Lord Abbett
U.S. Government Securities
Money Market Fund
Semi-annual Report For the Six Months Ended December 31, 1999
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A fund designed to help you with your current income needs and preserve your
capital
[LOGO]
Visit our Web Site and get: up to date statistics and other useful information
at www.lordabbett.com
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Report to Shareholders
For the Six Months Ended December 31, 1999
[PHOTO]
Robert S. Dow
Chairman
January 15, 2000
"In 2000, we expect money market rates to continue to track the overall level of
interest rates, and anticipate they will rise in response to any rate increases
by the Fed."
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Lord, Abbett & Co. is proud to announce we have received a DALBAR award for
providing consistently good service to shareholders, the 1999 Key Honor Award
for Mutual Fund Service. DALBAR, Inc., an independent research firm and
evaluator of mutual fund service, presents the awards to financial services
firms that provide consistently solid service to clients.
Lord Abbett U.S. Government Securities Money Market Fund completed the
first half of its fiscal year on December 31, 1999 with net assets of $244
million and a seven-day current yield of 4.91%.* The following chart
provides an overview of class-specific data for this six-month period.
Six Months Ended 12/31/1999
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $1.00 $1.00 $1.00
Dividends $0.023 $0.019 $0.023
Average annual total return** +2.3% +1.9% +2.3%
After three increases in the Federal Funds rate during 1999, the Federal
Reserve Board (the "Fed") ended the year by leaving interest rates
unchanged to help ensure a smooth transition into 2000. However, comments
from the Fed indicated that it remained concerned that the rapidly growing
economy would result in inflation, suggesting that further interest rate
increases would be likely in 2000.
In order to provide current income with minimal credit risk, we continued
to invest in obligations issued by the U.S. Treasury and certain U.S.
Government agencies and instrumentalities.*** These securities generally
provide substantial protection against credit risks.
During the period, the Fund maintained an average maturity of approximately
30 days, while concentrating on those money market securities that we
anticipated would provide the highest incremental yield. As the year ended,
we retained more highly liquid short-term securities than usual in our
reserves, in order to lessen the potential impact of any Y2K issues. In
2000, we expect money market rates to continue to track the overall level
of interest rates, and anticipate they will rise in response to any rate
increases by the Fed.
Finally, thank you for investing with us. We value the trust you have
placed in us and wish you the very best in this new millennium.
* The Fund's Class A current yield refers to the income generated by an
investment in the Fund over a seven-day period, which is then
annualized. The yield quotation more closely reflects the current
earnings of the Fund than the total return quotations. Past
performance is not indicative of future results.
** Average annual total return, which is not annualized, is the percent
change in net asset value, assuming the reinvestment of all
distributions. Returns do not reflect the deduction of the applicable
contingent deferred sales charges that apply to Class B shares when
held for less than six years.
*** Unlike U.S. Treasury securities, an investment in the Fund is neither
insured nor guaranteed by the U.S. Government.
Note: An investment in the 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 per share price.
