Lord Abbett Mid-Cap Value Fund
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JUNE 30, 1999
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Designed to provide you with
capital appreciation from a stock
portfolio of mid-sized companies
[LOGO]
<PAGE>
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ROBERT S. DOW
CHAIRMAN
JULY 9, 1999
"As investors continue to
shift away from large-cap
growth, we believe mid-cap
value will offer good
investment opportunities."
Report to Shareholders
For the Six Months Ended June 30, 1999
Lord Abbett Mid-Cap Value Fund completed the first half of its fiscal year on
June 30, 1999 with aggregate net assets of $436 million. The following chart
provides an overview of class-specific data through the first half of the fiscal
year.
Six Months Ended June 30, 1999
---------------------------------------------------------
Class A Class B Class C Class P Class Y**
---------------------------------------------------------
Net asset value $ 13.99 $ 13.84 $ 13.84 $ 13.84 $13.98
Total return* 10.15% 9.73% 9.81% 9.21% 7.04%
The Tide Has Turned ...
A sea of change best describes the stock market action so far in 1999. During
the second quarter, performance leadership shifted dramatically from the narrow
list of larger- capitalization growth stocks to mid-cap stocks. This change
proved to be rewarding for value investors in mid-cap stocks and helped your
fund to turn in solid performance. In particular, technology stocks continued to
perform strongly during the period, as did investments in the electric utilities
sector due to a trend toward industry deregulation. In past reports we have
highlighted the favorable valuation profile of the mid-cap universe and your
fund when compared to the largest capitalization stocks. Accordingly, we are
encouraged by the recent performance, as it appears other investors have begun
to recognize the excellent combination of improving fundamentals and attractive
valuation inherent in the mid-cap universe.
...But Our Strategy Will Not Change
Although the market may now be moving in our direction we will not change the
way we operate. We will remain focused on building a well-positioned portfolio
of attractively valued, mid-sized companies with excellent investment prospects.
The mid-cap sector includes companies with equity market capitalizations ranging
from $500 million to $5 billion. We believe that our bottom-up, value-oriented
style of stock selection, which emphasizes solid fundamental research, will
continue to lead us to timely investments as it has in the past.
Looking Forward
Stronger than expected economic growth resulted in a 0.25% interest rate hike by
the Federal Reserve Board of Governors and an increase in the long bond to over
6%. We do not believe this will push the U.S. economy into a recession but
merely moderate domestic growth as the rest of the world recovers. However, the
trend in interest rates will likely continue upward, which may create a perilous
environment for some of the excessively valued large-cap growth stocks and the
Internet start-ups. As investors continue to shift away from large-cap growth,
we believe mid-cap value will offer good investment oppor- tunities. We look
forward to executing our research-driven, value-oriented investment strategy in
a market environment more favorable to our style.
We remain committed to helping you achieve your long-term financial goals. Thank
you for including the Lord Abbett Mid-Cap Value Fund in your investment
portfolio.
* Total return, which is not annualized, is the percent change in net asset
value, assuming the reinvestment of all distributions.
** The inception date for Mid-Cap Value Fund Class Y shares was 5/3/99.
Mutual funds are not insured by the FDIC, are not deposits or other
obligations of, or guaranteed by banks, and are subject to investment
risks, including possible loss of principal amount invested.
<PAGE>
The Mid-Cap Advantage
The table below illustrates the wide margin among current valuations of
ultra-large capitalization stocks, as measured by the 50 largest market cap
stocks, the S&P 500 Index and mid-cap stocks as represented by the S&P MidCap
400 Index. This valuation margin is even greater when comparing these benchmarks
with the Lord Abbett Mid-Cap Value Fund.
50 Largest
Market Lord Abbett
Capitalization S&P 500 S&P MidCap Mid-Cap
Stocks* Index** 400 Index * Value Fund++
- --------------------------------------------------------------------------------
Price/Earnings 28.4x 25.2x 19.8x 16.9x
Price/Book 7.2 x 5.4x 3.0x 1.9x
All prices and data as of 6/30/99. The portfolio is actively managed and
the Fund's attributes will differ over time. Price/Earnings Ratio (P/E) is
the price of a stock divided by its earnings per share estimated for the
next full fiscal year. Price/Book Ratio is the price of a stock divided by
its stockholders' equity per share
* Representative data were calculated at Lord Abbett using the ValueLine
Database on Factset, which may not include all securities in any portfolio
or index.
