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LORD ABBETT Mid-Cap Value Fund
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JUNE 30,2000
[GRAPHIC OMITTED]
Designed to provide you with
capital appreciation from a stock
portfolio of mid-sized companies
[LOGO]
<PAGE>
REPORT TO SHAREHOLDERS
For the Six Months Ended June 30, 2000
[PHOTO]
/s/ Robert S. Dow
-----------------
Robert S. Dow
Chairman
July 10, 2000
"We believe that the potential
rewards in the value stocks of
many medium-sized companies
are excellent."
------------------------------------------------
======================
DALBAR
HONORS COMMITMENT TO:
INVESTORS
1999
=====================
Lord, Abbett & Co. is proud to announce
we have received a DALBAR award for
providing consistently good service to
shareholder the 1999 Key Honor Award for
Mutual Fund Service. DALBAR, Inc. an
independent research firm and evaluator
of mutual fund service, presents the
award to financial services firms that
provide consistently solid service to
clients.
------------------------------------------------
Lord Abbett Mid-Cap Value Fund completed the first six months of its fiscal year
June 30, 2000 with aggregate net assets of $454 million. The following chart
provides an overview of class-specific data for the period.
Six Months Ended June 30, 2000
-------------------------------------------------------------------------------
Class A Class B Class C Class P Class Y
-------------------------------------------------------------------------------
Net asset value $14.19 $13.96 $13.96 $14.05 $14.15
Total return(1) 18.36% 17.98% 17.98% 18.37% 18.37%
SETTING SAIL IN STORMY WEATHER
The new millennium started out at an exciting pace, with most stocks retreating
before those of "new economy" technology companies once again caught fire.
During this time, stocks of "old economy" industrial blue-chip companies were
hard hit as investors liquidated shares in order to chase seemingly attractive
stocks of technology, media and telecommunications companies. This bipolar stock
market reversed in late March as value stocks came roaring back while the
tech-heavy NASDAQ turned in negative performance for the month. Momentum
investing in technology appeared to fizzle out and investors increasingly turned
to companies with attractive relative values and quantifiable earnings. This
trend continued through the end of May before the NASDAQ had what we believe was
a snapback rally. Interestingly, during this volatile six-month period, stocks
of mid-sized companies fared much better than those of large and small
companies, as the MidCap 400 returned 8.97% versus returns of -0.42% and 6.89%
for the S&P 500 and SmallCap 600, respectively.(2) However, on a year-to-date
basis, growth investing was the clear winner among mid-sized companies, with the
MidCap 400/BARRA Growth Index up 14.95%, while the MidCap 400/BARRA Value Index
was up only 3.45%.(3)
EXPERIENCE AND DISCIPLINE HELP US WEATHER THE STORM
Overall, the period was a strong one from a stock picking standpoint, as
evidenced by the healthy gain of 18.36% posted by the Mid-Cap Value Fund.(4)
Initially, our positive performance was driven by solid gains in our stocks of
technology, energy and utilities companies, and later, by advances in our stocks
of healthcare and select consumer companies. The few select financial company
stocks that we held, namely those of insurance companies, far outperformed the
banks that dominate the mid-cap indexes. We were able to sidestep the
late-period correction in the technology sector by investing selectively in
stocks of medical technology companies that outperformed based on their solid
fundamentals, healthy profits and realistic profit projections. On the downside,
our stocks of companies in the basic industry (paper and metals), capital goods
(machinery and industrial equipment) and consumer non-cyclical sectors (food and
consumer products) hindered overall performance. Rising interest rates, souring
consumer confidence and a reduction in profit margins hurt a majority of
companies across these industries and within the portfolio. While high oil
prices benefited many of our energy holdings, they did not bode well for our
holdings in the transportation sector, where companies found it difficult to
pass on rising fuel costs.
WHAT LIES OVER THE HORIZON
We believe that the potential rewards in the value stocks of many medium-sized
companies are excellent. Many of these companies have shown promising business
developments and, in our opinion, have stocks that are currently selling at
appealing discounts compared to those of larger companies. We also believe that
the stocks of many large companies, especially technology companies, which have
performed well in the past, are now too expensive. Thank you for investing with
Lord Abbett and in the Mid-Cap Value Fund. We value the trust that you place in
us, and look forward to serving your investment needs in the years to come.
