Lord Abbett Global
Fund
o Income Series
o Equity Series
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JUNE 30, 1998
[GRAPHIC OMITTED]
A globally-diversified mutual fund with two
portfolios to help you achieve your goals
[LOGO](R)
<PAGE>
Report to Shareholders
For the Six Months Ended June 30, 1998
[PHOTO OMITTED]
/s/ ROBERT S. DOW
- ----------------------------------
ROBERT S. DOW
CHAIRMAN
JULY 25, 1998
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 8
Statements of Changes in
Net Assets 9
Financial Highlights 10
Notes to Financial Statements 12
Lord Abbett Global Fund completed the first half of its fiscal year on June 30,
1998. Below is an overview of each Series' class-specific data as of the close
of the period.
Income Series Equity Series
-------------------------------------------------------
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1998
-------------------------------------------------------
Class A Class B Class C Class A Class B Class C
-------------------------------------------------------
Net asset value $8.10 $8.10 $8.11 $13.55 $13.45 $13.46
Dividends $0.25 $0.22 $0.22 $ -- $ -- $ --
Total return*+ +3.2% +2.8% +3.0% +12.2% +11.8% +11.7%
About the Income Series
During the last six months, lower commodity prices and benign inflationary
pressures have curbed the need for higher interest rates both in the United
States and in Core Europe. In such an environment, the portfolio has maintained
modestly overweighted positions in the U.S. and dollar-bloc countries relative
to weightings in our benchmark, which is the J.P. Morgan Global Government Bond
Index. In addition, despite the Bank of England's tight monetary policy, we have
maintained an overweighted position in United Kingdom assets, taking advantage
of the currency appreciation and the relative outperformance of funds with
longer maturities.
Moreover, we have also captured some of the better high-yielding opportunities
in several lesser-developed, but still investment-grade, countries--like Poland,
Tunisia and Croatia. Greece has also provided an important vehicle for portfolio
diversification as it has begun the process of converging to Core European
inflation levels and interest rates.
Looking ahead to the second half of 1998, we believe the eleven countries
involved in the initial phase of EMU are poised to experience good economic
growth. We continue to like the U.K. market from a real yield, risk/reward
basis, but remain pessimistic on Japan from a fixed-income and currency
investment perspective. As the Asian overhang continues, we see potential for
upside appreciation for high-quality assets--particularly U.S. Treasuries.
About the Equity Series
The Equity Series' returns at net asset value for the three-month period ending
6/30/98 were 1.1%, versus the MSCI World Index's returns of 2.1%. This
underperformance, relative to the Series' benchmark, was affected by a one-time
transaction charge associated with restructuring by its new manager to focus the
portfolio upon a smaller number of better-quality, industry-leading stocks.
Looking ahead, we believe the third quarter of 1998 will witness a pattern of
stock market behavior across the world similar to that of the quarter just
ended. Combined political and economic uncertainties continue to mean that both
Far Eastern and emerging markets will remain vulnerable while Europe, in
particular, continues to appreciate based on generally stronger-than-expected
earnings growth.
Equity Management Change
Effective 6/15/98, the new sub-adviser for Lord Abbett Global Fund--Equity
Series is Fuji-Lord Abbett International, Limited (formerly named Fuji
Investment Management Co. (Europe) Ltd.) Effective the same date, the Fund's new
portfolio manager is Chris Taylor, who is Deputy Managing Director of Fuji-Lord
Abbett International, Limited and has been employed by the firm and its
predecessor companies since 1987. Mr. Taylor has over 15 years of investment
management experience and is a graduate of Oxford University and the City
University's Business School in London.
* 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 in the two charts below.
<TABLE>
<CAPTION>
A Comparison of 10-Year Government Bonds, After Currency Translations
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 6 Months 10 1/2 Years
Ended Ended
6/30/98 6/30/98
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Canada 19.0 16.1 5.6 24.1 (0.5) 13.2 (13.6) 26.1 11.3 8.6 1.5 172.6
- -----------------------------------------------------------------------------------------------------------------
France 7.3 8.9 19.8 16.4 4.6 17.0 (0.5) 31.3 4.8 (3.5) 4.4 175.1
- -----------------------------------------------------------------------------------------------------------------
Germany (3.0) 5.6 10.5 10.8 6.2 10.6 5.1 27.2 (0.3) (5.4) 4.4 93.9
- -----------------------------------------------------------------------------------------------------------------
Japan 2.7 (14.4) 3.0 24.2 11.3 30.8 5.5 12.9 (5.9) (4.3) (3.9) 68.8
- -----------------------------------------------------------------------------------------------------------------
United Kingdom 2.3 (3.5) 34.2 14.7 (3.9) 21.4 (5.4) 17.5 18.4 11.5 7.5 179.7
- -----------------------------------------------------------------------------------------------------------------
United States 8.8 14.0 6.7 17.0 7.3 12.1 (6.7) 23.6 2.9 11.5 4.3 157.0
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
All figures indicate percentage total returns in U.S. dollars; ( ) signify
negative return. Sources: J.P. Morgan Securities and Goldman Sachs
International, Limited.
Where in the World Can You Find Higher Yields?
A portfolio that 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.
As of 6/30/97 As of 6/30/98
- --------------------------------------------------------------------------------
United States 6.55% 5.45%
- --------------------------------------------------------------------------------
Australia 7.07% 5.60%
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Canada 6.33% 5.36%
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Denmark 6.21% 4.89%
- --------------------------------------------------------------------------------
France 5.50% 4.78%
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Germany 5.61% 4.71%
- --------------------------------------------------------------------------------
Greece 8.97% 7.62%
- --------------------------------------------------------------------------------
Italy 6.75% 5.01%
- --------------------------------------------------------------------------------
Japan 2.54% 1.35%
- --------------------------------------------------------------------------------
New Zealand 6.96% 6.34%
- --------------------------------------------------------------------------------
South Africa 14.35% 15.15%
- --------------------------------------------------------------------------------
Spain 6.27% 4.94%
- --------------------------------------------------------------------------------
Sweden 6.52% 4.94%
- --------------------------------------------------------------------------------
United Kingdom 7.09% 5.85%
- --------------------------------------------------------------------------------
Semi-annual yields to maturity on 10-year government benchmark bonds. Source:
Union Bank of Switzerland (as of June 30, 1998).
