<PAGE>
Lord Abbett
Global
Fund
. Income Series
. Equity Series
[ART - FOREIGN CURRENCY] 1995 ANNUAL REPORT
A globally-diversified
mutual fund with two
portfolios to help you
achieve your goals
<PAGE>
Report to Shareholders
For the Fiscal Year Ended December 31, 1995
[PHOTO OF RONALD P. LYNCH APPEARS HERE]
Ronald P. Lynch
Chairman
[PHOTO OF ROBERT S. DOW APPEARS HERE]
Robert S. Dow
President
January 22, 1996
About the Income Series
Lord Abbett Global Fund-Income Series ended fiscal 1995 on December 31 with a
net asset value of $8.58 per share. Based on this net asset value and the
monthly dividend of $.055 per share, annualized, the Series' distribution rate
was 7.7%; based on that same day's maximum offering price of $9.01, this rate
was 7.3%. The Series' total return (the percent change in net asset value
assuming the reinvestment of all distributions) was 17.9% for the fiscal year.
The Board of Directors recently declared a dividend of $.05 per share, effective
with the distribution payable April 15, 1996. This is a reduction of $.005,
reflecting the decline in interest rates, worldwide.
1995 was characterized by slowing economic growth and lower interest rates in
the U.S., which gave way to similar conditions abroad. Globally, inflation also
remained at low, favorable levels. In the first half of the year, when the
dollar was weak, the Series benefited from its foreign exposure. However, by
August, the dollar began to appreciate relative to the yen. As we anticipated
the dollar would also gain strength against other currencies (such as the German
mark and French franc), we acted defensively by hedging our exposure to these
currencies and reducing our long-term holdings in Japan.
The Series benefited from its exposure to domestic securities (in particular,
longer dated Treasuries). In addition, we increased our weighting in countries
with higher yielding securities, such as Italy and Spain. As we head into 1996,
we expect a continuation of the current low interest-rate environment with
moderate volatility. As such, we will continue to invest in countries, such as
Canada and Germany, where inflation is favorable and yields are higher than in
the U.S. Additionally, we will modify the portfolio's interest-rate sensitivity
by adjusting maturities of Treasury issues and coupons of mortgage-related
securities.
About the Equity Series
Lord Abbett Global Fund-Equity Series completed fiscal 1995 with a per-share net
asset value of $11.96 versus $11.07 one year ago (after adjustment for a $.48
capital gains distribution). The Series declared dividends totaling $.17 per
share for the year. Based on these distributions, the Series' total return for
1995 was 9.2%.
As we discussed in our last letter, a slow growth environment is developing in
key global economies, similar to that in the U.S. Moderating growth in Europe,
and particularly in Germany, continues to encourage the Bundesbank to further
reduce interest rates. In Japan, the Central Bank is essentially providing free
money to commercial banks, which should help banks dig out from bad debts. These
factors have positive implications for the dollar.
For 1996, we expect global short-term interest rates will resume their decline.
Many indicators of future economic performance in Europe and Japan have suffered
major reversals during recent months. Moreover, with inflation low and falling,
real short-term interest rates are too high to encourage stronger economic
growth in many overseas markets.
The country weighting of the Equity Series reflects our outlook for the global
markets in 1996: namely, we expect slowing in the U.S. and European economies.
Consequently, we reduced our holdings in the U.S. and in selected European
countries. We used this opportunity to purchase bargains in undervalued areas--
such as Japan, Mexico, Latin America and other emerging markets--which
underperformed the U.S. market in 1995, but that we think have positive
potential in 1996.
We are pleased to announce that Lord Abbett Global Fund's Board of Directors
elected Robert S. Dow as President of the Fund. Mr. Dow, who has been a partner
of Lord, Abbett & Co. for nine years, also serves as the Firm's Chief Investment
Officer.
Thank you for your continued trust and confidence in the Fund. We look forward
to helping you attain your investment objectives in 1996 and beyond.
- --------------------------------------------------------------------------------
Table of Contents
Income Series
About the Income Series 1
Statement of Net Assets 2
Equity Series
About the Equity Series 4
Statement of Net Assets 5
Income and Equity Series
Statements of Operations 9
Statements of Changes in
Net Assets 9
Financial Highlights 10
Notes to Financial Statements 10
- --------------------------------------------------------------------------------
<PAGE>
About Lord Abbett's Income Series
Global Diversification
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>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 10 Years
Ended
12/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Canada 16.1 8.0 19.0 16.1 5.6 24.1 (0.5) 13.2 (13.6) 26.1 178.5
France 47.4 20.6 7.3 8.9 19.8 16.4 4.6 17.0 (0.5) 31.3 363.2
Germany 37.6 27.1 (3.0) 5.6 10.5 10.8 6.2 10.6 5.1 27.2 244.5
Japan 36.1 40.4 2.7 (14.4) 3.0 24.2 11.3 30.8 5.5 12.9 272.5
United Kingdom 14.4 46.4 2.3 (3.5) 34.2 14.7 (3.9) 21.4 (5.4) 17.5 230.1
United States 24.1 (4.6) 8.8 14.0 6.7 17.0 7.3 12.1 (6.7) 23.6 154.2
</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 5.6%
CANADA 7.1%
DENMARK 7.2%
FRANCE 6.7%
ITALY 10.9%
JAPAN 3.1%
SPAIN 9.7%
UNITED KINGDOM 7.4%
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
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. See the Income Series'
portfolio of investments in long-term securities on page 2.
