Lord Abbett U.S. Government
Securities
Money Market Fund
-----------
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED
----------- DECEMBER 31, 1997
[PIGGY BANK]
A fund designed to help you with your current
income needs and preserve your capital
[LOGO]
<PAGE>
Report to Shareholders
For the Six Months Ended December 31, 1997
[PHOTO OMITTED]
/s/ Robert S. Dow
- ----------------
ROBERT S. DOW
CHAIRMAN
FEBRUARY 2, 1998
Lord Abbett U.S. Government Securities Money Market Fund completed the first
half of its fiscal year on December 31, 1997, with net assets of over $144
million and an average annualized seven-day yield of 4.85%. Below is an overview
of class-specific data for the period.
Six Months
Ended
12/31/97
----------------------------
Class A Class B Class C
- -------------------------------------------------------------------
Net asset value $1.00 $1.00 $1.00
Dividends $0.02 $0.02 $0.024
Total return*++ +2.39% +2.01% +2.39%
During the period, we invested strictly in U.S. Government agency
discount notes. We were also able to take advantage of the turmoil in
Asia, which increased yields in the discount note arena. These
securities allowed us to boost the yield of the Fund without
subjecting the Fund to more risk. As of December 31, 1997, the Fund's
average maturity was 21 days.
Our outlook for the next six months remains positive. We believe that
the economy will grow at a rate of about 211/42%, with inflation at
the same level. We are watchful of a decrease in the Federal Funds
Rate (the rate banks charge each other for overnight loans needed to
meet Reserve requirements), which is one of the most accurate
indicators of the direction of interest rates. Our analysis brings us
to the conclusion that the 30-year Treasury bond will remain under 6%
for most of 1998.
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 are
also 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.
We are pleased Lord Abbett U.S. Government Securities Money Market
Fund is part of your investment portfolio. We look forward to
maintaining our relationship in the coming years and helping you
achieve your financial goals.
"...increased yields in the
discount note arena...
allowed us to boost the
yield of the Fund without
subjecting the Fund to
more risk."
* Total return is the percent change in net asset value, assuming
the reinvestment of all distributions.
++ Not annualized.
<PAGE>
Statement of Net Assets
December 31, 1997
<TABLE>
<CAPTION>
Principal
Investments Rating Amount Market Value
=======================================================================================================
Investments in Securities 100.67%
=======================================================================================================
<S> <C> <C> <C> <C>
U.S. Government Federal Home Loan Banks
Agency Obligations 4.75% due 1/2/1998 A1+ $ 1,700M $ 1,699,776
5.485% due 1/7/1998 A1+ 5,000M 4,995,429
5.59% due 1/12/1998 A1+ 5,000M 4,991,460
5.47% due 1/23/1998 A1+ 5,000M 4,983,286
5.47% due 2/3/1998 A1+ 5,000M 4,974,929
5.47% due 2/9/1998 A1+ 5,000M 4,970,371
Total 26,615,251
-------------------------------------------------------------===========
Federal Home Loan Mortgage Corporation
5.60% due 1/9/1998 A1+ 5,000M 4,993,778
5.67% due 1/14/1998 A1+ 10,000M 9,979,525
5.70% due 1/15/1998 A1+ 5,000M 4,988,917
5.47% due 1/21/1998 A1+ 5,000M 4,984,805
5.69% due 1/30/1998 A1+ 5,000M 4,977,082
5.62% due 2/13/1998 A1+ 5,000M 4,966,436
5.50% due 3/4/1998 A1+ 5,000M 4,952,639
Total 39,843,182
--------------------------------------------------------------==========
Federal National Mortgage Association
5.58% due 1/5/1998 A1+ 5,000M 4,996,900
5.62% due 1/5/1998 A1+ 5,000M 4,996,878
5.47% due 1/16/1998 A1+ 10,000M 9,977,208
5.49% due 1/16/1998 A1+ 5,000M 4,988,562
5.70% due 1/16/1998 A1+ 5,000M 4,988,125
5.48% due 1/20/1998 A1+ 5,000M 4,985,539
5.67% due 1/21/1998 A1+ 5,000M 4,984,250
5.70% due 1/21/1998 A1+ 10,000M 9,968,333
5.51% due 1/22/1998 A1+ 5,000M 4,983,929
5.54% due 1/26/1998 A1+ 5,000M 4,980,764
5.54% due 1/27/1998 A1+ 5,000M 4,979,994
5.64% due 2/10/1998 A1+ 5,000M 4,968,667
Total 69,799,149
--------------------------------------------------------------==========
Student Loan Marketing Association
5.629% due 1/6/1998+ A1+ 9,000M 9,000,000
--------------------------------------------------------------==========
Total U.S. Government Agency Obligations* 145,257,582
=======================================================================================================
Other Assets, Less Liabilities (.67)% (970,003)
=======================================================================================================
Net Assets 100.00% (equivalent to $1.00 a share on 141,687,003 Class A
shares, 835,922 Class B shares and 1,764,654 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) $144,287,579
=======================================================================================================
</TABLE>
+ Floating Rate Note.
* Cost for Federal income tax purposes is
$144,257,582.
Average maturity of investments: 21 days.
See Notes to Financial Statements.