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 securities
on page 2.
High Quality of Long-Term Portfolio Holdings:
AAA 89.0%
BBB 11.0%
[The following table was depicted as a geographical chart in the printed
material.]
Canada 2.50%
U.S. 31.94%
Sweden 2.58%
Norway 2.41%
Netherlands 1.47%
U.K. 17.74%
Poland 1.82%
Germany 12.53%
Spain 2.48%
Tunisia 2.41%
Italy 8.23%
Croatia .76%
Greece 5.50%
South Africa 2.46%
Australia 3.64%
New Zealand 1.53%
Data as of 6/30/98. The Series' portfolio is actively managed and its holdings
are subject to change.
1
<PAGE>
Important Information
Prior to July 15, 1996, the Income Series had only one class of shares, which is
now designated as Class A shares. Results from periods from July 15, 1996 onward
relate to Class A shares. 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 less regulation and the potential for less 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 9/30/98, this report must be
accompanied by Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
Mutual funds are not insured by the FDIC, are not deposits or other obligations
of, or guaranteed by banks, and are subject to investment risks including loss
of principal amount invested.
Statement of Net Assets
INCOME SERIES June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount
Rating: S&P in Local
Investments or Moody's Currency Market Value
====================================================================================================================================
<S> <C> <C> <C> <C>
Investments in Securities 94.91%
====================================================================================================================================
Foreign 64.59%
====================================================================================================================================
Australia 3.46% Australian Commonwealth Treasury 83/4% due 8/15/2008 AAA $ 5,750M $ 4,420,652
- ------------------------------------------------------------------------------------------------------------------------============
Canada 2.37% Government of Canada Notes 9% due 6/1/2025 AAA 3,000M 3,031,668
- ------------------------------------------------------------------------------------------------------------------------============
Croatia .72% Croatia 7% due 2/27/2002 BBB 950M 920,906
- ------------------------------------------------------------------------------------------------------------------------============
Germany 11.89% Deutschland Republic Zero Coupon due 7/4/2007 AAA 4,280M 494,704
Deutschland Republic 61/2% due 7/4/2027 AAA 5,000M 3,226,965
Deutschland Republic 73/8% due 1/3/2005 AAA 14,975M 9,543,028
Ford Motor Credit 51/4% due 6/16/2008+ A 3,500M 1,930,208
Total 15,194,905
- ------------------------------------------------------------------------------------------------------------------------============
Greece 5.23% Hellenic Republic 8.90% due 4/1/2003 2,035,000M 6,674,800
- ------------------------------------------------------------------------------------------------------------------------============
Italy 7.81% Republic of Italy (BTPS) 12% due 9/1/2001 AAA 14,650,000M 9,976,650
- ------------------------------------------------------------------------------------------------------------------------============
Netherlands 1.39% Netherlands Government 83/4% due 1/15/2007 AAA 2,850M 1,779,765
- ------------------------------------------------------------------------------------------------------------------------============
New Zealand 1.45% New Zealand Government 8% due 2/15/2001+ AAA 3,500M 1,853,093
- ------------------------------------------------------------------------------------------------------------------------============
Norway 2.29% Norwegian Government 91/2% due 10/31/2002 AAA 19,500M 2,925,059
- ------------------------------------------------------------------------------------------------------------------------============
Poland 1.73% European Bank Recon & Develop 185/8% due 5/22/2000 AAA 7,820M 2,207,860
- ------------------------------------------------------------------------------------------------------------------------============
South Africa 2.33% Republic of South Africa 121/2% due 1/15/2002 BBB 13,700M 2,118,979
Walt Disney Co. 14% due 10/24/2002 A 5,500M 859,249
Total 2,978,228
- ------------------------------------------------------------------------------------------------------------------------============
Spain 2.35% Spanish Government 8.40% due 4/30/2001+ AAA 416,900M 3,004,598
- ------------------------------------------------------------------------------------------------------------------------============
Sweden 2.45% Kingdom of Sweden SGB 8% due 8/15/2007+ AAA 20,500M 3,131,888
- ------------------------------------------------------------------------------------------------------------------------============
Tunisia 2.29% Banque Cent De Tunisie 71/2% due 9/19/2007 BBB 3,000M 2,925,000
- ------------------------------------------------------------------------------------------------------------------------============
United Kingdom 16.83% British Airways 10% due 6/15/2008 A 3,450M 7,415,899
United Kingdom Treasury 9% due 10/13/2008 AAA 1,200M 2,477,640
</TABLE>
2
<PAGE>
Statement of Net Assets
INCOME SERIES June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount
Rating: S&P in Local
Investments or Moody's Currency Market Value
====================================================================================================================================
<S> <C> <C> <C> <C>
United Kingdom Treasury 10% due 9/8/2003 AAA 4,390M $ 8,469,969
United Kingdom Treasury 13% due 7/14/2000 AAA 1,700M 3,144,568
Total 21,508,076
-----------------------------------------------------------------------------------------============
Total Investments in Foreign Securities (Cost $84,607,120) 82,533,148
====================================================================================================================================
United States 30.32%
====================================================================================================================================
Federal National Mortgage Association 6 1/2% due on
an announced basis AAA $17,000M 17,095,625
U.S. Treasury Bonds Zero Coupon due 11/15/2021+ AAA 4,000M 1,054,375
U.S. Treasury Notes 6 1/8% due 11/15/2027+ AAA 14,000M 15,004,063
U.S. Treasury Notes 7 1/2% due 10/31/1999+ AAA 5,450M 5,586,250
Total Investments in United States Securities (Cost $38,079,814) 38,740,313
-----------------------------------------------------------------------------------------============
Total Investments in Securities (Cost $122,686,934) 121,273,461
====================================================================================================================================
Other Assets, Less Liabilities 5.09%
====================================================================================================================================
Other Assets
Short-Term Investments Federal Home Loan Bank 5.48% due 7/1/1998 AAA 6,000M 5,999,100
Federal Home Loan Mortgage Corporation 15% due 7/14/1998 AAA 17,000M 17,058,438
Other (See Note 5) 29,005,276
Total Short-Term Investments (Cost $52,121,280) 52,062,814
-----------------------------------------------------------------------------------------============
Cash 166,371
- ------------------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 56,685,454
Interest 3,556,030
Capital stock sold 284,581
Total Other Assets 112,755,250
====================================================================================================================================
Liabilities
Payable for: Securities purchased 76,203,715
Distributions 472,316
Capital stock reacquired 271,248
Cash collateral on securities loaned 29,005,276
Other 293,100
Total Liabilities 106,245,655
-----------------------------------------------------------------------------------------============
Total Other Assets, Less Liabilities 6,509,595
====================================================================================================================================
Net Assets 100.00% $127,783,056
====================================================================================================================================
Class A Shares-Net asset value ($122,505,488 / 15,115,183 shares outstanding) $8.10
Class B Shares-Net asset value ($1,388,122 / 171,371 shares outstanding) $8.10
Class C Shares-Net asset value ($3,889,446 / 479,799 shares outstanding) $8.11
</TABLE>
+ Security on loan. See Note 5.
