<PAGE>
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Lord Abbett GLOBAL FUND
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Semi-Annual Report for the Six Months Ended June 30, 1995
Equity Series .Income Series
A globally-diversified mutual fund with two portfolios:
Equity Series
With the objective of providing you with long-term growth
Income Series
With the objective of providing you with high current income
[ARTWORK -Two young boys looking at a globe]
<PAGE>
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REPORT TO SHAREHOLDERS For the Six Months Ended June 30, 1995
[PHOTO Ronald P. Lynch]
----------------------------
Ronald P. Lynch, Chairman
July 21, 1995
About the Equity Series
Lord Abbett Global Fund-Equity Series ended the first half of fiscal 1995 with a
per-share net asset value of $11.62 versus $11.55 six months ago. On a total
return basis, the Series gained 0.6% over the period. (Total return is the
percent change in net asset value, assuming the reinvestment of all
distributions.)
During the first half of 1995, the global economic environment developed as
we had forecast in our letter to you last December. However, there were
significant surprises during the period requiring portfolio adjustments.
Globally, the high interest-rate environment succeeded in slowing growth and
moderating inflation, in line with central bank objectives. However, the U.S.
economy lost momentum faster and to a greater degree than most forecasters
anticipated. The result has been a larger than expected drop in U.S. interest
rates and a lessening of inflationary fears, which benefitted stock market
valuations.
Fears of renewed recession resurfaced in Japan and Europe, as strong
currencies and high real interest rates combined to weaken the economic growth
outlook in both of those regions in 1995. Our belief is that slower growth is
now likely throughout the major industrialized nations this year and, as a
result, their outlook for price inflation is also much improved. While this
year's stock market gains already discount a large part of the improved
interest-rate and inflation outlook, global markets and many individual stocks
still appear reasonably valued.
At the close of the fiscal half-year, your portfolio's heaviest weighting
was in the U.S. (29%), the best performing major market so far in 1995. Japan's
weighting was reduced at the time of the Kobe earthquake and currently stands at
19%. Recently, the U.K. position was reduced slightly due to growing political
uncertainty and early signs of slowing economic growth.
Lower inflationary expectations on a global level should continue as
countries find their ability to grow via deficit spending severely restricted by
the capital markets. A system where politicians also must adhere to market
disciplines and economic laws usually provides better rewards to investment
capital. There is mounting evidence that global market valuations are beginning
to reflect the potential for a more investor friendly world.
About the Income Series
Lord Abbett Global Fund-Income Series ended the first half of fiscal 1995 on
June 30, with a per-share net asset value of $8.60. Based on this net asset
value and the monthly dividend of $.055 per share annualized, the Series'
distribution rate was 7.67%; based on that same day's maximum offering price of
$9.03, this rate was 7.31%. Over the period, the Series produced a total return
of 12.0%.
After 1994, a year that has been characterized by some as "the worst bond
market of the century", 1995 has offered welcome relief. Interest rates
throughout the industrialized world have declined, allowing bond prices to
improve. A slowing U.S. economy paved the way for substantially lower interest
rates domestically; to a lesser degree, other countries' economies and bond
markets followed. Inflation, too, appears to be contained to relatively low
levels in North America, Europe and Japan.
The Series' attractive year-to-date return reflects the strength in the
markets and the portfolio's position in intermediate and longer term maturities.
The portfolio also benefitted from a weaker dollar as we chose not to hedge most
of its foreign currency exposure.
Looking forward to the balance of 1995, the U.S. market is likely to trade
in a relatively narrow range allowing mortgage-backed securities to perform
well. Parts of Europe, on the other hand, look particularly attractive, with
slow growth and lower inflation than the U.S., but higher interest rates. We
look forward to good performance from Germany and other similar markets.
As always, Lord Abbett will endeavor to provide you with consistently
strong returns through its long-standing commitment to value investing and
global diversification.
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Table of Contents
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Equity Series
About the Equity Series 1
Statement of Net Assets 2
Income Series
About the Income Series 6
Statement of Net Assets 7
Equity and Income Series
Statement of Operations 8
Statements of Changes in Net Assets 9
Financial Highlights 9
Notes to Financial Statements 10
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About Lord Abbett's Equity Series
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THE GLOBAL PERSPECTIVE HAS PROVIDED A WORLD OF OPPORTUNITY
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A blended portfolio of 60% foreign stocks and 40% U.S. stocks provided a higher
return, with less risk than the domestic portfolio
Global investing can offer the opportunity to participate in those
markets which seem poised for growth. And, importantly, a globally-
diversified portfolio offered increased safety relative to a portfolio
of U.S. stocks, exclusively. This graph does not represent the Equity
Series' portfolio.
Diversification Reduced Risk and Increased Returns
[GRAPH APPEARS HERE]
Derived using returns from June 1969 to June 1995. Source: Morgan
Stanley Capital International.
MANY FOREIGN MARKETS HAVE SURPASSED THE U.S.
-----------------------------------------------------------------------
Over the last ten years, many of the world's stock markets have outperformed the
U.S., despite the fact that the U.S. market reached new heights over the past
decade
This performance does not represent Equity Series performance.
Australia 14.45%
Canada 7.65%
France 18.98%
Germany 15.70%
Hong Kong 24.40%
Italy 11.72%
Japan 14.24%
United Kingdom 17.08%
United States 13.49%
Singapore 17.11%
Average annual stock market returns for the 10 years ended June 30,
1995, as measured in U.S. dollars. Returns are historical and based on
changes in price and reinvestment of dividends (net of applicable
foreign taxes) paid on the stocks in the indices, and are not meant to
portray the future performance of these markets or the Series. Source:
Morgan Stanley Capital International.
MANAGED TO PARTICIPATE IN GLOBAL GROWTH
-----------------------------------------------------------------------
Twenty countries are represented in the Equity Series; see the portfolio of
investments on page 2
Portfolio diversification positions the Equity Series to participate in
global opportunities.
Australia 11.52%
Canada .44%
France 6.17%
Germany 1.73%
Hong Kong .02%
Italy 1.90%
Japan 18.99%
United Kingdom 12.14%
United States 29.11%
Singapore 1.42%
Venezuela .15%
Brazil .59%
Argentina .12%
Chile .20%
Sweden 1.46%
Norway .83%
Netherlands 3.91%
Malaysia 2.22%
Data as of 6/30/95. Cash and Equivalents 11.65%
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Important Information
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Lord Abbett Global Fund commenced operations 9/30/88. 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.
Foreign investment risk factors include the potential for less regulation and
liquidity and more volatility than U.S. markets; currency fluctuation;
potentially less publicly-available information about companies, banks and
governments than for U.S. counterparts; lack of uniform accounting standards
among countries, impairing comparisons; potentially higher transaction costs and
different securities settlement and trading practices. If used as sales material
after 9/30/95, this report must be accompanied by Lord Abbett's Performance
Quarterly for the most recently completed calendar quarter.