(1) Past performance is no indication of future results. Total return, which is
not annualized, reflects the percent change in net asset value and includes the
reinvestment of all distributions.
(2) The S&P MidCap 400 Index, S&P 500 Index and S&P SmallCap 600 Index consist
of 400, 500 and 600 domestic stocks, respectively, chosen for market size,
liquidity and industry group representation. They are market value weighted
indexes, with each stock's weight in the Index proportionate to its market
value. Source: Standard & Poor's.
(3) The S&P MidCap 400/BARRA Growth and Value Indexes are constructed by
dividing the stocks in an index according to a single attribute: book-to-price
ratio. The value index contains firms with higher book- to-price ratios;
conversely, the growth index has firms with lower book-to-price ratios. Indices
cited are unmanaged, do not reflect the deduction of fees or expenses and are
not available for direct investment. Source: BARRA.
(4) Return is for Class A shares. The Fund's portfolio is actively managed and
is subject to change.
<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.
<TABLE>
<CAPTION>
50 Largest
Market Lord Abbett
Capitalization S&P 500 S&P MidCap Mid-Cap
Stocks* Index** 400 Index+ Value Fund++
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Price/Earnings 32.8x 25.4x 16.4x 14.4x
Price/Book 7.6x 5.0x 2.6x 1.8x
</TABLE>
All prices and data as of 6/30/00. 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. The indices are unmanaged and are not available for
investment.
*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 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.
AVERAGE ANNUAL TOTAL RETURNS
Average annual compounded total returns for periods ended 6/30/00. Assumes
deduction of the Class A share 5.75% maximum sales charge, with all
distributions reinvested.
Class A
----------------------------------------------------------
1 year: 5.60%
5 years: 15.18%
10 years: 13.33%
PORTFOLIO DATA(1)
Top Ten Holdings as of 6/30/00 Top Sectors as of 6/30/00
Holding %TNA(2) Sector %TNA(2)
------------------------------------------------------------------------------
Caremark RX, Inc. 3.50% Energy 17.26%
EOG Resources, Inc. 3.35% Healthcare 17.02%
St. Jude Medical, Inc. 3.23% Utilities 14.85%
CBRL Group, Inc. 3.05% Materials & Processing 11.21%
Oxford Health Plans, Inc. 3.01% Financial Services 10.78%
R&B Falcon Corp. 2.89% Consumer Non-Cyclicals 8.64%
Dynegy, Inc. 2.83% Basic Industry 6.48%
XL Capital Ltd., Class A 2.63% Consumer Cyclicals 2.64%
Kerr-McGee Corp. 2.61% Consumer Staples 2.60%
Santa Fe Snyder Corp. 2.57% Consumer Discretionary 2.43%
(1) The Fund's portfolio is actively managed and is subject to change.
(2) Percent of total net assets.
The past performance 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 2.86% per
year. Over this time frame, the 5.45% average annual return of CDs outpaced
inflation. However, investors in the Fund saw their $100,000 investment grow an
average of 13.54% per year to $355,901(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.