** The S&P 500 Index is a market capitalization weighted index consisting of
500 widely held common stocks chosen for market size, liquidity and
industry group representation. Representative data were calculated at Lord
Abbett using the ValueLine Database on Factset, which may not include all
securities in any portfolio or index.
+ The S&P MidCap 400 Index is comprised of 400 widely held common stocks
chosen for their mid-cap size and industry characterizations.
Representative data were calculated at Lord Abbett using the ValueLine
Database on Factset, which may not include all securities in any portfolio
or index.
++ The Price/Earnings and Price/Book ratios for the Lord Abbett Mid-Cap Value
Fund represent the weighted average of each of these ratios for all of the
stocks in the Fund's portfolio. Representative data were calculated at Lord
Abbett using the ValueLine Database on Factset, which may not include all
securities in any portfolio or index.
The indices are unmanaged and are not available for investment.
Average Annual Total Returns
Average annual compounded total returns for periods ended 6/30/99. Assumes
deduction of the Class A share 5.75% maximum sales charge, with all
distributions reinvested.
Class A
- --------------------------------------------------------
1 year: -4.80%
5 years: +15.84%
10 years: +12.97%
Portfolio Data(1)
Top Ten Holdings as of 6/30/99 Top Sectors as of 6/30/99
Holding %TNA(2) Sector %TNA (2)
- --------------------------------------------------------------------------------
Dynegy, Inc. 3.39% Basic Industry 15.97%
MedPartners, Inc. 2.95% Utilities 13.13%
Amerada Hess Corp. 2.73% Financial Services 9.31%
Varian Medical Systems, Inc. 2.72% Energy 7.79%
Safety-Kleen Corp. 2.70% Other 7.64%
Northeast Utilities 2.54% Consumer Discretionary 6.64%
Cabletron Systems, Inc. 2.50% Consumer Services 6.19%
Dillard Dept. Stores, Inc. 2.42% Consumer Staples 4.53%
Niagra Mohawk Holdings, Inc. 2.21% Technology 4.48%
OfficeMax, Inc. 2.20% Health Care 4.18%
(1) The Fund's portfolio is actively managed and is subject to change.
(2) Percent of total net assets.
The past performance of the Fund is no indication of future results. The
investment return and principal value of an investment in the Fund will
fluctuate so that shares, on any given day or when redeemed, may be worth
more or less than their original cost.
1
<PAGE>
The Value of a Managed Equity Portfolio
The cost of goods and services (as measured by the Consumer Price Index) has
risen steadily over the past 10 years, increasing at an average of 2.96% per
year. Over this time frame, the 5.68% average annual return of CDs outpaced
inflation. However, investors in the Fund saw their $100,000 investment grow an
average of 13.21% per year to $345,797 (1) .
There is no doubt that when it comes to saving for near-term obligations, CDs
are important. But when investing for long-term goals, such as a house, a
child's education or retirement, owning good companies through a fund like Lord
Abbett Mid-Cap Value Fund can help your money work harder for you.
Growth of $100,000: 6/30/89 - 6/30/99
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(1) The Fund's results reflect the deduction of the Class A share reduced sales
charge of 3.75% applicable to investments of $100,000. All distributions
were reinvested. The Fund's maximum sales charge is 5.75%.
(2) Source: Lipper, Inc.
Total return is the percent change in value assuming the reinvestment of all
distributions. Results of the CD investment reflect the average six-month CD
rate available each year during the period. It is important to remember that,
unlike the Fund, a CD's rate and principal are guaranteed if held until
maturity. The Federal Deposit Insurance Corporation ("FDIC") insures CDs up to
$100,000.
Important Information
Results quoted herein represent past performance based on the current sales
charge schedule and reflect appropriate Rule 12b-1 Plan expenses from
commencement of the Plan. Prior to May 1, 1997, the Fund had only one class of
shares, which is now designated as Class A shares. Results for periods from May
1, 1997 onward relate to Class A shares. Past performance is no indication of
future results. Tax consequences are not reflected. The Fund's sales charge
structure has changed from the past. The investment return and principal value
of a Fund investment will fluctuate so that shares, on any given day or when
redeemed, may be worth more or less than their original cost. The Fund issues
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord Abbett
Distributor LLC at 800-874-3733 (or your investment professional) and ask for
the Fund's current prospectus. If used as sales material after 9/30/99, this
report must be accompanied by Lord Abbett's Performance Quarterly for the most
recently completed calendar quarter.