<TABLE>
<CAPTION>
==================================================================================================================================
Statement of Net Assets June 30, 1995
----------------------------------------------------------------------------------------------------------------------------------
EQUITY SERIES Number of Market Value
Security Shares (Notes 1a & 1f)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 88.35%
----------------------------------------------------------------------------------------------------------------------------------
FOREIGN 59.24%
----------------------------------------------------------------------------------------------------------------------------------
Argentina .12% Ypf S.A. ADR-Largest energy company 5,000 $ 94,375
----------------------------------------------------------------------------------------------------------------------------------
Australia AAPC-Manager of hotels in Australia and Asia 212,000 99,428
1.52% -----------------------------------------------------------------------------------------------------------
Australian Gas Light Co.-Gas utility 87,000 275,616
-----------------------------------------------------------------------------------------------------------
Australian National Industries-Large engineering company involved in
distribution, manufacturing and services 450,000 390,150
-----------------------------------------------------------------------------------------------------------
Broken Hill Proprietary-Miner and producer of metals and steel 24,200 297,708
-----------------------------------------------------------------------------------------------------------
Q.N.I.-Major Australian nickel company 125,000 170,500
----------------------------------------------------------------------------------------------------------------------------------
Total 1,233,402
----------------------------------------------------------------------------------------------------------------------------------
Brazil Brazilian Investment Trust plc-Closed-end trust investing
.59% in mid-cap Brazilian equities 125,000 150,391
-----------------------------------------------------------------------------------------------------------
Brazilian Investment Trust plc Warrants 30,000 26,250
-----------------------------------------------------------------------------------------------------------
Cesp (Companhia Energetica de Sao Paulo) 144A+ ADR-Electricity generator,
transmitter and distributor in the State of Sao Paulo 12,000 135,000
-----------------------------------------------------------------------------------------------------------
Telebras ADR-National telecom company monopoly 5,000 166,875
-----------------------------------------------------------------------------------------------------------
Total 478,516
----------------------------------------------------------------------------------------------------------------------------------
Canada Lytton Minerals Ltd.-Canadian diamond exploration company 100,000 162,500
.44% -----------------------------------------------------------------------------------------------------------
Mountain Province-Canadian diamond exploration company 10,000 39,063
-----------------------------------------------------------------------------------------------------------
Repap Enterprises-Canadian pulp and paper producer 20,000 155,000
-----------------------------------------------------------------------------------------------------------
Total 356,563
----------------------------------------------------------------------------------------------------------------------------------
Chile .20% Compania de Telefonos de Chile Sponsored ADR-Major telephone utility 2,000 162,750
----------------------------------------------------------------------------------------------------------------------------------
France Christian Dior-France's principal luxury goods manufacturer 6,460 580,405
6.17% -----------------------------------------------------------------------------------------------------------
CIE Financiere de Suez-Diversified industrial and financial group 10,380 578,643
-----------------------------------------------------------------------------------------------------------
Elf-Aquitaine-Major oil group 9,150 677,521
-----------------------------------------------------------------------------------------------------------
Lafarge Coppee-Cement manufacturer 7,026 547,382
-----------------------------------------------------------------------------------------------------------
Pinault Printemps Redoute-One of the principal retailing and
specialist distribution groups in France 2,621 563,004
-----------------------------------------------------------------------------------------------------------
Rhone Poulenc-Chemicals and pharmaceuticals manufacturer 22,100 498,908
-----------------------------------------------------------------------------------------------------------
Saint Gobain-Industrial group 4,450 538,601
-----------------------------------------------------------------------------------------------------------
Sanofi-Pharmaceutical, health and beauty group 10,000 554,570
-----------------------------------------------------------------------------------------------------------
SGE-A major construction/public works group 14,000 459,760
-----------------------------------------------------------------------------------------------------------
Total 4,998,794
----------------------------------------------------------------------------------------------------------------------------------
Germany Linde-A diversified engineering group, specializing in forklift trucks 1,200 712,012
1.73% -----------------------------------------------------------------------------------------------------------
Mannesmann-Engineering group 2,250 687,049
-----------------------------------------------------------------------------------------------------------
Total 1,399,061
----------------------------------------------------------------------------------------------------------------------------------
Hong Kong .02% Amway Asia Pacific Ltd.-A direct seller of household products in China and
East Asia 500 18,125
----------------------------------------------------------------------------------------------------------------------------------
Italy Fiat Pref.-Major automotive group 284,000 618,836
1.90% -----------------------------------------------------------------------------------------------------------
Italcementi-Cement company 52,000 358,800
-----------------------------------------------------------------------------------------------------------
Italcementi Warrants Rights 12,000 2,676
-----------------------------------------------------------------------------------------------------------
STET-Holding company involved in telecommunications 250,000 556,250
-----------------------------------------------------------------------------------------------------------
Total 1,536,562
-----------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Statement of Net Assets June 30, 1995
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EQUITY SERIES Number of Market Value
Security Shares (Notes 1a & 1f)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Japan Fuji Machine Mfg.-A major manufacturer of automated assembly machines
18.99% for electronic parts and components 22,000 $ 672,650
-----------------------------------------------------------------------------------------------------------
Hitachi Ltd.-One of Japan's major electrical engineering groups with operations
ranging from computers to electrical power systems 90,000 897,750
-----------------------------------------------------------------------------------------------------------
Honda Motor-Major automotive group 40,000 613,880
-----------------------------------------------------------------------------------------------------------
Kamigumi Co.-Warehouse and harbor transport company 67,000 672,278
-----------------------------------------------------------------------------------------------------------
Kurimoto Iron-Japan's second largest producer of cast iron, water, gas and
other pipes 58,000 612,132
-----------------------------------------------------------------------------------------------------------
Mitsubishi Heavy Industry-Leading heavy machinery maker 111,000 754,800
-----------------------------------------------------------------------------------------------------------
Mitsui Fudosan-Real estate company 34,000 389,742
-----------------------------------------------------------------------------------------------------------
Mitsui Petrochemical Industries-Petrochemical company 52,000 394,108
-----------------------------------------------------------------------------------------------------------
Nippon Signal-Railway and traffic signal maker 53,000 347,892
-----------------------------------------------------------------------------------------------------------
Nippondenso-Electric engineering company 30,000 545,400
-----------------------------------------------------------------------------------------------------------
Nissan Motors-Japan's second, and the world's fourth, largest auto manufacturer 100,000 639,800
-----------------------------------------------------------------------------------------------------------
Nomura Securities-Japan's largest securities firm 35,000 611,485
-----------------------------------------------------------------------------------------------------------
Sansei Yusoki Co., Ltd.-Amusement equipment and elevator manufacturer 34,000 291,006
-----------------------------------------------------------------------------------------------------------
Sanwa Bank-Large commercial bank 23,000 434,424
-----------------------------------------------------------------------------------------------------------
Senshukai Co.-Leading sales firm that operates on a nonstore basis
and through catalogs 22,000 412,940
-----------------------------------------------------------------------------------------------------------
Shikoku Electric Power-Regional electrical utility 19,000 529,340
-----------------------------------------------------------------------------------------------------------
Shimano Inc.-Manufacturer of bicycle parts and fishing tackle 27,000 468,531
-----------------------------------------------------------------------------------------------------------
Shin-Etsu Chemical-Producer of semiconductor silicon 26,000 457,314
-----------------------------------------------------------------------------------------------------------
Sony Corp.-Leading consumer electronics and entertainment company 17,000 816,782
-----------------------------------------------------------------------------------------------------------
Sumitomo Bank-The nucleus of the Sumitomo Group and one of
the largest banks in Japan 30,000 520,590
-----------------------------------------------------------------------------------------------------------
Sumitomo Electric Industries-Manufacturer of electric wire and cables 38,000 453,074
-----------------------------------------------------------------------------------------------------------
Sumitomo Forestry-Largest domestic lumber trader and major lumber importer 37,000 615,865
-----------------------------------------------------------------------------------------------------------
Sumitomo Trust & Banking-One of the leading trust banks in Japan 40,000 486,360
-----------------------------------------------------------------------------------------------------------
Toppan Printing-One of the largest commercial printing companies in Japan 55,000 720,720
-----------------------------------------------------------------------------------------------------------
Toshiba Engineering and Construction-Plant engineer 66,000 541,464
-----------------------------------------------------------------------------------------------------------
Yakult Honsha-Manufacturer and distributor of milk-based drinks 40,000 580,800
-----------------------------------------------------------------------------------------------------------
77th Bank Ltd.-Largest regional bank in the Tohoko area; ranks
13th among the regional banks 80,000 896,240
-----------------------------------------------------------------------------------------------------------
Total 15,377,367
----------------------------------------------------------------------------------------------------------------------------------
Malaysia Genting-Investment holding company with subsidiaries involved
2.22% with gaming and resort activity 26,000 257,088
-----------------------------------------------------------------------------------------------------------
Malaysian Airline System-National airline company 81,000 274,185
-----------------------------------------------------------------------------------------------------------
Malaysian Inter Shipping-National shipping company 171,000 501,714
-----------------------------------------------------------------------------------------------------------
Sime Darby-Diversified conglomerate 105,000 292,950
-----------------------------------------------------------------------------------------------------------
Southern Bank-Leading domestic bank 213,500 468,633
-----------------------------------------------------------------------------------------------------------
Total 1,794,570
----------------------------------------------------------------------------------------------------------------------------------
Netherlands ABN Amro Holdings-Major commercial bank 14,300 552,309
3.91% -----------------------------------------------------------------------------------------------------------
Hunter Douglas-International window covering group 10,000 435,960