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 than investors who concentrate solely on U.S.-based companies.
Percent of the World's Market Capitalizations
[The following material was depicted as a pie chart in the printed material.]
Based in the U.S. 49.6%
Based outside of the U.S. 50.4%
Source: Morgan Stanley Capital International. Data as of 6/30/98, based on
market capitalization.
Managed to Participate in Global Growth
Portfolio diversification positions the Equity Series to participate in global
opportunities. Nine countries were represented in the Equity Series at period
end. See the portfolio of investments in securities on page 5.
[The following table was depicted as a geographical chart in the printed
material.]
Canada 2.34%
U.S. 44.93%
Sweden 2.29%
Switzerland 4.64%
Netherlands 5.38%
U.K. 7.46%
France 11.14%
Germany 14.21%
Japan 7.61%
Data as of 6/30/98. The Series' portfolio is actively managed and its holdings
are subject to change.
4
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1998
<TABLE>
<CAPTION>
Investments Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Investments in Securities 98.41%
====================================================================================================================================
Foreign 54.19%
====================================================================================================================================
Canada 2.30% Ballard Power Systems-Designs, manufactures and develops methanol-or
hydrogen-based fuel cells that are the only true zero emission power
source for vehicles 60,000 $ 1,961,454
- -------------------------------------------------------------------------------------------------------------------------===========
France 10.96% Alcatel Alsthom-One of the world's largest full-line heavy electrical
engineering firms 10,000 2,031,052
AXA-UAP One of Europe's largest financial organizations 18,000 2,019,503
Suez Lyonnaise des Eaux-Water and business services group 20,670 3,393,332
Thomson-CSF-A major aerospace company 50,000 1,897,410
Total 9,341,297
- -------------------------------------------------------------------------------------------------------------------------===========
Germany 13.99% BASF-Major international bulk chemical company 12,500 592,786
Bayer-Major international specialty chemical and pharmaceutical
company 12,500 645,670
BMW-Motor manufacturer 2,708 2,733,496
Sap Ag-World's fourth-largest software firm dominating the global
market for relational databases 5,000 3,027,873
Thyssen-Largest producer of steel in Germany 8,000 2,030,749
Volkswagen Ag-European auto manufacturer 3,000 2,891,826
Total 11,922,400
- -------------------------------------------------------------------------------------------------------------------------===========
Japan 7.49% Bridgestone Corp.-Owns Firestone, making it one of the world's top
three tire manufacturers 22,000 519,061
Canon Inc.-Precision equipment manufacturer 16,000 362,538
Citizen Watch-Precision engineering and quartz watch component
supplier 29,000 238,850
East Japan Railway-Major regional ground transportation company 40 187,599
Fuji Photo Film-Major manufacturer of photo-sensitive materials 12,000 416,918
Honda Motor-Major automotive group 10,000 355,344
Ito Yokado Co.-Diversified retailing operations 6,000 281,830
Matsushita Electric Industrial Co.-Consumer electronics manufacturer 23,000 368,938
Nichiei Co.-Japanese domestic consumer credit guarantee company 3,900 266,508
Nippon Telephone & Telegraph-Japan's largest telecommunications
company 65 537,692
Sankyo Co.-Major domestic pharmaceutical company 10,000 227,305
Secom-Leading security software supplier in Japan 6,000 345,705
Shiseido-Cosmetic manufacturer 25,000 283,413
Sony Corp.-Leading consumer electronics and entertainment company 4,000 343,835
Sumitomo Electric Industries-Manufacturer of electric wire and cables 41,000 413,776
Taisho Pharmaceuticals-2nd largest OTC drug manufacturer in Japan 13,000 242,195
Takefuji-Largest Japanese consumer finance firm 3,500 161,128
Terumo Corp.-Japan's largest maker of disposable medical supplies 13,000 205,725
Tokyo Electric-Electric utility 15,000 293,483
Toyota Motor-Automobile manufacturer 13,000 335,707
Total 6,387,550
- -------------------------------------------------------------------------------------------------------------------------===========
Netherlands 5.29% Ahold (kon)-Dominant Dutch food retail chain, 4th largest in the U.S. 33,966 1,088,046
ING-Banking and insurance company 30,207 1,973,792
VNU-Publishing group 40,000 1,450,084
Total 4,511,922
- -------------------------------------------------------------------------------------------------------------------------===========
Sweden 2.26% Ericsson (LM) Series B-Telecommunications company 66,000 1,923,570
- -------------------------------------------------------------------------------------------------------------------------===========
Switzerland 4.56% Novartis-Pharmaceutical and chemical company 685 1,137,835
Union Bank Of Switzerland-Major global commercial and investment bank 4,050 1,503,258
Zurich Verischerun-Major European property & casualty insurer 1,960 1,248,621
Total 3,889,714
- -------------------------------------------------------------------------------------------------------------------------===========
United Kingdom 7.34% British Aerospace Ord-One of the United Kingdom's top defense
contractors 54,000 413,710
General Electric Company-Electronics group 150,000 1,290,345
Jarvis Ord-Specialist engineering and service company focused on the
installation of related track and signals 170,000 1,960,712
</TABLE>
5
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1998
<TABLE>
<CAPTION>
Investments Shares Market Value
====================================================================================================================================
<S> <C> <C> <C>
Marks & Spencer-United Kingdom's largest general merchandise retailers 51,300 $ 467,358
SmithKline Beecham Ord-United Kingdom based pharmaceutical company 54,000 656,089
Verity Group-Makes high-quality loudspeakers and has developed the
first commercial flat panel speaker 600,000 846,900
Vodafone Group-Major United Kingdom mobile phone utility 49,300 624,853
Total 6,259,967
------------------------------------------------------------------------------------------===========