2
<PAGE>
A Note About Year 2000 Matters
As you may know, there has been extensive media coverage about possible problems
that may arise as a result of uncertainties about the ability of computers to
"understand" dates using the year 2000. Potentially, these problems could
disrupt the services and systems that the Fund relies on in its daily
operations.
As a general matter, we believe the financial industry has taken a leadership
role addressing year 2000 (Y2K) issues and this should help to inspire
confidence among concerned investors. More specifically, Lord Abbett, Lord
Abbett Distributor LLC and the Fund's transfer agent, custodian and other
providers of services critical to the Fund have been actively working on
reviewing and replacing or updating computer systems and computer-to-computer
interfaces, as needed. Each has completed or is in the process of testing new or
revised systems and interfaces and generally expects that their systems, as well
as those of their key external service providers, will be ready to handle Y2K
without significant problems. Furthermore, the Fund has been routinely taking
each company's Y2K preparations into account when considering or reviewing
investments.
In summary, while the Y2K problem is unprecedented and we cannot completely
eliminate the possibility that the Fund could be affected in some way, we are
confident that all parties involved are taking appropriate steps to resolve Y2K
concerns.
Statement of Net Assets
June 30, 1999
<TABLE>
<CAPTION>
Investments Shares Value
- ---------------------------------------------------------------------------------------------------------------------------------
Investments in Common Stocks 96.42%
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace .67% *Orbital Sciences Corp.- A space and information systems
company that designs, manufactures, operates and markets
a broad range of affordable space-technology products and
satellite-based services 123,200 $ 2,910,600
- ----------------------------------------------------------------------------------------------------------------------===========
Airlines .46% SkyWest Inc.- A regional airline that provides passenger
and freight service in the Western United States 80,000 1,995,000
- ----------------------------------------------------------------------------------------------------------------------===========
Apparel 1.41% *Jones Apparel Group Inc.- Leading designer, manufacturer
and marketer of women's apparel 125,275 4,298,497
*Reebok International Ltd.- Designs, markets and distributes
sports, fitness and casual footwear, apparel, and equipment 100,000 1,862,500
Total 6,160,997
- ----------------------------------------------------------------------------------------------------------------------===========
Auto Parts 1.38% Snap-on, Inc.- Manufacturer and distributor of hand tools and
diagnostic equipment for the automotive industry 110,000 3,980,625
Standard Products Co.- Manufactures plastic and rubber
products for the automotive and appliance industries 80,000 2,050,000
Total 6,030,625
- ----------------------------------------------------------------------------------------------------------------------===========
Banks: Regional 1.26% Cullen/Frost Bankers Inc.- Leading Texas bank 200,000 5,512,500
- ----------------------------------------------------------------------------------------------------------------------===========
Chemical: Specialty 3.93% Crompton & Knowles Corp.- Specialty chemicals and plastic
processing equipment manufacturer 395,000 7,727,188
*Polymer Group Inc.- Major global manufacturer of non-woven
materials 800,000 9,400,000
Total 17,127,188
- ----------------------------------------------------------------------------------------------------------------------===========
Communications Equipment 1.34% *Plantronics, Inc.- Leading supplier of communication headset
products and services to users and providers worldwide 90,000 5,861,250
- ----------------------------------------------------------------------------------------------------------------------===========
Computer: Software 1.88% Adobe Systems Inc.- Developer of computer software products 100,000 8,215,620
- ----------------------------------------------------------------------------------------------------------------------===========
Containers 1.89% Ball Corp.- Leading manufacturer of aluminum, plastic and steel
containers for the beverage and food industries 195,000 8,238,750
- ----------------------------------------------------------------------------------------------------------------------===========
Drugs/Health Care Products 4.53% *MedPartners Inc.- Leading pharmaceutical benefits management
company 1,700,000 12,856,250
Mylan Laboratories Inc.- Leading producer of prescription
generic drugs and brand-name dermatological products 260,000 6,890,000
Total 19,746,250
