Lord Abbett Global
Fund o Income Series
o Equity Series
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JUNE 30, 1997
A globally-diversified mutual
fund with two portfolios to
help you achieve your goals
[GRAPHIC: Clock Dial]
[LOGO](R)
<PAGE>
Report to Shareholders
For the Six Months Ended June 30, 1997
[PHOTO: Robert S. Dow]
/s/ Robert S. Dow
- -----------------------------------
ROBERT S. DOW
CHAIRMAN
JULY 14, 1997
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 11
Lord Abbett Global Fund completed the first half of its fiscal year on June 30,
1997. Below is an overview of each Series' class-specific data as of the close
of the period.
<TABLE>
<CAPTION>
Income Series Equity Series
------------------------------ --------------------------------
Six Months Ended Six Months Ended
June 30, 1997 June 30, 1997
------------------------------ --------------------------------
Class A Class B Class C Class A Class B Class C
------------------------------ --------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value $8.08 $8.08 $8.08 $13.87 $13.81 $13.83
Dividends $0.296 $0.267 $0.267 $ - $ - $ -
Total return*++ +0.5% +0.1% +0.1% +10.5% +10.2% +10.3%
</TABLE>
About the Income Series
During the period, your Series increased its exposure to countries, such as
Australia, New Zealand and Canada. Following the Federal Reserve Board's
tightening of short-term interest rates by .25% in March, global inflationary
expectations seemed to subside, preparing the way for rallies in fixed-income
markets.
As concerns about the viability of the European Monetary Union lessened, we
shifted exposure out of core Europe (Germany, France and the Netherlands) into
Italy, Sweden and Spain. Questions remain about the political feasibility of
Monetary Union; however, spreads (the difference in yields between various
issues) throughout Europe continued to tighten substantially during the first
half of 1997.
The Series added exposure in Japan (capturing both the value in the market and
the currency exposure to an appreciating yen) and the United Kingdom ("U.K."),
which performed well in a post-election rally. Since the U.K. continues to offer
some of the highest yields in Western Europe, we continue to maintain our
position in the area.
As global bond yields continue to converge, the Series looks to expand its
country list to include greater participation in smaller, investment-grade
countries like Greece (which is currently in the portfolio), South Africa and
Poland. These countries will help to increase the possibilities for higher yield
in the declining yield environment we are forecasting.
About the Equity Series
While the Series' exposure to Japan decreased slightly during the period, it
remained the largest country holding in your Series at June 30. While our
overall exposure to Asia decreased as well, (we sold a number of strong
performing stocks and took profits), we continue to see good overall value in
the area, relative to the U.S. and Europe.
In the U.S. portion of the Series, we continued to maintain an overweighting in
the financial sector; however, given the sector's strong second quarter 1997
performance, we eliminated a number of these holdings and allocated assets to
select Canadian banks offering better value.
Going forward, we will rely on individual company dynamics rather than
country-specific allocations.
We are pleased that Lord Abbett Global Fund is a part of your investment
portfolio. We look forward to continuing to help you strive toward your
financial goals throughout 1997 and beyond.
* Total return is the percent change in net asset value, assuming the
reinvestment of all distributions.
++ Not annualized.
<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.
<TABLE>
<CAPTION>
A Comparison of 10-Year Government Bonds, After Currency Translations
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 6 Months 10 1/2 Years
Ended Ended
6/30/97 6/30/97
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Canada 8.0 19.0 16.1 5.6 24.1 (0.5) 13.2 (13.6) 26.1 11.3 3.5 176.4
- --------------------------------------------------------------------------------------------------------------------------------
France 20.6 7.3 8.9 19.8 16.4 4.6 17.0 (0.5) 31.3 4.8 (6.7) 207.2
- --------------------------------------------------------------------------------------------------------------------------------
Germany 27.1 (3.0) 5.6 10.5 10.8 6.2 10.6 5.1 27.2 (0.3) (8.2) 129.1
- --------------------------------------------------------------------------------------------------------------------------------
Japan 40.4 2.7 (14.4) 3.0 24.2 11.3 30.8 5.5 12.9 (5.9) 4.8 170.0
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom 46.4 2.3 (3.5) 34.2 14.7 (3.9) 21.4 (5.4) 17.5 18.4 3.6 253.9
- --------------------------------------------------------------------------------------------------------------------------------
United States (4.6) 8.8 14.0 6.7 17.0 7.3 12.1 (6.7) 23.6 2.9 2.5 116.1
</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.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- ---------------------------------------------
United States 6.55%
- ---------------------------------------------
Australia 7.07%
- ---------------------------------------------
Canada 6.33%
- ---------------------------------------------
Denmark 6.21%
- ---------------------------------------------
France 5.50%
- ---------------------------------------------
Germany 5.61%
- ---------------------------------------------
Greece 8.97%
- ---------------------------------------------
Italy 6.75%
- ---------------------------------------------
Japan 2.54%
- ---------------------------------------------
New Zealand 6.96%
- ---------------------------------------------
Spain 6.27%
- ---------------------------------------------
Sweden 6.52%
- ---------------------------------------------
United Kingdom 7.09%
- ---------------------------------------------
Semi-annual yields to maturity on 10-year government benchmark bonds. Source:
Union Bank of Switzerland (as of June 30, 1997).
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 97.5%
AA 2.5%
[THE FOLLOWING TABLE WAS REPRESENTED BY MAP GRAPH IN THE PRINTED MATERIAL.]
Canada 4.66%
United States 31.24%
Finland 1.14%
Sweden 8.32%
Denmark 3.28%
Netherlands 1.10%
UK 11.45%
Spain 3.81%
Portugal 1.31%
France 3.31%
Germany 7.49%
Italy 6.27%
Greece 2.59%
Japan 6.49%
Australia 4.98%
New Zealand 2.56%
Data as of 6/30/97
1
<PAGE>
Important Information
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. Each Series of
the Fund issues additional classes of shares, with distinct pricing options. For
a full discussion of the differences in pricing alternatives, please call
800-874-3733 and ask for the Fund's current prospectus. If used as sales
material after 9/30/97, this report must be accompanied by Lord Abbett's
Performance Quarterly for the most recently completed calendar quarter.