-----------------------------------------------------------------------------------------------------------
ING-Bank and financial services provider 9,500 525,835
-----------------------------------------------------------------------------------------------------------
KLM-Airline group 17,000 552,279
-----------------------------------------------------------------------------------------------------------
Vendex International-Retailing group 16,000 424,720
-----------------------------------------------------------------------------------------------------------
Ver Ned Uitger Ver Bezit Shares-Publishing group 5,600 670,930
-----------------------------------------------------------------------------------------------------------
Total 3,162,033
----------------------------------------------------------------------------------------------------------------------------------
Norway Norsk Hydro-Diversified company with interests in oil and gas,
.83% petrochemicals and agriculture 16,111 673,665
----------------------------------------------------------------------------------------------------------------------------------
Singapore Development Bank of Singapore-Leading Singapore bank and
1.42% financial services company 26,587 302,480
-----------------------------------------------------------------------------------------------------------
Jurong Shipyard-One of the largest ship repairers 37,000 264,772
-----------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Statement of Net Assets June 30, 1995
----------------------------------------------------------------------------------------------------------------------------------
EQUITY SERIES Number of Market Value
Security Shares (Notes 1a & 1f)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Singapore Airlines-National airline 33,000 $ 304,623
-----------------------------------------------------------------------------------------------------------
United Overseas Bank-One of the leading bank and financial services companies 29,240 276,172
-----------------------------------------------------------------------------------------------------------
Total 1,148,047
----------------------------------------------------------------------------------------------------------------------------------
Spain Acerinox-Steel producer 6,600 811,965
2.52% -----------------------------------------------------------------------------------------------------------
Banco Santander-Leading Spanish bank 7,800 308,139
-----------------------------------------------------------------------------------------------------------
Repsol-Oil refining and marketing company 15,600 491,743
-----------------------------------------------------------------------------------------------------------
Telefonica d'Espana-Telephone utility 33,100 427,222
-----------------------------------------------------------------------------------------------------------
Total 2,039,069
----------------------------------------------------------------------------------------------------------------------------------
Sweden Electrolux AB Series `B'-Electronics and household appliances 11,200 510,026
1.46% -----------------------------------------------------------------------------------------------------------
Stora Koppabergs Series `A'-Paper and forest products 50,000 670,700
-----------------------------------------------------------------------------------------------------------
Total 1,180,726
----------------------------------------------------------------------------------------------------------------------------------
Switzerland Baloise Holdings-Insurance group 280 640,794
2.91% -----------------------------------------------------------------------------------------------------------
Brown Boveri & Cie Series "A"-International power generation and
railway equipment supplier 750 776,627
-----------------------------------------------------------------------------------------------------------
Ciba Geigy-Multinational chemical company 430 315,428
-----------------------------------------------------------------------------------------------------------
Nestle-Europe's largest food company 600 626,001
-----------------------------------------------------------------------------------------------------------
Total 2,358,850
----------------------------------------------------------------------------------------------------------------------------------
United Kingdom BPB Industries-Manufacturer of building materials 83,000 410,850
12.14% -----------------------------------------------------------------------------------------------------------
British Petroleum-Integrated oil company 62,250 447,080
-----------------------------------------------------------------------------------------------------------
British Steel-Steel manufacturer 200,000 547,600
-----------------------------------------------------------------------------------------------------------
British Telecom-Leading domestic telecommunications group 120,000 749,880
-----------------------------------------------------------------------------------------------------------
BTR-Diversified industrial firm 92,356 470,369
-----------------------------------------------------------------------------------------------------------
BTR Warrants 2,041 878
-----------------------------------------------------------------------------------------------------------
Caradon-Building materials supplier 110,000 413,820
-----------------------------------------------------------------------------------------------------------
Cookson Group-Special industrial materials manufacturer 150,000 578,700
-----------------------------------------------------------------------------------------------------------
Grand Metropolitan-Food, beverage and retail group 85,000 522,410
-----------------------------------------------------------------------------------------------------------
Greenalls Group-Operator of public houses, hotels and restaurants 85,000 642,345
-----------------------------------------------------------------------------------------------------------
Lex Service-Distributor and retailer of automobiles 80,000 440,000
-----------------------------------------------------------------------------------------------------------
Mirror Group Newspapers-National newspaper company 240,000 508,800
-----------------------------------------------------------------------------------------------------------
National Westminster Bank-A major U.K. retail and investment bank 8,300 72,242
-----------------------------------------------------------------------------------------------------------
Peninsular and Oriental Steam Navigation Company-
Shipping, house building and property group 51,058 471,265
-----------------------------------------------------------------------------------------------------------
Powergen-Formerly state-owned electricity generator 135,000 412,155
-----------------------------------------------------------------------------------------------------------
Sears-Department stores and home shopping 320,000 507,520
-----------------------------------------------------------------------------------------------------------
Siebe-Electrical and electronics group 60,000 598,800
-----------------------------------------------------------------------------------------------------------
T&N-Supplier of automotive parts 161,691 434,302
-----------------------------------------------------------------------------------------------------------
Tesco-Food retailer 66,500 307,430
-----------------------------------------------------------------------------------------------------------
Tomkins Ord-A diversified industrial company 150,000 538,050
-----------------------------------------------------------------------------------------------------------
Unigate-Manufacturing and distribution of food and dairy products 100,000 646,400
-----------------------------------------------------------------------------------------------------------
Yorkshire Electricity-A regional electricity distribution company 10,000 110,640
-----------------------------------------------------------------------------------------------------------
Total 9,831,536
----------------------------------------------------------------------------------------------------------------------------------
Venezuela .15% Venprecar C.A. ADR-Steel industry 20,000 122,500
-----------------------------------------------------------------------------------------------------------
Total Investments in Foreign Securities (Cost $47,099,081) 47,966,511
----------------------------------------------------------------------------------------------------------------------------------
UNITED STATES 29.11%
----------------------------------------------------------------------------------------------------------------------------------
Aetna Life & Casualty Company-Major multi-line insurer 20,000 1,257,500
-----------------------------------------------------------------------------------------------------------
American Brands Inc.-Consumer products conglomerate 12,500 496,875
-----------------------------------------------------------------------------------------------------------
American Express Company-Operates largest travel and entertainment
charge card business 30,000 1,053,750
-----------------------------------------------------------------------------------------------------------
American Telephone & Telegraph Co.-Global telecom giant 20,000 1,062,500
-----------------------------------------------------------------------------------------------------------
Apple Computer Inc.-Main personal computer producer 12,400 575,825
-----------------------------------------------------------------------------------------------------------
Archer-Daniels-Midland Co.-Leading processor and seller of
agricultural commodities 25,125 467,952
-----------------------------------------------------------------------------------------------------------
Baltimore Gas & Electric Co.-Regional electric utility 20,000 500,000
-----------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Statement of Net Assets June 30, 1995
----------------------------------------------------------------------------------------------------------------------------------
EQUITY SERIES Number of Shares Market Value
Security or Principal Amount (Note 1a)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BankAmerica Corp.-Major money center bank 10,000 $ 526,250
-----------------------------------------------------------------------------------------------------------
Banta Corp.-Leading U.S. printer of books, magazines and catalogs 15,000 498,750
-----------------------------------------------------------------------------------------------------------
Carolina Power & Light Co.-Electric utility company serving North and
South Carolina 20,000 605,000
-----------------------------------------------------------------------------------------------------------
Chemical Banking Corp.-Major money-center bank holding company 15,000 708,750
-----------------------------------------------------------------------------------------------------------
Chevron Corp.-Worldwide petroleum company with important interests
in chemicals and minerals 10,000 466,250
-----------------------------------------------------------------------------------------------------------
Cigna Corp.-Multi-line insurance and medical services 5,000 388,125
-----------------------------------------------------------------------------------------------------------
Comerica Inc.-Midwestern regional bank holding company 7,500 240,938
-----------------------------------------------------------------------------------------------------------
Cooper Tire & Rubber Company-Major manufacturer of replacement
tires and inner tubes for cars, trucks and buses 20,000 487,500
-----------------------------------------------------------------------------------------------------------
CINergy Corp.-Supplier of electricity and natural gas in Southwestern
Ohio and adjacent Kentucky and Indiana territories 20,000 525,000
-----------------------------------------------------------------------------------------------------------
Dean Foods Co.-Major producer of dairy foods, canned and frozen
vegetables 20,000 560,000
-----------------------------------------------------------------------------------------------------------
Dow Chemical Co.-Leading global chemical producer 5,000 359,375
-----------------------------------------------------------------------------------------------------------
DSG International Ltd.-Global manufacturer of disposable diapers 25,000 456,250
-----------------------------------------------------------------------------------------------------------
Emerson Electric Co.-Diversified manufacturer of consumer and
industrial electrical components 13,000 929,500
-----------------------------------------------------------------------------------------------------------
Equitable Resources, Inc.-Natural gas distributor in Appalachia; oil
and gas exploration 35,000 1,010,625
-----------------------------------------------------------------------------------------------------------
Exxon Corp.-World's largest integrated oil company 8,000 565,000
-----------------------------------------------------------------------------------------------------------
Federal Paper Board Inc.-Producer of linerboard and pulp 20,000 707,500
-----------------------------------------------------------------------------------------------------------
First Fidelity Bancorporation-New Jersey regional bank 10,000 590,000
-----------------------------------------------------------------------------------------------------------
Freeport Copper & Gold-Silver Conv. Pfd. Series D-Diversified U.S.
