Lord Abbett
Research Fund
Large-Cap Series o Small-Cap Value
1999 Annual Report
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Two portfolios designed to help
you build for your future
Visit our Web Site and get: up to date statistics and other useful information
at www.lordabbett.com
<PAGE>
Lord Abbett Research Fund Large-Cap Series o Small-Cap Value Series
A Tradition of Value Investing
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We recognize each investor's need for a well-diversified portfolio. Our value
investing process can benefit investors in both large and small company stocks.
Our goal, to provide investors competitive returns with relatively moderate
fluctuations in price, applies to both Series.
- --------------------------------------------------------------------------------
Value Investing at Work in a Portfolio of Large Company Stocks and a Portfolio
of Small Company Stocks
Lord Abbett Research Fund--Large-Cap Series has produced long-term returns above
the average of mutual funds that focus on value stocks of large companies.
Large-Cap Series Performance
Average Annual Total Returns as of 11/30/99
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The Small-Cap Value Series has outperformed small value company stocks in
general and the average of mutual funds that focus on value stocks of small
companies for the period since its inception.
Small-Cap Value Series Performance
Average Annual Total Returns as of 11/30/99
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Performance data shown is for Class A shares at net asset value and assumes the
reinvestment of all distributions. Comparative fund performance provided by
Morningstar, Inc. does not account for the deduction of sales charges and would
be different if sales charges were included. The Russell 2000 Value Index is an
unmanaged index measuring the performance of those Russell 2000 companies with
lower price-to-book ratios and lower forecasted earnings growth values. An
investor cannot invest directly in an index.
Source: Morningstar, Inc.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
Average annual total returns for the periods ended 12/31/99 at the Class A share
maximum sales charge of 5.75%, with all distributions reinvested:
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The results quoted herein represent past performance, which is no indication of
future results. The investment return and principal value of an investment in
either Series will fluctuate so that shares, on any given day or when redeemed,
may be worth more or less than their original cost.
(1) Period 12/13/95-11/30/99 for the Small-Cap Value Series; 1/1/96-11/30/99
for Morningstar average and the Russell 2000 Value Index, which is an
unmanaged index. The Index is unavailable for investment.
(2) The Large-Cap Series commenced operations 6/3/92.
(3) The Small-Cap Value Series commenced operations 12/13/95.
During the 5-year and Life-of-Series periods shown, Lord Abbett waived or
assumed a portion of fees and expenses for each Series. Please see the Series'
prospectus for a history of such waivers and assumptions. There are no plans to
continue such waivers and assumptions in the future.
<PAGE>
Report to Shareholders
For the Fiscal Year Ended November 30, 1999
[PHOTO]
Robert S. Dow
Chairman
"The continued vigor of the U.S. economy combined with improving global
economies boded well for corporate profit growth and the U.S. equity market."
Lord Abbett Research Fund completed its fiscal year on November 30, 1999. We are
pleased to present you with an overview of performance and class-specific data
for the period.
Large-Cap Series
-----------------------------------------------------------
Class A Class B Class C Class P+ Class Y++
- --------------------------------------------------------------------------------
Net asset value $25.32 $25.03 $25.05 $25.36 $25.30
Dividends $ 0.10 $ - $ - $ 0.03 $ 0.04
Capital gains paid $ 0.17 $ 0.17 $ 0.17 $ - $ -
Total return* +16.99% +16.21% +16.20% +1.20%** +0.52%**
Small-Cap Value Series
-----------------------------------------------------------
Class A Class B Class C Class P+++ Class Y
- --------------------------------------------------------------------------------
Net asset value $15.63 $15.34 $15.34 $15.63 $15.71
Dividends $ - $ - $ - $ - $ -
Capital gains paid $ - $ - $ - $ - $ -
Total return* +8.84% +8.03% +8.03% -4.75%** +9.10%
The continued vigor of the U.S. economy combined with improving global economies
boded well for corporate profit growth and the U.S. equity market. Investors
continued to focus on large companies that had provided the best recent
performance. As a result, many large-cap growth stocks became more expensive
relative to their fundamentals. Evidence that a very few number of companies
dramatically influenced the market's overall returns is the fact that, through
November 1999, 280 of the stocks in the S&P 500 had negative returns for the
year. We believe that the retail investor's fascination with popular Internet
stocks contributed to this focus on a small number of specialized companies.
