Lord Abbett Growth Opportunities Fund Visit our
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up-to-date statistics and
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SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED MAY 31, 2000
[LOGO]
A portfolio of mid-sized
growth companies
[LOGO]
<PAGE>
REPORT TO SHAREHOLDERS
For the Six Months Ended May 31, 2000
[PHOTO OF
ROBERT S. DOW]
/s/ Robert S. Dow
Robert S. Dow
Chairman
June 9, 2000
"We believe the stocks of mid-sized
companies are an important part of
any well-diversified asset allocation
program."
DALBAR
HONORS COMMITMENT TO INVESTORS
1999
Lord, Abbett & Co. is proud to
announce we have received a DALBAR
award for providing consistently
good service to shareholders, the
1999 Key Honors Award for Mutual
Fund Service. DALBAR, Inc., an
independent research firm and
evaluator of mutual fund service,
presents the award to financial
services firms that provide
consistently solid service to
clients.
Lord Abbett Growth Opportunities Fund completed the first half
of its fiscal year on May 31, 2000 with a net asset value of
$19.75 per class A shares versus $18.89 on November 30, 1999.
The Fund's total return over the same period was 5.65%.
The period through May 2000 can best be described as "a tale of
two markets." Led by computer technology and biotechnology
companies, most major market indices exhibited strong
performance from December 1999 through March of this year and
many momentum investors were rewarded with significant price
gains. However, in April and May the stock market experienced a
sharp "correction" (or downturn) as investors' euphoria for the
stocks of technology companies, particularly Internet firms,
fizzled. Whereas the technology-rich NASDAQ Index* had
previously led the market, it fell by 37 percent from its March
peak to the end of May. During this volatile period, stocks of
mid-sized companies (represented by the Russell Midcap Growth
Index*) outperformed the stocks of larger firms (represented by
the S&P 500*).
Stocks of healthcare companies were the strongest performers for
the Growth Opportunities Fund during the period. Many healthcare
companies have recently performed well, due to strong revenues
from new products. We anticipate that many generic drug
manufacturers are likely to continue to experience accelerated
revenue and earnings growth, as the product patents owned by a
large number of brand-name pharmaceutical companies expire
during the next 2-3 years, making room for generic drug
manufacturers to produce even more new products. We have been
overweighted in healthcare companies (compared to the Fund's
benchmark, the Russell Midcap Growth Index*) during 2000 and
continue to do extensive research in this area to look for
strong companies with good growth prospects.
Our exposure to the stocks of energy companies also contributed
positively to the Fund's performance during the period. Oil and
natural gas prices have been very strong, particularly over the
past few months. This has provided a very positive environment
for both energy companies exploring for new reserves and the
service companies that facilitate that exploration.
Conversely, unlike 1999, when technology was our best performing
sector, our holdings in technology companies did not perform
well for the Fund during the first part of 2000. While we
strongly believe in the future of technology and its many
exciting applications, especially in Internet and wireless
communications companies, we feel the valuations of many of the
companies in the technology industry are very high compared to
their underlying fundamentals. In addition, we believe that many
of these companies are inappropriate for purchase in the Fund at
the present time, since they do not satisfy our criteria for
investing in higher-quality companies with established market
positions, experienced management teams, strong earnings growth
and healthy balance sheets.
We will continue to add to our positions in the stocks of
fundamentally strong, fast-growing mid-sized firms. We are
enthusiastic about the prospects for mid-sized companies,
especially given that they are more liquid than smaller
companies, and in our view possess faster revenue growth
potential versus many larger companies. We believe mid-sized
growth companies will continue to rebound from spring 2000's
stock market correction and we have attempted to position the
Fund to benefit from such an upswing. We believe the stocks of
mid-sized companies are an important part of any
well-diversified asset allocation program. In our opinion, this
segment of the stock market gives investors the opportunity to
invest in some of the most exciting trends and growing companies
in the United States. As always, we remain committed to
constructing the very best portfolio possible for our clients
and appreciate the opportunity to help you meet your investment
goals.
* The NASDAQ, Russell Midcap Growth and S&P 500 Indices are commonly used
measures of stock market performance, are unmanaged and not available for
direct investment.
<PAGE>
Strong Fund Performance
Comparison of the change in value of a $10,000 investment, 8/1/95-5/31/00, in
Lord Abbett Growth Opportunities Fund and the unmanaged S&P MidCap 400, Russell
2000 Index and Russell Midcap Growth Index.
-------------------------------------------------------------------------------
Graphics Omitted
$28,103 $23,967 $16,945 $27,406
Growth S&P Russell Russell
Opportunities MidCap 2000 Midcap Growth
Fund(1) 400(2) Index(3) Index(4)
-------------------------------------------------------------------------------
(1) The Fund (Class A shares) commenced operations 8/1/95. Reflects the
reinvestment of all distributions at net asset value.