Statement of Net Assets
INCOME SERIES June 30, 1997
<TABLE>
<CAPTION>
Principal
Amount
Rating: S&P in Local Market
Investments or Moody's Currency Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Investments in Securities 95.53%
===================================================================================================================================
Foreign 65.69%
===================================================================================================================================
Australia 4.76% Australian Commonwealth Treasury 10% due 10/15/2007 AAA $ 8,000M $ 7,319,600
Commonwealth Bank of Australia 13 3/4% due 9/21/1999 AAA 1,000M 871,928
Total 8,191,528
- -------------------------------------------------------------------------------------------------------------------------===========
Canada 4.45% Government of Canada 5 1/2% due 9/1/2002 AAA 7,200M 5,189,191
Government of Canada 8% due 6/1/2023 AAA 3,000M 2,463,099
Total 7,652,290
- -------------------------------------------------------------------------------------------------------------------------===========
Denmark 3.13% Denmark Government 7% due 11/15/2007 AAA 34,000M 5,382,404
- -------------------------------------------------------------------------------------------------------------------------===========
Finland 1.09% Finnish Government 7 1/4% due 4/18/2006 AAA 9,000M 1,881,801
- -------------------------------------------------------------------------------------------------------------------------===========
France 3.16% France O.A.T. 81/4% due 2/27/2004 AAA 27,150M 5,435,647
- -------------------------------------------------------------------------------------------------------------------------===========
Germany 7.16% Deutschland Republic 6% due 1/4/2007 AAA 3,450M 2,030,249
Deutschland Republic 73/8% due 1/3/2005 AAA 15,975M 10,290,121
Total 12,320,370
- -------------------------------------------------------------------------------------------------------------------------===========
Greece 2.47% Hellenic Republic 9.80% due 3/21/2000 AA 397,800M 1,442,423
Hellenic Republic 11% due 11/26/1999 AA 747,000M 2,801,250
Total 4,243,673
- -------------------------------------------------------------------------------------------------------------------------===========
Italy 5.99% Republic of Italy (BTPS) 9% due 11/1/2023 AAA 3,820,000M 2,620,520
Republic of Italy (BTPS) 9 1/2% due 4/15/1999 AAA 12,375,000M 7,684,875
Total 10,305,395
- -------------------------------------------------------------------------------------------------------------------------===========
Japan 6.20% Japanese Government Bond 2.90% due 12/20/2006 AAA 600,000M 5,397,000
Japanese Government Bond 6.70% due 9/20/2001 AAA 500,000M 5,265,500
Total 10,662,500
- -------------------------------------------------------------------------------------------------------------------------===========
Netherlands 1.05% Netherlands Government 5 3/4% due 2/15/2007 AAA 3,500M 1,812,528
- -------------------------------------------------------------------------------------------------------------------------===========
New Zealand 2.45% New Zealand Government 10% due 3/15/2002 AAA 5,500M 4,221,822
Portugal 1.25% Portuguese Government 8 3/4% due 3/23/2001 AAA 340,000M 2,143,020
Spain 3.64% Spanish Government 8.40% due 4/30/2001 AAA 834,900M 6,267,594
------------------------------------------------------------------------------------------===========
</TABLE>
2
<PAGE>
Statement of Net Assets
INCOME SERIES June 30, 1997
<TABLE>
<CAPTION>
Principal
Amount
Rating: S&P in Local Market
Investments or Moody's Currency Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Sweden 7.95% Kingdom of Sweden 10 1/4% due 5/5/2003 AAA $39,000M $ 6,095,661
Kingdom of Sweden SGB 8% due 8/15/2007 AAA 53,300M 7,589,227
Total 13,684,888
- -------------------------------------------------------------------------------------------------------------------------===========
United Kingdom 10.94% U.K. Treasury 7 1/4% due 12/7/2007 AAA 4,850M 8,163,156
U.K. Treasury 8% due 6/7/2021 AAA 5,825M 10,667,677
Total 18,830,833
------------------------------------------------------------------------------------------===========
Total Investments in Foreign Securities (Cost $113,523,095) 113,036,293
====================================================================================================================================
United States 29.84%
====================================================================================================================================
Federal Home Loan Mortgage Corporation 7 1/2% due 12/1/2026 AAA 3,930M 3,946,194
Federal National Mortgage Association 6 5/8% due 3/21/2006 AAA 5,000M 4,928,125
U.S. Treasury Notes 6 5/8% due 2/15/2027 AAA 20,000M 19,571,875
U.S. Treasury Notes 7% due 7/15/2006 AAA 22,250M 22,893,164
Total Investments in United States Securities (Cost $51,295,508) 51,339,358
------------------------------------------------------------------------------------------===========
Total Investments in Securities (Cost $164,818,603) 164,375,651
====================================================================================================================================
Other Assets, Less Liabilities 4.47%
====================================================================================================================================
Other Short-Term
Assets Investments Federal Home Loan Bank 5.39% due 7/2/1997 (Cost $3,698,892) AAA 3,700M 3,698,892
--------------------------------------------------------------------------------------------------------===========
Cash 271,422
--------------------------------------------------------------------------------------------------------===========
Receivable for:
Securities sold 100,681,072
Other 4,437,972
Total Other Assets 109,089,358
====================================================================================================================================
Liabilities Payable for: Securities purchased 99,988,125
Other 1,415,980
Total Liabilities 101,404,105
- -------------------------------------------------------------------------------------------------------------------------===========
Cash and Receivables, Net of Liabilities 7,685,253
====================================================================================================================================
Net Assets 100.00% $172,060,904
====================================================================================================================================
Class A Shares-Net asset value ($164,408,521 / 20,343,824 shares outstanding) $8.08
Class B Shares-Net asset value ($1,165,362 / 144,249 shares outstanding) $8.08
Class C Shares-Net asset value ($6,487,021 / 802,671 shares outstanding) $8.08
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
About Lord Abbett's Equity Series
Why Invest Internationally?
International investors have a larger choice of exceptional companies to choose
from.
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Percent of the World's Publicly Traded Companies
Based in the U.S. 32%
Based outside of the U.S. 68%
Source: Morgan Stanley Capital International. Data is as of 12/31/96 and is
based on market capitalization.
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.
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]
Diversification Reduced Risk and Increased Returns
Allocation Risk Return
100% Non-US 16.8% 12.8%
90% Non-US/10% US 15.89 12.74
80% Non-US/20% US 15.09 12.65
70% Non-US/30% US 14.41 12.55
60% Non-US/40% US 13.95 12.45
50% Non-US/50% US 13.55 12.25
40% Non-US/60% US 13.55 12.25
30% Non-US/70% US 13.60 11.89
20% Non-US/80% US 13.80 11.60
10% Non-US/90% US 14.30 11.40
100 US 14.85 11.10
Derived using returns from December 1969 to June 1997. Source: Morgan Stanley
Capital International.
Managed To Participate In Global Growth
Portfolio diversification positions the Equity Series to participate in global
opportunities. Twenty-three countries are represented in the Equity Series; see
the portfolio of investments in long-term securities on page 5.
[THE FOLLOWING TABLE WAS REPRESENTED BY MAP GRAPH IN THE PRINTED MATERIAL.]