High Quality of
Long-Term
Portfolio Holdings:
AAA 83.41%
AA 14.94%
A 1.65%
Canada 6.52%
United States 37.03%
Sweden 2.26%
Denmark 4.51%
Netherlands 4.15%
Belgium 3.15%
UK 5.29%
France 4.02%
Spain 4.71%
Germany 12.89%
Italy 4.83%
Japan 8.04%
Australia 2.60%
Data as of 12/31/95
1
<PAGE>
Important Information
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 3/31/96, this report must be accompanied by Lord
Abbett's Performance Quarterly for the most recently completed calendar
quarter.
Statement of Net Assets December 31, 1995
<TABLE>
<CAPTION>
INCOME SERIES Principal
Amount
Rating*: S&P in Local Market Value
Security or Moody's Currency (Notes 1a & 1f)
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENTS IN SECURITIES 103.72%
- ---------------------------------------------------------------------------------------------------------------------------------
FOREIGN 65.31%
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Australia Australian Commonwealth 7% due 4/15/2000 AAA $ 7,650M $ 5,542,119
2.69% Commonwealth Bank of Australia 13 3/4% due 9/21/1999 AAA 1,000M 877,080
Total 6,419,199
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Belgium
3.26% Government of Belgium 7 3/4% due 12/22/2000 AA 210,000M 7,780,500
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Canada Government of Canada 8 3/4% due 12/1/2005 AAA 14,700M 12,041,211
6.76% Province of Manitoba 7 3/4% due 12/22/2025 A 5,650M 4,067,831
Total 16,109,042
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Denmark Kingdom of Denmark 8% due 11/15/2001 AAA 44,000M 8,468,240
4.68% Kingdom of Denmark 8% due 5/15/2003 AAA 14,000M 2,679,180
Total 11,147,420
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France French Government 7 3/4% due 4/12/2000 AAA 30,000M 6,560,100
4.17% Republic of France (OAT) 8 1/2% due 4/25/2003 AAA 13,000M 2,966,730
Republic of France (OAT), ADR 9.80% due 1/30/1996 AAA 2,000M 409,380
Total 9,936,210
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Germany Bundesrepublic 6% due 6/20/2016 AAA 15,000M 9,613,950
13.37% Bundesrepublic 7 3/8% due 1/3/2005 AAA 16,000M 12,171,840
Treuhandanstalt 7 3/4% due 10/1/2002 AAA 13,000M 10,087,740
Total 31,873,530
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Italy Republic of Italy (BTP) 10 1/2% due 4/1/2000 AA 9,750,000M 6,240,000
5.01% Republic of Italy (BTP) 12% due 9/1/2001 AA 8,500,000M 5,695,000
Total 11,935,000
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Japan European Investment Bank 4 1/4% due 7/16/1998 AAA 450,000M 4,693,500
8.34% Japan Development Bank 5% due 10/1/1999 AAA 550,000M 5,989,500
Republic of Austria (Yen) 5% due 1/22/2001 AAA 840,000M 9,189,600
Total 19,872,600
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Netherlands
4.31% Dutch State Loan 8 1/4% due 2/15/2007 AAA 14,250M 10,267,838
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
Statement of Net Assets December 31, 1995
<TABLE>
<CAPTION>
INCOME SERIES Principal
Amount
Rating*: S&P in Local Market Value
Security or Moody's Currency (Notes 1a & 1f)
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Spain Government of Spain 10.30% due 6/15/2002 AA $320,000M $ 2,720,000
4.88% Government of Spain 12 1/4% due 3/25/2000 AA 990,000M 8,900,100
Total 11,620,100
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Sweden
2.35% Kingdom of Sweden 13% due 6/15/2001 AA 31,000M 5,595,190
- ----------------------------------------------------------------------------------------------------------------------------------
United Kingdom
5.49% U.K. Treasury 6 3/4% due 11/26/2004 AAA 8,800M 13,072,048
-------------------------------------------------------------------------------------------------------------
Total Investments in Foreign Securities (Cost $150,748,081) 155,628,677
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UNITED STATES 38.41%
- ----------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Banks 6.11% due 10/17/1997 AAA 7,750M 7,764,530
Federal Home Loan Mortgage Corporation 6 3/4% due 8/1/2005 AAA 2,250M 2,385,702
Federal Home Loan Mortgage Corporation 7 1/2% due 6/1/2019 AAA 725M 747,406
Federal Home Loan Mortgage Corporation 7 1/2% due 2/1/2023 AAA 341M 349,814
Federal Home Loan Mortgage Corporation 7 1/2% due 3/1/2023 AAA 94M 96,924
Federal Home Loan Mortgage Corporation 7 1/2% due 8/1/2023 AAA 437M 448,239
Federal Home Loan Mortgage Corporation 7 1/2% due 9/1/2023 AAA 69M 71,292
Federal Home Loan Mortgage Corporation 7 1/2% due 11/1/2023 AAA 426M 437,235
Federal Home Loan Mortgage Corporation 7 1/2% due 12/1/2023 AAA 433M 444,161
Federal National Mortgage Association 6 1/2% due on an
announced basis AAA 39,500M 39,043,281
Federal National Mortgage Association 6.85% due 8/22/2005 AAA 13,050M 13,947,188
Federal National Mortgage Association 8 1/2% due 2/1/2005 AAA 2,450M 2,685,046
Federal National Mortgage Association 8 1/2% due 9/1/2006 AAA 4,204M 4,388,121
Government National Mortgage Association 6 1/2% due on an
announced basis AAA 9,500M 9,422,812
Province of Ontario (US Dollars) 17% due 11/5/2011 AAA 8,045M 9,299,517
Total Investments in United States Securities (Cost $91,430,084) 91,531,268
-------------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $242,178,165) 247,159,945
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OTHER ASSETS, LESS LIABILITIES (3.72)%
- ----------------------------------------------------------------------------------------------------------------------------------
Other Short-term
Assets Investments,
at Market Federal National Mortgage Association 14% due 9/25/1996
(Cost $32,438,700) AAA 30,000M 31,800,000
--------------------------------------------------------------------------------------------------------------------------
Receivable Securities sold 78,435,156
for: Other 8,554,473
Total Other Assets 118,789,629
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Liabilities Payable Securities purchased 125,590,590
for: Other 2,068,388
Total Liabilities 127,658,978
-------------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities (8,869,349)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets (equivalent to $8.58 a share on 27,769,696 shares of $.001 par
100.00% value capital stock outstanding; authorized, 500,000,000 shares) $238,290,596
-------------------------------------------------------------------------------------------------------------
*Ratings have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
3
<PAGE>
About Lord Abbett's Equity Series
The Global Perspective Has Provided a World of Opportunity
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
Total Return Less Risk Risk/Volitility More Risk
13%
100% non U.S.
