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Previous: FREEDOM INVESTMENT TRUST II, 497, 1996-03-06 |
Next: AMERICAN FUNDS TAX EXEMPT SERIES I, NSAR-A, 1996-03-06 |
<PAGE>
LORD ABBETT FUNDAMENTAL
VALUE FUND
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
PHOTO - COMPASS
A portfolio designed to help you
grow your capital and income
<PAGE>
FUND FACTS
SOME ADVANTAGES OF LORD ABBETT FUNDAMENTAL VALUE FUND:
. Flexibility The Fund seeks to invest in undervalued stocks of large and
midsized companies. This policy allows management to look at opportunities for
value in a very large universe.
. Maneuverability The Fund's portfolio manager can quickly implement investment
decisions because of the Fund's size and investment flexibility.
. Professional Management Thorough, value-driven research is the basis for
portfolio selections. There are currently 59 issues in the Fund's portfolio.
<PAGE>
Report to Shareholders
For the Six Months Ended December 31, 1995
[PHOTO - Ronald P. Lynch]
RONALD P. LYNCH
Chairman
[PHOTO - Robert S. Dow]
ROBERT S. DOW
President
January 31, 1996
Lord Abbett Fundamental Value Fund completed the first half of its fiscal year
on December 31, 1995 with a net asset value of $14.11 per share, versus $12.85
per share six months ago (the latter figure has been adjusted for capital gains
distributions totaling $.75 per share paid during the period). Dividends of $.21
per share were paid over the period. The Fund's total return (the percent change
in net asset value assuming the reinvestment of all distributions) was 11.2% for
the six months.
The Fund's Board of Directors recently declared a dividend of $.12 per share,
which was paid on December 29, 1995 to shareholders of record on December 28,
1995.
The stock market benefited from a favorable economic environment in 1995. The
economy grew at a modest, annual rate of 2 1/2%, while inflation (as measured by
the Consumer Price Index) averaged just under 3%. The combination of these
factors enabled the Federal Reserve Bank to reverse course and begin gradually
lowering the Federal Funds Rate in three, one-quarter point increments. The
yield on the 30-year Treasury bond (which began the year near 8%) was close to
6% by year-end.
We expect Gross Domestic Product in 1996 will grow at an annual rate of about
2%, with inflation remaining just below 3%. We believe this environment will
enable the Federal Reserve to lower the Federal Funds Rate from the current
5 1/4% level toward 4 1/2% by mid-year. In this "soft landing" scenario, we
think 1996's corporate earnings will be modestly below 1995's record levels.
Still, moderate growth and contained inflation, combined with a lower interest-
rate environment, should bode well for the stock market, overall; although,
corrections along the way are likely.
Given the slow economic growth in 1995, we increased our holdings in less
cyclical, consumer non-durable goods (such as drug and consumer paper
companies). In anticipation of lower interest rates, and given a very favorable
inflation environment, we had a significant overweighting in financial
companies. Another area where we had major holdings was aerospace, which has
enjoyed strong appreciation. We were underweighted in technology stocks and
regional telephone issues, which generally did not meet our value criteria.
As we head into 1996, we continue to look for undervalued companies that offer
the potential for strong dividend growth. We believe financial companies remain
attractive, and that selected consumer cyclical stocks may offer interesting
long-term prospects once the economy starts to rebound. In the near term,
however, we expect earnings gains generally will be disappointing, and that the
main influence
"... we continue to look for undervalued com-
panies that offer the potential for strong dividend growth."
on the portfolio's performance will come from individual stock
selection. We are confident that our disciplined, value approach to investing
will prove rewarding to our investors over the long term.
We are pleased to announce that the Fund's Board of Directors elected
Robert S. Dow as President of the Fund. Mr. Dow, who has been a partner of
Lord, Abbett & Co. for nine years, is the Firm's Chief Investment Officer.
We look forward to helping you attain your financial objectives in 1996 and
beyond.
<PAGE>
Investing in the
Lord Abbett
FAMILY OF FUNDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
GROWTH
- ------------------------------------------------------------------------------------------------------------------------
INCOME
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GROWTH GROWTH & BALANCED INCOME TAX-FREE MONEY
FUNDS INCOME FUNDS FUND FUNDS INCOME FUNDS MARKEY FUND
Developing Affiliated Fund Investment U.S. Government . National U.S. Government
Growth Fund Trust-- Securities Fund* . California Securities
Fundamental Balanced Series . Connecticut Money Market
Value Value Fund Bond-Debenture . Florida Fund*+
Appreciation Fund . Georgia
Fund . Hawaii
Global Fund-- . Michigan
Global Fund-- Income Series . Minnesota
Equity Series . Missouri
Investment . New Jersey
Trust--Limited . New York
Duration U.S. . Pennsylvania
Government . Texas
Securities . Washington
Series*
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your financial adviser provides value in helping you identify and
understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Fundamental
Value Fund.