Canada 4.97%
US 11.80%
Mexico 0.69%
Brazil 1.31%
Argentina 0.56%
Chile 0.20%
Sweden 1.49%
Switzerland 2.77%
Netherlands 6.00%
UK 10.01%
France 7.02%
Spain 1.97%
Germany 5.74%
Italy 1.29%
South Africa 0.40%
Lebanon 1.30%
Israel 1.02%
Egypt 1.40%
Malaysia 1.09%
Japan 27.55%
Hong Kong 5.36%
Singapore 2.12%
Australia 3.94%
Data as of 6/30/97
4
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
====================================================================================================================================
Investments in Securities and Options 90.14%
====================================================================================================================================
Foreign 78.84%
====================================================================================================================================
<S> <C> <C> <C>
Argentina .51% Irsa Gdr-Real estate company 7,000 $ 306,688
Telecom Argentina-Telecommunications company 2,800 147,263
Total 453,951
- -------------------------------------------------------------------------------------------------------------------------==========
Australia 3.55% Amcor-Paper and packaging manufacturing 40,000 265,444
Brambles-Diversified business services 37,000 730,772
Broken Hill Proprietary-Miner and producer of metals and steel 28,200 414,317
Futuris Corp.-Conglomerate 335,000 538,077
Gio Australia Holdings-Insurance/fund management company 102,000 315,364
Lend Lease Corp.-Financial services company 30,400 641,890
QNI-Major Australian nickel company 125,000 225,288
Total 3,131,152
- -------------------------------------------------------------------------------------------------------------------------==========
Brazil 1.18% Electrobras ADR-Electric power utility 12,800 410,200
Telebras ADR-National telecommunications company monopoly 4,100 632,681
Total 1,042,881
- -------------------------------------------------------------------------------------------------------------------------==========
Canada 4.48% Bank of Montreal-Canadian bank 15,000 586,875
Canadian National Railway (Partially Paid)-
Major Canadian-based railroad operator 10,000 437,500
Canadian Natural Resources-Canadian natural gas
producer 8,000 208,000
Canadian Oil Sands Trust-Royalty trust for
heavy-oil production 24,000 420,000
Glenmore Highlands-Mineral exploration company 115,000 330,625
Lytton Minerals Ltd.-Canadian diamond exploration company 125,000 148,438
New Indigo Resources-Canadian diamond exploration company 60,000 240,000
Precision Drilling Corp.-Leading Canadian oil and
gas drilling contractor 25,000 1,209,375
Repap Enterprises-Canadian pulp and paper producer 300,000 140,625
Royal Bank of Canada-Canadian bank 5,000 226,875
Total 3,948,313
- -------------------------------------------------------------------------------------------------------------------------==========
Chile 0.18% Chilgener-Utility 5,500 156,063
- -------------------------------------------------------------------------------------------------------------------------==========
Egypt 1.26% Suez Cement-Cement manufacturer 54,880 1,108,748
- -------------------------------------------------------------------------------------------------------------------------==========
France 6.33% Christian Dior-France's principal luxury goods manufacturer 6,460 1,066,061
Paribas-Major banking and finance group 11,435 789,842
Pinault Printemps Redoute-One of the principal retailing and specialist
distribution groups in France 2,500 1,201,109
Saint Gobain-Industrial group 4,450 648,812
Suez Lyonnaise des Eaux-Water and business services group 10,670 1,074,642
Total S.A. "B" Shares-Energy and petroleum company 7,945 802,894
Total 5,583,360
- -------------------------------------------------------------------------------------------------------------------------==========
Germany 5.17% Commerzbank-Major bank 27,500 778,734
Jil Sanders-Exclusive women's wear designer and manufacturer 900 526,225
Linde-A diversified engineering group, specializing in forklift trucks 1,200 918,315
Mannesmann-Engineering group 2,250 1,002,150
Siemens-Europe's leading electrical and electronics company 1,100 65,294
Thyssen-Largest producer of steel in Germany 5,360 1,268,948
Total 4,559,666
- -------------------------------------------------------------------------------------------------------------------------==========
Hong Kong 4.83% Amway Asia Pacific Ltd.-A direct seller of household products in
China and East Asia 500 21,813
Cheung Kong-Property developer 69,000 681,361
Guoco Group-Major bank 80,000 421,328
HSBC Holding-Major global bank 32,800 986,499
Hutchison Whampoa-Ports, telecommunications and property conglomerate 93,000 804,311
Hysan Development Co.-Property developer 163,000 480,769
</TABLE>
5
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1997
<TABLE>
<CAPTION>
Shares or
Principal Amount
Investments in Local Currency Market Value
====================================================================================================================================
<S> <C> <C> <C>
Sun Hung Kai Properties-Leading property development
and investment company 72,000 $866,657
Total 4,262,738
- -------------------------------------------------------------------------------------------------------------------------==========
Israel .92% Blue Square-Diversified retailing 47,000 810,750
- -------------------------------------------------------------------------------------------------------------------------==========
Italy 1.16% ENI-Former state-owned oil and gas company 180,000 1,020,798
- -------------------------------------------------------------------------------------------------------------------------==========
Japan 24.18% Amada Corp.-Machine tool manufacturer 104,000 916,822
Asatsu-Advertising company 21,000 777,168
Bank of Tokyo-Mitsubishi-Major banks 60,000 1,204,506
Best Denki-Electric equipment retailer 30,000 322,074
Fuji Machine Mfg.-A major manufacturer of automated assembly
machines for electronic parts and components 14,000 507,114
Fuji Photo Film-Major manufacturer of
photo-sensitive materials 27,000 1,086,413
Fujikura Cable-Manufacturer of fiber-optic cable 78,000 728,465
Hankyu Department Stores-Department store retailer 68,000 718,162
Hitachi Ltd.-One of Japan's major electrical engineering
groups with operations ranging from computers to electrical
power systems 65,000 726,193
Kajima Corp.-Construction and civil engineering company 85,000 497,820
Kissei Pharmaceutical-Pharmaceutical company 35,000 769,836
Kyocera-World's largest manufacturer of integrated circuit
ceramic packages 9,000 714,848
Mitsui & Company-General trading company 100,000 960,110
Mitsui Fudosan-Real estate company 82,000 1,130,837
Mori Seiko-Machine tool manufacturer 7,000 112,421
Nippon Sheet Glass-Glass and optical fiber manufacturers 80,000 294,664
Nippon Telephone & Telegraph-Japan's largest telecommunications
company 123 1,180,939
Nissan Motors-Japan's second, and the world's fourth, largest
auto manufacturer 175,000 1,357,913
Nitto Denko Corp.-Manufacturer of electronic
components 36,000 700,708
NKK Corporation-Crude steel and pipe manufacturer 590,000 1,266,848
Sekisui Chemical-Housing manufacturer 55,000 556,864
Shiseido-Cosmetic manufacturer 65,000 1,072,273
Sumitomo Bank-The nucleus of the Sumitomo Group and
one of the largest banks in Japan 34,000 557,913
Sumitomo Electric Industries-Manufacturer of electric
wire and cables 94,000 1,575,280
Sumitomo Trust & Bank-One of the leading trust banks in Japan 38,000 407,960
Sumitomo Trust & Bank 0.5% due 1/10/2007 30,000M 295,230
Toyota Motor-Automobile manufacturer 30,000 885,051
Total 21,324,432
- -------------------------------------------------------------------------------------------------------------------------==========
Lebanon 1.17% Solidere-Real estate company 60,000 1,035,000
- -------------------------------------------------------------------------------------------------------------------------==========
Malaysia .98% Guinness Anchor-Brewing concern 120,000 266,172
Malayan Banking-Largest commercial bank in Malaysia 14,000 146,948
Southern Bank "A"-Major bank 106,750 255,805
Tenaga National-Power company 40,000 194,876
Total 863,801