12%
30% U.S.
70% non U.S.
11% 60%U.S
40% non U.S.
10%
100% U.S.
9%
8%
Derived using returns from December 1969 to December 1995. Source:
Morgan Stanley Capital International.
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
Many Foreign Markets Have Surpassed the U.S.
This performance does not represent Equity Series performance.
AUSTRALIA 15%
CANADA 8.5%
FRANCE 15.3%
GERMANY 10.7%
HONG KONG 23.8%
ITALY 7.8%
JAPAN 12.8%
SINGPORE 20.2%
UNITED KINGDOM 15.0%
UNITED STATES 14.8%
Average annual stock market returns for the 10 years ended December 31,
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
Portfolio diversification positions the Equity Series to participate in
global opportunities. Twenty-two countries are represented in the
Equity Series; see the portfolio of investments in long-term securities
on page 5.
[MAP APPEARS HERE]
Canada 1.14%
U.S. 18.25%
Mexico 0.82%
Venezula 0.11%
Ecuador 0.15%
Brazil 0.70%
Argentina 0.37%
Chile 0.21%
Sweden 1.31%
Switzerland 3.64%
Netherlands 4.75%
UK 7.52%
France 4.78%
Spain 0.48%
Germany 3.61%
Italy 2.50%
South Africa 0.39%
Japan 36.93%
Hong Kong 5.26%
Malaysia 1.91%
Singapore 2.66%
Australia 2.51%
Data as of 12/31/95
4
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets December 31, 1995
EQUITY SERIES
Number of Market Value
Security Shares (Notes 1a & 1f)
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES 94.80%
- --------------------------------------------------------------------------------------------------------------------------------
FOREIGN 77.50%
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Argentina Buenos Aires Embotelladora ADR-Pepsi bottler in Brazil and Argentina 9,000 $ 185,625
.35% YPF ADR-Largest energy company 5,000 108,125
Total 293,750
- --------------------------------------------------------------------------------------------------------------------------------
Australia AAPC-Manager of hotels in Australia and Asia 759,000 411,378
2.38% Australian Gas Light Co.-Gas utility 127,000 476,250
Australian National Industries-Large engineering company involved
in distribution, manufacturing and services 550,000 408,650
Broken Hill Proprietary-Miner and producer of metals and steel 32,200 456,403
QNI-Major Australian nickel company 125,000 263,625
Total 2,016,306
- --------------------------------------------------------------------------------------------------------------------------------
Brazil Brazilian Investment Trust plc-Closed-end trust investing in
mid-cap Brazilian equities 125,000 130,859
.66% Brazilian Investment Trust plc Warrants 30,000 21,094
CESP (Companhia Energetica de Sao Paulo) ADR+-Electricity generator,
transmitter and distributor in the State of Sao Paulo 20,000 170,000
Telebras ADR-National telecom company monopoly 5,000 237,500
Total 559,453
- --------------------------------------------------------------------------------------------------------------------------------
Canada Canadian National Railway (partially paid)++-Major Canadian-based
railroad operator 13,000 195,000
1.08% Crestbrook Forest Inc.-Canadian lumber and paper producer 10,000 130,000
Lytton Minerals Ltd.-Canadian diamond exploration company 125,000 257,813
Mountain Province-Canadian diamond exploration company 10,000 35,000
New Indigo Resources-Canadian diamond exploration company 20,000 161,250
Repap Enterprises-Canadian pulp and paper producer 30,000 133,125
Total 912,188
- --------------------------------------------------------------------------------------------------------------------------------
Chile
.20% Compania de Telecommunicaciones de Chile Sponsored ADR+-Major
telephone utility 2,000 165,750
- --------------------------------------------------------------------------------------------------------------------------------
Ecuador
.14% La Cemento National GDR-Largest cement producer 700 122,500
- --------------------------------------------------------------------------------------------------------------------------------
France Christian Dior-France's principal luxury goods manufacturer 6,460 684,909
4.53% Lafarge Coppee-Cement manufacturer 7,728 500,434
Paribas-Major banking and finance group 11,435 630,663
Pinault Printemps Redoute-One of the principal retailing and
specialist distribution groups in France 2,621 525,846
Saint Gobain-Industrial group 4,450 489,042
Sanofi-Pharmaceutical, health and beauty group 11,000 703,791
SGE-A major construction/public works group 14,000 306,852
Total 3,841,537
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Germany Bilfinger & Berger-Multinational chemical company 1,600 615,941
3.43% Jil Sanders-Exclusive women's wear designer and manufacturer 600 440,654
Linde-A diversified engineering group, specializing in forklift trucks 1,200 710,059
Mannesmann-Engineering group 2,250 715,019
Siemens-Europe's leading electrical and electronics company 770 422,387
Total 2,904,060
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Hong Kong Amway Asia Pacific Ltd.-A direct seller of household products in
4.99% China and East Asia 20,500 730,313
Hong Kong Electric-Electric power utility 212,000 694,936
HSBC Holdings-Major global bank 56,000 847,336
Hutchison Whampoa-Ports, telecommunications and property conglomerate 104,000 633,464
Sun Hung Kai Properties-Leading property development and
investment company 72,000 588,960
Swire Pacific `A'-Property and aviation conglomerate 94,000 729,346
Total 4,224,355
-----------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
Statement of Net Assets December 31, 1995
<TABLE>
<CAPTION>
EQUITY SERIES
Number of Market Value
Security Shares (Notes 1a & 1f)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Italy ENI-Former state-owned oil and gas company 180,000 $ 620,280
2.37% Fiat Pref.-Major automotive group 284,000 523,128
Italcementi-Cement company 52,000 311,168
Italcementi-Warrants 12,000 1,836
Olivetti-Office and computer equipment company 700,000 553,700