(2) S&P MidCap 400 Index is an unmanaged weighted index comprising 400 widely
held common stocks chosen by Standard & Poor's for their mid-size and industry
characteristics.
(3) Russell 2000 Index measures the performance of the 2,000 smallest companies
in the Russell 3000 Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index. As of the latest reconstitution, the
average market capitalization was approximately $580 million; the median market
capitalization was approximately $466 million. The largest company in the index
had an approximate market capitalization of $1.5 billion. Calculated from
7/31/95.
(4) Russell Midcap Growth Index measures the performance of those Russell midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The stocks are also members of the Russell 1000 Growth Index. Calculated from
7/31/95.
SEC-Required Information
Average annual compounded returns for periods ended 6/30/00, at the Class A
maximum sales charge of 5.75%, with all distributions reinvested:
-------------------------------------------------------------------------------
Grpahics Omitted
1 Year 36.80%
3 Years 24.05%
Life of Fund 24.14%
(8/1/95 Inception)
-------------------------------------------------------------------------------
Past performance is no indication of future results. The investment return and
principal value of an investment in the Fund will fluctuate so that shares, on
any given day or when redeemed, may be worth more or less than their original
cost.
1
<PAGE>
LORD ABBETT GROWTH OPPORTUNITIES FUND
There are Four Phases of Business Growth
1. Formative Phase...start-ups
2. Developing Growth Phase...often experience dramatic growth
3. Established Growth Phase...grow quickly and become more competitive forces
4. Maturity Phase...growth patterns begin to resemble the Gross Domestic
Product (GDP).
Growth Opportunities Fund focuses on companies that are in the late stages of
Phase Two of the business growth cycle and the early stages of Phase Three.
These are primarily mid-sized companies(1).
-------------------------------------------------------------------------------
Grpahics Omitted
<TABLE>
<CAPTION>
COMPANIES TOO SMALL GROWTH OPPORTUNITIES COMPANIES TOO LARGE
AND/OR SPECULATIVE FOR THE FUND FUND FOCUS(2) AND/OR MATURE FOR THE FUND(3)
<S> <C> <C>
AmeriCredit Corp. Wal-Mart Stores, Inc.
Convergys Corp. Oracle Corporation
Plantronics Amgen
(Sample companies not
necessarily in portfolio)
| | | | |
-----Formative------------------Developing------------------------Established-------Maturity--------
</TABLE>
(1) We define mid-sized companies as those with market capitalizations between
$1 billion and $10 billion.
(2) Sample of well-known current holdings. Investments in stocks of developing
companies involve more risk and are generally more volatile than investments in
mature companies. As of 6/30/00, allocations were as follows: AmeriCredit Corp.
2.6%, Convergys Corp. 2.1%, Plantronics 2.1%. The Fund is actively managed,
holdings and allocations are subject to change. The actual growth of a company
cannot be guaranteed.
(3) Well-known companies that are not in the Fund.
Opportunities with Mid-Sized Companies(4)
Mid-sized companies are expected to grow faster than large
companies over the next 3-5 years. In addition, their
stocks may represent better value than large company stocks
by two popular measures:
<TABLE>
<CAPTION>
Large Companies(7) Mid-Sized Companies(8)
------------------------------------------------------------------------------------------------
<S> <C> <C>
Estimated 3-5 Year Earnings Growth 20.3% 21.5%
------------------------------------------------------------------------------------------------
P/E (Price/Earnings Ratio)(5) 21.7% 14.9%
------------------------------------------------------------------------------------------------
P/B (Price/Book Value Ratio)(6) 4.8x 2.8x
</TABLE>
(4) Source: FactSet. Representative data were calculated at Lord Abbett using
the ValueLine Database on FactSet, which may not include all securities in
any portfolio or index. Data as of 6/30/00.
(5) Price/Earnings Ratio (P/E) gives investors an idea of how much they are
paying for a company's earning power. The higher the P/E, the more
investors are paying, and therefore, the more earnings growth they are
expecting.
(6) Price/Book Ratio (P/B) compares a stock's market value to the value of
total assets less total liabilities (book value). The higher the P/B, the
more investors are paying for the assets of the company.
(7) Large companies are represented by the Russell 1000 Index, which measures
the performance of the 1,000 largest companies in the Russell 3000, which
represents 92% of the total market capitalization of the Russell 3000. Both
indices are unmanaged and not available for direct investment.