Total Investments in Foreign Securities (Cost $40,522,709) 46,197,874
====================================================================================================================================
United States 44.22%
====================================================================================================================================
Air Products & Chemicals Inc.-Industrial gas producer 24,050 962,000
Allstate Corp.-Second largest provider of personal lines of insurance
in the U.S. 11,150 1,020,922
American General Corporation-A leading provider of financial services,
including life/health insurance, annuities, consumer credit and mortgage
financing 9,000 640,688
American Home Products Corp.-Producer of drugs, food housewares and
packaged medicine and medical products 17,200 890,100
Archer-Daniels-Midland Co.-Leading processor and seller of
agricultural commodities 38,865 753,009
Baltimore Gas & Electric Co.-Regional electric utility company 13,675 424,780
BankAmerica Corp.-Major money-center bank 7,025 607,223
BankBoston, N.A.-Leading New England regional bank 7,750 431,094
BellSouth Corp.-Regional telephone company 6,275 421,209
Best Foods-Producer of diversified packaged foods 15,850 920,291
Bowater Inc.-Manufacturer of newsprint, groundwood, kraft pulp and
lumber products 7,200 340,200
Bristol-Myers Squibb Company-Major worldwide pharmaceutical concern
with other interests in infant nutrition, non-prescription medications,
medical devices and toiletries 6,950 798,816
Chase Manhattan Corp.-Major money-center bank holding company 9,600 724,800
Chevron Corp.-Worldwide petroleum company with important interests in
chemicals and minerals 8,125 674,882
Chubb Corp.-Provider of broad-based property and casualty insurance 11,600 932,350
Cigna Corp.-Provider of multi-line insurance and medical services 5,475 377,775
Cinergy Corp.-Supplier of electricity and natural gas in southwestern
Ohio and adjacent Kentucky and Indiana territories 13,450 470,750
Columbia Energy Group-Utility holding company and natural gas provider 7,238 402,586
Comerica Inc.-Midwestern regional bank holding company 8,550 566,438
ConAgra Inc.-Major producer of agricultural and consumer products 29,200 925,275
Crown Cork & Seal Inc.-Major producer of a wide variety of steel and
aluminum containers for the food industry 18,700 888,250
Deere & Co.-World's largest manufacturer of farm equipment 16,125 852,608
DuPont DeNemours, E.I & Co.-Major U.S.-based producer of plastic and
chemicals 10,000 746,250
Emerson Electric Co.-Diversified manufacturer of consumer and
industrial electrical components 17,500 1,056,563
Exxon Corp.-World's largest integrated oil company 12,850 916,366
Fed National Mortgage-America's largest supplier of conventional home
mortgages 17,000 1,032,750
First Chicago NBD-Major midwest bank 7,125 631,453
First Union Corp. Major East Coast bank 10,700 623,275
Fort James Corp.-Producer of paper-based consumer products, packaging
and communication papers 13,850 616,325
FPL Group-One of the nation's premier electric utilities, serving
about 7 million people on Florida's East, Southeast and Southwest coasts. 9,400 592,200
General Motors Corp.-Worldwide auto producer 9,925 663,113
Heinz H.J. Co.-Domestic packaged foods producer 19,300 1,083,213
Hewlett-Packard Co.-Leading manufacturer of computer products
including printers, servers, workstations and PCs 15,050 901,119
Humana Inc.-Major U.S. provider of managed health plans 30,500 951,219
Intel Corp.-Leading producer of semiconductor memory circuits 7,500 555,938
International Business Machines Corp.-World's largest computer
manufacturer 7,525 863,963
Kimberly Clark Corp.-Major producer of consumer and personal care
products 13,600 623,900
</TABLE>
6
<PAGE>
Statement of Net Assets
EQUITY SERIES June 30, 1998
<TABLE>
<CAPTION>
Shares or
Investments Principal Amount Market Value
====================================================================================================================================
<S> <C> <C> <C>
Mobil Corp.-Large international oil company 8,425 $ 645,566
Morton International Inc.-Producer of specialty chemicals, salt and
airbags 12,775 319,375
Motorola Inc.-Manufacturer of semiconductor communications equipment 8,300 436,269
MBL Finance.-3% due 11/30/2002 120M 114,150
Nicor Inc.-Natural gas distributor in Illinois 16,025 643,002
Norwest Corp.-Midwestern Regional Bank Holding Co. 14,600 545,675
Penney, J.C. Co., Inc.-Leading departmental store retailer 5,300 383,256
Philip Morris Inc.-Leading tobacco company 10,750 423,281
Seagate Technology Inc.-Manufacturer of computer disk drive equipment 9,375 223,242
SmithKline Beecham plc ADS-Major U.K. based health care company 10,875 657,937
Sonoco Products Co.-A leading U.S. producer of specialty paper and
plastic packaging components 11,715 354,379
St. Jude Medical, Inc.-A leading manufacturer of artificial heart
valves 19,175 705,880
SBC Communication Inc.-Mexican telephone monopoly 9,400 376,000
The Coastal Corporation-A diversified gas pipeline company 13,675 954,686
Time-Warner Inc.-A major entertainment and communications firm 8,000 683,500
Transamerica Corp.-Diversified financial services company 3,500 402,938
U.S.A. Waste Services Inc.-A leading waste management concern 12,000 592,500
United Healthcare Corp.-Offers health care coverage and related
services in all 50 states 6,300 400,050
VF Corp.-Leading producer of blue jeans and other apparel 11,950 615,425
Warner-Lambert Co.-Drug and consumer products manufacturer 7,800 541,125
Xerox Corp.-World's leading duplication technology supplier 7,800 792,675
Total Investments in United States Securities (Cost $34,736,395) 37,694,604
------------------------------------------------------------------------------------------===========
Total Investments in Securities (Cost $75,259,104) 83,892,478
====================================================================================================================================
Other Assets, Less Liabilities 1.59%
====================================================================================================================================
Other Assets
Short-Term Investments Morgan Stanley Dean Witter 6.25% due 7/01/1998 (Cost $1,044,819) 1,045M 1,044,819
- -------------------------------------------------------------------------------------------------------------------------===========