Total 2,010,112
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Japan Fuji Machine Mfg.-A major manufacturer of automated assembly machines for
35.01% electronic parts and components 17,000 607,733
Fuji Photo Film-Major manufacturer of photo-sensitive materials 53,000 1,525,976
Hitachi Ltd.-One of Japan's major electrical engineering groups
with operations ranging from computers to electrical power systems 137,000 1,376,576
Honda Motor-Major automotive group 71,000 1,461,180
Kamigumi Co.-Warehouse and harbor transport company 88,000 842,600
Kinden-Japan's second largest electrical, engineering-
construction company 63,000 1,071,315
Kuraray Co.-Maker of synthetic fibers 88,000 960,784
Kurimoto Iron-Japan's second largest producer of cast iron,
water, gas and other pipes 105,000 1,065,225
Mitsubishi Electric Corp.-Manufacturer of integrated electrical
engineering and electronic parts 160,000 1,148,640
Mitsubishi Heavy Industry-Leading heavy machinery maker 157,000 1,248,464
Mitsui Fudosan-Real estate company 102,000 1,251,540
NGK Spark Plug-Manufacturer of spark plugs and ceramic parts
for semiconductors 110,000 1,381,600
Nippon Signal-Railway and traffic signal maker 53,000 432,692
Nippondenso-Electric engineering company 54,000 1,006,938
Nissan Motors-Japan's second, and the world's fourth, largest
auto manufacturer 175,000 1,340,850
NKK Corporation-Crude steel and pipe manufacturer 590,000 1,584,740
Nomura Securities-Japan's largest securities firm 63,000 1,369,557
Sanwa Bank-Large commercial bank 34,000 689,860
Senshukai Co.-Leading sales firm that operates on a nonstore
basis and through catalogs 74,000 1,208,272
Shikoku Electric Power-Regional electrical utility 28,300 650,759
Shimano Inc.-Manufacturer of bicycle parts and fishing tackle 52,000 914,368
Shin-Etsu Chemical-Producer of semiconductor silicon 40,000 827,040
Sumitomo Bank-The nucleus of the Sumitomo Group and one of the
largest banks in Japan 39,000 825,201
Sumitomo Electric Industries-Manufacturer of electric wire and cables 94,000 1,126,214
Sumitomo Forestry-Largest domestic lumber trader and house builder 42,000 649,278
Sumitomo Trust & Banking-One of the leading trust banks in Japan 78,000 1,100,268
Toppan Printing-One of the largest commercial printing
companies in Japan 55,000 722,700
Toshiba Plant Kensetsu-Plant engineer 66,000 542,058
77th Bank Ltd.-Largest regional bank in the Tohoko area;
ranks 13th among the regional banks 80,000 732,000
Total 29,664,428
- --------------------------------------------------------------------------------------------------------------------------------
Malaysia Malaysia International Shipping-National shipping company 171,000 447,678
1.81% Malaysian Airline System-National airline company 121,000 393,008
Sime Darby-Diversified conglomerate 105,000 279,090
Southern Bank-Leading domestic bank 213,500 413,550
Total 1,533,326
- --------------------------------------------------------------------------------------------------------------------------------
Mexico Cementos de Mexico-Largest cement producer 28,000 196,000
.78% Fomento Economico Mexicano ADS+-Mexican brewer and coke bottler 110,000 261,250
Grupo Carso ADS+-Mexican conglomerate 18,000 202,500
Total 659,750
- --------------------------------------------------------------------------------------------------------------------------------
Netherlands ABN Amro-Major commercial bank 14,300 649,878
4.51% AKZO-Diversified company in the manufacturing of chemicals, fibers,
coatings and health care 5,000 576,935
Berliner Semiconductor-Equipment supplier to semiconductor
manufacturers 40,000 522,240
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
Statement of Net Assets December 31, 1995
<TABLE>
<CAPTION>
EQUITY SERIES
Number of Market Value
Security Shares (Notes 1a & 1f)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Hagemeyer-Trading group 12,000 $ 625,176
Philips Electronics-Electrical and electronics group 5,600 201,925
Vendex International-Retailing group 16,000 474,480
VNU-Publishing group 5,600 766,976
Total 3,817,610
- --------------------------------------------------------------------------------------------------------------------------------
Singapore Development Bank of Singapore-Leading Singapore bank
2.52% and financial services company 32,587 405,513
Jurong Shipyard-One of the largest ship repairers 54,000 416,178
Singapore Airlines-A national airline company 63,000 587,979
United Overseas Bank-One of the leading bank and financial
services companies 75,240 723,508
Total 2,133,178
- --------------------------------------------------------------------------------------------------------------------------------
South Africa
.37% Malbak-South African auto, pharmaceutical and food distributor 45,000 315,000
- --------------------------------------------------------------------------------------------------------------------------------
Spain
.45% Banco Santander-Leading Spanish bank 7,800 385,289
- --------------------------------------------------------------------------------------------------------------------------------
Sweden Electrolux AB Series `B'-Electronics and household
1.24% appliances manufacturer 11,200 458,730
Stora Koppabergs Series `A'-Paper and forest products producer 50,000 593,700
Total 1,052,430
- --------------------------------------------------------------------------------------------------------------------------------
Switzerland Baloise Holdings-Insurance group 280 581,969
3.46% Brown Boveri & Cie Series `A'-International power generation and
railway equipment supplier 750 870,356
Ciba Geigy-Multinational chemical company 430 377,977
Nestle-Europe's largest food company 600 663,029
Roche Holdings-Leading pharmaceutical group 55 434,637
Total 2,927,968
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom British Petroleum-Integrated oil company 55,432 463,689