<PAGE>
Statement of Net Assets (unaudited)
December 31, 1999
<TABLE>
<CAPTION>
Principal
Amount
Investments Rating (000) Value
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Investments in Securities 100.74%
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<S> <C> <C> <C> <C>
U.S. Government Federal Farm Credit Bank
Agency Obligations 5.59% due 1/18/2000 A1+ $ 3,378 $ 3,369,041
100.74% 5.56% due 2/17/2000 A1+ 6,300 6,254,035
Total 9,623,076
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Federal Home Loan Bank
1.50% due 1/3/2000 A1+ 4,692 4,691,609
5.48% due 1/7/2000 A1+ 10,000 9,990,844
5.54% due 1/12/2000 A1+ 5,000 4,991,431
5.71% due 1/14/2000 A1+ 8,000 7,983,465
5.84% due 1/19/2000 A1+ 10,000 9,970,753
5.62% due 3/22/2000 A1+ 5,000 4,936,765
Total 42,564,867
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Federal Home Loan Mortgage Corporation
5.48% due 1/10/2000 A1+ 5,000 4,993,027
5.60% due 1/10/2000 A1+ 2,920 2,915,898
5.75% due 1/10/2000 A1+ 300 299,568
5.59% due 1/11/2000 A1+ 5,000 4,992,207
5.75% due 1/11/2000 A1+ 726 724,839
5.51% due 1/12/2000 A1+ 1,504 1,501,452
5.56% due 1/12/2000 A1+ 10,000 9,982,924
5.60% due 1/12/2000 A1+ 4,500 4,492,274
5.50% due 1/13/2000 A1+ 5,000 4,990,769
5.53% due 1/19/2000 A1+ 5,000 4,985,913
5.54% due 1/20/2000 A1+ 5,000 4,985,103
5.48% due 1/26/2000 A1+ 5,000 4,980,702
5.52% due 1/28/2000 A1+ 5,000 4,979,159
5.52% due 2/1/2000 A1+ 5,000 4,975,788
5.74% due 2/1/2000 A1+ 10,000 9,950,485
5.05% due 2/1/2000 A1+ 20,000 19,913,003
5.515% due 2/2/2000 A1+ 5,000 4,975,049
5.75% due 2/17/2000 A1+ 5,000 4,962,369
5.83% due 3/2/2000 A1+ 5,000 4,950,535
Total 104,551,064
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Federal National Mortgage Association
5.59% due 1/18/2000 A1+ 5,000 4,986,625
5.80% due 1/18/2000 A1+ 5,000 4,986,281
5.48% due 1/21/2000 A1+ 5,000 4,984,562
5.51% due 1/25/2000 A1+ 5,000 4,981,506
5.53% due 2/4/2000 A1+ 5,000 4,973,639
5.83% due 2/4/2000 A1+ 10,000 9,944,850
5.80% due 2/8/2000 A1+ 5,000 4,969,344
5.49% due 2/9/2000 A1+ 5,000 4,970,002
5.50% due 2/14/2000 A1+ 5,000 4,965,793
5.62% due 2/24/2000 A1+ 5,000 4,957,652
5.55% due 2/24/2000 A1+ 15,000 14,875,106
5.76% due 3/9/2000 A1+ 10,000 9,891,008
5.73% due 4/3/2000 A1+ 10,000 9,851,904
Total 89,338,272
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Total U.S. Government Agency Obligations* 246,077,279
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Other Assets, Less Liabilities (0.74%) (1,812,258)
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Net Assets 100.00% (Equivalent to $1.00 a share on 228,341,062 Class A shares, 10,920,506 Class B shares
and 5,003,453 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) $244,265,021
===================================================================================================================================
*Cost for federal income tax purposes is $246,077,279. Average maturity of investments: 33 days.
See Notes to Financial Statements.
</TABLE>
<PAGE>
Statement of Operations (unaudited)
<TABLE>
<CAPTION>
Investment Income For Six Months Ended December 31, 1999
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<S> <C> <C>
Income Interest $ 6,200,363
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Expenses Management fee $ 562,088
12b-1 distribution plan-Class B 41,608
Shareholder servicing 258,880
Registration 30,246
Professional 20,205
Reports to shareholders 15,300
Directors' fees 2,596
Other 1,210
Total expenses 932,133
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Net investment income $ 5,268,230
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See Notes to Financial Statements.
Statements of Changes in Net Assets
Six Months Ended
Increase in Net Assets December 31, 1999 Year Ended
(unaudited) June 30, 1999
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Operations Net investment income (declared as dividends to shareholders)
Class A $ 4,953,010 $ 7,538,290
Class B 208,810 258,502
Class C 106,410 164,760
Total 5,268,230 7,961,552
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Capital share transactions (dollar amounts and number of shares are the same)
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Proceeds from shares sold:
Class A 291,408,400 510,782,049
Class B 9,586,589 25,887,755
Class C 6,860,798 42,179,622
Total 307,855,787 578,849,426
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Net asset value of shares issued to shareholders in reinvestment of dividends:
Class A 4,273,538 6,951,998
Class B 173,220 205,821
Class C 79,648 129,445
Total 4,526,406 7,287,264
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Cost of shares reacquired:
Class A (251,940,715) (495,764,765)
Class B (10,027,831) (16,627,593)
Class C (7,129,645) (37,891,791)
Total (269,098,191) (550,284,149)
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Increase in net assets 43,284,002 35,852,541
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Net Assets
Beginning of period 200,981,019 165,128,478
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End of period $ 244,265,021 $ 200,981,019
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See Notes to Financial Statements.