- -------------------------------------------------------------------------------------------------------------------------==========
Mexico .62% Cementos de Mexico-Largest cement producer 17,000 148,750
Fomento Economico Mexicano ADS -Mexican brewer and cola bottler 35,600 215,269
Gruma S.A. de C.V. Class B-Flour manufacturer 37,740 180,824
Total 544,843
- -------------------------------------------------------------------------------------------------------------------------==========
Netherlands 5.41% Hagemeyer-Trading group 24,000 1,240,430
ING-Banking and insurance company 26,400 1,217,800
Vendex International-Retailing group 26,000 1,424,639
VNU-Publishing group 40,000 884,856
Total 4,767,725
-------------------------------------------------------------------------------------------==========
</TABLE>
6
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1997
<TABLE>
<CAPTION>
Investments Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Singapore 1.91% DBS Land-Real estate company 144,000 $ 455,256
Development Bank of Singapore-Leading Singapore bank and
financial services company 48,587 611,715
United Overseas Bank-One of the leading bank and financial
services companies 60,240 619,382
Total 1,686,353
- -------------------------------------------------------------------------------------------------------------------------==========
South Africa .36% Rembrandt Group Ltd.-Conglomerate 30,000 320,212
- -------------------------------------------------------------------------------------------------------------------------==========
Spain 1.78% Banco Santander-Leading Spanish bank 42,600 1,312,732
Enersis S.A.-Electric power utility 7,200 256,950
Total 1,569,682
- -------------------------------------------------------------------------------------------------------------------------==========
Sweden 1.34% Ericsson (LM) Series B-Telecommunications company 30,000 1,183,320
- -------------------------------------------------------------------------------------------------------------------------==========
Switzerland 2.50% Nestle-One of the world's top two food manufacturing companies 600 790,857
Novartis-Pharmaceutical and chemical company 885 1,413,626
Total 2,204,483
- -------------------------------------------------------------------------------------------------------------------------==========
United Kingdom 9.02% Bass plc-Brewing interests and hotels 31,500 384,303
BBA Group-Industrial components manufacturer 58,000 342,699
British Petroleum-Integrated oil company 58,499 726,833
British Telecom-Leading domestic telecommunications group 70,000 519,624
Burton Group-Leading retailer in the United Kingdom 190,000 372,362
Capital Shopping Centre-Property investment company 71,750 461,561
General Electric Company-Electronics group 70,000 418,264
Glaxo Wellcome-Pharmaceutical manufacturer 19,500 402,453
Granada Group-Diversified leisure group owning hotels,
motorway services and bars 28,000 368,166
Guinness-Diversified company involved in brewing, distilling and hotels 53,200 520,652
HSBC Holdings plc-Bank 17,500 538,412
Legal & General Group Ord-Insurance company 47,000 317,208
Lloyds TSB Group-Banking company 83,000 850,974
Severn Trent-Utility company 42,000 543,509
Stagecoach Holdings-Bus and train operator 28,000 295,464
T L Group-Engineering company 45,000 392,090
Zeneca Group-Pharmaceutical company 15,000 495,825
Total 7,950,399
-------------------------------------------------------------------------------------------==========
Total Investments in Foreign Securities (Cost $56,820,334) 69,528,670
===================================================================================================================================
United States 10.64%
===================================================================================================================================
Champion International Corp.-Large paper and
forest products producer 5,000 276,250
Core Laboratories N.V.-A provider of petroleum reservoir
analysis and environmental testing 10,000 260,000
Dailey Petroleum Services Co.-Provides directional drilling
services and designs, manufactures and rents technologically-advanced
downhole tools for oil and gas drilling and workover applications 55,000 371,250
Dawson Production Services-Provider of oil and gas drilling services 21,400 299,600
Enserch Exploration Inc.-Natural gas producer 10,000 109,375
Equitable of Iowa-A leading provider of individual annuities
and insurance 20,000 1,120,000
Fortune Brands Inc.-Consumer products conglomerate 6,000 223,875
Freeport-McMoRan Copper & Gold-Silver Conv. Pfd. Series D 20,000 365,000
General Motors Corp.-Worldwide auto producer 5,000 278,438
Genuine Parts Company-National distributor of automotive replacement
parts 12,000 406,500
Heinz H.J. Co.-Domestic packaged foods producer 10,000 461,250
International Paper Co.-Producer of paper and forest products 7,000 339,938
Jefferson-Pilot Corp.-Life insurance holding company 4,000 279,500
New West Eyeworks-Eye-care chain 40,000 290,000
Nicor Inc.-Natural gas distributor in Illinois 15,000 538,125
</TABLE>
7
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1997
<TABLE>
<CAPTION>
Shares,Contracts
Investments or Principal Amount Market Value
====================================================================================================================================
<S> <C> <C> <C>
Panaco Inc.-Energy exploration and development company 20,000 $ 90,000
Philip Morris Inc.-Leading tobacco company 8,000 355,000
Plantronics, Inc.-Leading supplier of communication headset products
and services to usersand providers worldwide 30,000 1,503,750
Questar Corp.-Regional natural gas producer in Utah 10,000 403,750
Seagate Technology Inc.-Manufacturer of computer disk drive equipment 10,000 351,875
Standard Products Co.-Manufactures plastic and rubber products
for the automotive andappliance industries 10,000 252,500
Torchmark Corp.-Diversified insurance company 7,000 498,750
Vintage Petroleum Inc.-Independent energy company engaged in the
exploitation and development of oil and gas properties 10,000 307,500
Total Investments in United States Securities (Cost $7,972,933) 9,382,226
====================================================================================================================================
Outstanding Put Options Purchased .66%
====================================================================================================================================
Japanese Yen Expiring 12/22/1997 at(Y)108.5 (Cost $460,350) 13,500,000 585,900
-------------------------------------------------------------------------------------------===========
Total Investments in Securities and Options (Cost $65,253,617) 79,496,796
====================================================================================================================================
Other Assets, Less Liabilities 9.86%
====================================================================================================================================
Short-Term Investments Ford Motor Credit Co. 5.75% due 7/31/1997 3,225M 3,225,000
General Electric Capital Corp. 5.56% due 7/2/1997 2,400M 2,400,000
Prudential Funding Corp. 5.30% due 7/1/1997 2,650M 2,650,000
-------------------------------------------------------------------------------------------===========
Total Short-Term Investments (Cost $8,275,000) 8,275,000
- -------------------------------------------------------------------------------------------------------------------------===========
Cash and Receivables,
Net of Liabilities 418,425
-------------------------------------------------------------------------------------------===========
Total Other Assets, Less Liabilities 8,693,425
====================================================================================================================================
Net Assets 100.00% $88,190,221
====================================================================================================================================
Class A Shares-Net asset value ($86,918,257 / 6,264,951 shares outstanding) $13.87
Class B Shares-Net asset value ($743,230 / 53,826 shares outstanding) $13.81
Class C Shares-Net asset value ($528,734 / 38,230 shares outstanding) $13.83
</TABLE>
+ Restricted security under Rule 144A.