- ----------------------------------------------------------------------------------------------------------------------===========
Electric Power 12.03% FirstEnergy Corp.- Major Midwestern electric utility holding company 220,000 6,820,000
Illinova Corp.- Major Midwestern electric utility holding company 330,000 8,992,500
Ipalco Enterprises Inc.- Major Midwestern electric utility holding
company 300,000 6,356,250
*Niagara Mohawk Holdings Inc.- Electric and gas utility company 600,000 9,637,500
</TABLE>
3
<PAGE>
Statement of Net Assets
June 30, 1999
<TABLE>
<CAPTION>
Investments Shares Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
*Northeast Utilities- Major Northeastern electric utility company 625,000 $ 11,054,688
Sierra Pacific Resources- Western electric, water and gas utility
holding company 125,000 4,546,875
SCANA Corp.- Major Southeastern electric and gas utility holding
company 215,000 5,025,625
Total 52,433,438
- --------------------------------------------------------------------------------------------------------------------===========
Electronics: Equipment .58% *Varian Semiconductor Equipment Associates, Inc.- Manufacturers
of semiconductor equipment 150,000 2,550,000
- --------------------------------------------------------------------------------------------------------------------===========
Electronics: Semiconductors 1.08% *Atmel Corp.- Manufacturer of non-volatile memory and
logic integrated circuits 180,000 4,713,750
- --------------------------------------------------------------------------------------------------------------------===========
Food 9% Corn Products International Inc.- Leading refiner of corn and
other grains 280,000 8,522,500
Dean Foods Co.- Major producer of dairy foods and pickles 220,000 9,143,750
*Del Monte Foods Co.- Major producer of canned foods 500,000 8,375,000
IBP Inc.- Beef and pork processor 200,000 4,750,000
Universal Foods Corp.- Manufacturer of yeast, flavorings,
colorants and dried spices for the food industry 400,000 8,450,000
Total 39,241,250
- --------------------------------------------------------------------------------------------------------------------===========
Health-Care Products 7% *Acuson Corp.- Manufacturer of medical diagnostic ultrasound
imaging systems 535,000 9,195,313
*St. Jude Medical, Inc.- A leading manufacturer of artificial
heart valves and pacemakers 265,000 9,440,625
Varian Medical Systems Inc.- A worldwide supplier of
integrated cancer-care systems 470,000 11,867,500
Total 30,503,438
- --------------------------------------------------------------------------------------------------------------------===========
Health-Care Services 2.41% *Sierra Health Services Inc.- Managed health plans in Nevada,
Texas and the Northeast; workers' compensation 300,000 4,331,250
*Trigon Healthcare Inc. Class A- Provider of managed health
plans in Virginia 170,000 6,183,750
Total 10,515,000
- --------------------------------------------------------------------------------------------------------------------===========
Insurance: Life 1.90% MONY Group Inc.- Major U. S. life insurer 253,850 8,281,856
- --------------------------------------------------------------------------------------------------------------------===========
Insurance: Property & Casualty Ace Ltd.- Insurance holding company specializing in
property and casualty coverage 200,000 5,650,000
4.32% Transatlantic Holdings Inc.- International property and
casualty reinsurer 90,000 6,744,375
XL Capital Ltd. Class A- Excess liability insurer 114,000 6,441,000
Total 18,835,375
- --------------------------------------------------------------------------------------------------------------------===========
Machinery: Diversified 1.99% *Coltec Industries Inc.- Diversified manufacturer of aerospace,
defense and automotive products 400,000 8,675,000
- --------------------------------------------------------------------------------------------------------------------===========
Manufacturing: Diversified 1.92% Tenneco Inc.- A global manufacturing company with
operations in automotive parts and packaging 350,000 8,356,250
- --------------------------------------------------------------------------------------------------------------------===========
Miscellaneous 1.45% Jostens Inc.- Produces class rings, yearbooks and recognition
products for schools and businesses 300,000 6,318,750
- --------------------------------------------------------------------------------------------------------------------===========
Natural Gas: Distribution 2.68% Eastern Enterprises- Natural gas distributor in Massachusetts 150,000 5,962,500
Southwest Gas Corp.- Natural gas distributor in Arizona
and Nevada 200,000 5,725,000
Total 11,687,500
- --------------------------------------------------------------------------------------------------------------------===========
Natural Gas: Diversified 3.39% Dynegy Inc.- Major U. S. marketer of natural gas, natural