For more complete information about a Lord Abbett fund, including charges and
expenses, call your financial adviser or Lord, Abbett & Co. at 800-874-3733 for
a prospectus. Read it carefully before investing.
WHEN YOU INVEST IN A FAMILY OF FUNDS, YOU BENEFIT FROM:
DIVERSIFICATION. You and your financial adviser can diversify your investments
between equity and income funds.
FLEXIBILITY. As your investment goals change, your financial adviser can help
you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 25
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your financial adviser to help you customize your investment plan.
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ There can be no assurance that this Fund will be able to maintain a stable net
asset value of $1.00 per share. This Fund is managed to maintain, and has
maintained, its stable $1.00 per share price.
<PAGE>
STATEMENT OF NET ASSETS December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF MARKET VALUE
SECURITY SHARES (NOTE 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN COMMON STOCKS 93.41%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aerospace Boeing Co.--World's leading commercial aircraft
4.36% manufacturer 12,000 $ 940,500
Lockheed Martin Corp.--Leading producer of military
aircraft and space systems technology 5,000 395,000
Rockwell International Corp.--Leading producer of space
systems and electrical and electronic products including
defense, telecommunications and factory automation
systems 10,000 528,750
Total 1,864,250
----------
Agricultural Equipment/
Supplies
1.04% Pioneer Hi-Bred International, Inc.--Leading U.S.
supplier of hybrid seed 8,000 445,000
----------
Airlines
1.70% British Airways plc ADR--One of the world's
largest international airlines 10,000 727,500
----------
Apparel
1.48% VF Corp.--Leading producer of blue jeans
and other apparel 12,000 633,000
----------
Auto Parts Genuine Parts Company--National
3.08% distributor of automotive replacement parts 10,000 410,000
Snap-On, Inc.--Manufactures and distributes hand
tools and diagnostic equipment for the automotive
industry 20,000 905,000
Total 1,315,000
----------
Automobiles
1.02% Ford Motor Co.--World's second largest producer of
cars and trucks 15,000 435,000
----------
Banks: Money Center
2.06% Chemical Banking Corp.--Major money-center bank
holding company 15,000 881,250
----------
Banks: Regional Bank of Boston Corp.--Leading New England regional bank 15,000 693,750
4.77%
Comerica Inc.--Midwestern regional bank holding company 20,000 802,500
KeyCorp--Multi-regional bank holding company serving
the Northwest U.S. 15,000 543,750
Total 2,040,000
----------
Building Materials Masco Corp.--Manufactures home furnishings, kitchen and
.37% bathroom products and other building and home
improvement products 5,000 156,875
----------
Chemicals
1.64% Hanna, M.A. Co.--Leading producer and
distributor of plastic compounds, resins and additives 25,000 700,000
----------
Containers
1.93% Sonoco Products Co.--A leading U.S.