mining company 52,000 1,014,000
-----------------------------------------------------------------------------------------------------------
Fruit of The Loom-Low-cost producer of non-fashion apparel and
undergarments 20,000 422,500
-----------------------------------------------------------------------------------------------------------
General Motors Corp.-Worldwide auto producer 16,000 750,000
-----------------------------------------------------------------------------------------------------------
Genuine Parts Co.-National distributor of automotive replacement parts 10,000 378,750
-----------------------------------------------------------------------------------------------------------
Great Western Financial Corp.-Leading savings and loan company 40,000 825,000
-----------------------------------------------------------------------------------------------------------
Mobil Corp.-Large international oil company 5,000 480,000
-----------------------------------------------------------------------------------------------------------
MCI Communications Corp.-Long distance telecom provider 50,000 1,100,000
-----------------------------------------------------------------------------------------------------------
Plantronics Inc.-Manufacturer of telephone headsets 20,000 535,000
-----------------------------------------------------------------------------------------------------------
RJR Nabisco Percs-Diversified food and tobacco producer 20,000 557,500
-----------------------------------------------------------------------------------------------------------
Sonoco Products Co.-Leading U.S. producer of paper and plastic
packaging components 15,750 389,812
-----------------------------------------------------------------------------------------------------------
Standard Products Co.-Manufactures plastic and rubber products for
the automotive and appliance industries 30,000 652,500
-----------------------------------------------------------------------------------------------------------
Supervalu Inc.-Second largest U.S. food wholesaler 20,000 582,500
-----------------------------------------------------------------------------------------------------------
Transamerica Corp.-Diversified financial services 6,000 349,500
-----------------------------------------------------------------------------------------------------------
Warnaco Group Inc. Class A-Designer and manufacturer of branded
apparel products 25,000 500,000
-----------------------------------------------------------------------------------------------------------
Total Investments in United States Securities (Cost $22,278,131) 23,576,277
-----------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $69,377,212) 71,542,788
----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 11.65%
----------------------------------------------------------------------------------------------------------------------------------
Short-term Investments, at Cost
-----------------------------------------------------------------------------------------------------------
American Express Credit Co. 5.05% due 7/3/1995 2,100M 2,100,000
-----------------------------------------------------------------------------------------------------------
Beneficial Corp. 5.89% due 7/5/1995 900M 900,000
-----------------------------------------------------------------------------------------------------------
Ford Motor Credit Co. 5.96% due 7/7/1995 2,225M 2,225,000
-----------------------------------------------------------------------------------------------------------
General Electric Credit Co. 5.86% due 7/10/1995 2,700M 2,700,000
-----------------------------------------------------------------------------------------------------------
Prudential Funding Corp. 5.95% due 7/6/1995 3,000M 3,000,000
-----------------------------------------------------------------------------------------------------------
Total Short-term Investments, at Cost 10,925,000
----------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (1,487,923)
----------------------------------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 9,437,077
-----------------------------------------------------------------------------------------------------------
Net Assets (equivalent to $11.62 a share on 6,968,926 shares of $.001 par value
100.00% capital stock outstanding; authorized, 500,000,000 shares) $ 80,979,865
-----------------------------------------------------------------------------------------------------------
+Restricted security under Rule 144A.
See Notes to Financial Statements.
</TABLE>
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About Lord Abbett's Income Series
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GLOBAL DIVERSIFICATION
-----------------------------------------------------------------------
Over the last 10 1/2 years, different countries have had widely different
total returns on their bonds
Our research team seeks to identify the best value in relation to risk
by analyzing economic factors and interest-rate trends in the world's
major bond markets. Investing in many bond markets, versus investing
only in the U.S., has the potential to increase returns and reduce
risk. The returns below are not Income Series returns. There is no
guarantee that the Income Series' portfolio will include all of the
countries listed below.
A Comparison of 10-Year Government Bonds, After Currency Translations
<TABLE>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 6 Months 10 1/2 Years
Ended Ended
6/30/95 6/30/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Canada 15.8 16.1 8.0 19.0 16.1 5.6 24.1 (0.5) 13.2 (13.6) 14.4 192.7
----------------------------------------------------------------------------------------------------------------------------------
France 43.8 47.4 20.6 7.3 8.9 19.8 16.4 4.6 17.0 (0.5) 19.5 506.1
----------------------------------------------------------------------------------------------------------------------------------
Germany 38.0 37.6 27.1 (3.0) 5.6 10.5 10.8 6.2 10.6 5.1 20.3 349.5
----------------------------------------------------------------------------------------------------------------------------------
Japan 37.5 36.1 40.4 2.7 (14.4) 3.0 24.2 11.3 30.8 5.5 36.5 519.5
----------------------------------------------------------------------------------------------------------------------------------
United Kingdom 43.4 14.4 46.4 2.3 (3.5) 34.2 14.7 (3.9) 21.4 (5.4) 7.9 334.6
----------------------------------------------------------------------------------------------------------------------------------
U.S.A. 26.6 24.1 (4.6) 8.8 14.0 6.7 17.0 7.3 12.1 (6.7) 15.2 200.0
</TABLE>
All figures indicate percentage total returns in U.S. dollars;
( ) signify negative return. Sources: J.P. Morgan Securities and
Goldman Sachs International, Limited.
WHERE IN THE WORLD ARE HIGH YIELDS?
-----------------------------------------------------------------------
A portfolio which includes high-quality foreign bonds has the opportunity to
search for higher yields around the globe
As shown below, yields on high-quality bonds vary from country to
country. This data does not represent Income Series performance.
United States 6.25%
Canada 7.98%
Denmark 8.56%
France 7.65%
Italy 12.66%
Japan 2.84%
Spain 11.56%
United Kingdom 8.41%
Yields to maturity on recently-offered 10-year government bonds.
Sources: J.P. Morgan Securities and Goldman Sachs International,
Limited.
DIVERSIFICATION IN HIGH-QUALITY GLOBAL BONDS
-----------------------------------------------------------------------
See the Income Series' portfolio of investments on page 7
In seeking its goal of high income with relative safety, the Income
Series focuses on quality. Using global diversification, the Income
Series attempts to reduce risk while striving to capture high interest
rates from quality bonds around the world.
Australia 1.34%
Sweden 1.27%
Netherlands 6.28%
Belgium 4.30%
United States 21.06%
Canada 2.34%
Denmark 5.11%
France 4.00%
Italy 3.09%
Japan 14.12%
Spain 4.74%
United Kingdom 6.78%
Data as of 6/30/95.