See Notes to Financial Statements.
8
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997
------------------------------
Investment Income Equity Series Income Series
====================================================================================================================================
<S> <C> <C> <C>
Income Dividends $ 801,009 $ --
Interest 119,612 6,563,990
Foreign taxes withheld (1,198) --
Total income 919,423 6,563,990
----------------------------------------------------------------------------------------------------------------------
Expenses Management fee 327,169 461,453
12b-1 distribution plan-Class A 119,798 274,409
12b-1 distribution plan-Class B 2,226 4,581
12b-1 distribution plan-Class C 1,295 30,977
Shareholder servicing 121,000 147,893
Custodian 42,000 7,848
Reports to shareholders 20,800 42,198
Expenses reimbursed to manager 11,048 --
Miscellaneous 2,805 23,525
Total expenses 648,141 992,884
----------------------------------------------------------------------------------------------------------------------
Net investment income 271,282 5,571,106
----------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions
====================================================================================================================================
Net realized gain (loss) from investment and foreign currency transactions
Proceeds from sales 35,847,155 1,135,122,651
Cost of investments sold 33,497,180 1,136,525,353
----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 2,349,975 (1,402,702)
----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments and foreign currency holdings 5,954,298 (3,776,306)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investment and foreign currency transactions 8,304,273 (5,179,008)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $ 8,575,555 $ 392,098
====================================================================================================================================
See Notes to Financial Statements.
</TABLE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997 Year Ended December 31, 1996
------------------------------ -----------------------------
Equity Income Equity Income
Increase (Decrease) in Net Assets Series Series Series Series
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Operations Net investment income $ 271,282 $ 5,571,106 $ 492,477 $ 13,928,162
Net realized gain (loss) from investment and
foreign currency transactions 2,349,975 (1,402,702) 2,557,061 (532,551)
Net unrealized appreciation (depreciation) of
investments and foreign currency holdings 5,954,298 (3,776,306) 4,234,210 (1,411,128)
Net increase in net assets resulting from operations 8,575,555 392,098 7,283,748 11,984,483
----------------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price of share
transactions (6,046) -- (1,917) --
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income-Class A -- (6,479,981) (499,800) (15,524,985)
Net investment income-Class B -- (35,100) -- (6,387)
Net investment income-Class C -- (212,225) -- (233,299)
Net realized gain from investment and
foreign currency transactions-Class A -- -- (2,421,006) (2,767,516)
Net realized gain from investment and
foreign currency transactions-Class B -- -- (6,410) (8,277)
Net realized gain from investment and
foreign currency transactions-Class C -- -- (6,734) (102,458)
Total distributions -- (6,727,306) (2,933,950) (18,642,922)
----------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 6,266,828 4,120,269 19,131,767 9,429,839
Net asset value of shares issued to shareholders in
reinvestment of net investment income and realized gain
from investment and foreign currency transactions -- 2,863,951 2,759,133 9,798,593
Net assets of shares issued in exchange for assets
acquired in tax-free acquisition -- -- -- 7,559,607
Total 6,266,828 6,984,220 21,890,900 26,788,039
----------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (18,809,998) (31,082,581) (18,806,279) (55,925,723)
----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from
share transactions (12,543,170) (24,098,361) 3,084,621 (29,137,684)
----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (3,973,661) (30,433,569) 7,432,502 (35,796,123)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of period 92,163,882 202,494,473 84,731,380 238,290,596
----------------------------------------------------------------------------------------------------------------------
End of period + $ 88,190,221 $172,060,904 $ 92,163,882 $202,494,473
======================================================================================================================
</TABLE>
+Including underdistributed (overdistributed) net investment
income of $975,306 and $(2,417,042) for the Equity and Income
Series, respectively, as of June 30, 1997 and $710,080 and
$(1,260,840), respectively, for the year ended December 31, 1996.
See Notes to Financial Statements.
9
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------------------------------------------------
Six Months Ended Year Ended Year Ended Year Ended
June 30, 1997 December 31, 1996 December 31, 1995 December 31, 1994
------------------ ----------------- ------------------ -------------------
Equity Income Equity Income Equity Income Equity Income
Per Share Operating Performance: Series Series Series Series Series Series Series Series
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.55 $8.34 $11.96 $8.58 $11.55 $7.98 $12.44 $9.02
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .04(b) .25(b) .07 .53 .16 .77 .10 .65
Net realized and unrealized gain (loss)
on investments 1.28 (.21) .93 (.04) .90 .6138 (.1125) (.9603)
Total from investment operations 1.32 .04 1.00 .49 1.06 1.3838 (.0125) (.3103)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income -- (.30) (.07) (.61) (.17) (.6613) (.10) (.6035)
Dividends from net realized gain -- -- (.21) -- (.48) -- (.7775) --
Distribution to shareholders in
excess of netinvestment income -- -- -- -- -- -- -- (.1262)
Distributions from foreign currency
transactions -- -- (.13) (.12) -- (.1225) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.87 $8.08 $12.55 $8.34 $11.96 $8.58 $11.55 $7.98
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 10.52%(c) .49%(c) 8.37% 6.12% 9.19% 17.86% (.09)% (3.40)%
====================================================================================================================================
Ratios to Average Net Assets:
Expenses .74%(c) .52%(c) 1.52% 1.04% 1.63% 1.04% 1.56% 1.02%
Net investment income .31%(c) 3.04%(c) .54% 6.52% 1.31% 7.60% .79% 7.72%
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------------------
Year Ended Year Ended
December 31, 1993 December 31, 1992
------------------------- ----------------------
Equity Income Equity Income
Per Share Operating Performance: Series Series Series Series
====================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.48 $8.87 $10.79 $9.40
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .04 .76 .078 .808
Net realized and unrealized gain (loss) on investments 2.635 .174 (.268) (.288)
Total from investment operations 2.675 .934 (.190) .520
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.10) (.784) (.12) (.840)
Dividends from net realized gain (.615) -- -- --
Distribution from foreign currency transactions -- -- -- (.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.44 $9.02 $10.48 $8.87
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 26.05% 10.78% (1.73)% 5.76%
====================================================================================================================================
Ratios to Average Net Assets:
Expenses 1.68% 1.04% 1.84% 1.22%
Net investment income .70% 7.81% .76% 8.50%
====================================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads.