7.12% British Telecom-Leading domestic telecommunications group 120,000 659,280
BTR-Diversified industrial firm 92,356 471,570
BTR Warrants 2,041 657
Caradon-Building materials supplier 110,000 333,740
General Electric Company-Electronics group 66,500 366,349
Grand Metropolitan-Food, beverage and retail group 85,000 612,085
Greenalls Group-Operator of public houses, hotels and restaurants 43,000 392,375
Lex Service-Distributor and retailer of automobiles 93,333 443,238
National Westminster Bank-A major U.K. retail and investment bank 8,300 83,598
Peninsular and Oriental Steam Navigation Company-Shipping,
house building and property group 51,058 377,165
Powergen-Formerly state-owned electricity generator 54,000 185,598
Siebe-Electrical and electronics group 30,000 369,660
Tesco-Food retailer 66,500 306,499
Tomkins Ord-A diversified industrial company 150,000 656,400
Unigate-Manufacturing and distribution of food and dairy products 50,000 318,900
Total 6,040,803
- --------------------------------------------------------------------------------------------------------------------------------
Venezuela
.10% Venprecar C.A. ADR+-Steel (HBI) manufacturer 20,000 87,500
Total Investments in Foreign Securities (Cost $63,992,071) 65,667,293
- --------------------------------------------------------------------------------------------------------------------------------
UNITED STATES 17.30%
- --------------------------------------------------------------------------------------------------------------------------------
American Brands Inc.-Consumer products conglomerate 10,000 446,250
American Express Co.-Operates largest travel and entertainment
charge card business 5,000 206,875
Amoco Corporation-Major integrated petroleum and natural gas company
with sizable interests in chemicals 2,000 143,750
AT&T Corp.-Global telecom giant 10,000 647,500
BankAmerica Corp.-Major money-center bank 3,000 194,250
</TABLE>
7
<PAGE>
Statement of Net Assets December 31, 1995
<TABLE>
<CAPTION>
EQUITY SERIES
Number of Shares Market Value
Security or Principal Amount (Notes 1a)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Banta Corp.-A leading U.S. printer of books, magazines and catalogs 10,000 $ 440,000
Chemical Banking Corp.-Major money-center bank holding company 5,000 293,750
Comerica Inc.-Midwestern regional bank holding company 7,500 300,937
Cooper Tire & Rubber Company-Major manufacturer of replacement tires
and inner tubes for cars, trucks and buses 20,000 492,500
Emerson Electric Co.-Diversified manufacturer of consumer and
industrial electrical components 10,000 817,500
Equitable of Iowa-A leading provider of individual annuities and insurance 15,000 481,875
Exxon Corp.-World's largest integrated oil company 6,000 480,750
Freeport-McMoRan Copper & Gold Class B-
An Indonesian copper and gold producer 25,086 705,543
Freeport-McMoRan Copper & Gold-Silver Conv. Pfd. Series D 52,000 1,098,500
General Motors Corp.-Worldwide auto producer 16,000 846,000
Genuine Parts Company-National distributor of automotive replacement parts 8,000 328,000
Great Western Financial Corp.-A leading savings and loan company 35,000 892,500
Kimberly Clark Corp.-Major producer of consumer and personal care products
(recently purchased Scott Paper) 3,900 322,725
Lilly, Eli & Co.-Major drug company 4,000 225,000
MCI Communications Corp.-Long distance telecom provider 20,000 522,500
Mobil Corp.-Large international oil company 8,000 896,000
Plantronics Inc.-Leading supplier of communication headset products
and services to users and providers worldwide 25,000 903,125
RJR Nabisco-Diversified food and tobacco producer 20,000 617,500
Sonat Inc.-Major diversified energy company with interests in natural
gas pipelines, exploration and drilling 10,000 356,250
Sonoco Products Co.-A leading U.S. producer of specialty paper and
plastic packaging components 15,750 413,437
Standard Products Co.-Manufactures plastic and rubber products for the
automotive and appliance industries 5,000 88,124
Supervalu Inc.-Second largest U.S. food wholesaler 15,000 472,500
Transamerica Corp.-Diversified financial services company 6,000 437,250
Warner Lambert Co.-Drugs and consumer products manufacturer 1,500 145,687
Western Resources-Kansas utility 5,000 166,874
Westvaco Corporation-Major producer of paper and paperboard products 10,000 277,500
Total Investments in United States Securities (Cost $12,492,374) 14,660,952
-----------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $76,484,445) 80,328,245
- --------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 5.20%
- --------------------------------------------------------------------------------------------------------------------------------
Other Short-term Ford Motor Credit Co. 5.81% due 1/2/1996 1,875M 1,875,000
Assets Investments, General Electric Capital Corp. 5.91% due 1/3/1996 1,175M 1,175,000
at Cost Prudential Funding Corp. 5.66% due 1/4/1996 1,000M 1,000,000
Total 4,050,000
------------------------------------------------------------------------------------------------------------------------
Receivable Securities sold 11,767,760
for: Other 604,430
Total Other Assets 16,422,190
- --------------------------------------------------------------------------------------------------------------------------------
Liabilities Payable Securities purchased 11,250,190
for: Other 768,865
Total Liabilities 12,019,055
-----------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 4,403,135
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets (equivalent to $11.96 a share on 7,083,040 shares of $.001 par
100.00% value capital stock outstanding; authorized, 500,000,000 shares) $84,731,380
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The descriptions of the companies shown in the portfolio,
which were obtained from published reports and other
sources believed to be reliable, are supplemental and are
not covered by the Independent Auditors' Report.