About Large-Cap Series
We attribute the solid performance of your portfolio to several factors. First,
the new era of technology-related telecommunications spawned several winning
stocks for the portfolio. Second, we sharply reduced our exposure to the
consumer non-cyclical sector, a group whose performance was poor for the year.
Third, we increased our allocation in the basic materials sector (aluminum,
paper, chemicals, etc.), as we believe this sector contains significant value.
Amidst merger and acquisition activity, the performance of the financial sector
weakened in 1999. Valuations suffered as acquiring banks eventually found it
hard to both cut costs and grow revenue. Intense competition forced downward
earnings revisions in the group and some of our holdings suffered as a result.
About Small-Cap Value Series
Our exposure to technology and telecommunications stocks helped the overall
performance of the portfolio. Additionally, the portfolio benefited from the
purchase of several hardware technology stocks that were depressed earlier in
the year, but performed quite well as the year progressed. When these stocks hit
the target prices we had set, they were sold and the proceeds were used to
invest in other parts of the technology sector such as software and information
technology services. Despite prospects of continuing consolidation, we remained
significantly underweighted in the financial sector. This paid off later as
disappointing earnings drove small-cap financial stocks down.
Looking Ahead
We anticipate that corporate earnings both in the U.S. and the global economy
will continue to improve. We remain watchful for any signs of inflation caused
by global expansion. Periods of inflation, usually resulting in higher interest
rates, can be a challenging environment for stocks. However, we believe that in
an environment characterized by accelerating global growth, rising interest
rates and stable inflation, the earnings of a large number of companies tend to
accelerate, and value stocks tend to outperform growth stocks.
Thank you for your continued confidence in Lord Abbett Research Fund. We look
forward to helping you achieve your financial goals in the new millennium.
* Total return is the percent change in net asset value, assuming the
reinvestment of all distributions.
** Not annualized.
+ Since inception (4/28/99). ++ Since inception (5/4/99).
+++ Since inception (6/23/99).
<PAGE>
LORD ABBETT RESEARCH FUND--LARGE-CAP SERIES
Unique Management Style Produces an Outperformer
Shareholders investing $10,000 at the Series' inception on June 3, 1992 had a
portfolio worth $36,060 as of November 30, 1999, an average annual gain of
18.7%.
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(1) Series performance is at net asset value for Class A shares and assumes the
reinvestment of all distributions.
(2) Source: Morningstar. Performance reflects the period 6/1/92-11/30/99.
LORDABBETT RESEARCH FUND--SMALL-CAP VALUE SERIES
Seeking the Best Small-Cap Value Stocks
A $10,000 investment made on January 1, 1996 was worth $16,941 as of November
30, 1999, outperforming both the unmanaged Russell 2000 Value Index and the
Morningstar Average of Small Value Funds. This represents an average annual gain
of 14.4%
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(1) Series performance is at net asset value for Class A shares and assumes the
reinvestment of all distributions.
(2) Source: Morningstar.
(3) The Russell 2000 Value Index is an unmanaged index measuring the
performance of those Russell 2000 companies with lower price-to-book ratios
and lower forecasted earnings growth values. An investor cannot invest
directly in an index.
<PAGE>
Important Information
Common stocks purchased by each Series are subject to market fluctuations,
providing the potential for gains and the risk of loss. Lord Abbett Research
Fund-Small-Cap Value Series invests in small-cap companies, which typically have
a higher risk of failure and historically have experienced a greater degree of
illiquidity and market volatility than large-cap companies. 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. Each Series issues additional classes of
shares, with distinct pricing options. For a full discussion 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
3/31/00, this report must be accompanied by Lord Abbett's Performance Quarterly
for the most recently completed calendar quarter.