(b) Calculated using average shares outstanding during the period.
(c) Not annualized.
See Notes to Financial Statements.
10
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------------------------------- --------------------------------------------
Six Months Ended 8/1/96(c) 8/1/96(c) Six Months Ended 8/1/96(c) 7/15/96(c)
June 30, 1997 to 12/31/96 to 12/31/96 June 30, 1997 to 12/31/96 to 12/31/96
============================================================ ========================= =================== ========================
Equity Income Equity Income Equity Income Equity Income
Per Share Operating Performance: Series Series Series Series Series Series Series Series
- -------------------------------------------------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.53 $ 8.34 $ 12.30 $ 8.24 $ 12.54 $ 8.34 $ 12.31 $ 8.14
- -------------------------------------------------------------------------------------- --------------------------------------------
Income from investment operations
- -------------------------------------------------------------------------------------- --------------------------------------------
Net investment income (loss) .01(d) .21(d) (.01) .23 .02(d) .22(d) -- .21
Net realized and unrealized gain (loss)
on investments 1.27 (.20) .58 .22 1.27 (.21) .57 .37
Total from investment operations 1.28 .01 .57 .45 1.29 .01 .57
.58
- -------------------------------------------------------------------------------------- --------------------------------------------
Distributions
Dividends from net investment income -- (.27) -- (.23) -- (.27) -- (.26)
Dividends from net realized gain -- -- (.21) -- -- -- (.21) --
Distributions from foreign currency
transactions -- -- (.13) (.12) -- -- (.13) (.12)
- -------------------------------------------------------------------------------------- --------------------------------------------
Net asset value, end of period $ 13.81 $ 8.08 $ 12.53 $ 8.34 $ 13.83 $ 8.08 $ 12.54 $ 8.34
- -------------------------------------------------------------------------------------- --------------------------------------------
Total Return(a)(b) 10.22% .12% 4.56% 5.58% 10.29% .12% 4.64% 7.43%
====================================================================================================================================
Ratios to Average Net Assets(b):
Expenses 1.11% .85% .83% .73% .97% .84% .83% .87%
Net investment income (loss) .05% 2.64% (.16)% 2.11% .16% 2.72% (.11)% 2.69%
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
Supplemental Data Six Months Ended -------------------------------------------------------------------------------------------
For All Classes: June 30, 1997 1996 1995 1994 1993 1992
===================================== ================ ================ ================ ================= ==============
Equity Income Equity Income Equity Income Equity Income Equity Income Equity Income
Series Series Series Series Series Series Series Series Series Series Series Series
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of
period (000) $88,190 $172,061 $92,164 $202,494 $84,731 $238,291 $83,739 $ 249,490 $71,632 $ 277,495 $ 34,332 $148,137
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover
rate 26.10% 403.24% 81.97% 621.79% 83.32% 1,073.69% 75.39% 1,230.20% 197.59% 1,599.43% 136.75% 812.01%
Average commissions
per share paid on
equity transactions $.022 n/a $.025 n/a $.033 n/a n/a n/a n/a n/a n/a n/a
====================================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads.
(b) Not annualized.
(c) Commencement of offering Class shares.
(d) Calculated using average sharesoutstanding during the period.
See Notes to Financial Statements.
Notes to Financial Statements
1. Significant Accounting Policies Lord Abbett Global Fund, Inc. (the "Company")
is an open-end management investment company. The Company consists of two
portfolios ("Series") - Lord Abbett Global Fund - Equity Series ("Equity
Series") and Lord Abbett Global Fund - Income Series ("Income Series"). Equity
Series is diversified as defined under the Investment Company Act of 1940.
Income Series is non-diversified. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Company: (a) 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. 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). Realized gains
and losses from security transactions are calculated on the identified cost
basis. Dividend income and distributions to shareholders are recorded on the
ex-dividend date and interest is recorded on the accrual basis. Discounts on
strips are accrued to maturity using the constant yield method. Net investment
income (other than distribution and service fees) and realized and unrealized
gains or losses are allocated to each class of shares based upon the relative
proportion of net assets at the beginning of the day. (d) For the Equity Series,
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 net investment income.
Undistributed net investment income per share thus is unaffected by sales or
repurchases of shares. (e) The Company enters into forward currency contracts
and currency option contracts in order 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.
A currency option contract gives you the right, but not the obligation, to
purchase or sell a foreign currency at a fixed price during a specified period.
The contracts are valued daily at current exchange rates or market values
(currency option) and any unrealized gain or loss is included in net unrealized
appreciation or depreciation of investment and foreign currency holdings. The
gain or loss, if any, arising from the difference between the settlement value
of the forward contract (or the cost of the option) and the closing of such
contracts, is included as net realized
11
<PAGE>
Notes to Financial Statements
gain or loss from investment and foreign currency transactions. Risk may arise
due to a change in the value of the foreign currency and as a result of the
potential inability of the counterparts to meet the terms of their contracts.
(f) 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. The effect of changes in foreign currency exchange rates on
investments in securities is not segregated in the Statements of Operations from
the effect of changes in market prices of those securities. (g) The Company may
write call options on securities it owns. Premiums received by the Company upon
writing covered call options are included in the Company's statement of net
assets as an asset and an equivalent liability. The liability is adjusted daily
to the market value of the options written. If an option expires, or if the
Company enters into a closing purchase transaction, the Company realizes a gain
(the total premium) or, if the cost of a closing purchase transaction exceeds
the premium originally received, a loss, and the liability related to the option
is extinguished. If an option is exercised, the proceeds of the sale of the
underlying investment are increased by the premium originally received when the
option was written.
2. Management Fee and Other Transactions With Affiliates The Company has a
management agreement with Lord, Abbett & Co. ("Lord Abbett") pursuant to which
Lord Abbett supplies the Company with investment management services and
executive and other personnel, pays the remuneration of officers, provides
office space and pays 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 Edinburgh Fund Managers PLC ("Edinburgh"). Edinburgh furnishes investment
advisory services in connection with the management of the Equity Series'
portfolio. Lord Abbett pays for the cost of Edinburgh's services. The management
fee is based on average daily net assets for each month at the annual rate of
.75% for the Equity Series and .50% for the Income Series.