(8) Mid-sized companies are represented by the Russell Midcap Index, which
measures the performance of the 800 smallest companies in the Russell 1000
Index, which represents approximately 26% of the total market
capitalization of the Russell 1000. The index is unmanaged and not
available for direct investment.
2
<PAGE>
Uncovering Growing Companies
Growth Opportunities Fund is managed by a team of
experienced investment professionals working to identify
mid-sized companies with apparent competitive advantages
that will help them grow faster than the overall economy.
Such companies generally have:
o Established market positions o Proprietary products or services,
often with:
o Experienced management teams --> Unique technology
o Reasonable debt levels --> Patents, licenses or copyrights
o Strong sales and earnings growth --> Exposure to new markets
About Lord Abbett
o Established in 1929
o Exclusively focused on investmentmanagement
o Over $32 billion in assets under management*
Dedication, accountability, involvement and performance define our organization
and characterize the way we invest. Lord, Abbett & Co. strives to stand apart by
providing superior products and exceptional levels of service that investment
professionals and investors demand and deserve.
*As of 5/31/00.
Important Information
Common stocks purchased by the Fund are subject to market fluctuations,
providing the potential for gains and the risk of loss. Starting in October
1998, Growth Opportunities Fund changed its investment strategy to one
emphasizing growth-oriented investments. Performance results quoted herein
reflect past performance, current sales charges (where applicable) and
appropriate Rule 12b-1 Plan expenses from commencement of the Plan. Past
performance is no indication of future results. Tax consequences are not
reflected. The investment return and principal value of an investment will
fluctuate so that shares, on any given day or when redeemed, may be worth more
or less than their original cost. The Fund issues additional shares with
distinct pricing options. For a full disclosure of the differences in pricing
alternatives, please call Lord Abbett Distributor LLC at 800-874-3733 and ask
for the Fund's current prospectus. If used as sales material after 9/30/00, this
report must be accompanied by Lord Abbett's Performance Quarterly for the most
recently completed calendar quarter.
3
<PAGE>
Statement of Net Assets (unaudited)
May 31, 2000
Investments Shares Value
========================================================================
Investments in Common Stocks 95.66%
------------------------------------------------------------------------
Biotechnology .66% *Immunex Corp. 60,800 $1,573,200
-----------------------------------------------------------=============
Building
Materials .76% *Royal Group
Technologies Ltd. 85,000 1,822,187
-----------------------------------------------------------=============
Business * Acxiom Corp. 130,000 3,802,500
Services 8.36% * CSG Systems
International, Inc. 78,800 3,920,300
* CheckFree Holdings Corp. 99,100 4,143,619
* Sykes Enterprises, Inc. 160,000 3,090,000
* West Teleservices Corp. 195,000 5,130,937
Total 20,087,356
-----------------------------------------------------------=============
Communications * CommScope, Inc. 126,800 4,897,650
Equipment 7.07% Harris Corp. 118,800 3,630,825
Mastec, Inc. 45,600 3,117,900
* Sawtek, Inc. 65,000 4,180,313
* UTStarcom, Inc. 30,000 1,147,500
Total 16,974,188
-----------------------------------------------------------=============
Computer: * Cambridge Technology
Services 3.50% Partners, Inc. 258,800 2,086,575
* Diamond Technology
Partners, Inc. 50,100 3,156,300
* iGate Capital Corp. 123,300 1,934,269
*Safeguard Scientifics,
Inc. 38,000 1,223,125
Total 8,400,269
-----------------------------------------------------------=============
Computer:
Hardware 1.18% * American Power Conversion
Corp. 80,000 2,835,000
-----------------------------------------------------------=============
Computer: * BEA Systems, Inc. ADR 44,000 1,589,500
Software 7.27% * Lycos, Inc. 32,100 1,942,050
National Computer Systems,
Inc. 65,200 2,962,525
* Network Solutions, Inc. 7,700 1,132,862
* RSASecurity, Inc. 30,700 1,767,169
*Satyam Infoway Ltd. ADR 21,000 435,750
* Symantec Corp. 59,100 3,885,825
* VIA NET.WORKS, Inc. 100,000 1,412,500
*Wind River Systems, Inc. 64,300 2,330,875
Total 17,459,056