High Quality of Long-Term Portfolio Holdings:
AAA 90.3%
AA 9.7%
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets June 30, 1995
------------------------------------------------------------------------------------------------------------------------------------
INCOME SERIES Rating S&P Principal Amount Market Value
Security or Moody's in Local Currency (Notes 1a & 1f)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN SECURITIES 93.66%
------------------------------------------------------------------------------------------------------------------------------------
FOREIGN 72.60%
------------------------------------------------------------------------------------------------------------------------------------
Australia Commonwealth Bank of Australia 13 3/4% due 9/21/1999 AAA $ 1,000M $ 836,380
1.34% ----------------------------------------------------------------------------------------------------
State Bank New South Wales 9 1/4% due 2/18/2003 AAA 3,500M 2,521,785
----------------------------------------------------------------------------------------------------
Total 3,358,165
------------------------------------------------------------------------------------------------------------------------------------
Belgium 4.30% Government of Belgium 10% due 8/2/2000 AAA 270,000M 10,781,100
------------------------------------------------------------------------------------------------------------------------------------
Canada Government of Canada Zero Coupon due 12/1/2014 AAA 19,000M 2,787,680
2.34% ----------------------------------------------------------------------------------------------------
Government of Canada 8 3/4% due 12/1/2005 AAA 4,000M 3,074,720
----------------------------------------------------------------------------------------------------
Total 5,862,400
------------------------------------------------------------------------------------------------------------------------------------
Denmark 5.11% Kingdom of Denmark 8% due 11/15/2001 AAA 70,000M 12,794,600
------------------------------------------------------------------------------------------------------------------------------------
France Republic of France (OAT) 7 1/2% due 4/25/2005 AAA 33,000M 6,764,670
4.00% ----------------------------------------------------------------------------------------------------
Republic of France (OAT) 8 1/2% due 4/25/2003 AAA 13,000M 2,842,190
----------------------------------------------------------------------------------------------------
Republic of France (OAT), ADR 9.80% due 1/30/1996 AAA 2,000M 420,160
----------------------------------------------------------------------------------------------------
Total 10,027,020
------------------------------------------------------------------------------------------------------------------------------------
Germany Bundesrepublic 6 1/2% due 7/15/2003 AAA 7,600M 5,328,815
19.23% ----------------------------------------------------------------------------------------------------
Bundesrepublic 7% due 1/13/2000 AAA 10,000M 7,477,600
----------------------------------------------------------------------------------------------------
Bundesrepublic 7 3/8% due 1/3/2005 AAA 27,400M 20,250,518
----------------------------------------------------------------------------------------------------
Treuhandanstalt 7 3/4% due 10/1/2002 AAA 20,000M 15,115,800
----------------------------------------------------------------------------------------------------
Total 48,172,733
------------------------------------------------------------------------------------------------------------------------------------
Italy 3.09% Republic of Italy (BTP) 12% due 9/1/2001 AA 12,700,000M 7,747,000
------------------------------------------------------------------------------------------------------------------------------------
Japan European Investment Bank 4 1/4% due 7/16/1998 AAA 450,000M 5,755,500
14.12% ----------------------------------------------------------------------------------------------------
International Bank for Reconstruction & Development
4 1/2% due 3/20/2003 AAA 1,100,000M 14,619,000
----------------------------------------------------------------------------------------------------
International Bank for Reconstruction & Development
4 3/4% due 12/20/2004 AAA 250,000M 3,422,500
----------------------------------------------------------------------------------------------------
Japan Development Bank 5% due 10/1/1999 AAA 870,000M 11,588,400
----------------------------------------------------------------------------------------------------
Total 35,385,400
------------------------------------------------------------------------------------------------------------------------------------
Netherlands 6.28% Netherlands Government 6 1/2% due 4/15/2003 AAA 24,850M 15,720,855
------------------------------------------------------------------------------------------------------------------------------------
Spain Government of Spain 10 1/4% due 11/30/1998 AA 540,000M 4,298,400
4.74% ----------------------------------------------------------------------------------------------------
Government of Spain 12 1/4% due 3/25/2000 AA 900,000M 7,569,000
----------------------------------------------------------------------------------------------------
Total 11,867,400
------------------------------------------------------------------------------------------------------------------------------------
Sweden 1.27% Kingdom of Sweden 13% due 6/15/2001 AA 21,000M 3,181,710
------------------------------------------------------------------------------------------------------------------------------------
United Kingdom U.K. Treasury 11 1/2% due 3/19/2004 AAA 1,700M 3,080,246
6.78% ----------------------------------------------------------------------------------------------------
U.K. Government Cnv. 9 1/2% due 4/18/2005 AAA 8,200M 13,901,705
----------------------------------------------------------------------------------------------------
Total 16,981,951
----------------------------------------------------------------------------------------------------
Total Investments in Foreign Securities (Cost $172,254,210) 181,880,334
------------------------------------------------------------------------------------------------------------------------------------
UNITED STATES 21.06%
------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 6/1/2019 AAA 756M $ 762,141
----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 2/1/2023 AAA 358M 359,820
----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 3/1/2023 AAA 97M 97,390
----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 8/1/2023 AAA 469M 470,409
----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 9/1/2023 AAA 72M 72,256
----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 11/1/2023 AAA 455M 457,127
----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 7 1/2% due 12/1/2023 AAA 452M 453,872
----------------------------------------------------------------------------------------------------
Federal National Mortgage Association 6 1/2% due 1/25/2019 AAA 6,250M 6,160,156
----------------------------------------------------------------------------------------------------
Federal National Mortgage Association
7% due on an announced basis AAA 3,500M 3,440,390
----------------------------------------------------------------------------------------------------
Federal National Mortgage Association 8 1/2% due 9/1/2006 AAA 4,717M 4,889,982
----------------------------------------------------------------------------------------------------
Government National Mortgage Association
7% due on an announced basis AAA 7,000M 6,888,906
----------------------------------------------------------------------------------------------------
Government National Mortgage Association
7 1/2% due on an announced basis AAA 10,750M 10,797,813
----------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Net Assets June 30, 1995
------------------------------------------------------------------------------------------------------------------------------------
INCOME SERIES Rating: S&P Market Value
Security or Moody's Principal Amount (Note 1a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Government National Mortgage Association
8% due on an announced basis AAA $ 2,500M $ 2,559,766
-------------------------------------------------------------------------------------------------------------
Province of Ontario (U.S. Dollars) 17% due 11/5/2011 AAA 8,045M 9,598,691
-------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes 6 1/2% due 5/15/2005 AAA 1,750M 1,787,461
-------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes 7 5/8% due 2/15/2025 AAA 3,500M 3,953,359
-------------------------------------------------------------------------------------------------------------
Total Investments in United States Securities (Cost $53,586,526) 52,749,539
-------------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $225,840,736) 234,629,873
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 6.34%
------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Other Short-term Federal Home Loan Banks 15% due 9/7/1995 AAA 19,000M 19,314,687
Assets Investments, ----------------------------------------------------------------------------------------------------
at Market Student Loan Marketing Association 15% due 10/13/1995 AAA 9,000M 9,247,500
----------------------------------------------------------------------------------------------------
Total (Cost $29,665,843) 28,562,187
-----------------------------------------------------------------------------------------------------------------------
Short-term Beneficial Corp. 6.01% due 7/5/1995 A1 2,200M 2,200,000
Investment ----------------------------------------------------------------------------------------------------
at Cost Total Short-term Investments 30,762,187
-----------------------------------------------------------------------------------------------------------------------
Receivable for: Securities sold 82,646,932
----------------------------------------------------------------------------------------------------
Other 8,770,444
----------------------------------------------------------------------------------------------------
Total Other Assets 122,179,563
------------------------------------------------------------------------------------------------------------------------------------
Liabilities Payable for: Securities purchased 104,290,922
----------------------------------------------------------------------------------------------------
Other 1,999,889
----------------------------------------------------------------------------------------------------
Total Liabilities 106,290,811
----------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 15,888,752
------------------------------------------------------------------------------------------------------------------------------------
Net Assets (equivalent to $8.60 a share on 29,138,864 shares of $.001 par value
100.00% capital stock outstanding; authorized, 500,000,000 shares) $250,518,625