gas liquids, crude oil and electricity 725,000 14,771,875
- --------------------------------------------------------------------------------------------------------------------===========
Office Equipment/Supplies 2.50% *Cabletron Systems Inc.- Manufactures, markets and
installs network connectivity hardware and software 840,000 10,920,000
- --------------------------------------------------------------------------------------------------------------------===========
Oil: Domestic Integrated 8.04% Amerada Hess Corp.- Oil and gas exploration,
production and refining 200,000 11,900,000
Kerr-McGee Corp.- Oil and gas exploration and production,
refining and chemicals 190,000 9,535,625
Ultramar Diamond Shamrock Corp.- Refiner and marketer
of petroleum products 280,000 6,107,500
Valero Energy Corp.- An independent petroleum refining
and marketing company 350,000 7,503,125
Total 35,046,250
- --------------------------------------------------------------------------------------------------------------------===========
Paper and Forest Products 2.38% *Buckeye Technologies Inc.- Producer of specialty cellulose
pulp and non-wovens 300,000 4,556,250
Unisource Worldwide Inc.- Distributor of printing and
imaging supplies in North America 481,500 5,808,094
Total 10,364,344
- --------------------------------------------------------------------------------------------------------------------===========
REITs & Finance 1.83% Healthcare Realty Trust Inc.- Healthcare facility real estate
investment trust 380,006 7,980,126
- --------------------------------------------------------------------------------------------------------------------===========
Restaurants 1.59% CBRL Group Inc.- Operates restaurants throughout the United States 400,000 6,925,000
- --------------------------------------------------------------------------------------------------------------------===========
Retail: Deptartment Stores & *Consolidated Stores Corp.- Major U. S. retailer specializing in
closeouts and toys 275,800 7,446,600
Merchandise 6.33% Dillard's Inc. Class A- Southwestern department store chain 300,000 10,537,500
*OfficeMax Inc.- Major operator of office product superstores 800,000 9,600,000
Total 27,584,100
- --------------------------------------------------------------------------------------------------------------------===========
</TABLE>
4
<PAGE>
Statement of Net Assets
June 30, 1999
<TABLE>
<CAPTION>
Shares or
Investments Principal Amount Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Toys 1.44% Hasbro Inc.- Major U. S. manufacturer of toys and games 225,000 $ 6,285,938
- -------------------------------------------------------------------------------------------------------------------------===========
Waste Management 3.81% *Republic Services Inc.- Provider of non-hazardous solid waste
collection and disposal services in the United States 195,000 4,826,250
*Safety-Kleen Corp.- Largest hazardous waste management
company in North America 650,000 11,781,250
Total 16,607,500
- -------------------------------------------------------------------------------------------------------------------------===========
Total Investments in Common Stocks (Cost $346,703,242) 420,395,520
====================================================================================================================================
Other Assets, Less Liabilities 3.58%
====================================================================================================================================
Short-term Investments Prudential Funding Corp. Discount Note 5 5 /8% due 7/1/1999
(Cost $13,000,000) $13,000,000 13,000,000
- -------------------------------------------------------------------------------------------------------------------------===========
Cash and Receivables, Net of Liabilities 2,612,468
- -------------------------------------------------------------------------------------------------------------------------===========
Total Other Assets, Less Liabilities 15,612,468
====================================================================================================================================
Net Assets 100.00% $436,007,988
====================================================================================================================================
Class A Shares- Net asset value ($ 390,348,577 / 27,911, 381 shares outstanding) $13.99
Maximum offering price (net asset value plus sales charge of 5.75% of the offering
price) $14.84
Class B Shares- Net asset value ($ 31, 899,592 / 2,304,998 shares outstanding) $13.84
Class C Shares- Net asset value ($ 13,611,655 / 983,842 shares outstanding) $13.84
Class P Shares- Net asset value ($ 147, 093 /10,628 shares outstanding) $13.84
Class Y Shares- Net asset value ($ 1, 070.63 / 76.570 shares outstanding) $13.98
</TABLE>
* Non-income producing security.
See Notes to Financial Statements.