-----------------------------------------------------------=============
Drugs 11.36% Alpharma Inc., Class A 87,700 4,341,150
* Alza Corp. 69,600 3,536,550
* Elan Corp. plc ADR 55,600 2,213,575
* Ivax Corp. 94,650 3,561,206
MedImmune, Inc. 8,000 1,243,000
* QLT, Inc. 47,600 2,329,425
* Sepracor, Inc. 29,600 2,830,500
Teva Pharmaceutical
Industries Ltd. ADR 99,200 5,344,400
* Watson Pharmaceutical,
Inc. 43,000 1,897,375
Total 27,297,181
-----------------------------------------------------------=============
Electronics 1.48% * SCI Systems, Inc. 79,100 3,559,500
-----------------------------------------------------------=============
Electronics:
Equipment/ * Sensormatic
Components 2.45% Electronics Corp. 375,200 5,885,950
-----------------------------------------------------------=============
Electronics: Dallas Semiconductor
Corp. 45,000 $ 1,800,000
Semiconductors * Integrated Device
7.39% Technology, Inc. 151,500 7,186,781
* Lattice Semiconductor
Corp. 31,000 1,838,687
* Nvidia Corp. 34,700 3,960,138
* Silicon Storage
Technology, Inc. 40,000 2,970,000
Total 17,755,606
-----------------------------------------------------------=============
Energy Equipment * Grant Prideco, Inc. 75,100 1,746,075
& Services 6.15% * Nabors Industries, Inc. 120,000 5,160,000
Transocean Sedco
Forex, Inc. 85,000 4,180,938
* Weatherford
International, Inc. 85,700 3,690,456
Total 14,777,469
-----------------------------------------------------------=============
Financial * AmeriCredit Corp. 322,300 5,942,406
Services 3.27% * Catellus Development
Corp. 142,000 1,908,125
Total 7,850,531
-----------------------------------------------------------=============
Health Care * Caremark Rx, Inc. 476,000 2,885,750
Services 3.54% * Priority Healthcare
Corp. 109,900 5,604,900
Total 8,490,650
-----------------------------------------------------------=============
Hospital Supplies
1.00% Beckman Coulter, Inc. 40,000 2,405,000
-----------------------------------------------------------=============
Metals & Minerals
1.10% * Stillwater Mining Co. 94,400 2,649,100
-----------------------------------------------------------=============
Publishing .80% Reader's Digest
Association,
Inc. Class A 56,400 1,910,550
-----------------------------------------------------------=============
Radio & TV * Emmis Communications
Corp. 84,100 2,869,913
Broadcast 3.87% * Pegasus Communications
Corp. 83,200 3,411,200
* Spanish Broadcasting
System, Inc. 177,700 3,020,900
Total 9,302,013
-----------------------------------------------------------=============
Restaurants .42% * Starbucks Corp. 30,000 1,020,000
-----------------------------------------------------------=============
Retail 3.88% RadioShack Corp. 104,900 4,451,694
* Whole Foods Market, Inc. 140,000 4,865,000
Total 9,316,694
-----------------------------------------------------------=============
Retail:
Specialty 2.16% * Michaels Stores, Inc. 121,400 5,197,438
-----------------------------------------------------------=============
Services 2.43% * Convergys Corp. 130,000 5,841,875
-----------------------------------------------------------=============
Technology 3.39% * Arrow Electronics, Inc. 32,000 1,122,000
* Proxicom, Inc. ADR 52,500 2,408,437
* Tech Data Corp. 122,800 4,612,675
Total 8,143,112
-----------------------------------------------------------=============
Telecommunication * Antec Corp. 80,500 4,045,125
Equipment 3.89% * Plantronics, Inc. 62,000 5,293,250
Total 9,338,375
-----------------------------------------------------------=============
Telecommunications * Broadwing, Inc. 151,700 3,612,356
7.81% * Dobson Communications
Corp. 25,000 595,313
* FLAG Telecom
Holdings Ltd. 107,800 1,529,413
*ICG Communications, Inc. 180,100 3,388,131
*NEXTLINK Communications,
Inc. Class A 26,500 1,856,656
*Net2Phone, Inc. 60,300 1,778,850
*Research In Motion Ltd. 21,300 685,594
*TeleCorp PCS, Inc. 103,000 3,128,625
*Viatel, Inc. 87,800 2,189,512
Total 18,764,450
-----------------------------------------------------------=============
4
<PAGE>
Investments Shares Value
========================================================================
Utilities .47% *Independent Energy
Holdings plc ADR 50,000 $ 1,118,750
Total Investments in
Common Stocks
(Cost $222,487,301) 229,775,500
-----------------------------------------------------------=============
Principal
Short-Term Investments 3.79% Amount
-----------------------------------------------------------=============
Associates Corp.