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
SMALL-CAP VALUE SERIES November 30, 1999
Investments Shares Value
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Investments in Common Stocks and Other Securities 99.86%
- ------------------------------------------------------------------------------------------------------------------------============
<S> <C> <C> <C>
Aerospace/Defense 4.69% AAR Corp.-Major supplier of products and services
for the worldwide aviation industry 365,000 $ 6,022,500
*Alliant Techsystems Inc.-Develops and supplies aerospace
and defense technologies, products,
and systems to the U.S. and its allies 25,000 1,373,437
*Doncasters plc ADR-Supplier of tolerance-critical
aircraft engine components 259,200 2,268,000
*Moog Inc. Class A+-Manufacturer of electrohydraulic control systems 455,200 11,949,000
Total 21,612,937
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Aluminum .95% IMCO Recycling Inc.-Major aluminum recycler, and zinc
and magnesium processor 340,000 4,377,500
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Apparel 4.44% *Cutter & Buck Inc.-Designs and markets upscale s
portswear and outerwear 154,200 2,399,737
Garan Inc.-Supplier of knitted and woven apparel 236,200 7,322,200
*Gildan Activewear Inc. Class A-Manufacturer of
branded basic activewear 200,000 3,500,000
*North Face Inc.-Manufacturer of camping equipment and outerwear 186,500 967,469
Phillips-Van Heusen Corp.-Apparel manufacturer 700,000 5,950,000
Stride Rite Corp.-Producer and retail marketer of
adult's & children's shoes 47,900 305,363
Total 20,444,769
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Auto Parts: After Market .55% Clarcor Inc.-Manufactures engine and environmental filtration
products for automotive and heavy duty applications 145,000 2,519,375
- ------------------------------------------------------------------------------------------------------------------------============
Auto Parts: Original Equipment *American Axle & Manufacturing Holdings Inc.-Manufacturer
2.15% of driveline systems for light trucks and sport utility vehicles 250,000 3,218,750
*Jason Inc.-Produces nonwoven fiber insulation for the
automotive industry and seating products for off-road equipment 119,700 927,675
Superior Industries International-Designs and manufactures
motor vehicle parts and accessories 215,000 5,764,688
Total 9,911,113
- ------------------------------------------------------------------------------------------------------------------------============
Auto Trucks & Parts 3.07% Oshkosh Truck Corp.-Manufactures and markets a broad range
of heavy specialized motor vehicles 512,000 14,144,000
- ------------------------------------------------------------------------------------------------------------------------============
- ------------------------------------------------------------------------------------------------------------------------============
Banks: Regional 1.81% Community First Bankshares Inc.-A multibank holding company 235,000 4,274,062
East-West Bancorp Inc.-A commercial bank specializing in
commercial, construction and real estate lending, as well
as financing international trade 115,000 1,415,937
Sterling Bancshares Inc.-Provides a wide range of retail,
commercial and mortgage banking services 205,000 2,626,563
Total 8,316,562
- ------------------------------------------------------------------------------------------------------------------------============
Biotechnology 1.15% *Gliatech Inc.-Develops and commercializes medical devices
designed to inhibit excessive surgical scarring and adhesions 400,000 5,300,000
- ------------------------------------------------------------------------------------------------------------------------============
Building Materials 5.31% Hughes Supply Inc.-Supplier of building materials
and plumbing equipment 374,700 8,875,706
LSI Industries Inc.-Manufacturer of lighting fixtures,
menu board systems and graphic products 165,400 3,979,938
*Simpson Manufacturing Co. Inc.-Manufacturer of
construction-related fasteners 278,000 11,589,125
Total 24,444,769
- ------------------------------------------------------------------------------------------------------------------------============
3
<PAGE>
STATEMENT OF NET ASSETS
SMALL-CAP VALUE SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals .75% Calgon Carbon Corp.-Manufactures and markets products
and services employed for separation, concentration
and purification of liquids and gases 143,300 $ 877,713
Cambrex Corp.-Supplies health and biotechnology
products to the life sciences industries 81,900 2,579,850
Total 3,457,563
- ------------------------------------------------------------------------------------------------------------------------============
Communications Equipment 1.69% Methode Electronics Class A-Producer of electronic components 288,500 7,789,500
- ------------------------------------------------------------------------------------------------------------------------============
Communications Technology .36% *Anadigics Inc.-Supplies radio frequency and microwave
integrated circuits used to receive and transmit signals 37,000 1,665,000
- ------------------------------------------------------------------------------------------------------------------------============
Computer Services 4.53% *American Management Systems-Provides a range of consulting services 275,000 8,078,125
Analysts International Corp.-Provides a variety of computer