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Operations For the Six Months Ended June 30, 1995
------------------------------------------------------------------------------------------------------------------------------------
Investment Income (Note 1) Equity Series Income Series
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income Dividends $ 1,155,074 $ -
-----------------------------------------------------------------------------------------------------------------
Interest 273,712 11,488,060
-----------------------------------------------------------------------------------------------------------------
Foreign taxes withheld (78,439) (57,242)
-----------------------------------------------------------------------------------------------------------------
Total income 1,350,347 11,430,818
-----------------------------------------------------------------------------------------------------------------------------------
Expenses Management 304,512 625,346
(Note 2) -----------------------------------------------------------------------------------------------------------------
12b-1 distribution plan 110,272 304,420
-----------------------------------------------------------------------------------------------------------------
Shareholder servicing 116,128 210,000
-----------------------------------------------------------------------------------------------------------------
Custodian 46,000 59,000
-----------------------------------------------------------------------------------------------------------------
Audit and legal 24,000 23,800
-----------------------------------------------------------------------------------------------------------------
Registration 24,000 23,000
-----------------------------------------------------------------------------------------------------------------
Reports to shareholders 21,000 33,000
-----------------------------------------------------------------------------------------------------------------
Miscellaneous 26,477 40,592
-----------------------------------------------------------------------------------------------------------------
Total expenses 672,389 1,319,158
-----------------------------------------------------------------------------------------------------------------
Net investment income 677,958 10,111,660
-----------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions (Note 1)
-----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from security and foreign currency transactions (excluding short-term
securities)
-----------------------------------------------------------------------------------------------------------------------------------
Proceeds from sales 30,429,522 1,493,236,524
-----------------------------------------------------------------------------------------------------------------
Cost of securities sold 30,047,788 1,490,542,751
-----------------------------------------------------------------------------------------------------------------
Net realized gain from security transactions 381,734 2,693,773
-----------------------------------------------------------------------------------------------------------------
Net realized loss from foreign currency transactions (160,418) (2,975,999)
-----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from security and foreign currency transactions 221,316 (282,226)
-----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments and foreign currency holdings
-----------------------------------------------------------------------------------------------------------------
Beginning of period 1,261,506 (11,470,183)
-----------------------------------------------------------------------------------------------------------------
End of period 781,365 7,282,476
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) (480,141) 18,752,659
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
transactions (258,825) 18,470,433
-----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 419,133 $ 28,582,093
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================================
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------
Six Months Ended For the Year Ended
June 30, 1995 December 31, 1994
------------------------- -------------------------
Equity Income Equity Income
Increase (Decrease) in Net Assets Series Series Series Series
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Operations Net investment income $ 677,958 $ 10,111,660 $ 652,845 $ 20,919,974
---------------------------------------------------- ----------- ------------ ----------- ------------
Net realized gain (loss) from investment and foreign
currency transactions 221,316 (282,226) 5,305,636 (22,910,751)
---------------------------------------------------- ----------- ------------ ----------- ------------
Net unrealized appreciation (depreciation) of
investments and foreign currency holdings during
the period (480,141) 18,752,659 (6,347,251) (8,188,919)
---------------------------------------------------- ----------- ------------ ----------- ------------
Net increase (decrease) in net assets resulting
from operations 419,133 28,582,093 (388,770) (10,179,696)
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
Undistributed net investment income included in price of shares sold
and (reacquired) (Note 1d) (12,981) - 26,752 -
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
Distributions to shareholders from
---------------------------------------------------- ----------- ------------ ----------- ------------
Net investment income - (9,957,940) (668,159) (18,359,997)
---------------------------------------------------- ----------- ------------ ----------- ------------
In excess of net investment income - - - (5,415,502)
---------------------------------------------------- ----------- ------------ ----------- ------------
Net realized gain from investment and foreign
currency transactions - - (5,254,330) -
---------------------------------------------------- ----------- ------------ ----------- ------------
Total distributions - (9,957,940) (5,922,489) (23,775,499)
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
Capital share transactions (Note 4)
---------------------------------------------------- ----------- ------------ ----------- ------------
Net proceeds from sales of shares 5,758,404 5,278,604 28,418,981 48,527,057
---------------------------------------------------- ----------- ------------ ----------- ------------
Net asset value of shares issued to shareholders
in reinvestment of net investment income and
realized gain from investment transactions - 4,032,907 5,508,027 10,694,704
---------------------------------------------------- ----------- ------------ ----------- ------------
Total 5,758,404 9,311,511 33,927,008 59,221,761
---------------------------------------------------- ----------- ------------ ----------- ------------
Cost of shares reacquired (8,923,833) (26,906,884) (15,535,843) (53,271,429)
---------------------------------------------------- ----------- ------------ ----------- ------------
Increase (Decrease) in net assets derived from
capital share transactions (3,165,429) (17,595,373) 18,391,165 5,950,332
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
Total increase (decrease) in net assets (2,759,277) 1,028,780 12,106,658 (28,004,863)
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
Net Assets
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
Beginning of period 83,739,142 249,489,845 71,632,484 277,494,708
---------------------------------------------------- ----------- ------------ ----------- ------------
End of period+ $80,979,865 $250,518,625 $83,739,142 $249,489,845
---------------------------------------------------------------------- ----------- ------------ ----------- ------------
</TABLE>
+ Including undistributed net investment income of $545,755 and $2,607,388,
respectively, for the six months ended June 30, 1995 and (overdistributed)
net investment income of $(115,073) and $(1,273,879), respectively, for the
year ended December 31, 1994. See Notes to Financial Statements.
================================================================================
Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended For the Year Ended For the Year Ended
June 30, 1995 December 31, 1994 December 31, 1993
-------------------- --------------------- ---------------------
Equity Income Equity Income Equity Income
Per Share Operating Performance: Series Series Series Series Series Series
----------------------------------- ------- -------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $11.55 $7.98 $12.44 $9.02 $10.48 $8.87
----------------------------------- ------- -------- ------- ---------- ------- --------
Income from investment
operations
----------------------------------- ------- -------- ------- ---------- ------- --------
Net investment income .10 .46 .10 .65 .04 .76
----------------------------------- ------- -------- ------- ---------- ------- --------
Net realized and unrealized
gain (loss) on investments (.03) .4877 (.1125) (.9603) 2.635 .174
----------------------------------- ------- -------- ------- ---------- ------- --------
Total from investment
operations .07 .9477 (.0125) (.3103) 2.675 .934
----------------------------------- ------- -------- ------- ---------- ------- --------
Distributions
----------------------------------- ------- -------- ------- ---------- ------- --------
Dividends from net
investment income - (.3277) (.10) (.6035) (.10) (.784)
----------------------------------- ------- -------- ------- ---------- ------- --------
Dividends from net
realized gain - - (.7775) - (.615) -
----------------------------------- ------- -------- ------- ---------- ------- --------
Distributions to shareholders
in excess of net
investment income - - - (.1262) - -
----------------------------------- ------- -------- ------- ---------- ------- --------
Special distributions from
foreign currency transactions - - - - - -
----------------------------------- ------- -------- ------- ---------- ------- --------
Net asset value,
end of period $11.62 $8.60 $11.55 $ 7.98 $12.44 $ 9.02
----------------------------------- ------- -------- ------- ---------- ------- --------
Total Return* 0.61% 12.05% (0.09)% (3.40)% 26.05% 10.78%
----------------------------------- ------- -------- ------- ---------- ------- --------
Ratios/Supplemental Data:
----------------------------------- ------- -------- ------- ---------- ------- --------
Net assets, end of
period (000) $80,980 $250,519 $83,739 $249,490 $71,632 $277,495
----------------------------------- ------- -------- ------- ---------- ------- --------
Ratios to Average Net Assets:
----------------------------------- ------- -------- ------- ---------- ------- --------
Expenses, including waiver .83%+ .53%+ 1.56% 1.02% 1.68% 1.04%
----------------------------------- ------- -------- ------- ---------- ------- --------
Expenses, excluding waiver .83%+ .53%+ 1.56% 1.02% 1.68% 1.04%
----------------------------------- ------- -------- ------- ---------- ------- --------
Net investment income .83%+ 4.04%+ .79% 7.72% .70% 7.81%