6.77% due 6/1/2000
(Cost $9,105,000) $9,105,000 9,105,000
-----------------------------------------------------------=============
Total Investments 99.45%
(Cost $231,592,301) 238,880,500
-----------------------------------------------------------=============
Other Assets, Less Liabilities .55%
========================================================================
Cash 104,806
========================================================================
Receivables for: Securities sold 11,511,990
Capital stock sold 2,037,543
Dividend and interest 26,935
Total Other Assets 13,681,274
===============================================================================
Payables for: Securities purchased $ 11,918,214
Capital stocks reacquired 189,382
Other 250,830
Total Liabilities 12,358,426
-----------------------------------------------------------=====================
Total Other Assets,
Less Liabilities 1,322,848
===============================================================================
Net Assets 100.00% $240,203,348
===============================================================================
Class A Shares-Net asset value ($146,096,845/7,396,814
shares outstanding) $19.75
Maximum offering price (net asset value plus sales charge
of 5.75% of the offering price) $20.96
Class B Shares-Net asset value ($54,319,093/2,773,769
shares outstanding) $19.58
Class C Shares-Net asset value ($39,784,262/2,032,047
shares outstanding) $19.58
Class Y Shares-Net asset value ($3,147.52/158.773
shares outstanding) $19.82
*Non-income producing security.
ADRAmerican Depositary Receipt
See Notes to Financial Statements.
Statement of Operations (unaudited)
Investment Income Six Months Ended May 31, 2000
===============================================================================-
Income Interest $294,591
Dividends 79,101
--------
Total income $ 373,692
--------------------------------------------------------------------------------
Expenses Management fee 781,646
Management fee waived (257,312)
12b-1 distribution plan-Class A 207,313
12b-1 distribution plan-Class B 195,922
12b-1 distribution plan-Class C 138,287
Shareholder servicing 197,611
Reports to shareholders 32,600
Registration 37,285
Professional 17,088
Directors' fees 1,128
Other 2,344
--------------------------------------------------------------------------------
Total expenses 1,353,912
--------------------------------------------------------------------------------
Net investment loss (980,220)
--------------------------------------------------------------------------------
Realized and Unrealized Loss on Investments
===============================================================================-
Net realized loss from investment transactions (11,322,382)
===============================================================================-
Net change in unrealized depreciation of investments (3,527,246)
===============================================================================-
Net realized and unrealized loss on investments (14,849,628)
===============================================================================-
Net Decrease in Net Assets Resulting from Operations $(15,829,848)
===============================================================================-
See Notes to Financial Statements.
5
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 2000November 30,
Increase (Decrease) in Net Assets (unaudited) 1999
====================================================================================================================================
<S> <C> <C>
Operations Net investment income (loss) $ (980,220) $ 17,047
Net realized gain (loss) from investment transactions (11,322,382) 1,508,482
Net change in unrealized appreciation (depreciation) of investments (3,527,246) 10,365,297
Net increase(decrease) in net assets resulting from operations (15,829,848) 11,890,826
------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders from:
Net investment income-Class A (31,428) -
Net investment income-Class B - -
Net investment income-Class C - -
Net investment income-Class Y (6) -
Net realized gain from investment transactions-Class A (462,980) -
Net realized gain from investment transactions-Class B (127,732) -
Net realized gain from investment transactions-Class C (98,035) -
Net realized gain from investment transactions-Class Y (30) -
Total (720,211) -
------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 219,554,073 47,393,509
Net asset value of shares issued in reinvestment of dividends and distributions 705,953 -
Total 220,260,026 47,393,509
------------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (23,154,107) (4,359,957)
------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets derived from capital share transactions 197,105,919 43,033,552
------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 180,555,860 54,924,378
------------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of period 59,647,488 4,723,110
----------------------------------------------------------------------------------------------------------------------
End of period* $240,203,348 $ 59,647,488
======================================================================================================================
</TABLE>
* Including undistributed (overdistributed) net investment income of
$(994,370) and $17,284, respectively.
See Notes to Financial Statements.