The Company has Rule 12b-1 plans and agreements (the "Class A, Class B and Class
C Plans") with Lord Abbett Distributor LLC ("Distributor"), an affiliate of Lord
Abbett. The Company makes payments to Distributor which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, the Company
pays Distributor (1) an annual service fee of 0.25% of the average daily net
asset value of Class A shares, (2) a one-time distribution fee of up to 1% on
certain qualifying purchases and (3) a supplemental annual distribution fee of
0.10% of the average daily net asset value of Class A shares serviced by certain
qualifying institutions. Pursuant to the Class B Plan, the Company pays
Distributor an annual service and distribution fee of 0.25% and 0.75%,
respectively, of the average daily net asset value of the Class B shares.
Pursuant to the Class C Plan, the Company pays Distributor (1) a service fee and
a distribution fee, at the time such shares are sold, not to exceed 0.25% and
0.75%, respectively, of the net asset value of such shares sold and (2) at each
quarter-end after the first anniversary of the sale of such shares, a service
fee and a distribution fee at an annual rate not to exceed 0.25% and 0.75%,
respectively, of the average annual net asset value of such shares outstanding.
Lord Abbett may waive its management fee or reimburse each Series for certain of
its other expenses. Any such fees waived or expenses reimbursed 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. As of June 30, 1997, other expenses reimbursed
and not repaid by Equity Series amounted to $51,242. For Income Series, all
management fees waived and expenses reimbursed pursuant to the aforementioned
formula have been repaid. Distributor received the following commissions on
sales of Class A shares of the Company after concessions were paid to authorized
dealers:
Lord Abbett Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
Equity $16,844 $94,743
- --------------------------------------------------------------------------------
Income $ 6,722 $40,993
- --------------------------------------------------------------------------------
Certain of the Company's officers and directors have an interest in Lord Abbett.
3. Distributions Dividends from net investment income are declared semi-annually
for Equity Series and daily for Income Series. Distributions from net realized
gain from investment and foreign currency transactions are declared annually. At
June 30, 1997, accumulated net realized capital gain (loss) for financial
reporting purposes aggregated $2,459,403 for Equity Series and $(25,736,769) for
Income Series. The Income Series had a capital loss carryforward as of December
31, 1996 of approximately $24,300,000, of which $20,100,000 expires in 2002 and
$4,200,000 expires in 2004. 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.
4. Capital The Equity Series has authorized 65 million shares of $.001 par value
capital stock designated Class A, 15 million shares of $.001 par value capital
stock designated Class B and 20 million shares of $.001 par value capital stock
designated Class C. The Income Series has authorized 50 million shares of $.001
par value capital stock designated Class A, 30 million shares of $.001 par value
capital stock designated Class B and 20 million shares of $.001 par value
capital stock designated Class C. At June 30, 1997, paid in capital amounted to
$70,512,333 for Equity Series and $200,440,260 for Income Series. Transactions
in shares of capital stock were as follows:
Six Months Ended June 30, 1997
-----------------------------------------------------
Equity Series Income Series
Class A Shares Amount Shares Amount
- --------------------------------------------------- ---------------------------
Sales of shares 408,113 $ 5,200,062 347,684 $ 2,812,361
Shares issued to share-
holders in reinvestment
of net investment income -- -- 339,079 2,741,039
Total 408,113 5,200,062 686,763 5,553,400
- --------------------------------------------------- ---------------------------
Shares reacquired (1,445,134) (18,354,665) (3,678,643) (29,762,962)
Decrease in shares (1,037,021 $(13,154,603) (2,991,880) $(24,209,562)
- --------------------------------------------------- ---------------------------
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
Equity Series Income Series
Class A Shares Amount Shares Amount
- -------------------------------------------------------------------------------
Sales of shares 1,491,466 $18,591,308 1,002,952 $ 8,346,570
Shares issued to share-
holders in reinvestment
of net investment income 218,914 2,746,014 1,155,234 9,582,418
Total 1,710,380 21,337,322 2,158,186 17,928,988
- -------------------------------------------------------------------------------
Shares reacquired (1,491,443) (18,764,209) (6,592,178) (54,647,236)
Increase (decrease)
in shares 218,937 $ 2,573,113 (4,433,992) $(36,718,248)
- -------------------------------------------------------------------------------
Six Months Ended June 30, 1997
- -------------------------------------------------------------------------------
Equity Series Income Series
Class B Shares Amount Shares Amount
- -------------------------------------------------------------------------------
Sales of shares 53,366 $689,443 86,583 $699,740
Shares issued to share-
holders in reinvestment
of net investment income -- -- 2,047 16,511
Total 53,366 689,443 88,630 716,251
- -------------------------------------------------------------------------------
Shares reacquired (18,903) (298,230) (13,902) (111,747)
Increase in shares 34,463 $391,213 74,728 $604,504
- -------------------------------------------------------------------------------
12
<PAGE>
Notes to Financial Statements
August 1, 1996
(Commencement of Offering Class B Shares)
to December 31, 1996
- -------------------------------------------------------------------------------
Equity Series Income Series
Class B Shares Amount Shares Amount
- -------------------------------------------------------------------------------
Sales of shares 20,863 $267,552 68,234 $574,870
Shares issued to share-
holders in reinvestment
of net investment income 510 6,386 1,287 10,787
Total 21,373 273,938 69,521 585,657
- -------------------------------------------------------------------------------
Shares reacquired (2,010) (26,432) -- --
Increase in shares 19,363 $247,506 69,521 $585,657
- -------------------------------------------------------------------------------
Six Months Ended June 30, 1997
- -------------------------------------------------------------------------------
Equity Series Income Series
Class C Shares Amount Shares Amount
- -------------------------------------------------------------------------------
Sales of shares 29,620 $377,323 75,033 $608,166
Shares issued to share-
holders in reinvestment
of net investment income -- -- 13,165 106,403
Total 29,620 377,323 88,198 714,569
- -------------------------------------------------------------------------------
Shares reacquired (12,496) (157,103) (148,809) (1,207,872)
Increase (decrease)
in shares 17,124 $220,220 (60,611) $493,303)
- -------------------------------------------------------------------------------
August 1, 1996 July 15, 1996
(Commencement of (Commencement of
Offering Class C Shares) Offering Class C Shares)
to December 31, 1996 to December 31, 1996
- -------------------------------------------------------------------------------
Equity Series Income Series
Class C Shares Amount Shares Amount
- -------------------------------------------------------------------------------
Sales of shares 21,789 $272,907 60,986 $ 508,399
Shares issued to share-
holders in reinvestment
of net investment income 537 6,733 24,561 205,388
Shares issued to share-
holders in exchange for
assets acquired in
tax-free acquisition -- -- 928,927 7,559,607
Total 22,326 279,640 1,014,474 8,273,394
- -------------------------------------------------------------------------------
Shares reacquired (1,220) (15,638) (151,192) (1,278,487)
Increase in shares 21,106 $264,002 863,282 $6,994,907
- -------------------------------------------------------------------------------
5. Purchases and Sales of Investments During the six months ended June 30, 1997,
purchases and sales of investment securities, exclusive of short-term
investments, were $21,164,589 and $35,912,018, respectively, for the Equity
Series and $655,627,751 and $678,477,039, respectively, for the Income Series.