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Investment Income Six Months Ended December 31, 1997
=================================================================================================================
<S> <C> <C> <C>
Income Interest $4,066,935
---------------------------------------------------------------------------------------------------
Expenses Management fee $367,574
Shareholder servicing 173,535
Registration 36,420
Professional 21,680
Reports to shareholders 15,058
12b-1 distribution plan-Class B 1,529
Other 3,396
Total expenses 619,192
---------------------------------------------------------------------------------------------------
Net investment income $3,447,743
=================================================================================================================
</TABLE>
See Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets 1997 1997
- -----------------------------------------------------------------------------------------------------------------
Operations Net investment income (declared as dividends to shareholders)
<S> <C> <C> <C>
Class A $ 3,416,002 $ 7,000,498
Class B 8,198 5,627
Class C 3,543 40,045
Total 3,447,743 7,046,170
---------------------------------------------------------------------------------------------------
Capital share transactions (dollar amounts and number of shares are the same)(a)
- -----------------------------------------------------------------------------------------------------------------
Proceeds from shares sold:
Class A 153,123,007 268,128,291
Class B 2,589,507 866,542
Class C 3,816,370 3,189,828
Total 159,528,884 272,184,661
---------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in reinvestment of net
investment income:
Class A 3,133,927 6,474,938
Class B 5,538 3,906
Class C 13,167 25,667
Total 3,152,632 6,504,511
---------------------------------------------------------------------------------------------------
Cost of shares reacquired:
Class A (157,768,985) (283,936,697)
Class B (1,983,381) (626,772)
Class C (2,873,706) (2,424,375)
Total 162,626,072) (286,987,844)
---------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 55,444 (8,298,672)
- -----------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 144,232,135 152,530,807
---------------------------------------------------------------------------------------------------
End of period $ 144,287,579 $ 144,232,135
===================================================================================================
</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.
Copyright (C) 1998 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.
<PAGE>
Financial Highlights
+-<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------------------
Six Months
Per Share Operating Ended 12/31, Year Ended 6/30,
Performance: 1997 1997 1996 1995 1994
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.024 0.046 0.048 0.046 0.025
- -----------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (0.024) (0.046) (0.048) (0.046) (0.025)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Total Return 2.39%(b) 4.66%(b) 4.85% 4.65% 2.54%
=============================================================================================================================
Ratios/Supplemental Data:
=============================================================================================================================
Net assets, end of period (000) $141,887 $143,197 $152,531 $140,642 $156,069
=============================================================================================================================
Ratios to Average
Net Assets:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver 0.42%(b) 0.84% 0.81 0.86% 0.85%
Expenses, excluding waiver 0.42%(b) 0.84% 0.81 0.86% 0.90%
Net investment income 2.37%(b) 4.57% 4.75 4.54% 2.56%
=============================================================================================================================
<CAPTION>
Class A Class B Class C
--------------------- -------------------------------------- -----------------------------
Six Months 8/1/96(a)(c) Six Months 7/15/96(a)
Per Share Operating Year Ended 6/30, Ended 12/31, to 6/30, Ended 12/31, to 6/30,
Performance: 1993 1997 1997 1997 1997
====================================================== ====================================== =============================
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.024 0.020 0.024 0.024 0.044
- -----------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (0.024) (0.020) (0.024) (0.024) (0.044)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Total Return 2.43% 2.01%(b) 2.39%(b) 2.39%(b) 4.47%(b)
====================================================== ====================================== =============================
Ratios/Supplemental Data:
====================================================== ====================================== =============================
Net assets, end of period (000) $122,782 $ 836 $ 244 $ 1,765 $ 791
====================================================== ====================================== =============================
Ratios to Average
Net Assets:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver 0.87% 0.81%(b) 0.99%(b) 0.43%(b) 0.81%(b)
Expenses, excluding waiver 0.96% 0.81%(b) 0.99%(b) 0.43%(b) 0.81%(b)
Net investment income 2.41% 2.05%(b) 2.38%(b) 2.40%(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 ClassC 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
December 31, 1997, under a deferred compensation plan, were $127,000.
<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 Fund Income Funds Income Funds Market Fund
Developing Global Fund- Affiliated Fund Balanced Series Bond-Debenture o National U.S. Government
Growth Fund Equity Series Fund o California Securities
Growth & o Connecticut Money Market
International Income Series Global Fund- o Florida Fund**+
Series Income Series o Georgia
Research Fund- o Hawaii
Mid-Cap Large-Cap Series Limited Duration o Michigan
Value Fund U.S. Government o Minnesota
Securities o Missouri
Research Fund- Series** o New Jersey
Small-Cap Series* o New York
U.S. Government o Pennsylvania
Securities o Texas
Series** o Washington
</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 Lord Abbett U.S. Government
Securities Money Market Fund.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
When you invest in a family of funds, you benefit from:
Diversification. You and your 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.
As an investor in the Lord Abbett Family of Funds, you have access to 28
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your invest-ment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement
Inquiries: 800-821-5129
For Literature: 800-874-3733
For More Information: 800-426-1130
Visit Our Web Site:
http://www.lordabbett.com
* Lord Abbett intends to close Lord Abbett Research Fund-Small-Cap Series to
new investors in the first half of 1998. For more information, call Lord
Abbett Distributor LLC at 800-426-1130.
** An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ There can be no assurance that this Fund will be able to maintain a stable
net asset value of $1.00 per share. This Fund is managed to maintain, and has
maintained, its stable $1.00 per share price.
- --------------------------------------------------------------------------------
[LOGO] LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD ABBETT DISTRIBUTOR LLC
- ---------------------------
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203
LAMM-3-1297
2/98)