----------------------------------- ------- -------- ------- ---------- ------- --------
Portfolio turnover rate 34.63% 599.66% 75.39% 1,230.20% 197.59% 1,599.43%
----------------------------------- ------- -------- ------- ---------- ------- --------
</TABLE>
*Total return does not consider the effects of sales loads. +Not annualized.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended For the Year Ended
December 31, 1992 December 31, 1991 December 31, 1990
-------------------- --------------------- ---------------------
Equity Income Equity Income Equity Income
Per Share Operating Performance: Series Series Series Series Series Series
----------------------------------- ------- -------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $10.79 $ 9.40 $ 9.57 $ 9.13 $11.09 $ 9.28
----------------------------------- ------- -------- ------- ---------- ------- --------
Income from investment
operations
----------------------------------- ------- -------- ------- ---------- ------- --------
Net investment income .078 .808 .134 .877 .211 .940
----------------------------------- ------- -------- ------- ---------- ------- --------
Net realized and unrealized
gain (loss) on investments (.268) (.288) 1.276 .316 (1.551) .059
----------------------------------- ------- -------- ------- ---------- ------- --------
Total from investment
operations (.190) .520 1.410 1.193 (1.340) .999
----------------------------------- ------- -------- ------- ---------- ------- --------
Distributions
----------------------------------- ------- -------- ------- ---------- ------- --------
Dividends from net
investment income (.12) (.840) (.12) (.873) (.18) (.959)
----------------------------------- ------- -------- ------- ---------- ------- --------
Dividends from net
realized gain - - (.07) (.05) - -
----------------------------------- ------- -------- ------- ---------- ------- --------
Distributions to shareholders
in excess of net
investment income - - - - - -
----------------------------------- ------- -------- ------- ---------- ------- --------
Special distributions from
foreign currency transactions - (.21) - - - (.19)
----------------------------------- ------- -------- ------- ---------- ------- --------
Net asset value,
end of period $10.48 $8.87 $10.79 $ 9.40 $ 9.57 $ 9.13
----------------------------------- ------- -------- ------- ---------- ------- --------
Total Return* (1.73)% 5.76% 14.76% 14.33% (12.13)% 11.88%
----------------------------------- ------- -------- ------- ---------- ------- --------
Ratios/Supplemental Data:
----------------------------------- ------- -------- ------- ---------- ------- --------
Net assets, end of
period (000) $34,332 $148,137 $36,654 $101,023 $32,986 $68,587
----------------------------------- ------- -------- ------- ---------- ------- --------
Ratios to Average Net Assets:
----------------------------------- ------- -------- ------- ---------- ------- --------
Expenses, including waiver 1.84% 1.22% 1.61% 1.30% 1.45% 1.16%
----------------------------------- ------- -------- ------- ---------- ------- --------
Expenses, excluding waiver 1.84% 1.22% 1.61% 1.30% 1.72% 1.33%
----------------------------------- ------- -------- ------- ---------- ------- --------
Net investment income .76% 8.50% 1.30% 9.96% 2.03% 10.13%
----------------------------------- ------- -------- ------- ---------- ------- --------
Portfolio turnover rate 136.75% 812.01% 74.83% 543.90% 76.24% 613.01%
----------------------------------- ------- -------- ------- ---------- ------- --------
</TABLE>
9
<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 securities exchange are valued at the last sales price
on the exchange on which such securities are traded, as of the close of business
on the day the securities are being valued or, lacking any sales, at the latest
price on the basis of current quotations from dealers (as in the case of bonds),
from valuations furnished by an independent pricing service or, in their
absence, fair value as determined under procedures approved by the Board of
Directors. (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 and interest is recorded on the accrual basis. Discounts on strips
are accrued to maturity using the constant yield method. (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. (e) The Company enters into forward currency contracts to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward contract is a commitment to purchase or sell a foreign
currency at a future date (usually the security transaction settlement date) at
a negotiated forward rate. The contracts are valued daily at current exchange
rates and any unrealized gain or loss is included in net unrealized appreciation
or depreciation of investments and foreign currency holdings. The gain or loss,
if any, arising from the difference between the settlement value of the forward
contract and the closing of such contract, is included in net realized gain or
loss from security and foreign currency transactions. Risks may arise due to
changes in the value of the foreign currency and as a result of the potential
inability of the counterparties to meet the terms of their contracts. (f)
Foreign Currency Translation: Effective January 1, 1994, the Fund adopted
Statement of Position (SOP) 93-4: Foreign Currency Accounting and Financial
Statement Presentation for Investment Companies. In accordance with this SOP,
reported net realized gains and losses from foreign currency transactions
represent net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses realized
between the trade and settlement dates on securities transactions, and the
differences between the amount of net investment income accrued and the U.S.
dollar amount actually received. Further, as permitted under the SOP, the
effects of changes in foreign currency exchange rates on investments in
securities are not segregated in the Statement of Operations from the effects of
changes in market prices of those securities.
2. Management Fee and Other Transactions With Affiliates
Lord, Abbett & Co. received a management fee of $304,512 from the Equity Series
and $625,646 from the Income Series for which it provided the Company with
investment management services and executive and other personnel, paid the
remuneration of officers, provided office space and paid for ordinary and
necessary office and clerical expenses relating to research, statistical work
and the supervision of the Company's investment portfolios. Lord Abbett has
entered into a sub-advisory agreement with Dunedin Fund Managers Limited
("Dunedin"); Dunedin furnishes investment advisory services in connection with
the management of the Company. Lord Abbett pays for the cost of Dunedin's
services. The management fee paid to Lord, Abbett & Co. is based on average
daily net assets for each month at the annual rate of .75 of 1% for the Equity
Series and the annual rate of .50 of 1% for the Income Series.
The Company has a Rule 12b-1 Plan providing for (a) the payment of a service fee
to dealers at the annual rate of .25% of the average daily net asset value of
shares sold 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.
Lord, Abbett & Co. may waive its management fee and pay or reimburse the Fund
for certain of its other expenses. Any such fees waived or expenses paid are
subject to repayment by each Series pursuant to a formula based on the expense
ratio of each Series until October 31, 1998 or the termination of the Management
Agreement, whichever is earlier. Since inception through June 30, 1995, Lord,
Abbett & Co. waived management fees of $221,260 and assumed expenses of $62,290
for the Equity Series. For the Income Series, all management fees waived and
expenses assumed pursuant to the aforementioned formula have been repaid. Lord,
Abbett & Co. received the following commissions on sales of capital stock of the
Company after concessions were paid to authorized distributors:
<TABLE>
<S> <C> <C>
Lord, Abbett & Co. Distributors'
Series Commissions Concessions
--------------------------------------------------------------------------------
Equity $12,716 $ 80,123
--------------------------------------------------------------------------------
Income $20,428 $127,569
--------------------------------------------------------------------------------
</TABLE>
Certain of the Company's officers and directors have an interest in Lord,
Abbett & Co.
3. Distributions
Net realized gain from security and foreign currency transactions is declared in
December and distributed to shareholders in January. At June 30, 1995,
accumulated net realized capital gain for financial reporting purposes, which is
substantially the same as for federal income tax purposes, aggregated $1,282,572
for the Equity Series and accumulated net realized loss aggregated $19,610,450
for the Income Series. The Income Series had a capital loss carryforward as of
December 31, 1994 of approximately $21,000,000 expiring in 2002. Accordingly, no
capital gain distribution is expected to be paid to shareholders until net gains
have been realized in excess of such amount.
10
<PAGE>
================================================================================
Notes to Financial Statements
--------------------------------------------------------------------------------
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 the 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
either Series.
A dividend from net investment income is paid to Equity Series shareholders
semi-annually and to Income Series shareholders monthly.
4. Capital Share Transactions
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
For the Six Months For the Year Ended
Ended June 30, 1995 December 31, 1994
--------------------- ---------------------
Equity Income Equity Income
Series Series Series Series
----------------------------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales of shares 507,327 629,984 2,246,737 5,647,641
----------------------------- -------- --------- --------- ---------
Shares issued to shareholders
in reinvestment of net
investment income and
realized gain from security
transactions - 482,267 475,678 1,294,495
----------------------------- -------- --------- --------- ---------
Total 507,327 1,112,251 2,722,415 6,942,136
----------------------------- -------- --------- --------- ---------
Shares reacquired (786,372) (3,239,506) (1,234,221) (6,431,505)
----------------------------- -------- --------- --------- ---------
Increase (decrease) in shares (279,045) (2,127,255) 1,488,194 510,631
----------------------------- -------- --------- --------- ---------
</TABLE>
5. Capital Paid In
At June 30, 1995, capital paid in was $78,370,173 for the Equity Series and
$260,200,218 for the Income Series.
6. Purchases and Sales of Securities
(a) During the six months ended June 30, 1995, purchases and sales, exclusive of
investments in short-term securities and foreign currency transactions, were
$25,164,311 and $30,429,522, respectively, for the Equity Series and
$1,444,379,870 and $1,482,689,945, respectively, for the Income Series. Security
gains and losses are computed on the identified cost basis.