+ Restricted security under Rule 144A.
++ Non-income producing.
See Notes to Financial Statements.
8
<PAGE>
Statements of Operations For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Investment Income (Note 1) Equity Series Income Series
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Income Dividends $ 2,059,813 -
-----------------------------------------------------------------------------------------------------------------
Interest 498,746 $ 21,436,209
-----------------------------------------------------------------------------------------------------------------
Foreign taxes withheld (135,691) (138,049)
-----------------------------------------------------------------------------------------------------------------
Total income 2,422,868 21,298,160
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 617,448 1,232,346
(Note 2) -----------------------------------------------------------------------------------------------------------------
12b-1 distribution plan 215,186 604,324
-----------------------------------------------------------------------------------------------------------------
Shareholder servicing 236,128 380,000
-----------------------------------------------------------------------------------------------------------------
Custodian 82,000 94,000
-----------------------------------------------------------------------------------------------------------------
Audit and legal 48,000 49,800
-----------------------------------------------------------------------------------------------------------------
Registration 48,000 35,200
-----------------------------------------------------------------------------------------------------------------
Reports to shareholders 42,000 97,000
-----------------------------------------------------------------------------------------------------------------
Other 54,500 82,873
-----------------------------------------------------------------------------------------------------------------
Total expenses 1,343,262 2,575,543
-----------------------------------------------------------------------------------------------------------------
Net investment income 1,079,606 18,722,617
-----------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions (Notes 1e, 1f & 6b)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain from securities and foreign currency transactions
-----------------------------------------------------------------------------------------------------------------
Proceeds from sales 76,853,248 3,182,443,127
-----------------------------------------------------------------------------------------------------------------
Cost of securities sold 73,467,182 3,176,767,689
-----------------------------------------------------------------------------------------------------------------
Net realized gain 3,386,066 5,675,438
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments and foreign currency holdings
-----------------------------------------------------------------------------------------------------------------
Beginning of year 1,261,506 (11,470,183)
-----------------------------------------------------------------------------------------------------------------
End of year 4,054,661 5,010,295
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation 2,793,155 16,480,478
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency transactions 6,179,221 22,155,916
-----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 7,258,827 $ 40,878,533
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
December 31, 1995 December 31, 1994
---------------------------- ----------------------------
Increase (Decrease) in Net Assets Equity Series Income Series Equity Series Income Series
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations Net investment income $ 1,079,606 $ 18,722,617 $ 652,845 $ 20,919,974
--------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment
and foreign currency transactions 3,386,066 5,675,438 5,305,636 (22,910,751)
--------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments and foreign currency holdings 2,793,155 16,480,478 (6,347,251) (8,188,919)
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 7,258,827 40,878,533 (388,770) (10,179,696)
- --------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price of
shares sold (reacquired) (Note 1d) (33,583) - 26,752 -
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
--------------------------------------------------------------------------------------------------------------------
Net investment income (1,159,614) (19,419,519) (668,159) (18,359,997)
--------------------------------------------------------------------------------------------------------------------
In excess of net investment income - - - (5,415,502)
--------------------------------------------------------------------------------------------------------------------
Net realized gain from investment and foreign
currency transactions (3,241,931) (3,359,656) (5,254,330) -
--------------------------------------------------------------------------------------------------------------------
Total distributions (4,401,545) (22,779,175) (5,922,489) (23,775,499)
- --------------------------------------------------------------------------------------------------------------------------------
Capital share transactions (Note 4)
--------------------------------------------------------------------------------------------------------------------
Net proceeds from sales of shares 12,580,328 10,404,685 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 4,172,873 11,575,339 5,508,027 10,694,704
--------------------------------------------------------------------------------------------------------------------
Total 16,753,201 21,980,024 33,927,008 59,221,761
--------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (18,584,662) (51,278,631) (15,535,843) (53,271,429)
--------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from
capital share transactions (1,831,461) (29,298,607) 18,391,165 5,950,332
- --------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 992,238 (11,199,249) 12,106,658 (28,004,863)
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Beginning of year 83,739,142 249,489,845 71,632,484 277,494,708
--------------------------------------------------------------------------------------------------------------------
End of year+ $ 84,731,380 $238,290,596 $83,739,142 $249,489,845
--------------------------------------------------------------------------------------------------------------------
</TABLE>
+Including overdistributed net investment income of $90,350 and $318,773,
respectively, for the year ended December 31, 1995 and $115,073 and $1,273,879,
respectively, for the year ended December 31, 1994. See Notes to Financial
Statements.
