whereby credits realized as a result of uninvested cash balances
were used to reduce a portion of the Company's expenses.
7. Transactions with Affiliated Companies An affiliated company is a company in
which the Fund has ownership of at least 5% of the voting securities of the
underlying issuer. Transactions during the year with companies that are
affiliates are as follows:
Balance of
Shares Held Gross Gross
Affiliates Jan. 31, 2000 Purchases Sales
-------------------------------------------------------------------------------
ATS Medical, Inc. 1,214,610 - -
Armor Holdings, Inc. 1,190,000 - -
CellStar Corp. 3,005,000 - -
Comtech Telecommunications
Corp. - 530,000 -
Cornell Corrections, Inc. 712,980 - -
Crossmann Communities, Inc 559,280 - -
EXCO Resources, Inc. 650,000 - (26,300)
Edge Petroleum Corp. 550,000 - (65,000)
Federal Agricultural
Mortgage Corp. Class C 625,000 - -
Frontier Airlines, Inc. 918,000 - -
Healthcare Service Group, Inc. 848,350 - -
LeCroy Corp. 520,500 - -
Matria Healthcare, Inc. 2,016,000 - -
MicroTouch Systems, Inc. 565,000 - -
Orbital Sciences Corp. 1,820,350 250,000 -
Orthofix International N.V. 607,680 51,900 -
Plantronics, Inc. 1,021,100 - (50,000)
Quicksilver, Inc. 1,353,750 - -
RadiSys Corp. 937,720 - -
Shoe Carnival, Inc. 753,540 - -
Tarrant Apparel Group 920,040 - -
Tropical Sportswear
International Corp. 740,000 200,000 -
-------------------------------------------------------------------------------
Realized Gain
Balance of (Loss)
Shares Held Value Feb. 1, 2000 to
Affiliates Jul. 31, 2000 Jul. 31, 2000 Jul. 31, 2000
-------------------------------------------------------------------------------
ATS Medical, Inc. 1,214,610 $ 16,169,496 $ -
Armor Holdings, Inc. 1,190,000 17,478,125 -
CellStar Corp. 3,005,000 7,043,119 -
Comtech Telecommunications
Corp. 530,000 7,618,750 -
Cornell Corrections, Inc. 712,980 4,589,809 -
Crossmann Communities, Inc 559,280 8,389,200 -
EXCO Resources, Inc. 623,700 5,691,262 20,787
Edge Petroleum Corp. 485,000 1,333,750 (674,746)
Federal Agricultural
Mortgage Corp.Class C 625,000 9,335,937 -
Frontier Airlines, Inc. 918,000 16,466,625 -
Healthcare Service Group, Inc. 848,350 4,029,663 -
LeCroy Corp. 520,500 7,807,500 -
Matria Healthcare, Inc. 2,016,000 7,434,000 -
MicroTouch Systems, Inc. 565,000 4,590,625 -
Orbital Sciences Corp. 2,070,350 31,184,647 -
Orthofix International N.V. 659,580 13,109,152 -
Plantronics, Inc. 971,100 134,011,800 6,139,437
Quicksilver, Inc. 1,353,750 18,106,406 -
RadiSys Corp. 937,720 57,669,780 -
Shoe Carnival, Inc. 753,540 4,709,625 -
Tarrant Apparel Group 920,040 7,360,320 -
Tropical Sportswear
International Corp. 940,000 16,273,750 -
-------------------------------------------------------------------------------
8. Directors' Remuneration The Directors of theCompany 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 on July 31, 2000, under a deferred compensation plan,
were $430,216.
9. Line of Credit The Company, along with certain other funds managed by Lord
Abbett, has available a $200,000,000 unsecured revolving credit facility
("Facility") from a consortium of banks, to be used for temporary or emergency
purposes as an additional source of liquidity to fund redemptions of investor
shares. Any borrowings under this Facility will bear interest at current market
rates as defined in the agreement. The fee for this Facility is 0.09% per annum.
There were no loans outstanding pursuant to this Facility on July 31, 2000, nor
was the Facility utilized at any time during the period.
Copyright(C)2000 by Lord Abbett Developing Growth Fund,Inc., 90 Hudson Street,
Jersey City, NJ 07302-3973
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
each Series' investment objective and policies, sales charges and other matters.
There is no guarantee that the forecasts contained 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
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AGGRESSIVE GROWTH FUNDS GROWTH & BALANCED FUND INCOME FUNDS TAX-FREE MONEY
GROWTH FUNDS INCOME FUNDS INCOME FUNDS MARKET FUND
Large-Cap Balanced World Bond-
Growth Growth Fund Research Fund - Series** Debenture Series o National U. S. Government
Opportunities Large-Cap o California Securities Money
Fund Research Fund- Series Global Fund - o Connecticut Market Fund + ++
Small-Cap Value Income Series o Florida
Series Growth & o Georgia
Income Series High Yield Fund o Hawaii
Alpha Series* o Michigan
Affiliated Fund Bond-Debenture o Minnesota
International Fund o Missouri
Developing Series o New Jersey
Growth Fund Limited Duration o New York
U. S. Government o Pennsylvania
Lord Abbett Mid-Cap Securities Series+ o Texas
Developing Value Fund o Washington
Growth Fund U. S. Government
is closed to Global Fund- Securities Series+
new investors. Equity Series
</TABLE>
FINDING THE RIGHT MUTUAL FUND CAN BE CONFUSING. AT LORD, ABBETT & CO., WE
BELIEVE YOUR INVESTMENT PROFESSIONAL PROVIDES VALUE IN HELPING YOU IDENTIFY AND
UNDERSTAND 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 the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, including risks,
charges and ongoing expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios designed
to meet a variety of investment needs.
DIVERSIFICATION. You and your investment professional can diversify your
investments between equity and income funds.
FLEXIBILITY. As your investment goals change, your investment professional
can help you reallocate your portfolio.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
NUMBERS TO KEEP HANDY
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit Our Web Site:
www.lordabbett.com
* Lord Abbett Securities Trust - Alpha Series is a "fund of funds" investing
in shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund
- Small-Cap Value Series and Lord Abbett Securities Trust - International
Series.
** Lord Abbett Balanced Series is a "fund of funds" investing in shares of
certain other Lord Abbett funds.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
++ An investment in this Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed to
maintain and has maintained its stable $1.00 price per share.
[LOGO]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
---------------------------------------------------------
90 Hudson Street o Jersey City, New Jersey 07302-3973
LADG-3-700
(9/00)