Cumulative Total Returns Over
10 Years
The Fund: 255.90%
CDs: 70.05%
Inflation: 32.62%
-------------------------------------------------------------------------------
GROWTH OF $100,000: 6/30/90 - 6/30/00
[LINE CHART GRAPHIC OMITTED]
The Fund Six-Month CD/2 Inflation
6/30/90 96030 100000 100000
1990 90489 104060 103000
1991 115247 110366 106152
1992 130761 114582 109230
1993 149009 118409 112234
1994 144143 124389 115231
1995 181747 132051 118158
1996 220325 139459 122080
1997 289803 147645 124156
1998 288503 155884 126155
1999 300729 164598 129536
6/30/00 355901 170046 132619
-------------------------------------------------------------------------------
(1) The Fund's results reflect the deduction of the Class A share reduced sales
charge of 3.95% 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. 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 9/30/00, this report must be
accompanied by Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
2
<PAGE>
STATEMENT OF NET ASSETS (UNAUDITED)
June 30, 2000
<TABLE>
<CAPTION>
Investments Shares Value
===================================================================================================================================
<S> <C> <C>
Common Stocks 95.55%
===================================================================================================================================
Air Transportation .93% *AMR Corp.-Operates an airline that provides scheduled
passenger, freight and mail service throughout North America,
the Caribbean, Latin America, Europe and the Pacific 159,400 $ 4,214,137
-----------------------------------------------------------------------------------------------------------------------============
Apparel .14% V.F. Corp.-Leading producer of blue jeans and other apparel 27,200 647,700
-----------------------------------------------------------------------------------------------------------------------============
Auto: Replacement Parts 2.95% Genuine Parts Co.-National distributor of automotive replacement parts 216,000 4,320,000
Snap-on, Inc.-Manufacturer and distributor of hand tools and
diagnostic equipment for the automotive industry 340,900 9,076,463
Total 13,396,463
-----------------------------------------------------------------------------------------------------------------------============
Chemicals 2.01% Crompton Corp.-Manufactures and markets specialty chemicals,
polymers and polymer processing equipment 746,300 9,142,175
-----------------------------------------------------------------------------------------------------------------------============
Containers 5.47% American National Can Group, Inc.-Manufacturer of beverage cans 427,400 7,212,375
Ball Corp.-Leading manufacturer of aluminum, plastic and steel
containers for the beverage and food industries 299,300 9,633,719
*Pactiv Corp.-Provider of packing solutions and
manufacturer of food service products 1,014,100 7,986,037
Total 24,832,131
-----------------------------------------------------------------------------------------------------------------------============
Electric Power 5.21% Constellation Energy Group-A holding company with operations
throughout North America and various Latin American countries. 117,900 3,839,119
Dynegy, Inc. Class A-Provides energy products and services in
North America and the United Kingdom 188,360 12,867,343
Reliant Energy, Inc.-International energy services company 235,700 6,967,881
Total 23,674,343
-----------------------------------------------------------------------------------------------------------------------============
Fertilizer 2.90% IMC Global, Inc.-Producer and distributor of crop nutrients
and animal feed ingredients 659,200 8,569,600
Potash Corp. of Saskatchewan, Inc.-Produces potash,
phosphate and nitrogen 83,200 4,591,600
Total 13,161,200
-----------------------------------------------------------------------------------------------------------------------============
Financial Services 1.57% C.I.T. Group, Inc. Class A-Provides commercial and individual
financing through a nationwide distribution network 438,200 7,120,750
-----------------------------------------------------------------------------------------------------------------------============
Food 7.10% Dean Foods Co.-Major producer of dairy foods, canned and
frozen vegetables 226,000 7,161,375
*Del Monte Foods Co.-Major producer of canned foods 235,800 1,606,388
IBP, Inc.-Beef and pork processor 444,600 6,863,512
*Smithfield Foods, Inc.-Fresh pork and processed meats
producer and marketer 239,700 6,726,581
Universal Foods Corp.-Manufacturer of yeast, flavorings, colorants
and dried spices for the food industry 534,600 9,890,100
Total 32,247,956
-----------------------------------------------------------------------------------------------------------------------============
Health Care Products 9.42% *Acuson Corp.-Manufacturer of medical diagnostic ultrasound
imaging systems 652,800 8,812,800
*Boston Scientific Corp.-Develops, manufactures and
markets minimally invasive medical devices 359,700 7,890,919
*St. Jude Medical, Inc.-A leading manufacturer of artificial heart
valves and pacemakers 320,000 14,680,000
*Varian Medical Systems, Inc.-A worldwide supplier of
integrated cancer-care systems 291,300 11,397,113
Total 42,780,832
-----------------------------------------------------------------------------------------------------------------------============
Health Care Services 7.60% *Caremark Rx, Inc.-Leading physician practice management company 2,333,800 15,899,012
*Oxford Health Plans, Inc.-Health benefit plans provider for
New York, New Jersey and Connecticut 574,800 13,687,425
*Trigon Healthcare, Inc. Class A-Provider of managed health
plans in Virginia 95,400 4,919,063
Total 34,505,500
-----------------------------------------------------------------------------------------------------------------------============