producer of specialty paper and plastic
packaging components 31,500 826,875
----------
Data Processing Equipment Hewlett-Packard Co.--Leading manufacturer of computer
1.57% products including printers, servers, workstations
and PCs 8,000 670,000
----------
Data Processing Services General Motors Corp. (Electronic Data
3.72% Systems) Class E--Leading computer services company 15,000 780,000
H & R Block Inc.--Leader in preparation of income tax
returns and on-line computer systems (CompuServe) 20,000 810,000
Total 1,590,000
----------
Drugs/Health Care Baxter International Inc.--World's leading distributor
Products and major manufacturer of hospital supplies and
8.17% related medical equipment 12,000 502,500
Mallinckrodt Group Inc.--Producer of medical products,
specialty chemicals and veterinary supplies 30,000 1,091,250
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF MARKET VALUE
SECURITY SHARES (NOTE 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Merck & Co., Inc.--Nation's largest ethical drug
manufacturer 10,000 $ 657,500
SmithKline Beecham plc ADR--United Kingdom-based health
care company providing prescription and over-the-counter
drugs and clinical laboratory services 22,400 1,243,200
Total 3,494,450
-----------
Electric Power Carolina Power & Light Co.--Electric utility company
5.95% serving North and South Carolina 25,000 862,500
CINergy Corp.--Supplier of electricity and natural gas
in southwestern Ohio and adjacent Kentucky and Indiana
territories 30,000 918,750
Ipalco Enterprises Inc.--Major midwestern electric
utility holding company 20,000 762,500
Total 2,543,750
-----------
Electrical Equipment
2.30% Emerson Electric Co.--Diversified
manufacturer of consumer and industrial
electrical components 12,000 981,000
-----------
Electronics:
Communications
1.92% Harris Corp.--Manufacturer of advanced
electronic systems and communications
equipment 15,000 819,375
-----------
Electronics: Components
1.80% AMP Inc.--World's leading producer of
electronic connection devices 20,000 767,500
-----------
Electronics: Equipment Perkin-Elmer Corp.--Leading manufacturer
1.81% of analytical instruments and life
science systems 8,000 302,000
Raytheon Company--A leading factor in
air-defense missiles and military
electronic products 10,000 472,500
Total 774,500
-----------
Financial: Miscellaneous
.77% American Express Co.--Operates largest travel and
entertainment charge card business 8,000 331,000
-----------
Food Conagra Inc.--Major producer of agricultural and consumer
8.96% products 25,000 1,031,250
Dean Foods Co.--Major producer of dairy foods, canned and
frozen vegetables 6,500 178,750
Hershey Foods Corp.--Major U.S. maker of chocolate and
confectionary products 15,000 975,000
Sara Lee Corp.--A diversified maker of branded food
products, apparel and household consumer products 20,000 637,500
Supervalu Inc.--Second largest U.S. food wholesaler 32,000 1,008,000
Total 3,830,500
-----------
Insurance Chubb Corp.--Broad-based property and
6.00% casualty insurance organization 10,000 967,500
Cincinnati Financial--Midwest-based specialty insurer 6,000 391,500
Lincoln National Corp.--Holding company with operations
in insurance, reinsurance and investment-related services 10,000 537,500
St. Paul Companies Inc.--Large property-casualty
insurance company 12,000 667,500
Total 2,564,000
-----------
Machinery: Diversified
1.17% Goulds Pumps, Inc.--Largest U.S. producer of industrial
and residential pump systems 20,000 500,000
-----------
Miscellaneous Jostens Inc.--Produces class rings, yearbooks and
4.27% recognition products for schools and businesses 20,000 485,000
Minnesota Mining & Mfg. Co.--Diversified global
manufacturer of value-added industrial, consumer and
medical products 8,000 530,000
National Service Industries, Inc.--Diversified manufacturer
of lighting equipment, rental uniforms and specialty
chemicals 25,000 809,375
Total 1,824,375
-----------
Oil: Domestic Amoco Corporation--Major integrated petroleum and natural
gas company with sizable interests in chemicals 7,000 503,125
-----------
Oil: International Chevron Corp.--Worldwide petroleum company with important
2.64% interests in chemicals and minerals 10,000 525,000
Exxon Corp.--World's largest integrated oil company 4,000 320,500
Royal Dutch Petroleum Co.--Major international oil company 2,000 282,250
Total 1,127,750
-----------
Paper and Forest Products James River Corp.--Producer of paper-based consumer
5.47% products packaging and communication papers 35,000 844,375
Kimberly Clark Corp.--Major producer of consumer and
personal care products (recently purchased Scott Paper) 8,000 662,000
Westvaco Corporation--Major producer of paper and
paperboard products 30,000 832,500
Total 2,338,875
-----------
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
OF SHARES
OR PRINCIPAL MARKET PLACE
SECURITY AMOUNT (NOTE 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Printing and Publishing
1.11% Donnelley, R.R. & Sons Co.--Largest commercial
printer in the U.S. 12,000 $ 472,500
-----------
Retail Nordstrom Inc.--Major operator of specialty, upscale
3.70% department stores 15,000 607,500
Sears, Roebuck & Co.--Major U.S. retailer 25,000 975,000
Total 1,582,500
-----------
Savings and Loan
1.84% Standard Federal Bancorporation