9
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended For the Year Ended For the Year Ended For the Year Ended
December 31, 1995 December 31, 1994 December 31, 1993 December 31, 1992 December 31, 1991
------------------ ------------------ ------------------ ------------------ ------------------
Per Share Equity Income Equity Income Equity Income Equity Income Equity Income
Operating Performance: Series Series Series Series Series Series Series Series Series Series
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $ 11.55 $ 7.98 $12.44 $ 9.02 $10.48 $ 8.87 $10.79 $ 9.40 $ 9.57 $ 9.13
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income .16 .77 .10 .65 .04 .76 .078 .808 .134 .877
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .90 .6133 (.1125) (.9603) 2.635 .174 (.268) (.288) 1.276 .316
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 1.06 1.3838 (.0125) (.3103) 2.675 .934 (.190) .520 1.410 1.193
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net
investment income (.17) (.6613) (.10) (.6035) (.10) (.784) (.12) (.840) (.12) (.873)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net
realized gain (.48) - (.7775) - (.615) - - - (.07) (.05)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders
in excess of net
investment income - - - (.1262) - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Special distributions from
foreign currency transactions - (.1225) - - - - - (.21) - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of year $ 11.96 $ 8.58 $11.55 $ 7.98 $12.44 $ 9.02 $10.48 $ 8.87 $10.79 $ 9.40
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return* 9.19% 17.86% (0.09)% (3.40)% 26.05% 10.78% (1.73)% 5.76% 14.76% 14.33%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000) $84,731 $238,291 $83,739 $ 249,490 $71,632 $ 277,495 $ 34,332 $148,137 $36,654 $101,023
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses 1.63% 1.04% 1.56% 1.02% 1.68% 1.04% 1.84% 1.22% 1.61% 1.30%
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 1.31% 7.60% .79% 7.72% .70% 7.81% .76% 8.50% 1.30% 9.96%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83.32% 1,073.69% 75.39% 1,230.20% 197.59% 1,599.43% 136.75% 812.01% 74.83% 543.90%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return does not consider the effects of sales loads.
See Notes to Financial Statements.
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; such procedures require the use of estimates. (b) It is the policy of
the Company to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its taxable income in
taxable distributions. Therefore, no federal income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date 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
10
<PAGE>
Notes to Financial Statements
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 $617,448 from the Equity Series
and $1,232,346 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 December 31, 1994,
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>
<CAPTION>
Lord, Abbett & Co. Distributors'
Series Commissions Concessions
- --------------------------------------------------------------------------
<S> <C> <C>
Equity $20,326 $245,921
- --------------------------------------------------------------------------
Income $43,332 $265,179
- --------------------------------------------------------------------------
</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 December 31, 1995,
accumulated net realized capital gain for financial reporting purposes, which is
substantially the same as for federal income tax purposes, aggregated $1,067,077
for the Equity Series and accumulated net realized loss aggregated $20,352,403
for the Income Series. The Income Series had a capital loss carryforward as of
December 31, 1995 of approximately $20,000,000 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.
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 Year Ended For the Year Ended
December 31, 1995 December 31, 1994
----------------------- ---------------------
Equity Income Equity Income
Series Series Series Series
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales of shares 1,071,166 1,228,622 2,246,737 5,647,641
- -----------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of net investment income
and realized gain from
securities transactions 348,579 1,361,451 475,678 1,294,495
- -----------------------------------------------------------------------------
Total 1,419,745 2,590,073 2,722,415 6,942,136
- -----------------------------------------------------------------------------
Shares reacquired (1,584,676) (6,086,496) (1,234,221) (6,431,505)
- -----------------------------------------------------------------------------
Increase (decrease) in shares (164,931) (3,496,423) 1,488,194 510,631
- -----------------------------------------------------------------------------
</TABLE>
5. Capital Paid In
At December 31, 1995, capital paid in was $79,699,992 for the Equity Series and
$253,951,476 for the Income Series.
6. Purchases and Sales of Securities
(a) During the year ended December 31, 1995, purchases and sales, exclusive of
investments in short-term securities and foreign currency transactions, were
$62,149,870 and $63,173,866, respectively, for the Equity Series and
$2,786,825,881 and $2,791,920,541, respectively, for the Income Series. Security
gains and losses are computed on the identified cost basis. As of December 31,
1995, unrealized appreciation and depreciation of investments based on cost for
federal income tax purposes were $7,434,016 and $3,590,216, respectively, for
the Equity Series and $7,230,757 and $2,887,677, 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 December 31,
1995, the Equity Series and the Income Series had outstanding forward currency
contracts to sell foreign currencies as follows:
11
<PAGE>
Notes to Financial Statements
<TABLE>
<CAPTION>
EQUITY SERIES
- -----------------------------------------------------------------------------------
Value at
Foreign Currency Settlement Date Current
Sell Contracts Receivable Value Appreciation
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Japanese Yen, expiring 2/16/96 $11,000,000 $10,789,139 $210,861
- -----------------------------------------------------------------------------------
<CAPTION>
INCOME SERIES
- -----------------------------------------------------------------------------------
Value at
Foreign Currency Settlement Date Current
Sell Contracts Receivable Value Appreciation
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
French Francs, expiring 2/16/96 $ 9,700,000 $ 9,695,940 $ 4,060
- -----------------------------------------------------------------------------------
Deutsche Marks, expiring 2/16/96 $19,000,000 $18,733,646 $266,354
- -----------------------------------------------------------------------------------
Japanese Yen, expiring 2/16/96 $20,700,000 $20,303,199 $396,801
- -----------------------------------------------------------------------------------
$49,400,000 $48,732,785 $667,215
- -----------------------------------------------------------------------------------
</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 $4,822 (exclusive of expenses), a portion of which has been deemed
invested in shares of the Company under a deferred compensation plan
contemplating future payment of the value of those shares. As of December 31,
1995, the aggregate amount in Directors' accounts maintained under the plan was
$47,628. Retirement costs accrued during the period amounted to $4,008.