Insurance 7.11% ACE Ltd.-Insurance holding company specializing in property
and casualty coverage 239,800 6,714,400
PartnerRe Ltd.-Provides multi-line reinsurance to insurance companies 171,000 6,059,813
Transatlantic Holdings, Inc.-International property and
casualty reinsurer 90,000 7,537,500
XL Capital Ltd. Class A-Excess liability insurer 220,900 11,956,212
Total 32,267,925
-----------------------------------------------------------------------------------------------------------------------============
Milling: Fruits/Grain 2.59% Archer-Daniels-Midland Co.-Leading processor and seller of
agricultural commodities 456,500 4,479,406
Corn Products International, Inc.-Leading refiner of corn
and other grains 274,600 7,276,900
Total 11,756,306
----------------------------------------------------------------------------------------============
3
<PAGE>
STATEMENT OF NET ASSETS (UNAUDITED)
June 30, 2000
Investments Shares Value
===================================================================================================================================
Natural Gas 3.35% EOG Resources, Inc.-Oil and gas exploration, production and
development company 454,000 $ 15,209,000
-----------------------------------------------------------------------------------------------------------------------============
Oil: Crude Producers 5.17% Kerr-McGee Corp.-Oil and gas exploration and production,
refining and chemicals 200,800 11,834,650
*Santa Fe Snyder Corp.-Explorer and producer of crude oil
and natural gas 1,025,000 11,659,375
Total 23,494,025
-----------------------------------------------------------------------------------------------------------------------============
Oil: Integrated Domestic 1.36% Amerada Hess Corp.-Oil and gas exploration, production
and refining company 100,000 6,175,000
-----------------------------------------------------------------------------------------------------------------------============
Oil: Refiners 1.56% Valero Energy Corp.-An independent petroleum refining
and marketing company 223,100 7,083,425
-----------------------------------------------------------------------------------------------------------------------============
Oil: Services 4.62% ENSCO International, Inc.-An international offshore contract
drilling company, provides marine transportation services in the
Gulf of Mexico 219,600 7,864,425
*R&B Falcon Corp.-Provides drilling and workover services
for the domestic and international oil and gas industry 556,700 13,117,244
Total 20,981,669
-----------------------------------------------------------------------------------------------------------------------============
REIT 2.11% Healthcare Realty Trust, Inc.-Purchases and leases investment
properties in the United States 561,306 9,577,284
-----------------------------------------------------------------------------------------------------------------------============
Restaurants 3.05% CBRL Group, Inc.-Operates restaurants throughout the United States 944,200 13,867,937
-----------------------------------------------------------------------------------------------------------------------============
Retail 5.24% *Consolidated Stores Corp.-Major U.S. retailer specializing in
closeouts and toys 824,000 9,888,000
Delhaize America, Inc.-A supermarket holding company that
operates stores under the names Food Lion, Kash n' Karry
and Save n' Pack 250,200 4,425,413
J.C. Penney Co., Inc.-Leading departmental store retailer 514,000 9,476,875
Total 23,790,288
-----------------------------------------------------------------------------------------------------------------------============
Synthetic Fibers 1.78% Polymer Group, Inc.-Major global manufacturer of non-woven materials 872,500 8,070,625
-----------------------------------------------------------------------------------------------------------------------============
Utilities: Electrical 9.15% FirstEnergy Corp.-Major Midwestern electric utility holding company 376,900 8,810,037
IPALCO Enterprises, Inc.-Major Midwestern electric utility
holding company 356,400 7,172,550
*Niagara Mohawk Holdings, Inc.-Electric and gas utility company 543,000 7,568,062
Northeast Utilities-Major Northeastern electric utility company 364,800 7,934,400
SCANA Corp.-A holding company involved in regulated electric and
natural gas utility operations, telecommunications and other
energy-related businesses 136,869 3,301,965
TECO Energy, Inc.-A diversified, energy-related utility
holding company 336,100 6,743,006
Total 41,530,020
-----------------------------------------------------------------------------------------------------------------------============
Uilities: Gas 3.16% Eastern Enterprises-Natural gas distributor in Massachusetts 128,800 8,114,400
Southwest Gas Corp.-Natural gas distributor in Arizona and Nevada 357,100 6,249,250
Total 14,363,650
----------------------------------------------------------------------------------------============
Total Investments in Common Stocks (Cost $381,142,923) 433,890,341
===================================================================================================================================
Short-Term Investments 9.21% Principal Amount
===================================================================================================================================
American General Corp. 6.85% due 7/3/2000 $19,880,000 19,880,000
Associates Corp. NA 6.95% due 7/3/2000 19,880,000 19,880,000
Federal Home Loan Mortgage Corp. 6.57% due 7/3/2000 2,040,000 2,039,255
Total Short-Term Investments (Cost $41,799,255) 41,799,255
----------------------------------------------------------------------------------------============
Total Investments 104.76% (Cost $422,942,178) 475,689,596
===================================================================================================================================