Inc.--Regional savings and loan company 20,000 787,500
-----------
Tire and Rubber Goods Cooper Tire & Rubber Co.--Major manufacturer of
1.44% replacement tires and inner tubes for cars,
trucks and buses 25,000 615,625
-----------
Waste Management Browning Ferris Industries Inc.--A leading international
4.17% provider of solid waste disposal services 30,000 885,000
WMX Technologies Inc.--A leading international provider of
solid waste disposal and other environmental services 30,000 896,250
Total 1,781,250
-----------
Total Investments in Common Stocks 39,924,325
(Cost $32,171,716)
OTHER ASSETS, LESS LIABILITIES 6.59%
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate Ford Motor Credit Co. 5.81% due 1/2/1996 1,475M 1,475,000
Obligations, General Electric Capital Corp. 5.91% due 1/3/1996 1,375M 1,375,000
at Cost Prudential Funding Corp. 5.66% due 1/4/1996 525M 525,000
Total Corporate Obligations 3,375,000
-----------
Cash and Receivables, Net of Liabilities (559,029)
Total Other Assets, Less Liabilities 2,815,971
Net Assets (equivalent to $14.11 a share on 3,028,836 shares of $.10 par
100.00% value capital stock outstanding; authorized, 150,000,000 shares) $42,740,296
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS For the Six Months Ended December 31, 1995
INVESTMENT INCOME
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME Dividends $ 528,309
Interest 94,433
Total income $ 622,742
EXPENSES Management fee (Note 5) 148,354
12b-1 distribution plan (Note 5) 41,546
Shareholder servicing 30,000
Reports to shareholders 21,000
Legal and audit 16,800
Other 17,948
Total expenses 275,648
Net investment income 347,094
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT (NOTE 4)
--------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN FROM SECURITY TRANSACTION (excluding short-term securities)
Proceeds from sales 10,209,445
Cost of securities sold 8,605,730
Net realized gain 1,603,715
NET UNREALIZED APPRECIATION OF INVESTMENTS
--------------------------------------------------------------------------------------------------------------------------------
Beginning of period 5,439,276
End of period 7,752,609
Net unrealized appreciation 2,313,333
Net realized and unrealized gain on investments 3,917,048
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,264,142
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets 1995 1995
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS Net investment income $ 347,094 $ 625,160
Net realized gain from securities transactions 1,603,715 2,762,332
Net unrealized appreciation of investments 2,313,333 2,972,645
Net increase in net assets resulting from
operations 4,264,142 6,360,137
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN PRICE OF SHARES SOLD AND (REACQUIRED)
(NOTE 1d) 76,712 41,884
DISTRIBUTIONS TO SHAREHODLERS FROM (NOTE 2)
Net investment income (604,646) (499,978)
Net realized gain from security transactions (2,132,817) (2,715,942)
Total distributions (2,737,463) (3,215,920)
CAPITAL SHARE TRANSACTIONS
Net proceeds from sales of 288,272 and 630,907
shares, respectively 3,864,585 7,724,276
Net asset value of 185,171 and 243,978 shares,
respectively, issued to shareholders in
reinvestment of net investment income and realized
gain from security transactions 2,461,456 2,855,092
Total 6,326,041 10,579,368
Cost of 225,820 and 697,373 shares reacquired,
respectively (3,027,313) (8,490,607)
Increase in net assets derived from
capital share transactions (net increase of
247,623 and 177,512 shares, respectively) 3,298,728 2,088,761
INCREASE IN NET ASSETS 4,902,119 5,274,862
NET ASSETS
------------------------------------------------------------------------------------------------------------------------
Beginning of period 37,838,177 32,563,315
End of period (including undistributed net
investment income of $250,941 and $871,975,
respectively) $42,740,296 $37,838,177
------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months
Ended
December 31, Year Ended June 30,
PER SHARE OPERATING PERFORMANCE: 1995 1995 1994 1993 1992 1991
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.60 $ 12.51 $ 14.17 $ 13.11 $ 12.22 $ 12.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income .12 .23 .21 .20 .22 .26
Net realized and unrealized
gain on investments 1.35 2.0825 .12 1.86 1.36 .12
Total from investment operations 1.47 2.3125 .33 2.06 1.58 .38
---------- ----------- --------- --------- ---------- -------
DISTRIBUTIONS
Dividends from net
investment income (.21) (.19) (.19) (.22) (.27) (.24)
Distributions from net
realized gain (.75) (1.0325) (1.80) (.78) (.42) (.56)
NET ASSET VALUE, END OF PERIOD $ 14.11 $ 13.60 $ 12.51 $ 14.17 $ 13.11 $ 12.22
---------- ----------- --------- --------- ---------- -------
TOTAL RETURN* 11.19%+ 20.15% 2.64% 16.95% 13.46% 3.22%
---------- ----------- --------- --------- ---------- -------
RATIOS/SUPPLEMENTAL DATA:
------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 42,740 $ 37,838 $ 32,563 $ 30,403 $ 25,827 $24,200
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.69%+ 1.38% 1.28% 1.60% 1.60% 1.86%
Net investment income 0.87%+ 1.84% 1.83% 1.61% 1.85% 2.30%
PORTFOLIO TURNOVER RATE 26.26% 51.35% 67.88% 82.48% 57.86% 47.07%
------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Total return does not consider the effects of sales loads.