Cash and Receivables, Net of Liabilities 307,288
------------------------------------------------------------------------------------------===========
Total Other Assets, Less Liabilities 1,352,107
====================================================================================================================================
Net Assets 100.00% $85,244,585
====================================================================================================================================
Class A Shares-Net asset value ($81,642,635 / 6,026,937 shares outstanding) $13.55
Class B Shares-Net asset value ($2,283,378 / 169,782 shares outstanding) $13.45
Class C Shares-Net asset value ($1,318,572 / 97,930 shares outstanding) $13.46
</TABLE>
+ Restricted security under Rule 144A.
See Notes to Financial Statements.
7
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998
------------------------------
Investment Income Equity Series Income Series
====================================================================================================================================
<S> <C> <C> <C>
Income Dividend $ 903,463 $ --
Interest 81,546 5,663,352
Foreign taxes withheld (58,999) --
Total income 926,010 5,663,352
----------------------------------------------------------------------------------------------------------------------
Expenses Management fee 311,046 342,723
12b-1 distribution plan-Class A 116,348 195,947
12b-1 distribution plan-Class B 9,102 6,688
12b-1 distribution plan-Class C 5,927 22,304
Shareholder servicing 164,460 144,132
Custodian 16,000 32,734
Reports to shareholders 19,800 37,782
Registration 18,000 24,000
Professional 14,700 22,878
Miscellaneous 12,723 5,629
Total expenses before deductions 688,106 834,817
-----------------------------
Expense reductions (9,046) (9,090)
Total expenses 679,060 825,727
----------------------------------------------------------------------------------------------------------------------
Net investment income 246,950 4,837,625
----------------------------------------------------------------------------------------------------------------------
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 50,182,190 486,594,829
Cost of investments sold 43,813,766 486,873,807
----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 6,368,424 (278,978)
----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments and foreign currency holdings 2,875,502 (117,709)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investment and foreign currency transactions 9,243,926 (396,687)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $ 9,490,876 $ 4,440,938
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998 Year Ended December 31, 1997
------------------------------ ----------------------------
Increase (Decrease) in Net Assets Equity Series Income Series Equity Series Income Series
======================================================================================================= ============================
<S> <C> <C> <C> <C> <C>
Operations Net investment income $ 246,950 $ 4,837,625 $ 475,406 $ 10,728,518
Net realized gain (loss) from investment and foreign
currency transactions 6,368,424 (278,978) 8,643,260 (386,507)
Net unrealized appreciation (depreciation) of investments
and foreign currency holdings 2,875,502 (117,709) (2,530,998) (4,218,698)
Net increase in net assets resulting from operations 9,490,876 4,440,938 6,587,668 6,123,313
----------------------------------------------------------------------------------------- ----------------------------
Undistributed net investment income included in price of share transactions -- -- 5,192 --
- ------------------------------------------------------------------------------------------------------- ----------------------------
Distributions to shareholders from:
Net investment income-Class A -- (3,994,212) (364,730) (10,676,319)
Net investment income-Class B -- (36,244) -- (60,905)
Net investment income-Class C -- (123,005) (397) (360,770)
In excess of net investment income-Class A -- -- -- (1,201,001)
In excess of net investment income-Class B -- -- -- (9,781)
In excess of net investment income-Class C -- -- -- (38,752)
Net realized gain from investment and foreign currency
transactions-Class A -- -- (8,064,753) --
Net realized gain from investment and foreign currency
transactions-Class B -- -- (135,059) --
Net realized gain from investment and foreign currency
transactions-Class C -- -- (82,246) --
Total distribution -- (4,153,461) (8,647,185) (12,347,528)
----------------------------------------------------------------------------------------- ----------------------------
Capital share transactions:
Net proceeds from sale of shares 6,051,081 2,746,288 16,590,094 6,604,979
Net asset value of shares issued to shareholders in
reinvestment of net investment income and realized
gain from investment and foreign currency transactions -- 2,108,395 8,176,325 5,560,277
Total 6,051,081 4,854,683 24,766,419 12,165,256
----------------------------------------------------------------------------------------- ----------------------------
Cost of shares reacquired (11,117,700) (26,144,033) (34,055,648) (59,650,585)
----------------------------------------------------------------------------------------- ----------------------------
Decrease in net assets derived from share transactions (5,066,619) (21,289,350) (9,289,229) (47,485,329)
----------------------------------------------------------------------------------------- ----------------------------
Increase (decrease) in net assets 4,424,257 (21,001,873) (11,343,554) (53,709,544)
- ------------------------------------------------------------------------------------------------------- ----------------------------
Net Assets Beginning of period 80,820,328 148,784,929 92,163,882 202,494,473
----------------------------------------------------------------------------------------- ----------------------------
End of period+ $ 85,244,585 $127,783,056 $ 80,820,328 $148,784,929
======================================================================================================================
</TABLE>
+ Includes underdistributed (overdistributed) net investment
income of $295,938 and $23,544 for the Equity and Income
Series, respectively, as of June 30, 1998 and $48,988 and
$(660,620), respectively, for the year ended December 31,
1997.