Other Assets, Less Liabilities (4.76%)
===================================================================================================================================
Cash 102,116
----------------------------------------------------------------------------------------------------------------------------------
Receivables for: Securities sold 42,357,859
Capital shares sold 1,325,046
Dividends 150,223
Interest 19,760
Total Other Assets 43,955,004
----------------------------------------------------------------------------------------============
4
<PAGE>
STATEMENT OF NET ASSETS (UNAUDITED)
June 30, 2000
===================================================================================================================================
Payables for: Securities purchased $ 64,171,778
Capital shares reacquired 666,575
Other 730,362
Total Liabilities 65,568,715
----------------------------------------------------------------------------------------============
Total Other Assets, Less Liabilities (21,613,711)
===================================================================================================================================
Net Assets 100.00% $454,075,885
===================================================================================================================================
Class A Shares-Net asset value ($394,614,443 /
27,803,366 shares outstanding) $14.19 Maximum
offering price (net asset value plus sales charge
of 5.75% of the offering
price) $15.06
Class B Shares-Net asset value ($40,826,772 / 2,923,697 shares outstanding) $13.96
Class C Shares-Net asset value ($18,066,613 / 1,293,776 shares outstanding) $13.96
Class P Shares-Net asset value ($566,720 / 40,336 shares outstanding) $14.05
Class Y Shares-Net asset value ($1,337.25 / 94.500 shares outstanding) $14.15
*Non-income producing security.
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
STATEMENT OF OPERATIONS (UNAUDITED)
Investment Income Six Months Ended June 30, 2000
===================================================================================================================================
<S> <C>
Income Dividends $ 3,104,643
Interest 794,696
Total income 3,899,339
---------------------------------------------------------------------------------------------------------------------
Expenses Management fee 1,414,072
12b-1 distribution plan-Class A 622,180
12b-1 distribution plan-Class B 174,991
12b-1 distribution plan-Class C 74,787
12b-1 distribution plan-Class P 1,067
Shareholder servicing 488,461
Reports to shareholders 49,029
Registration 35,901
Professional 25,118
Directors' fees 5,518
Other 4,971
Total expenses before reductions 2,896,095
---------------------------------------------------------------------------------------------------------------------
Expense reductions (16,780)
---------------------------------------------------------------------------------------------------------------------
Net expenses 2,879,315
---------------------------------------------------------------------------------------------------------------------
Net investment income 1,020,024
---------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain on Investments
===================================================================================================================================
Net realized gain from investment transactions 58,102,824
-----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 8,143,667
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 66,246,491
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $67,266,515
===================================================================================================================================
See Notes to Financial Statements.
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
June 30, 2000 December 31,
Increase (Decrease) in Net Assets (unaudited) 1999
===================================================================================================================================
<S> <C> <C>
Operations Net investment income $ 1,020,024 $ 966,014
Net realized gain from investment transactions 58,102,824 36,414,649
Net change in unrealized appreciation of investments 8,143,667 (23,559,784)
Net increase in net assets resulting from operations 67,266,515 13,820,879
---------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (575,530) (1,370,426)
Class B - -
Class C - -
Class P (408) (526)
Class Y (6) -
Total (575,944) (1,370,952)
---------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain from investment transactions:
Class A (32,194,656) (14,800,901)
Class B (3,133,152) (1,118,553)
Class C (1,286,580) (486,334)
Class P (38,786) (14,191)
Class Y (106) -
Total (36,653,280) (16,419,979)
---------------------------------------------------------------------------------------------------------------------
Total distributions (37,229,224) (17,790,931)
---------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 48,465,309 85,821,932
Net asset value of shares issued in reinvestment of dividends and distributions 34,757,394 16,443,137
Total 83,222,703 102,265,069
---------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (53,290,558) (111,094,564)
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from capital share transactions 29,932,145 (8,829,495)
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 59,969,436 (12,799,547)
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of period 394,106,449 406,905,996
---------------------------------------------------------------------------------------------------------------------
End of period+ $454,075,885 $ 394,106,449
=====================================================================================================================
+Includes undistributed net investment income of $980,153 and $536,073, respectively.