As of June 30, 1997, net unrealized appreciation, (depreciation), unrealized
appreciation and unrealized depreciation of investments based on cost for
federal income tax purposes were as follows:
Net Unrealized
Appreciation Unrealized Unrealized
Series (Depreciation) Appreciation (Depreciation)
- -------------------------------------------------------------------------------
Equity $ 14,243,179 $ 18,241,885 $ (3,998,706)
Income $ (442,952) $ 867,770 $ (1,310,722)
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
At June 30, 1997, the Income Series had outstanding forward currency contracts
to sell and buy foreign currencies as follows:
Value at
Foreign Currency Settlement Date Current
Sell Contracts Receivable Value Appreciation
- -------------------------------------------------------------------------------
Australian Dollars,
expiring 7/10/97 $ 1,900,325 $ 1,886,500 $ 13,825
- -------------------------------------------------------------------------------
Deutsche Marks,
expiring 7/14/97 to 8/11/97 $20,120,233 $19,819,308 $300,925
- -------------------------------------------------------------------------------
New Zealand Dollars,
expiring 7/16/97 to 7/21/97 $ 4,207,098 $ 4,136,504 $ 70,595
- -------------------------------------------------------------------------------
Total $26,227,656 $25,842,312 $385,345
- -------------------------------------------------------------------------------
Value at
Foreign Currency Settlement Date Current
Buy Contracts Payable Value (Depreciation)
- -------------------------------------------------------------------------------
Deutsche Marks,
expiring 7/17/97 $5,021,766 $4,830,771 $(190,995)
- -------------------------------------------------------------------------------
At June 30, 1997, the Income Series had outstanding covered call option
contracts as follows:
Principal
Amount Contract
Underlying in Local Expiration Premium Appreciation
Investment Currency Date Received Value (Depreciation)
- -------------------------------------------------------------------------------
U. K. Treasury
8% due
6/7/2021 $ 5,825M 7/14/97 $ 66,238 $ 33,288 $32,950
- -------------------------------------------------------------------------------
Republic of Italy
(BTPS) 9% due
11/1/2023 $3,820,000M 7/28/97 $ 22,182 $ 22,409 $ (227)
- -------------------------------------------------------------------------------
Kingdom of
Sweden
SGB 8% due
8/15/2007 $ 53,300M 7/28/97 $ 37,402 $ 47,068 $(9,666)
- -------------------------------------------------------------------------------
Total $125,822 $102,765 $23,057
- -------------------------------------------------------------------------------
Transactions in call options written during the six months ended June 30, 1997
were as follows:
Number Premiums
of Contracts Received
- -------------------------------------------------------------------------------
Options written 4 $ 154,606
- -------------------------------------------------------------------------------
Options expired (1) $( 28,784)
- -------------------------------------------------------------------------------
Options outstanding at June 30, 1997 3 $ 125,822
- -------------------------------------------------------------------------------
6. Directors' Remuneration The Directors of the Company associated with Lord
Abbett and all officers of the Company receive no compensation from the Company
for acting as such. Outside Directors' fees and retirement costs are allocated
among all funds in the Lord Abbett group based on net assets of each fund.
Directors' fees payable at June 30, 1997, under a deferred compensation plan,
were $49,712.
7. Acquisition On July 12, 1996, Income Series acquired the net assets of Lord
Abbett Securities Trust - Global Income Trust (the "Trust") pursuant to a plan
of reorganization approved by the Trust's shareholders on June 19, 1996. The
acquisition was accomplished by a tax-free exchange of 928,927 shares of newly
issued Class C shares for 1,631,867 shares of the Trust valued at $7,559,607 in
the aggregate on July 12, 1996. The aggregate net assets of the Income Series
and the Trust immediately before the acquisition were $204,257,984 and
$7,559,607 (including $48,406 of net unrealized depreciation and $110,517 of
accumulated net realized losses), respectively.
Copyright (C) 1997 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.
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Investing in the
Lord Abbett
Family of Funds
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GROWTH
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INCOME
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Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Income Funds Income Funds Market Fund
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Developing Global Fund- Affiliated Fund Balanced Series Bond-Debenture o National U.S. Government
Growth Fund Equity Series Fund o California Securities
Growth & o Connecticut Money Market
International Mid-Cap Income Series Global Fund- o Florida Fund*+
Series Value Fund Income Series o Georgia
Research Fund- o Hawaii
Research Fund- Large-Cap Limited Duration o Michigan
Small-Cap Series U.S. Government o Minnesota
Series Securities Series* o Missouri
o New Jersey
U.S. Government o New York
Securities Series* o Pennsylvania
o Texas
o Washington
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Finding the right mutual fund can be When you invest in a family of funds, Numbers to Keep Handy
confusing. At Lord, Abbett & Co., we you benefit from:
believe your financial adviser provides For Shareholder Account or
value in helping you identify and Diversification. You and your financial Statement Inquiries:
understand your investment objectives adviser can diversify your investments 800-821-5129
and, ultimately, offering fund between equity and income funds.
recommendations suitable for your For Literature:
individual needs. Flexibility. As your investment goals 800-874-3733
change, your financial adviser can help
This publication, when used as sales you reallocate your portfolio. For More Information:
literature, is to be distributed only if 800-426-1130
preceded or accompanied by a current As an investor in the Lord Abbett Family
prospectus for Lord Abbett Global Fund. of Funds, you have access to 28 Visit Our Web Site:
portfolios designed to meet a variety of http://www.lordabbett.com
For more complete information about any investment needs. While you may
other Lord Abbett fund, including reallocate your assets among our funds * An investment in this Fund is neither
charges and expenses, call your at any time, we recommend speaking with insured nor guaranteed by the U.S.
financial adviser or Lord Abbett your financial adviser to help you Government.
Distributor LLC at 800-874-3733 for a customize your investment plan.
prospectus. Read it carefully before + There can be no assurance that this
investing. 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.
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[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD ABBETT DISTRIBUTOR LLC
- ------------------------------------------------------------ LAG-3-697
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (8/97)