See Notes to Financial Statements.
9
<PAGE>
Financial Highlights
INCOME SERIES
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------------------------
Six Months Ended Year Ended December 31,
Per Share Operating Performance: 6/30/98 1997 1996 1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.09 $ 8.34 $ 8.58 $ 7.98 $ 9.02 $ 8.87
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .29(b) .51(b) .53 .77 .65 .76
Net realized and unrealized gain (loss)
on investments (.03) (.18) (.04) .6138 (.9603) .174
Total from investment operations .26 .33 .49 1.3838 (.3103) .934
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.25) (.51) (.61) (.6613) (.6035) (.784)
Distributions to shareholders
from paid-in-capital -- (.07) -- -- (.1262) --
Distributions from foreign
currency transactions -- -- (.12) (.1225) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.10 $ 8.09 $ 8.34 $ 8.58 $ 7.98 $ 9.02
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 3.19%(d) 4.23%(c) 6.12% 17.86% (3.40)% 10.78%
====================================================================================================================================
Ratios to Average Net Assets:
Expenses(e) .59%(d) 1.10% 1.04% 1.04% 1.02% 1.04%
Net investment income 3.53%(d) 6.29% 6.52% 7.60% 7.72% 7.81%
====================================================================================================================================
<CAPTION>
Class B Shares Class C Shares
---------------------------------------------- ------------------------------------------
Six Months Ended Year Ended 8/1/96(c) Six Months Ended Year Ended 7/15/96(c)
Per Share Operating Performance: 6/30/98 12/31/97 to 12/31/96 6/30/98 12/31/97 to 12/31/96
===================================================================================== ==========================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.09 $8.34 $8.24 $8.09 $8.34 $8.14
- ------------------------------------------------------------------------------------- -------------------------------------------
Income from investment operations
Net investment income .26(b) .45(b) .23 .26(b) .45(b) .21
Net realized and unrealized
gain (loss) on investments (.03) (.18) .22 (.02) (.18) .37
Total from investment operations .23 .27 .45 .24 .27 .58
- ------------------------------------------------------------------------------------- -------------------------------------------
Distributions
Dividends from net investment income (.22) (.46) (.23) (.22) (.46) (.26)
Distributions to shareholders
from paid-in-capital -- (.06) -- -- (.06) --
Distributions from foreign
currency transactions -- -- (.12) -- -- (.12)
- ------------------------------------------------------------------------------------- -------------------------------------------
Net asset value, end of period $8.10 $8.09 $8.34 $8.11 $8.09 $8.34
- ------------------------------------------------------------------------------------- -------------------------------------------
Total Return(a) 2.84%(d) 3.49% 5.58%(d) 2.97%(d) 3.48% 7.43%(d)
===================================================================================== ===========================================
Ratios to Average Net Assets:
Expenses(e) .93%(d) 1.78% .73%(d) .93%(d) 1.77% .87%(d)
Net investment income 3.19%(d) 5.57% 2.11%(d) 3.20%(d) 5.62% 2.69%(d)
====================================================================================================================================
<CAPTION>
Six Months Ended Year Ended December 31,
Supplemental Data For All Classes: 6/30/98 1997 1996 1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $ 127,783 $ 148,785 $ 202,494 $ 238,291 $ 249,490 $ 277,495
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 186.83% 616.63% 621.79% 1,073.69% 1,230.20% 1,599.43%
====================================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and
assumes the reinvestment of all distributions.
(b) Calculated using average shares outstanding during the period.
(c) Commencement of offering respective Class shares.
(d) Not annualized.
(e) The ratios for 1997 and 1998 include expenses paid through an
expense offset arrangement.
See Notes to Financial Statements.
10
<PAGE>
Financial Highlights
EQUITY SERIES
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------------------------------------------
Six Months Ended Year Ended December 31,
Per Share Operating Performance: 6/30/98 1997 1996 1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.08 $12.55 $11.96 $11.55 $12.44 $10.48
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .04(b) .07(b) .07 .16 .10 .04
Net realized and unrealized gain (loss)
on investments 1.43 .90 .93 .90 (.1125) 2.635
Total from investment operations 1.47 .97 1.00 1.06 (.0125) 2.675
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income -- (.06) (.07) (.17) (.10) (.10)
Distributions to shareholders from paid-in-capital -- (1.11) (.21) (.48) (.7775) (.615)
Distributions from foreign currency transactions -- (.27) (.13) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.55 $12.08 $12.55 $11.96 $11.55 $12.44
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 12.17%(d) 7.99%(c) 8.37% 9.19% (.09)% 26.05%
====================================================================================================================================
Ratios to Average Net Assets:
Expenses(e) .80%(d) 1.51% 1.52% 1.63% 1.56% 1.68%
Net investment income .31%(d) .57% .54% 1.31% .79% .70%
====================================================================================================================================
<CAPTION>
Class B Shares Class C Shares
--------------------------------------- -----------------------------------
Six Months Year Six Months Year
Ended Ended 8/1/96(c) Ended Ended 7/15/96(c)
Per Share Operating Performance: 6/30/98 12/31/97 to 12/31/96 6/30/98 12/31/97 to 12/31/96
============================================================================================= ===================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.03 $12.53 $12.30 $12.05 $12.54 $12.31
- --------------------------------------------------------------------------------------------- -----------------------------------
Income from investment operations
Net investment income .00(b)(f) (.02)(b) (.01) .00(b)(f) (.01)(b) --
Net realized and unrealized gain (loss)
on investments 1.42 .89 .58 1.41 .90 .57
Total from investment operations 1.42 .87 .57 1.41 .89 .57
- --------------------------------------------------------------------------------------------- -----------------------------------
Distributions
Dividends from net investment income -- -- -- -- (.01) --
Distributions to shareholders from paid-in-capital -- (1.11) (.21) -- (1.11) (.21)
Distributions from foreign currency transactions -- (.26) (.13) -- (.26) (.13)
- --------------------------------------------------------------------------------------------- -----------------------------------
Net asset value, end of period $13.45 $12.03 $12.53 $13.46 $12.05 $12.54
- --------------------------------------------------------------------------------------------- -----------------------------------
Total Return(a) 11.80%(d) 7.19% 4.56%(d) 11.70%(d) 7.34% 4.64%(d)
====================================================================================================================================
Ratios to Average Net Assets:
Expenses(e) 1.15%(d) 2.23% .83%(d) 1.15%(d) 2.14% .83%(d)
Net investment income .02%(d) (.16)% (.16)%(d) .02%(d) (.06)% (.11)%(d)
====================================================================================================================================
<CAPTION>
Six Months Ended Year Ended December 31,
Supplemental Data For All Classes: 6/30/98 1997 1996 1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $ 85,245 $ 80,820 $ 92,164 $ 84,731 $ 83,739 $ 71,632
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 56.08% 99.05% 81.97% 83.32% 75.39% 197.59%
====================================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads.