See Notes to Financial Statements.
6
<PAGE>
FINANCIAL HIGHLIGHTS
Class A Shares Class B Shares
-------------------------------------------------------------- -----------------------------------------
Six Months Six Months
Ended Ended 5/1/97(b)
Per Share 6/30/00 Year Ended 6/30/00 Year Ended to
Operating Performance: (unaudited) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 (unaudited) 12/31/99 12/31/98 12/31/97
======================================================================================= =========================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.24 $13.31 $13.37 $13.29 $12.18 $11.25 $13.06 $13.17 $13.33 $12.14
--------------------------------------------------------------------------------------- ------------------------------------------
Income (loss) from
investment operations
Net investment income (loss) .04(e) .04(e) .05(e) .08 .13 .162 _(c)(e) (.04)(e) (.05)(e) _(c)
Net realized and unrealized
gain(loss) on investments 2.17 .48 (.11) 3.61 2.19 2.383 2.14 .47 (.11) 3.27
Total from investment
operations 2.21 .52 (.06) 3.69 2.32 2.545 2.14 .43 (.16) 3.27
------------------------------------------------------------------------------------ ------------------------------------------
Distributions
Dividends from net
investment income (.02) (.05) - (.23) (.16) (.17) - - - (.05)
Distributions from
net realized gain (1.24) (.54) - (3.38) (1.05) (1.445) (1.24) (.54) - (2.03)
Total (1.26) (.59) - (3.61) (1.21) (1.615) (1.24) (.54) - (2.08)
------------------------------------------------------------------------------------ ------------------------------------------
Net asset value,
end of period $14.19 $13.24 $13.31 $13.37 $13.29 $12.18 $13.96 $13.06 $13.17 $13.33
--------------------------------------------------------------------------------------- ------------------------------------------
Total Return(a) 18.36%(d) 4.23% (0.45)% 31.53% 21.22% 26.09% 17.98%(d) 3.54% (1.20)% 27.51%(d)
===================================================================================================================================
Ratios to Average
Net Assets:
Expenses(f) .67%(d) 1.34% 1.16% 1.25% 1.22% 1.27% .99%(d) 2.02% 1.92% 1.29%(d)
Net investment
income (loss) .29%(d) .31% .39% .74% 1.12% 1.48% (.02)%(d)(.34)% (.35)% (.15)%(d)
=============================================================================================================================
Class C Shares Class P Shares Class Y Shares
------------------------------------------- ---------------------------------------------------------
Six Months Six Months Six Months
Ended 5/1/97(b) Ended Year 1/1/98(b) Ended 5/3/99(b)
Per Share 6/30/00 Year Ended to 6/30/00 Ended to 6/30/00 to
Operating Performance: (unaudited) 12/31/99 12/31/98 12/31/97 (unaudited) 12/31/99 12/31/98 (unaudited) 12/31/99
======================================================================= =========================================================
Net asset value,
beginning of period $13.06 $13.16 $13.33 $12.14 $13.12 $13.25 $13.38 $13.25 $13.06
------------------------------------------------------------------------ ----------------------------------------------------------
Income (loss) from
investment operations
Net investment income (loss) _(c)(e) (.04)(e) (.05)(e) -(c) .03(e) .04(e) .02(e) .06(e) .05(e)
Net realized and unrealized
gain (loss) on investments 2.14 .48 (.12) 3.27 2.15 .39 (.15) 2.15 .14
Total from investment
operations 2.14 .44 (.17) 3.27 2.18 .43 (.13) 2.21 .19
---------------------------------------------------------------------- ----------------------------------------------------------
Distributions
Dividends from net
investment income - - - (.05) (.01) (.02) - (.07) -
Distributions from net
realized gain (1.24) (.54) - (2.03) (1.24) (.54) - (1.24) -
Total (1.24) (.54) - (2.08) (1.25) (.56) - (1.31) -
---------------------------------------------------------------------- ----------------------------------------------------------
Net asset value, end of period $13.96 $13.06 $13.16 $13.33 $14.05 $13.12 $13.25 $14.15 $13.25
------------------------------------------------------------------------ ----------------------------------------------------------
Total Return(a) 17.98%(d) 3.62% (1.28)% 27.51%(d) 18.37%(d) 3.44% (.97)% 18.37%(d) 1.45%(d)
===================================================================================================================================
Ratios to Average
Net Assets:
Expenses(f) .99%(d) 2.02% 1.92% 1.28%(d) .72%(d) 1.45% 1.37% .49%(d) .69%(d)
Net investment
income (loss) (.02)%(d) (.34)% (.35)% (.13)%(d) .25%(d) .31% .20% .49%(d) .41%(d)
=================================================================================================================================
Six Months Ended Year Ended December 31,
Supplemental Data for All Classes: 6/30/00 (unaudited) 1999 1998 1997 1996 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $454,076 $394,106 $406,906 $343,236 $257,148 $227,149
Portfolio turnover rate 45.97% 64.76% 46.58% 56.96% 38.88% 41.42%
---------------------------------------------------------------------------------------------------------------------------------
</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, 1999 and 2000 include expenses paid through an expense
offset arrangement.