As of June 30, 1995, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were $6,084,615 and $3,919,039,
respectively, for the Equity Series and $11,772,998 and $4,087,517,
respectively, for the Income Series. The cost of investments for federal income
tax purposes is substantially the same as that used for financial reporting
purposes. (b) At June 30, 1995, the Equity Series and the Income Series had
outstanding forward currency contracts to sell foreign currencies as follows:
<TABLE>
<CAPTION>
EQUITY SERIES
-----------------------------------------------------------------------------
Value at
Foreign Currency Settlement Date Current
Sell Contracts Receivable Value (Depreciation)
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Japanese Yen,
expiring 11/16/95 $ 9,700,000 $11,084,211 $(1,384,211)
--------------------------------------- ----------- -----------
INCOME SERIES
-----------------------------------------------------------------------------
Value at
Foreign Currency Settlement Date Current
Sell Contracts Receivable Value (Depreciation)
-----------------------------------------------------------------------------
Canadian Dollars,
expiring 9/29/95 $ 4,428,151 $ 4,438,300 $ (10,149)
--------------------------------------- ----------- -----------
Deutsche Marks,
expiring 8/21/95 $19,010,661 $19,340,562 $ (329,901)
--------------------------------------- ----------- -----------
Spanish Pesetas,
expiring 7/7/95 $12,000,000 $12,062,955 $ (62,955)
--------------------------------------- ----------- -----------
$35,438,812 $35,841,817 $ (403,005)
=========== =========== ===========
</TABLE>
7. 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 $3,619 (exclusive of expenses), 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 June 30, 1995, the aggregate amount
in Directors' accounts maintained under the plan was $38,187. Retirement costs
accrued during the period amounted to $2,004.
11
<PAGE>
================================================================================
Our Management
--------------------------------------------------------------------------------
Board of Directors
Ronald P. Lynch
Thomas S. Henderson
E.Thayer Bigelow*
Stewart S. Dixon*
John C. Jansing*+
C. Alan MacDonald*+
Hansel B. Millican, Jr.*+
Thomas J. Neff*
*Outside Director
+Audit Committee
Officers
Ronald P. Lynch, Chairman
and President
Zane E. Brown, Executive Vice President
and Portfolio Manager--Income Series
E. Wayne Nordberg, Executive Vice
President and Portfolio Manager--Equity Series
Kenneth B. Cutler, Vice President
and Secretary
Stephen I. Allen, Vice President
Daniel E. Carper, Vice President
Robert S. Dow,
Vice President
Thomas S. Henderson,
Vice President
John J. Walsh, Vice President
John J. Gargana, Jr.,
Vice President
Thomas F. Konop, Vice President
and Assistant Secretary
Victor W. Pizzolato,
Vice President
Keith F. O'Connor, Treasurer
Joseph Van Dyke,
Assistant Treasurer
Lydia Guzman,
Assistant Secretary
Robert M. Hickey,
Assistant Secretary
A. Edward Oberhaus III,
Assistant Secretary
Investment Manager
and Underwriter
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Sub-Adviser
Dunedin Fund Managers Limited
25 Ravelston Terrace
Edinburgh, Scotland EH4 3EX
Custodian
Morgan Guaranty
Trust Company
of New York
Transfer Agent
United Missouri Bank of
Kansas City, N.A.
Shareholder
Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Debevoise & Plimpton
New York, NY
--------------------------------------------------------------------------------
Copyright (C) 1995 by Lord Abbett Global Fund, Inc.
767 Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Global Fund, Inc., is to be distributed only if preceded or
accompanied by a current prospectus which includes information concerning each
Series' investment objective and policies, sales charges and other matters.
All rights reserved. Printed in the U.S.A.
12
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Successful investing
requires an experienced,
professional team.
"Many successful companies have invested outside the U.S. for years; investors
may want to consider the same strategy for their portfolios."
Zane E. Brown
Portfolio Manager
Identifying value and reducing risk require a disciplined approach and a
talented and experienced investment team. At Lord, Abbett & Co., a staff of 42
investment professionals, averaging 19 years of industry experience and 9 years
of tenure with the Firm, performs research to determine an overall view of the
economy and discover opportunities with the potential for high total return.
Searching for Value By:
. Anticipating economic changes and their impact on fixed-income securities;
. Taking advantage of security combinations that result from the interaction of
credit markets; and
. Understanding the historical yield relationship among securities.
[Photo of Lord Abbett personnel described below]
(from left to right)
Zane E. Brown, portfolio manager of Lord Abbett Global Fund's Income Series, is
director of Lord, Abbett & Co.'s fixed-income area. Mr. Brown earned his MBA
in investment management from Colorado State University. He has over 18 years of
investment experience.
E. Wayne Nordberg, partner and portfolio manager of Lord Abbett Global Fund's
Equity Series, has 35 years of investment experience. In addition to being a
member of the Executive Office of Investments, Mr. Nordberg also serves on the
Firm's Investment Strategy Committee. He earned his BA in economics from
Lafayette College.
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THE LORD ABBETT FAMILY Meeting Investor Needs Since 1929
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Lord, Abbett & Co. manages a spectrum of mutual funds to meet the investment
goals of its shareholders. Assets may be allocated or transferred among these
funds as described in the relevant prospectus. The exchange privilege may be
modified or terminated. For more information about a Lord Abbett fund, including
charges and expenses, please call us at 800-874-3733 for a prospectus. Please
read the prospectus carefully before investing.
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Equity Portfolios
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Affiliated Fund
Established 1934
Seeks long-term growth of capital and income without excessive fluctuations
in market value. Portfolio emphasis: The stocks of large, well-seasoned
companies.
Lord Abbett Developing Growth Fund
Established 1973
Seeks aggressive, long-term capital appreciation. Price volatility is not
uncommon. Portfolio emphasis: The stocks of small growth companies mostly
traded over the counter.
Lord Abbett Fundamental Value Fund
Established 1986
Seeks growth of capital and growth of income consistent with reasonable risk.
Portfolio emphasis: The stocks of large and midsized
companies with strong underlying fundamentals.
Lord Abbett Global Fund
Equity Series
Established 1988
Seeks long-term growth of capital and, secondarily, production of current
income. Portfolio: A diversified portfolio of stocks from around the world.
Lord Abbett Value Appreciation Fund
Established 1983
Seeks capital appreciation. Portfolio emphasis: The stocks of midsized
companies.
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Balanced Portfolio
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Lord Abbett Balanced Series
Established 1994
Seeks current income and capital growth. Portfolio: A blend of stocks and
fixed-income securities.
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Fixed-Income Portfolios
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Lord Abbett Bond-Debenture Fund
Established 1971
Seeks high current income and capital growth to produce a high total return.
Portfolio emphasis: Convertible issues and lower rated debt.
Lord Abbett Global Fund
Income Series
Established 1988
Seeks high current income and, secondarily, capital appreciation. Portfolio:
High-quality international and U.S. debt.
Lord Abbett Limited Duration U.S. Government Securities Series
Established 1993
Seeks a high level of income, relative to money market instruments, with less
fluctuations in principal than long-term U.S. Government securities. Portfolio
emphasis: Limited duration fixed-income securities (primarily U.S. Government
securities).
Lord Abbett U.S. Government Securities Fund
Established 1932
Seeks high current income. Portfolio: Since 1985, U.S. Government securities
exclusively.
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Tax-Free Portfolios
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Lord Abbett Tax-Free Income Funds
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National and New York Series Established 1984
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California Fund Established 1985
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Texas Series Established 1987
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New Jersey, Connecticut, Missouri, Hawaii, Florida and Pennsylvania Series
Established 1991
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Washington and Michigan Series Established 1992
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Georgia and Minnesota Series Established 1994
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Seek high tax-free income. Portfolios' emphasis: High-quality municipal bonds.
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Money Market Portfolio
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Lord Abbett U.S. Government Securities
Money Market Fund
Established 1979
Seeks high current income and preservation of capital. Portfolio: U.S.
Government money market instruments.
An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and 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.
[PHOTO - Father daughter and son]
[LOGO OF LORD ABBETT APPEARS HERE] Lord, Abbett & Co.
Investment Management
A Tradition of Performance Through Disciplined Investing
LAG-3-695
The GM Building * 767 Fifth Avenue * New York, NY 10153-0203 (8/95)