(b) Calculated using average shares outstanding during the period.
(c) Commencement of offering respective Class shares.
(d) Not annualized.
(e) The ratios for 1997 and 1998 include expenses paid through an
expense offset arrangement.
(f) Amount less than $.01.
See Notes to Financial Statements.
11
<PAGE>
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, or,
lacking any sales, at the latest price on the basis of current quotations from
dealers, or from valuations furnished by an independent pricing service.
Short-term securities are valued at amortized cost which approximates market
value. Securities for which market quotations are not available are valued at
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
income 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 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 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. Under the Investment Company Act of 1940 and the rules
thereunder, Lord Abbett has entered into a sub-advisory agreement with Fuji
Investment Management Co. (Europe), Ltd. ("sub-adviser") for a temporary period
of time. During this period a shareholders' meeting will be held to obtain their
approval of this sub-adviser on a long-term basis. The sub-adviser furnishes
investment advisory services in connection with the management of the Equity
Series' portfolio. Lord Abbett pays for the cost of the sub-adviser'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. As of June 30, 1998, all management fees waived and expenses
reimbursed pursuant to the aforementioned formula have been either accrued by
each Series or forgiven by Lord Abbett. 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 $12,169 $73,859
- --------------------------------------------------------------------------------
Income $4,189 $27,255
- --------------------------------------------------------------------------------
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, 1998, accumulated net realized capital gain (loss) for financial
reporting purposes aggregated $6,567,759 for Equity Series and $(25,313,329) for
Income Series. The Income Series had a capital loss carryforward as of December
31, 1997 of approximately $25,030,000, of which $19,900,000 expires in 2002,
$4,450,000 expires in 2004 and $680,000 expires in 2005. 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 500 million shares of $.001 par
value capital stock designated as follows: Class A-465 million shares, Class
B-15 million shares and Class C-20 million shares. The Income Series has
authorized 500 million shares of $.001 par value capital stock designated as
follows: Class A-450 million shares, Class B-30 million shares and Class C-20
million shares. At June 30, 1998, paid-in-capital amounted to $69,747,514 for
Equity Series and $153,858,487 for Income Series. Transactions in shares of
capital stock were as follows:
12
<PAGE>
Notes to Financial Statements
Six Months Ended June 30, 1998
-----------------------------------------------------
Equity Series Income Series
Class A Shares Amount Shares Amount
- ---------------------------------------------------- -----------------------
Sales of shares 325,763 $ 4,257,730 275,313 $ 2,236,112
Shares issued to share-
holders in reinvestment
of net investment income -- -- 246,575 2,003,909
Total 325,763 4,257,730 521,888 4,240,021
- --------------------------------------------------------------------------------
Shares reacquired (811,419) (10,471,023) (2,993,318) (24,340,215)
Decrease in shares (485,656) $(6,213,293) (2,471,430) $(20,100,194)
- --------------------------------------------------------------------------------
Year Ended December 31, 1997
-----------------------------------------------------
Equity Series Income Series
Class A Shares Amount Shares Amount
- ---------------------------------------------------- -----------------------
Sales of shares 1,095,651 $ 14,481,551 604,529 $ 4,878,516
Shares issued to share-
holders in reinvestment
of net investment income
and realized gain from
investment transactions 674,542 7,961,767 658,101 5,308,446
Total 1,770,193 22,443,318 1,262,630 10,186,962
- --------------------------------------------------------------------------------
Shares reacquired (2,559,577) (33,537,757) (7,011,721) (56,584,653)
Decrease in shares (789,384) $(11,094,439) (5,749,091) $(46,397,691)
- --------------------------------------------------------------------------------
Six Months Ended June 30, 1998
-----------------------------------------------------
Equity Series Income Series
Class B Shares Amount Shares Amount
- ---------------------------------------------------- -----------------------
Sales of shares 73,719 $957,771 49,908 $406,579
Shares issued to share-
holders in reinvestment
of net investment income -- -- 2,608 21,179
Total 73,719 957,771 52,516 427,758
- --------------------------------------------------------------------------------
Shares reacquired (15,288) (200,196) (47,313) (384,766)
Increase in shares 58,431 $757,575 5,203 $ 42,992
- --------------------------------------------------------------------------------
Year Ended December 31, 1997
-----------------------------------------------------
Equity Series Income Series
Class B Shares Amount Shares Amount
- ---------------------------------------------------- -----------------------
Sales of shares 105,825 $1,394,310 118,462 $ 955,629
Shares issued to share-
holders in reinvestment
of net investment income
and realized gain from
investment transactions 11,349 133,462 5,007 40,318
Total 117,174 1,527,772 123,469 995,947
- --------------------------------------------------------------------------------
Shares reacquired (25,186) (338,740) (26,822) (215,805)
Increase in shares 91,988 $1,189,032 96,647 $ 780,142
- --------------------------------------------------------------------------------
Six Months Ended June 30, 1998
-----------------------------------------------------
Equity Series Income Series
Class C Shares Amount Shares Amount
- ---------------------------------------------------- -----------------------
Sales of shares 63,935 $835,580 12,713 $ 103,597
Shares issued to share-
holders in reinvestment
of net investment income -- -- 10,251 83,307
Total 63,935 835,580 22,964 186,904