Independent Auditors' Report
The Board of Directors and Shareholders,
Lord Abbett Global Fund, Inc.:
We have audited the accompanying statements of net assets of the Equity Series
and the Income Series of Lord Abbett Global Fund, Inc. as of December 31, 1995,
the related statements of operations for the year then ended, and of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1995 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Equity Series
and the Income Series of Lord Abbett Global Fund, Inc. at December 31, 1995, the
results of their operations, the changes in their net assets and the financial
highlights for the above-stated periods in conformity with generally accepted
accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
February 9, 1996
Our Management
Board of Directors
Ronald P. Lynch
Robert S. Dow
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
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
The Bank 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
This report to shareholders inaugurates a new procedure whereby a single copy of
the report is sent to an address to which more than one registered shareholder
of the Fund with the same last name has indicated mail is to be delivered,
unless additional reports are specifically requested in writing or by telephone.
Copyright (C) 1996 by Lord Abbett 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.
There is no guarantee that the forecasts contained within this publication will
come to pass .
All rights reserved. Printed in the U.S.A.
12
<PAGE>
Lord, Abbett & Co.
A Tradition of Performance Through
Disciplined
Investing
[PHOTO OF ZANE E. BROWN AND E. WAYNE NORDBERG APPEARS HERE]
(left to right)
Zane E. Brown, director of fixed
income and portfolio manager--
Lord Abbett Global Fund--Income Series
E. Wayne Nordberg, partner and
portfolio manager--Lord Abbett
Global Fund--Equity Series
A successful long-term track record is evidence of a successful investment
strategy. For decades we, at Lord, Abbett & Co., have believed that investing
with a disciplined, value approach is the best way to achieve competitive
returns and reduce portfolio risk. This commitment and the dedication of our
team of 47 investment professionals have helped us earn the trust of financial
professionals and investors for over 65 years.
About Your
Fund's
Board of
Directors
The Securities and Exchange Commission (SEC) views the role of the independent
Board of Directors as one of the most important components in overseeing a
mutual fund. The Board of Directors watches over your Fund's general operations
and represents your interests. Board members review and approve every contract
between your Fund and Lord, Abbett & Co. (the Fund's investment manager). They
meet regularly to review a wide variety of information and issues regarding your
Fund. Every member of the Board possesses extensive business experience; Lord
Abbett Global Fund's shareholders are indeed fortunate to have a group of
independent directors with diverse backgrounds to provide a variety of
viewpoints in the oversight of their Fund. Below, we feature one of our
independent directors, John C. Jansing.
John C. Jansing,
Director--
Lord Abbett Global Fund
[PHOTO OF JOHN C. JANSING APPEARS HERE]
An alumnus of Dartmouth College, Mr. Jansing is the founder and retired Chairman
of Independent Election Corporation of America, a proxy tabulating firm. His
diversified business career has spanned 40 years and includes extensive
experience in the investment company industry.
Mr. Jansing has served on the American Stock Exchange Board of Governors as well
as on a Securities and Exchange Commission Special Advisory Committee on
Investment Advisors. He has been an independent director for all of Lord
Abbett's funds since 1978.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
- --------------------------------------------------------------------------------
GROWTH
- --------------------------------------------------------------------------------
INCOME
- --------------------------------------------------------------------------------
Growth
Funds
Developing
Growth Fund
Value
Appreciation Fund
Global Fund-
Equity Series
Growth &
Income Funds
Affiliated Fund
Fundamental
Value Fund
Balanced
Fund
Investment
Trust-
Balanced Series
Income
Funds
U.S. Government
Securities Fund*
Bond-Debenture
Fund
Global Fund-
Income Series
Investment
Trust-Limited
Duration U.S.
Government
Securities Series*
Tax-Free Income Funds
.National
.California
.Connecticut
.Florida
.Georgia
.Hawaii
.Michigan
.Minnesota
.Missouri
.New Jersey
.New York
.Pennsylvania
.Texas
.Washington
Money
Market Fund
U.S. Government
Securities
Money Market
Fund*+
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your financial adviser provides value in helping you identify and
understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Global Fund.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your financial adviser or Lord, Abbett & Co. at
800-874-3733 for a prospectus. Read it carefully before investing.
When you invest in a family of funds, you benefit from:
Diversification. You and your financial adviser can diversify your investments
between equity and income funds.
Flexibility. As your investment goals change, your financial adviser can help
you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 25
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your financial adviser to help you customize your investment plan.
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ There can be no assurance that this Fund will be able to maintain a stable net
asset value of $1.00 per share. This Fund is managed to maintain, and has
maintained, its stable $1.00 per share price.
[LOGO OF LORD, ABBETT & CO. APPEARS HERE]
LAG-2-1295
The GM Building . 767 Fifth Avenue . New York, NY 10153-0203 (2/96)