Financial Highlights
<TABLE>
<CAPTION>
Class A Shares
-------------------------------------------------------------------------------------------
Six Months August 1, 1995
Ended Commencement
May 31, Year Ended of Operations) to
2000 November 30, November 30,
Per Share Operating Performance: (unaudited) 1999 1998 1997 1996 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.89 $ 12.58 $ 16.18 $ 12.84 $ 10.18 $ 10.00
-----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income (loss) (0.09)(e) .04(e) .15 .23 .30 .10
Net realized and unrealized
gain on investments 1.15 6.27 .09 3.39 2.50 .08
Total from investment operations 1.06 6.31 .24 3.62 2.80 .18
-----------------------------------------------------------------------------------------------------------------------------------
Distributions from:
Net investment income (.01) - (.37) (.28) (.12) -
Net realized gain on investments (.19) - (3.47) - (.02) -
Total distributions (.20) - (3.84) (.28) (.14) -
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 19.75 $ 18.89 $ 12.58 $ 16.18 $ 12.84 $ 10.18
-----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 5.65%(d) 50.04% 5.71% 28.90% 27.81% 1.80%(d)
===================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver
and reimbursements .66%(d) .41% .02% .00% .00% .00%(d)
Expenses, excluding waiver
and reimbursements .80%(d) 1.64% 1.60% 1.58% 2.39% 1.20%(d)
Net investment income (loss) (.44)%(d) .25% 1.14% 1.69% 2.67% 1.04%(d)
====================================================================================================================================
</TABLE>
6
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Class B Shares Class C Shares Class Y Shares
----------------------------------------------------------------- ---------------------------------- ----------------------------
Six Months Oct. 16, Six Months Oct. 19, Six Months Dec. 9,
Ended 1998(c) to Ended 1998(c) to Ended 1998(c) to
Per Share May 31, 2000 Nov. 30, May 31, 2000 Nov. 30, May 31, 2000 Nov. 30,
Operating Performance: (unaudited) 1999 1998 (unaudited) 1999 1998 (unaudited) 1999
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $18.78 $12.57 $10.41 $18.76 $12.59 $10.70 $18.94 $12.76
------------------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income (loss) (.16)(e) (.06)(e) __(a) (.16)(e) (.06)(e) __(a) (.07)(e) .09(e)
Net realized and unrealized
gain on investment 1.15 6.27 2.16 1.17 6.23 1.89 1.18 6.09
Total from investment
operations .99 6.21 2.16 1.01 6.17 1.89 1.11 6.18
------------------------------------------------------------------------------------------------------------------------------------
Distributions from:
Net investment income -- -- -- -- -- -- (.04) --
Net realized gain on
investments (.19) -- -- (.19) -- -- (.19) --
Total distributions (.19) -- -- (.19) -- -- (.23) --
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.58 $18.78 $12.57 $19.58 $18.76 $12.59 $19.82 $18.94
------------------------------------------------------------------------------------------------------------------------------------
Total Return (b) 5.35%(d) 49.32% 20.75%(d) 5.40%(d) 49.01% 17.66%(d) 5.88%(d) 48.43%(d)
====================================================================================================================================
Ratios to Average
Net Assets:
Expenses, including waiver
and reimbursements .98%(d) 1.07% .13%(d) .97%(d) 1.07% .13%(d) .48%(d) .06%(d)
Expenses, excluding waiver
and reimbursements 1.12%(d) 2.30% .34%(d) 1.11%(d) 2.30% .34%(d) .62%(d) 1.27%(d)
Net investment income (loss) (.77)%(d) (.40)% (.08)%(d) (.76)%(d) (.40)% (.10)%(d) (.31)%(d) .62%(d)
=================================================================================================================================
Six Months August 1, 1995
Ended (Commencement
May 31, Year Ended of Operations) to
2000 November 30, November 30,
Supplemental Data For All Classes: (unaudited) 1999 1998 1997 1996 1995
====================================================================================================================================
Net assets, end of period (000) $240,203 $59,647 $4,723 $1,672 $1,462 $968
Portfolio turnover rate 66.60% 104.87% 136.81% 52.86% 30.78% 1.55%
=================================================================================================================================
</TABLE>
(a) Amount less than $.01.
(b) Total return does not consider the effects of sales loads and assumes
the reinvestment of all distributions. (c)Commencement of operations of
respective class shares.
(d) Not annualized.
(e) Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
7
<PAGE>
Notes to Financial Statements (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Lord Abbett Research Fund, Inc. (the "Company") is an open-end management
investment company incorporated under Maryland law on April 26, 1992. The
Company consists of three separate portfolios. This report covers one of the
portfolios-Lord Abbett Growth Opportunities Fund ("Series"). The Series is
diversified as defined under the Investment Company Act of 1940. The financial
statements have been prepared in conform ity with accounting principles
generally accepted in the United States of America, 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 Series.
(a) Security valuation is determined as follows: Portfolio securities listed or
admitted to trad ing privileges on any national securities exchange are valued
at the last sales price on the principal securities exchange on which such
securities are traded, or, if there is no sale, at the mean between the last bid
and ask prices on such exchange. Securities traded only in the over-the-counter
market are valued at the mean between the last bid and ask prices, except that
securities admitted to trading on the NASDAQ National Market System are valued
at the last sales price if it is determined that such price more accurately
reflects the value of such securi ties. Short-term securities maturing in 60
days or less are valued at amortized cost which approximates market value.
