Lord Abbett U.S. Government
Securities
Money Market Fund
1997 ANNUAL REPORT
[GRAPHIC: Coins]
A fund designed
to help you with
your current income
needs and preserve
your capital
[LOGO](R)
<PAGE>
Report to Shareholders
For the Fiscal Year Ended June 30, 1997
[PHOTO: Robert S. Dow]
/s/ Robert S. Dow
- ----------------------
ROBERT S. DOW
CHAIRMAN
JULY 10, 1997
"...your Fund performed
well in a climate of modest
economic growth, low
inflation and relatively
high short-term interest
rates."
Lord Abbett U.S. Government Securities Money Market Fund completed its fiscal
year on June 30, 1997 with net assets of $144 million and an average annualized
seven-day yield of 4.7%. Below is an overview of class-specific data for the
period.
Year Ended 8/1/96(a) to 7/15/96(b) to
6/30/97 6/30/97 6/30/97
---------- ------------ -------------
Class A Class B Class C
-----------------------------------------------------------------
Net asset value $ 1.00 $ 1.00 $ 1.00
Dividends $ 0.046 $ 0.024 $ 0.044
Total return* + 4.7% + 2.4%++ + 4.5%++
Over the period, your Fund performed well in a climate of modest economic
growth, low inflation and relatively high short-term interest rates. The Federal
Reserve Board's move to raise short-term rates in March of this year (from
5 1/4% to 5 1/2%) appears to have achieved its goal: The economy continued its
trend of moderate growth and inflation remained subdued. Within this
environment, your Fund continued to invest in issues offering attractive yields,
consistent with low credit risk and low volatility.
During the period, we invested entirely in agency discount notes. We also took
advantage of the Fed's increase by seeking out longer maturities; at the close
of the fiscal year, the Fund's average maturity was approximately 33 days.
Our outlook through 1997 is for the economy to grow at a rate averaging less
than 2 1/2%, with inflation averaging about 3% or less. We believe the Federal
Reserve Board will move to raise short-term interest rates again should the
economy show signs of rapid growth or if inflation picks up. Given our outlook,
we will continue to manage the portfolio to take advantage of the higher
short-term rates should they occur.
Lord Abbett U.S. Government Securities Money Market Fund seeks to provide
investors with income and relative safety of principal in all interest-rate
environments. As a shareholder of the Fund, you also are offered checkwriting
privileges and have the flexibility to exchange Fund shares for other Lord
Abbett-managed funds of the same class, should your investment goals change.
Thank you for your continued confidence in Lord Abbett U.S. Government
Securities Money Market Fund. We look forward to maintaining our relationship in
the coming years and helping you achieve your financial goals.
(a) Commencement of offering Class B shares.
(b) Commencement of offering Class C shares.
* Total return is the percent change in net asset value, assuming the
reinvestment of all distributions.
++ Not annualized
<PAGE>
Statement of Net Assets
June 30, 1997
<TABLE>
<CAPTION>
Principal
Investments Rating+ Amount Market Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Investments in Securities 100.00%
==================================================================================================================================
U.S. Government Federal Farm Credit Banks
Agency Obligations 5.43% due 7/15/1997 A1+ $ 5,000M $ 4,989,441
--------------------------------------------------------------------------------------============
Federal Home Loan Banks
5.39% due 7/2/1997 A1+ 5,900M 5,899,117
--------------------------------------------------------------------------------------============
Federal Home Loan Mortgage Corporation
5.51% due 7/1/1997 A1+ 5,000M 5,000,000
5.46% due 7/7/1997 A1+ 14,000M 13,987,260
5.43% due 7/9/1997 A1+ 5,000M 4,993,967
5.47% due 7/21/1997 A1+ 5,000M 4,984,805
5.41% due 7/22/1997 A1+ 5,000M 4,984,221
5.41% due 7/25/1997 A1+ 5,000M 4,981,967
5.51% due 7/28/1997 A1+ 5,000M 4,979,338
5.53% due 8/1/1997 A1+ 5,000M 4,976,190
5.53% due 8/5/1997 A1+ 5,000M 4,973,118
5.53% due 8/7/1997 A1+ 4,900M 4,872,150
5.48% due 9/5/1997 A1+ 5,000M 4,949,767
5.43% due 9/19/1997 A1+ 5,000M 4,939,667
5.43% due 9/26/1997 A1+ 5,000M 4,934,387
Total 73,556,837
--------------------------------------------------------------------------------------============
Federal National Mortgage Association
5.51% due 7/2/1997 A1+ 5,000M 4,999,235
5.44% due 7/7/1997 A1+ 5,000M 4,995,467
5.50% due 7/11/1997 A1+ 5,000M 4,992,361
5.49% due 7/17/1997 A1+ 5,000M 4,987,800
5.51% due 7/18/1997 A1+ 5,000M 4,986,990
5.44% due 8/15/1997 A1+ 5,000M 4,966,000
5.45% due 8/27/1997 A1+ 5,000M 4,956,854
5.44% due 8/28/1997 A1+ 5,000M 4,956,178
5.44% due 9/15/1997 A1+ 5,000M 4,942,578
5.59% due 12/18/1997 A1+ 5,000M 5,000,000
Total 49,783,463
--------------------------------------------------------------------------------------============
Student Loan Marketing Association
5.25% due 8/21/1997++ A1+ 10,000M 10,000,000
--------------------------------------------------------------------------------------============
Total U.S. Government Agency Obligations* 144,228,858
=================================================================================================================================
Other Assets, Less Liabilities .00% 3,277