Statement of Operations
<TABLE>
<CAPTION>
Investment Income Six Months Ended June 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Income Dividends $ 2,486,013
Interest 285,123
Total income 2,771,136
---------------------------------------------------------------------------------------------------------------------
Expenses Management fee 1,335,808
12b-1 distribution plan- Class A 482,971
12b-1 distribution plan- Class B 136,146
12b-1 distribution plan- Class C 58,426
12b-1 distribution plan- Class P 401
Shareholder servicing 351,257
Reports to shareholders 48,342
Registration 35,611
Professional 38,614
Directors' fees 7,084
Other 17,433
---------------------------------------------------------------------------------------------------------------------
Total expenses before reductions 2,512,093
Expense reductions (13,855)
---------------------------------------------------------------------------------------------------------------------
Net expenses 2,498,238
Net investment income 272,898
---------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain on Investments
====================================================================================================================================
Net realized gain from investment transactions 31,820,994
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 5,528,743
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 37,349,737
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $37,622,635
====================================================================================================================================
See Notes to Financial Statements.
</TABLE>
5
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
Increase (Decrease) in Net Assets 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations Net investment income $ 272,898 $ 1,301,551
Net realized gain from investment transactions 31,820,994 16,394,308
Net change in unrealized appreciation of investments 5,528,743 (21,076,685)
Net increase (decrease) in net assets resulting from operations 37,622,635 (3,380,826)
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders from:
Net investment income- Class A (1,370,461) -
Net investment income- Class B - -
Net investment income- Class C - -
Net investment income- Class P (526) -
Net realized gain from investment transactions- Class A (14,800,905) -
Net realized gain from investment transactions- Class B (1,118,553) -
Net realized gain from investment transactions- Class C (486,334) -
Net realized gain from investment transactions- Class P (14,191) -
Total distributions (17,790,970) -
---------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 49,985,703 127,473,361
Net asset value of shares issued in reinvestment of dividends and distributions 16,443,137 -
Total 66,428,840 127,473,361
---------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (57,158,513) (60,422,158)
---------------------------------------------------------------------------------------------------------------------
Increase in net assets derived from capital share transactions 9,270,327 67,051,203
---------------------------------------------------------------------------------------------------------------------
Increase in net assets 29,101,992 63,670,377
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of period 406,905,996 343,235,619
---------------------------------------------------------------------------------------------------------------------
End of period (including undistributed (distributions in excess of)
net investment income of $(157, 078) and $941, 011, respectively) $436,007,988 $406,905,996
=====================================================================================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Shares Class B Shares
Six Months Six Months
Ended Year Ended December 31, Ended Year Ended 5/1/97(b)
Per Share Operating Performance: 6/30/99 1998 1997 1996 1995 1994 6/30/99 12/31/98 to 12/31/97
- ---------------------------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $13.31 $13.37 $13.29 $12.18 $11.25 $12.65 $13.17 $13.33 $12.14
- ---------------------------------------------------------------------------------------------- -------------------------------------
Income (loss) from
investment operations
Net investment income (loss) .01(e) .05(e) .08 .13 .162 .18 (.03)(e) (.05)(e) -(c)
Net realized and unrealized
gain (loss) on investments 1.26 (.11) 3.61 2.19 2.383 (.545) 1.24 (.11) 3.27
Total from investment
operations 1.27 (.06) 3.69 2.32 2.545 (.365) 1.21 (.16 3.27
---------------------------------------------------------------------------------------- -------------------------------------
Distributions
Dividends from net
investment income (.05) - (.23) (.16) (.17) (.16) - - (.05)
Distributions from
net realized gain (.54) - (3.38) (1.05) (1.445) (.875) (.54) - (2.03)
Total (.59) - (3.61) (1.21) (1.615) (1.035) (.54) - (2.08)
Net asset value, end of period $13.99 $13.31 $13.37 $13.29 $12.18 $11.25 $13.84 $13.17 $13.33
- ---------------------------------------------------------------------------------------------- -------------------------------------