See Notes to Financial Statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 accounting principles generally accepted
in the United States of America, which permit management to make certain
estimates and assumptions at the date of the financial statements. The follow
ing 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-the-counter 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 Association
of Securities Dealers and Quotations) 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. Short-term securities maturing in 60 days or less 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 se curities 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 class-specific 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 fees and
certain other expenses of the Company. The management fee is based on average
daily net assets for each month 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 mil lion. At June 30, 2000, the management fee payable was
$235,563.
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 daily
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. At June 30, 2000, the 12b-1 fee payable
with respect to all classes of shares aggregated $208,611.
Distributor received $75,420, representing payment of commissions on sales of
Class A shares after deducting $414,845 allowed to authorized dealers as
concessions. Certain Company 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, 2000,
undistributed net realized gain for financial reporting purposes aggregated
$57,780,364.
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 accounting
principles generally accepted in the United States of America.
4. CAPITAL The Company has authorized 150 million shares of $.001 par value
capital stock designated as follows: Class A-90 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 $342,567,950 at June 30, 2000.
Transactions in shares of capital stock were as follows:
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
----------------------------------------------- ---------------------------
Class A Shares Amount Shares Amount
----------------------------------------------- ---------------------------
Sales of shares 2,566,587 $ 34,878,882 4,977,296 $ 65,129,612
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 2,522,672 30,524,335 1,210,990 14,919,395
Total 5,089,259 65,403,217 6,188,286 80,049,007
----------------------------------------------- ---------------------------
Shares reacquired (3,510,651) (44,333,555) (7,604,904) (96,986,822)
Increase (decrease) 1,578,608 $ 21,069,662 (1,416,618) $(16,937,815)
----------------------------------------------- ---------------------------
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
----------------------------------------------- ---------------------------
Class B Shares Amount Shares Amount
----------------------------------------------- ---------------------------
Sales of shares 655,640 $ 8,618,606 1,012,260 $12,935,186
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 248,178 2,963,238 85,467 1,045,263
Total 903,818 11,581,844 1,097,727 13,980,449
----------------------------------------------- ---------------------------
Shares reacquired (498,905) (6,240,317) (653,306) (8,200,650)
Increase 404,913 $ 5,341,527 444,421 $ 5,779,799
----------------------------------------------- ---------------------------
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
----------------------------------------------- ---------------------------
Class C Shares Amount Shares Amount
----------------------------------------------- ---------------------------
Sales of shares 373,589 $ 4,858,108 538,770 $ 6,987,618
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 103,059 1,230,527 37,920 463,762
Total 476,648 6,088,635 576,690 7,451,380
----------------------------------------------- ---------------------------
Shares reacquired (215,326) (2,684,186) (436,890) (5,567,140)
Increase 261,322 $ 3,404,449 139,800 $ 1,884,240
----------------------------------------------- ---------------------------
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
----------------------------------------------- ---------------------------
Class P Shares Amount Shares Amount
----------------------------------------------- ---------------------------
Sales of shares 8,520 $109,713 58,806 $ 768,389
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 3,271 39,187 1,196 14,717
Total 11,791 148,900 60,002 783,106
----------------------------------------------- ---------------------------
Shares reacquired (2,607) (32,500) (28,922) (339,952)
Increase 9,184 $116,400 31,080 $ 443,154
----------------------------------------------- ---------------------------
May 3, 1999
(Commencement of
Six Months Ended offering Class Y shares)
June 30, 2000 to December 31, 1999
----------------------------------------------- ---------------------------
Class Y Shares Amount Shares Amount
----------------------------------------------- ---------------------------
Sales of shares - $ - 86 $1,127
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 8,897 107.28 - -
Total 8,897 107.28 86 1,127
----------------------------------------------- ---------------------------
Shares reacquired - - - -
Increase 8,897 $107.28 86 $1,127
----------------------------------------------- ---------------------------
5. PURCHASES AND SALES OF SECURITIES Purchases and sales of investment
securities (other than short-term investments) aggregated $176,094,781 and
$195,373,883, respectively.