Securities for which market quotations are not available are valued at fair
value under procedures approved by the Board of Directors.
(b) It is the policy of the Series 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) Investment transactions are accounted for on the date that the securities
are purchased or sold (trade date). Realized gains and losses from investment
transactions are calculated on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. 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.
2. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Series has a management agreement with Lord, Abbett & Co. ("Lord Abbett")
pursuant to which Lord Abbett supplies the Series 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
Series' investment portfolio. The management fee paid is based on average daily
net assets for each month at the annual rate of 0.90 of 1%. Lord Abbett waived a
portion of its management fee during the period ended May 31, 2000. At May 31,
2000, the management fee payable was $184,283.
The Series 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 Series makes payments to Distributor, which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, the Series
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) an annual distribution fee of 0.10% of the
average daily net asset value of Class A shares. Pursuant to the Class B and
Class C Plans, the Series pays Distributor an annual service and distribution
fee of 0.25% and 0.75%, respectively, of the average daily net asset value of
the shares outstanding. Class Y does not have a Rule 12b-1 plan. At May 31,
2000, the 12b-1 fee payable was $113,409.
Distributor received $358,014, representing payment of commissions on sales of
Class A shares, after deducting $2,040,869 allowed to authorized dealers as
concessions. Certain of the Series' officers and directors have an interest in
Lord Abbett.
3. CAPITAL
The Company has authorized 150 million shares of $.001 par value capital stock
desig nated as follows: Class A-50 million, Class B -30 million, Class C-20
million, Class P -20 million, Class Y-30 million. Paid in capital amounted to
$244,370,778 at May 31, 2000.
Transactions in capital stock were as follows:
Six Months Ended May 31, 2000 Year Ended Nov. 30, 1999
----------------------------------------------------------------
Class A Shares Amount Shares Amount
--------------------------------------------------------------------------------
Sales of shares 5,883,802 $128,016,674 2,010,484 $31,122,767
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 24,829 488,885 -- --
Total 5,908,631 128,505,559 2,010,484 31,122,767
--------------------------------------------------------------------------------
Shares reacquired (642,643) (13,645,038) (212,825) (3,631,283)
Increase 5,265,988 $114,860,521 1,797,659$ 27,491,484
Six Months Ended May 31, 2000 Year Ended Nov. 30, 1999
----------------------------------------------------------------
Class B Shares Amount Shares Amount
--------------------------------------------------------------------------------
Sales of shares 2,470,095 $54,011,012 583,643 $9,180,995
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 6,306 123,464 - -
Total 2,476,401 54,134,476 583,643 9,180,995
--------------------------------------------------------------------------------
Shares reacquired (286,038) (6,145,035) (18,432) (294,430)
Increase 2,190,363 $47,989,441 565,211$ 8,886,565
--------------------------------------------------------------------------------
Six Months Ended May 31, 2000 Year Ended Nov. 30, 1999
----------------------------------------------------------------
Class C Shares Amount Shares Amount
--------------------------------------------------------------------------------
Sales of shares 1,739,313 $37,526,387 450,156 $7,087,621
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 4,783 93,568 - -
Total 1,744,096 37,619,955 450,156 7,087,621
--------------------------------------------------------------------------------
Shares reacquired (161,764) (3,364,034) (24,444) (434,244)
Increase 1,582,332 $34,255,921 425,712 $6,653,377
--------------------------------------------------------------------------------
Six Months Ended May 31, 2000 Year Ended Nov. 30, 1999
----------------------------------------------------------------
Class Y Shares Amount Shares Amount
--------------------------------------------------------------------------------
Sales of shares - $ - 157 $ 2,126
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 1.802 36 - -
Total 1.802 36 157 2,126
--------------------------------------------------------------------------------
Shares reacquired - - - -
Increase 1.802 $36 157 $ 2,126
--------------------------------------------------------------------------------
NOTE: There was no capital stock activity for Class P shares during the period.
4. Distributions
Distributions from net investment income and net realized gain from investment
transactions, if any, are distributed to shareholders annually. At May 31, 2000,
accumulated net realized loss for the Series was $10,461,259.
Income and capital gain 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 accounting
principles generally accepted in the United States of America.
5. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (other than short-term investments)
for the period ended May 31, 2000 aggregated $298,232,991 and $110,315,054,
respectively. As of May 31, 2000, net unrealized appreciation for federal income
tax purposes aggregated $7,288,199 of which $30,806,095 related to appreciated
securities and $23,517,896 related to depreciated securities. The cost of
investments for federal income tax purposes is substantially the same as that
used for financial reporting purposes.
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 the net assets of each fund.
7. LINE OF CREDIT
The Company, along with certain other funds managed by Lord Abbett, has
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 was at an annual rate of
0.06% during the year ended November 30, 1999. Effective December 17, 1999, this
fee was increased to 0.09% per annum. There were no loans outstanding pursuant
to this Facility at May 31, 2000, nor was the Facility utilized at any time
during the period.
Copyright (C) 2000 by Lord Abbett Growth Opportunities Inc., 90 Hudson Street,
Jersey City, NJ 07302-3973
This publication, when not used for the general information of shareholders of
Lord Abbett Growth Opportunities, is to be distributed only if preceded or
accompanied by a current prospectus which includes information concerning the
Series' Investment objective and policies, sales charges and other matters.
There is no guarantee that the forecasts contained in this publication will come
to pass. All rights reserved. Printed in the U.S.A.
8
<PAGE>
Lord, Abbett & Co.
INVESTMENT
TEAM LEADER
PROFILE
[Photo of Stephen J. McGruder]
Stephen J. McGruder
Partner and Investment Team Leader
Stephen J. McGruder, a CFA charterholder, has 30 years of
experience in the investment industry. Prior to joining Lord
Abbett in 1995, he was Vice President and Portfolio Manager
at Wafra Investment Advisory Group. He holds a BS from
Stanford University and a BA in Business Economics from
Claremont McKenna College.
ABOUT YOUR FUND'S
BOARD OF
DIRECTORS
The Securities and Exchange Commission (SEC) views the role of the independent
Board of Directors as one of the most important components in overseeing a
mutual fund. The Board of Directors watches over your Fund's general operations
and represents your interests. Board members review and approve every contract
between your Fund and Lord, Abbett & Co. (the Fund's investment manager) and
Lord Abbett Distributor LLC (the Fund's underwriter). They meet regularly to
review a wide variety of information and issues regarding your Fund. Every
member of the Board possesses extensive business experience. Lord Abbett
Tax-Free Income Fund's shareholders are indeed fortunate to have a group of
independent directors with diverse backgrounds to provide a variety of
viewpoints in the oversight of their Fund. Below, we feature one of our
independent directors, E. Thayer Bigelow, Jr.
[PHOTO]
E. Thayer Bigelow, Jr.
Director -Lord Abbett
Tax-Free Income Fund
Mr. Bigelow is a graduate of Trinity College and earned his MBA at the
University of Virginia's Darden Business School. He is currently Senior Advisor
at Time Warner Inc. Prior to that, he was acting CEO of Courtroom Television
Network, and previously served for five years as President and CEO of Time
Warner Cable Programming, Inc.
Mr. Bigelow serves as a member of the Board of Trustees for the Cate School. He
is also a member of the Board of Directors of Crane Co. He has been an
independent director for all of Lord Abbett's Family of Funds since 1994.
<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
Growth Large-Cap Research Fund - Balanced World Bond- National U. S. Government
Opportunities Growth Fund Large-Cap Series** Debenture Series California Securities Money
Fund Research Fund- Series Global Fund - Connecticut Market Fund + ++
Small-Cap Value Growth & Income Series Florida
Series Income Series High Yield Fund Georgia
Alpha Series* Affiliated Fund Bond-Debenture Hawaii
Developing International Fund Michigan
Growth Fund Series Limited Duration Minnesota
Lord Abbett Mid-Cap U. S. Government Missouri
Developing Value Fund Securities Series+ New Jersey
Growth Fund Global Fund- U. S. Government) New York
is closed to Equity Series Securities Series+ Pennsylvania
new investors. Texas
Washington
</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
under stand your investment objectives and, ultimately, offering fund recom
mendations 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 the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, in cluding risks,
charges and ongoing expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios designed
to meet a variety of investment needs.
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.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit Our Web Site:
www.lordabbett.com
** Lord Abbett Securities Trust - Alpha Series is a fund of funds investing in
shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund -
Small-Cap Value Series and Lord Abbett Securities Trust - International
Series.
** Lord Abbett Balanced Series is a fund of funds investing in shares of
certain other Lord Abbett funds.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
++ An investment in this 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]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
-----------------------------------------------------
90 Hudson Street o Jersey City, New Jersey 07302-3973
LAGOF-3-300
(7/00)