+ Not annualized.
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES The Company is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Company. The policies are in conformity with
generally accepted accounting principles. (a) Market value is determined as
follows: 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 price on such exchange.
Securities traded in the over-the-counter market are valued at the mean between
the last bid and asked price 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; such
procedures require the use of estimates. (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 in taxable
distributions. Therefore, no federal income tax provision is required. (c)
Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date. (d) A portion of proceeds
from sales and costs of repurchases of capital shares, equivalent to the amount
of distributable net investment income on the date of the transaction, is
credited or charged to undistributed income. Undistributed net investment income
per share thus is unaffected by sales or repurchases of shares.
2. DISTRIBUTIONS Net realized gains from security transactions are expected to
be declared and distributed to shareholders in July and December. At
December 31, 1995, the accumulated undistributed net realized gain for financial
reporting purposes, which is substantially the same as for federal income tax
purposes, aggregated $944,424. Income and capital gains distributions are
determined in accordance with income tax regulations which may differ from
methods used to determine the corresponding income and capital gains amounts in
accordance with generally accepted accounting principles. These differences are
primarily caused by differences in the timing of recognition of certain
components of income, expense or capital gain. Where such differences are
permanent in nature, they are reclassified in the Sources of Net Assets based
upon their ultimate characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations or
net asset value of the Fund. 3. CAPITAL PAID IN At December 31, 1995, capital
paid in aggregated $33,792,322. 4. PURCHASES AND SALES OF SECURITIES Purchases
and sales of investment securities (other than short-term investments)
aggregated $10,894,445 and $9,723,411, respectively. Security gains and losses
are computed on the identified cost basis. As of December 31, 1995, net
unrealized appreciation for federal income tax purposes aggregated $7,752,609,
of which $7,898,345 related to appreciated securities and $145,736 related to
depreciated securities. For federal income tax purposes, the identified cost of
investments owned at December 31, 1995 was substantially the same as the cost
for financial reporting purposes. 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH
AFFILIATES Lord, Abbett & Co. received a management fee of $148,354 for which it
supplied investment management, research, statistical and advisory services and
paid 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. Lord, Abbett & Co. also received
$5,699 representing payment of commissions on sales of capital stock of the
Company after deducting $73,390 allowed to authorized distributors as
concessions. Certain of the Company's officers and directors have an interest in
Lord, Abbett & Co. The Company has a Rule 12b-1 Plan providing for (a) the
payment of a service fee at the annual rate of .25% of the average daily net
asset value of shares sold by dealers and (b) a one-time 1% distribution fee at
the time of sale on shares sold at net asset value of $1 million or more.
6. DIRECTORS' REMUNERATION The Directors of the Company associated with Lord,
Abbett & Co. and all officers of the Company receive no compensation from the
Company for acting as such. Outside Directors' fees, including attendance fees
for board and committee meetings, and outside Directors' retirement costs, are
allocated among all funds in the Lord Abbett group based on net assets of each
fund. The direct remuneration accrued during the period for outside Directors of
the Company as a group was $320 (exclusive of expenses), a portion of which has
been deemed invested in shares of the Company under a deferred compensation plan
contemplating future payment of the value of those shares. As of December 31,
1995, the aggregate amount in Directors' accounts maintained under the plan was
$82,752. Retirement costs accrued during the period amounted to $180.
This report to shareholders inaugurates a new procedure whereby a single copy of
the report is sent to an address to which more than one registered shareholder
of the Fund with the same last name has indicated mail is to be delivered,
unless additional reports are specifically requested in writing or by telephone.
Copyright (C) 1996 by Lord Abbett Fundamental 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 Fundamental Value Fund, Inc., is to be distributed only if preceded
or accompanied by a current prospectus which includes information concerning the
Fund's investment objectives 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.
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