=================================================================================================================================
Net Assets 100.00% (equivalent to $1.00 a share on 143,197,339 Class A shares, 243,676 Class B
shares and 791,120 Class C shares of $.001 par value capital stock outstanding;
authorized, 700,000,000 Class A shares, 100,000,000 Class B shares and 200,000,000
Class C shares) $144,232,135
=================================================================================================================================
</TABLE>
+ Ratings have not been audited by Deloitte &
Touche LLP.
++ Floating Rate Note.
* Cost for Federal income tax purposes is
$144,228,858.
Average maturity of investments: 33 days.
See Notes to Financial Statements.
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Investment Income Year Ended June 30, 1997
====================================================================================================================================
<S> <C> <C>
Income Interest $8,336,843
Expenses ----------------------------------------------------------------------------------------------------------------------
Management fee $773,869
Shareholder servicing 351,695
Registration 63,400
Professional 53,700
Reports to shareholders 38,000
Other 10,009
Total expenses 1,290,673
----------------------------------------------------------------------------------------------------------------------
Net investment income $7,046,170
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
Increase (Decrease) in Net Assets 1997 1996
===================================================================================================================================
<S> <C> <C>
Operations Net investment income (declared as dividends to shareholders)
Class A $ 7,000,498 $ 7,086,890
Class B 5,627 --
Class C 40,045 --
Total 7,046,170 7,086,890
---------------------------------------------------------------------------------------------------------------------
Capital share transactions (dollar amounts and number of shares are the same)(a)
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold:
Class A 268,128,291 195,939,486
Class B 866,542 --
Class C 3,189,828 --
Total 272,184,661 195,939,486
---------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment of net investment income:
Class A 6,474,938 6,646,051
Class B 3,906 --
Class C 25,667 --
Total 6,504,511 6,646,051
---------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired:
Class A (283,936,697) (190,697,177)
Class B (626,772) --
Class C (2,424,375) --
Total (286,987,844) (190,697,177)
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (8,298,672) 11,888,360
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of year 152,530,807 140,642,447
---------------------------------------------------------------------------------------------------------------------
End of year $144,232,135 $152,530,807
======================================================================================================================
</TABLE>
(a) The Fund began offering Class C shares on July 15, 1996 and
Class B shares on August 1, 1996.
See Notes to Financial Statements.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
-------------------------------------------------------- ---------- ----------
Year Ended June 30,
-------------------------------------------------------- August 1, July 15,
1996(a)(c) 1996(a) to
to June 30, June 30,
Per Share Operating Performance: 1997 1996 1995 1994 1993 1997 1997
===================================================================================================== ============ =========
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------- ------------ ---------
Income from investment operations
Net investment income 0.046 0.048 0.046 0.025 0.024 0.024 0.044
------------------------------------------------------------------------------------------------ ------------ ---------
Distributions
Dividends from net investment income (0.046) (0.048) (0.046) (0.025) (0.024) (0.024) (0.044)
------------------------------------------------------------------------------------------------ ------------ ---------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------- ------------ ---------
Total Return 4.66% 4.85% 4.65% 2.54% 2.43% 2.39%(b) 4.47%(b)
===================================================================================================== ============ =========
Ratios/Supplemental Data:
===================================================================================================== ============ =========
Net assets, end of period (000) $143,197 $152,531 $140,642 $156,069 $122,782 $ 244 $ 791
================================================================================================ ============ =========
Ratios to Average Net Assets:
------------------------------------------------------------------------------------------------ ------------ ---------
Expenses, including waiver 0.84% 0.81% 0.86% 0.85% 0.87% 0.99%(b) 0.81%(b)
Expenses, excluding waiver 0.84% 0.81% 0.86% 0.90% 0.96% 0.99%(b) 0.81%(b)
Net investment income 4.57% 4.75% 4.54% 2.56% 2.41% 2.38%(b) 4.39%(b)
==========================================================================================================================
</TABLE>
(a) Commencement of offering respective class shares.