Total Return(a) 10.15%(d) (0.45)% 31.53%(c) 21.22% 26.09% (3.27)% 9.73%(d) (1.20)% 27.51%(d)
====================================================================================================================================
Ratios to Average
Net Assets:
Expenses(f)
.61%(d) 1.16% 1.25%(c) 1.22%* 1.27% 1.12% .96%(d) 1.92% 1.29%(d)
Net investment income (loss) .11%(d) .39% .74%(c) 1.12% 1.48% 1.53% (.25)%(d) (.35)% (.15)%(d)
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Class P Shares Class Y Shares
-------------------------------------------- --------------------------------- ----------------
Six Months Ended Year Ended 5/1/97(b) Six Months Ended 1/1/98(b) 5/3/99(b)
Per Share Operating Performance: 6/30/99 12/31/98 to 12/31/97 6/30/99 to 12/31/98 to 6/30/99
- --------------------------------------------------------------------------------- --------------------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.16 $13.33 $12.14 $13.25 $13.38 $13.06
- --------------------------------------------------------------------------------- --------------------------------- ----------------
Income (loss) from
investment operations
Net investment income (loss) (.03)(e) (.05)(e) -(c) .01(e) .02(e) .01(e)
Net realized and unrealized gain (loss)
on investments 1.25 (.12) 3.27 1.14 (.15) .91
Total from investment
operations 1.22 (.17) 3.27 1.15 (.13) .92
--------------------------------------------------------------------------- --------------------------------- ----------------
Distributions
Dividends from net investment income - - (.05) (.02) - -
Distributions from net realized gain (.54) - (2.03) (.54) - -
Total (.54) - (2.08) (.56) - -
Net asset value, end of period $13.84 $13.16 $13.33 $13.84 $13.25 $13.98
- --------------------------------------------------------------------------------- --------------------------------- ----------------
Total Return(a) 9.81%(d) (1.28)% 27.51%(d) 9.21%(d) (.97)% 7.04%(d)
====================================================================================================================================
Ratios to Average Net Assets:
Expenses(f) .96%(d) 1.92% 1.28%(d) .67%(d) 1.37% .18%(d)
Net investment income (loss) (.25)%(d) (.35)% (.13)%(d) .06%(d) .20% .06%(d)
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
Supplemental Data for All Classes: 6/30/99 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period(000) $436,008 $406,906 $343,236 $257,148 $227,149 $190,788
Portfolio turnover rate 24.61% 46.58% 56.96% 38.88% 41.42% 57.49%
==============================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Commencement of operations of respective Class shares.
(c) Amounts less than $0.01.
(d) Not annualized.
(e) Calculated using average shares outstanding during the period.
(f) The ratios for 1998 and 1999 include expenses paid through an expense
offset arrangement. See Notes to Financial Statements.
7
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies Lord Abbett Mid-Cap Value 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 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) Securities are valued 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. Securities traded only
in the over-thecounter market are valued at the mean between the last bid and
asked prices in such market, 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. Securities for which market quotations are not available are valued
at fair value under procedures approved by the Board of Directors. Shortterm
securities are valued at amortized 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). Realized gains and losses from security transactions are
calculated on the identified cost basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income is accrued on
a daily basis. Net investment income (other than distribution and service fees)
and 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 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: .75 of 1% on the first $200 million; .65
of 1% on the next $300 million; and .50 of 1% on the excess over $500 million.
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 Rule 12b-1 plan.
Distributor received $86,425 representing payment of commissions on sales of
Class A shares after deducting $529,802 allowed to authorized distributors as
concessions. Certain of the Company's officers and directors have an interest in
Lord Abbett.
3. Distributions Dividends from net investment income and net realized gain from
investment transactions, if any, are declared annually. At June 30, 1999,
undistributed net realized gain for financial reporting purposes aggregated $31,
737, 161.
Income and capital gain 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 generally
accepted accounting principles.
4. Capital The Company has authorized 150 million shares of $. 001 par value
capital stock designated as follows: Class A- 105 million shares, Class B- 15
million shares, Class C- 15 million shares, Class P- 15 million shares and Class
Y- 15 million shares. Paid in capital amounted to $330,735,627 at June 30, 1999.