</TABLE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
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Six Six
Months Months
Ended Year Ended Year 8/1/96(a)
Per Share Operating 12/31/99 Ended 12/31/99 Ended to
Performance: (unaudited) 1999 1998 1997 1996 6/30/95 (unaudited) 1999 6/30/98 6/30/97
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<S> <C> <C> <C> <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 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.023 0.043 0.047 0.046 0.048 0.046 0.019 0.036 0.039 0.024
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Distributions
Dividends from
net investment income (0.023) (0.043) (0.047) (0.046) (0.048) (0.046) (0.019) (0.036) (0.039) (0.024)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00$ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(c) 2.30%(b) 4.36% 4.79% 4.66% 4.85% 4.65% 1.91%(b) 3.76% 4.01% 2.39%(b)
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Ratios/Supplemental Data:
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Net assets, end of
period (000) $228,341 $184,600 $162,631 $143,197 $152,531 $140,642 $10,921 $11,188 $ 1,760 $ 244
====================================================================================================================================
Ratios to Average Net Assets
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Expenses 0.38%(b) 0.76% 0.83% 0.84% 0.81% 0.86% 0.76%(b) 1.52% 1.59% 0.99%(b)
Net investment income 2.28%(b) 4.31% 4.68% 4.57% 4.75% 4.54% 1.90%(b) 3.52% 3.96% 2.38%(b)
====================================================================================================================================
Class C
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Six
Months
Ended Year 7/15/96(a)
Per Share Operating 12/31/99 Ended to
Performance: (unaudited) 1999 6/30/98 6/30/97
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Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------
Income from investment
operations
Net investment income 0.023 0.043 0.047 0.044
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Distributions
Dividends from
net investment income (0.023) (0.043) (0.047) (0.044)
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00$ 1.00
- -------------------------------------------------------------------
Total Return(c) 2.30%(b) 4.36% 4.79% 4.47%(b)
- -------------------------------------------------------------------
Ratios/Supplemental Data:
- -------------------------------------------------------------------
Net assets, end of
period (000) $ 5,003 $ 5,193 $ 738 $ 791
- -------------------------------------------------------------------
Ratios to Average Net Assets
- -------------------------------------------------------------------
Expenses 0.38%(b) 0.76% 0.84% 0.81%(b)
Net investment income 2.28%(b) 4.27% 4.73% 4.39%(b)
- -------------------------------------------------------------------
</TABLE>
(a) Commencement of offering Class B and Class C shares, respectively.
(b) Not annualized.
(c) Total return assumes reinvestment of all distributions. See Notes to
Financial Statements.
Notes to Financial Statements (unaudited)
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 federal 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) is
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 cor responding
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
December 31, 1999, under a deferred compensation plan, were approximately
$127,892.
<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
Growth Large-Cap Research Fund - Balanced World Bond- National U. S. Government
Opportunities Growth Fund Large-Cap Series** Debenture Series California Securities Money
Fund Research Fund- Series Global Fund - Connecticut Market Fund +++
Small-Cap Value Growth & Income Series Florida
Series Income Series High Yield Fund Georgia
Alpha Series* Affiliated Fund Bond-Debenture Hawaii
Developing International Fund Michigan
Growth Fund Series Limited Duration Minnesota
Lord Abbett Mid-Cap U. S. Government Missouri
Developing Value Fund Securities Series+ New Jersey
Growth Fund Global Fund- U. S. Government) New York
is closed to Equity Series Securities Series+ Pennsylvania
new investors Texas
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
under stand your investment objectives and, ultimately, offering fund recom
mendations 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, in cluding 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.
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Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
90 Hudson Street o Jersey City, New Jersey 07302-3973
LAMM-3-1299
(3/00)