(b) Not annualized.
(c) November 15, 1996 commencement of operations.
See Notes to Financial Statements.
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett U.S. Government Securities Money Market Fund (the "Company") is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The financial statements have been prepared in
conformity with generally accepted accounting principles, which require
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Company:
(a) The Company values securities utilizing the amortized cost method, which
approximates market value. Under this method, all investments purchased at a
discount are valued by amortizing the difference between the original purchase
price and maturity value of the issue over a period to maturity. Securities
purchased at face value are valued at cost, which approximates market value.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income. Therefore, no income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Interest income is recorded on the accrual
basis.
(d) Dividends from net investment income are declared each business day and paid
monthly. Net investment income (other than distribution and service fees) are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day.
(e) Income distributions are determined in accordance with income tax
regulations which may differ from methods used to determine the corresponding
income amounts in accordance with generally accepted accounting principles.
2. Management Fee and Other Transactions with Affiliates
The Company has a management agreement with Lord, Abbett & Co. ("Lord Abbett")
pursuant to which Lord Abbett supplies the Company with investment management,
research, statistical and advisory services and pays officers' remuneration and
certain other expenses of the Company. The management fee is based on average
daily net assets at the following annual rates: 0.50% on the first $250 million,
0.45% on the next $250 million and 0.40% on the excess over $500 million.
The Company has Rule 12b-1 plans and agreements (the "Class A, Class B and Class
C Plans") with Lord Abbett Distributor LLC, an affiliate of Lord Abbett, which
provides for payments of 0.15% of the average daily net asset value of Class A
shares, 0.75% of the average daily net asset value of Class B shares and 0.25%
of the average daily net asset value of Class C shares sold, and, at each
quarter-end after the first anniversary of the sale of such shares, 0.25% of the
average daily net asset value of such shares outstanding. The Company is
currently not making payments under the Class A and Class C Plans.
Certain of the Company's officers and directors have an interest in Lord Abbett.
3. Directors' Remuneration
The Directors of the Company associated with Lord Abbett and all officers of the
Company receive no compensation from the Company for acting as such. Outside
Directors' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on the net assets of each fund. Directors' fees payable at
June 30, 1997, under a deferred compensation plan, were $122,675.
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders,
Lord Abbett U.S. Government Securities Money Market Fund, Inc.:
We have audited the accompanying statement of net assets of Lord Abbett U.S.
Government Securities Money Market Fund, Inc. as of June 30, 1997, the related
statements of operations and of changes in net assets, and the financial
highlights for each of the periods presented. These financial statements and the
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at June 30,
1997 by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett U.S.
Government Securities Money Market Fund, Inc. at June 30, 1997, the results of
its operations, the changes in its net assets and the financial highlights for
each of the periods presented in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
August 1,1997
Our Management
Investment Manager and
Underwriter
Lord, Abbett & Co. and
Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Custodian, Transfer Agent and Dividend
Disbursing Agent
United Missouri Bank of
Kansas City, N.A.
Tenth and Grand
Kansas City, MO 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Debevoise & Plimpton
New York, NY
Numbers to Keep Handy
For Shareholder Account or
Statement Inquiries:
800-821-5129
For Literature:
800-874-3733
For More Information:
800-426-1130
Visit Our Web Site:
http://www.lordabbett.com
An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that this Fund will be able to maintain
a stable net asset value of $1.00 per share. This Fund is managed to maintain,
and has maintained, its stable $1.00 per share price.
- --------------------------------------------------------------------------------
Copyright (C) 1997 by Lord Abbett U.S. Government Securities Money Market Fund,
Inc., 767 Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett U.S. Government Securities Money Market Fund, Inc., is to be
distributed only if preceded or accompanied by a current prospectus which
includes information concerning the Fund's investment objective and policies 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.
- --------------------------------------------------------------------------------
[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD ABBETT DISTRIBUTOR LLC
- ------------------------------------------------------------ LAMM-2-697
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (8/97)