- --------------------------------------------------------------------------------
Shares reacquired (34,483) (446,481) (174,370) (1,419,052)
Increase (decrease) in shares 29,452 $389,099 151,406 $(1,232,148)
- --------------------------------------------------------------------------------
Year Ended December 31, 1997
-----------------------------------------------------
Equity Series Income Series
Class C Shares Amount Shares Amount
- ----------------------------------------------------- ----------------------
Sales of shares 54,661 $714,233 95,470 $ 770,834
Shares issued to share-
holders in reinvestment
of net investment income
and realized gain from
investment transactions 6,879 81,096 26,224 211,513
Total 61,540 795,329 121,694 982,347
- --------------------------------------------------------------------------------
Shares reacquired (14,168) (179,151) (353,771) (2,850,127)
Increase (decrease) in shares 47,372 $616,178 (232,077) $(1,867,780)
- --------------------------------------------------------------------------------
5. Purchases and Sales of Investments The Income Series loans its portfolio
securities to brokers. As of June 30, 1998, the market value of securities on
loan to brokers was $27,606,412, for which the Income Series has obtained
collateral aggregating $29,005,276 consisting of cash. During the six months
ended June 30, 1998, purchases and sales of investment securities, exclusive of
short-term investments, were $45,383,464 and $50,182,190, respectively, for the
Equity Series and $242,749,709 and $262,423,233, respectively, for the Income
Series. As of June 30, 1998, 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 $ 8,633,374 $10,214,422 $(1,581,048)
Income $(1,471,939) $ 1,365,499 $(2,837,438)
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
At June 30, 1998, the Income Series had outstanding forward currency contracts
to sell and buy foreign currencies as follows:
Value at Unrealized
Foreign Currency Settlement Date Current Appreciation
Sell Contracts Receivable Value (Depreciation)
- --------------------------------------------------------------------------------
Australian Dollars,
expiring 7/22/98 to 7/27/98 $ 3,647,000 $ 3,713,000 $ (66,000)
- --------------------------------------------------------------------------------
Deutsche Marks,
expiring 9/17/98 to 10/19/98 $24,691,380 $24,762,803 $ (71,423)
- --------------------------------------------------------------------------------
New Zealand Dollars,
expiring 7/22/98 $ 2,070,000 $ 2,066,880 $ 3,120
- --------------------------------------------------------------------------------
South African Rands,
expiring 7/13/98 to 7/22/98 $ 7,514,023 $ 6,587,533 $926,490
- --------------------------------------------------------------------------------
Total $37,922,403 $37,130,216 $792,187
- --------------------------------------------------------------------------------
Value at
Foreign Currency Settlement Date Current Unrealized
Buy Contracts Payable Value (Depreciation)
- --------------------------------------------------------------------------------
Deutsche Marks,
expiring 7/17/98 to 7/24/98 $10,132,447 $10,026,553 $(105,894)
- --------------------------------------------------------------------------------
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, 1998, under a deferred compensation plan,
were approximately $52,000.
7. Expense Reduction The Company has entered into an arrangement with its
transfer agent whereby credits realized as a result of uninvested cash balances
were used to reduce a portion of each Series' expenses.
8. Line of Credit The Equity Series, along with certain other funds managed by
Lord Abbett, have available a $200,000,000 unsecured revolving credit facility
("Facility"), from a consortium of banks, to be used for temporary or emergency
purposes as an additional source of liquidity to fund redemptions of investor
shares. Any borrowings under this Facility will bear interest at current market
rates as defined in the agreement. The fee for this Facility is 0.05% per annum.
There were no loans outstanding pursuant to this Facility at June 30, 1998, nor
was the Facilitly utilized at any time during the period.
Copyright (C) 1998 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.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
GROWTH
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
INCOME
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market Fund
Developing Alpha Series Affiliated Fund Balanced Series Bond-Debenture o National U.S. Government
Growth Fund Fund o California Securities
Global Fund- Growth & o Connecticut Money Market
Equity Series Income Series Global Fund- o Florida Fund**+
Income Series o Georgia
International Research Fund- o Hawaii
Series Large-Cap Limited Duration o Michigan
Series U.S. Government o Minnesota
Mid-Cap Securities Series** o Missouri
Value Fund o New Jersey
U.S. Government o New York
Research Fund- Securities Series** o Pennsylvania
Small-Cap o Texas
Series* World Bond- o Washington
Debenture Series
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your investment professional provides value in helping you identify and
understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Global Fund.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your investment professional or Lord Abbett
Distributor llc 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 investment professional can diversify your
investments between equity and income funds.
Flexibility. As your investment goals change, your investment professional can
help you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 30
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 invest-ment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature: 800-874-3733
For 24-Hour Automated Shareholder Service Line: 800-865-7582
Visit Our Web Site:
http://www.lordabbett.com
* The Lord Abbett Research Fund-Small-Cap Series is closed to new investors.
** An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed
to maintain, and has maintained, its stable $1.00 price per share.
[LOGO](R) LORD ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
- ------------------------------------------------------------ LAG-3-698
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (8/98)