Transactions in shares of capital stock were as follows:
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
-----------------------------------------------------
Class A Shares Amount Shares Amount
- ------------------------------------------------------------------------
Sales of shares 3,027,141 $ 39,405,371 6,679,081 $ 89,842,339
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 1,210,990 14,919,395 - -
Total 4,238,131 54,324,766 6,679,081 89,842,339
- ------------------------------------------------------------------------
Shares reacquired (3,968,126) (49,371,142) (4,048,822) (54,443,261)
Increase 270,005 $ 4,953,624) 2,630,259 $ 35,399,078
- ------------------------------------------------------------------------
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
-----------------------------------------------------
Class B Shares Amount Shares Amount
- ------------------------------------------------------------------------
Sales of shares 513,271 $6,413,281 1,915,350 $26,070,405
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 85,467 1,045,263 - -
Total 598,738 7,458,544 1,915,350 26,070,405
- ------------------------------------------------------------------------
Shares reacquired (368,103) (4,531,944) (247,290) (3,182,255)
Increase 230,635 $2,926,600) 1,668,060 $22,888,150
- ------------------------------------------------------------------------
Six Months Ended Year Ended
June 30, 1999 December 31, 1998,
-----------------------------------------------------
Class C Shares Amount Shares Amount
- ------------------------------------------------------------------------
Sales of shares 289,406 $3,689,970 848,457 $11,559,761
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 37,920 463,762 - -
Total 327,326 4,153,732 848,457 11,559,761
- ------------------------------------------------------------------------
Shares reacquired (236,138) (2,937,367) (212,341) (2,796,591)
Increase 91,188 $1,216,365) 636,116 $ 8,763,170
- ------------------------------------------------------------------------
9
<PAGE>
Notes Notes to to Financial Financial Statements Statements
January 1, 1998
(Commencement of
Six Months Ended operations of Class shares)
June 30, 1999 to December 31, 1998
-------------------------------------------------------
Class P Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Sales of shares 36,576 $476,081 76 $856
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 1,197 14,717 - -
Total 37,773 490,798 76 856
- -----------------------------------------------------------------------------
Shares reacquired (27,217) (318,060) (4) (51)
Increase 10,556 $172,738) 72 $805
- -----------------------------------------------------------------------------
May 3, 1999
(Commencement of
operations of Class shares)
to June 30, 1999
---------------------------
Class Y Shares Amount
- -----------------------------------------------------------------------------
Sales of shares 77 $1,000
Increase 77 $1,000
- -----------------------------------------------------------------------------
Copyright (C)1999 by Lord Abbett Mid-Cap Value Fund, Inc., 767 Fifth Avenue, New
York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Mid-Cap Value 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, 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.
Notes to Financial Statements
5. Purchases and Sales of Securities Purchases and sales of investment
securities (other than short-term investments) aggregated $93,361, 559 and
$105,329,289, respectively.
As of June 30, 1999, net unrealized appreciation based on cost for federal
income tax purposes aggregated $73,692,278, of which $82,649,778 related to
appreciated securities and $8,957, 500 related to depreciated securities. The
cost of investments for federal income tax purposes is substantially the same as
that used for financial reporting purposes.
6. 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 net assets of each fund.
Directors' fees payable at June 30, 1999, under a deferred compensation plan,
were approximately $298,297.
7. 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 Fund's expenses.
8. 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 0.06% per annum.
There were no loans outstanding pursuant to this Facility at June 30, 1999, nor
was the Facility utilized at any time during the year.
Copyright (C) 1999 by Lord Abbett Bond-Debenture Fund, Inc., 767 Fifth Avenue,
New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Bond-Debenture 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, 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 Fund Income Funds Income Funds Market Fund
Developing Research Fund - Research Fund - Balanced World Bond- National U. S. Government
Growth Fund* Small-Cap Value Large-Cap Series*** Debenture Series California Securities Money
Series Series Global Fund - Connecticut Market Fund ++
Alpha Series** Growth & Income Series Florida
International Income Series High Yield Fund Georgia
Series Affiliated Fund Bond-Debenture Hawaii
Mid-Cap Fund Michigan
Value Fund Limited Duration Minnesota
Growth U. S. Government Missouri
Opportunities Securities Series+ New Jersey
Fund U. S. Government) New York
Global Fund - Securities Series+ Pennsylvania
Equity Series 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
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:
http://www.lordabbett.com
*** Lord Abbett Developing Growth Fund Class A, B and C will close to new
investors on 9/30/99.
*** 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
The GM Building 767 Fifth Avenue New York, NY 10153-0203
LAMCVF-3-699
(8/99