As of June 30, 2000, net unrealized appreciation, based on cost for federal
income tax purposes, aggregated $52,747,418, of which $78,819,838 related to
appreciated securities and $26,072,420 related to depreciated securities. The
cost of investments for federal income tax purposes is substantially the same as
that used for financial re porting 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 the net assets of each Fund.
Directors' fees, payable at June 30, 2000, under a deferred compensation plan,
were $280,459.
7. EXPENSE REDUCTIONS 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 defined in the agreement. The fee for this Facility is 0.09% per annum.
There were no loans outstanding pursuant to this Facility at June 30, 2000, nor
was the Facility utilized at any time during the period.
Copyright(C)2000 by Lord Abbett Mid-Cap Value Fund, Inc., 90 Hudson Street,
Jersey City, NJ 07302-3973
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 in this publication will come to
pass. All rights reserved. Printed in the U.S.A.
<PAGE>
INVESTING IN THE
LORD ABBETT
FAMILY OF FUNDS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
GROWTH
---------------------------------------------------------------------------------------------------------------------------
INCOME
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AGGRESSIVE GROWTH FUNDS GROWTH & BALANCED FUND INCOME FUNDS TAX-FREE MONEY
GROWTH FUNDS INCOME FUNDS INCOME FUNDS MARKET FUND
Large-Cap Balanced World Bond-
Growth Growth Fund Research Fund - Series** Debenture Series o National U. S. Government
Opportunities Large-Cap o California Securities Money
Fund Research Fund- Series Global Fund - o Connecticut Market Fund + ++
Small-Cap Value Income Series o Florida
Series Growth & o Georgia
Income Series High Yield Fund o Hawaii
Alpha Series* o Michigan
Affiliated Fund Bond-Debenture o Minnesota
International Fund o Missouri
Developing Series o New Jersey
Growth Fund Limited Duration o New York
U. S. Government o Pennsylvania
Lord Abbett Mid-Cap Securities Series+ o Texas
Developing Value Fund o Washington
Growth Fund U. S. Government
is closed to Global Fund- Securities Series+
new investors. Equity Series
</TABLE>
FINDING THE RIGHT MUTUAL FUND CAN BE CONFUSING. AT LORD, ABBETT & CO., WE
BELIEVE YOUR INVESTMENT PROFESSIONAL PROVIDES VALUE IN HELPING YOU IDENTIFY AND
UNDERSTAND YOUR INVESTMENT OBJECTIVES AND, ULTIMATELY, OFFERING FUND
RECOMMENDATIONS SUITABLE FOR YOUR INDIVIDUAL NEEDS.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, including risks,
charges and ongoing expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios designed
to meet a variety of investment needs.
DIVERSIFICATION. You and your investment professional can diversify your
investments between equity and income funds.
FLEXIBILITY. As your investment goals change, your investment professional
can help you reallocate your portfolio.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
NUMBERS TO KEEP HANDY
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit Our Web Site:
www.lordabbett.com
* Lord Abbett Securities Trust - Alpha Series is a "fund of funds" investing
in shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund
- Small-Cap Value Series and Lord Abbett Securities Trust - International
Series.
** Lord Abbett Balanced Series is a "fund of funds" investing in shares of
certain other Lord Abbett funds.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
++ An investment in this Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed to
maintain and has maintained its stable $1.00 price per share.
[LOGO]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
---------------------------------------------------------
90 Hudson Street o Jersey City, New Jersey 07302-3973
LAMCV-3-600
(8/00)