software services to computer users 625,000 7,460,937
*Ciber Inc.-Provides management consulting for business
technology solutions 250,000 5,328,125
Total 20,867,187
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Computer Technology 1.01% *RSA Security Inc.-Delivers Internet security solutions
for electronic businesses 125,000 4,656,250
- ------------------------------------------------------------------------------------------------------------------------============
- ------------------------------------------------------------------------------------------------------------------------============
Computer: Hardware 1.89% *Electronics For Imaging Inc.-Develops technologies that
enable digital color printing over computer networks 65,000 2,896,563
*Paxar Corp.-Manufactures identification and tracking
systems for all aspects of the retail supply chain 421,100 3,579,350
*Zebra Technologies Corp. Class A-Provider of
bar code labeling systems 37,000 2,233,875
Total 8,709,788
- ------------------------------------------------------------------------------------------------------------------------============
Computer: Software 1.93% *Datastream Systems Inc.-Develops and markets computers,
file/server enterprise software for the industrial
automation market 211,800 2,965,200
*Inprise Corp.-A direct marketer of microcomputers,
peripherals and software 154,300 1,369,412
*Metro Information Services Inc.-Distributes and
manufactures electronic products and custom-made
electronic assemblies 185,000 2,751,875
*Systems & Computer Technology Corp.-Provides
client/server, mission-critical enterprise software and
information technology services 125,000 1,789,063
Total 8,875,550
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Consumer Electronics 2.86% *Good Guys Inc.+-Warrants expiring 8/19/2002 387,500 1,822,710
*Good Guys Inc.+-Retailer of consumer electronics products 1,399,100 11,367,688
Total 13,190,398
- ------------------------------------------------------------------------------------------------------------------------============
Containers 2.69% *BWAY Corp.-Manufacturer of steel containers 223,300 1,283,975
*Ivex Packaging Corp.+-Designer and manufacturer of
flexible packaging products 1,050,000 11,090,625
Total 12,374,600
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Drugs .09% *Covance Inc.-A contract research organization
providing a wide range of integrated product development services 37,900 412,162
- ------------------------------------------------------------------------------------------------------------------------============
Electrical Equipment .03% Woodhead Industries Inc.-Manufacturer of specialty electrical products 8,800 116,600
- ------------------------------------------------------------------------------------------------------------------------============
Electronics 3.36% BEI Technologies Inc.+-Designs, makes and sells electronic
devices that provide vital sensory input for the control
systems of advanced machinery and automatic systems 415,000 5,343,125
Kollmorgen Corp.-Manufacturer of electronic motion
control products and systems 480,000 4,380,000
*SBS Technologies Inc.-Manufactures standard bus-embedded
computer components and custom stand-alone applications 170,000 5,737,500
Total 15,460,625
- ------------------------------------------------------------------------------------------------------------------------============
Electronics: *Kent Electronics Corp.-Manufactures electronic components
Equipment/Components and interconnect assemblies 96,100 2,204,294
3.70%
*Sensormatic Electronics Corp.-Supplies electronic
security systems to the retail, commercial and
industrial marketplaces 930,000 14,821,875
Total 17,026,169
- ------------------------------------------------------------------------------------------------------------------------============
Energy Equipment *NS Group Inc.-Manufacturer of oil tubular steel
& Services .93% products and industrial adhesive products 410,000 4,253,750
- ------------------------------------------------------------------------------------------------------------------------============
Engineer/Control Services .72% *Baker (Michael) Corp.+-Engineering, operations
& maintenance and construction firm 511,500 3,324,750
- ------------------------------------------------------------------------------------------------------------------------============
Financial: Miscellaneous 3.11% Doral Financial Corp.-Originates, purchases, sells and
services mortgage loans for single-family residences in Puerto Rico 465,000 5,550,937
5
<PAGE>
STATEMENT OF NET ASSETS
SMALL-CAP VALUE SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
*Financial Federal Corp.-Provides installment financing and
leasing programs to the manufacturing industries 425,000 $ 8,792,187
Total 14,343,124
- ------------------------------------------------------------------------------------------------------------------------============
Food 5.45% Dreyer's Grand Ice Cream Inc.-Ice cream manufacturer
and distributor 800,000 13,300,000
Michael Foods Inc.-Processor and distributor of
eggs and egg products, retail potato and dairy items 297,300 7,451,081
*NBTY Inc.-Manufacturer and retailer of a broad line of
nutritional supplements in the United States and the United Kingdom 310,000 3,032,188
Sanderson Farms Inc.-Produces, processes, markets and
distributes fresh & frozen chicken and other prepared food 143,200 1,306,700
Total 25,089,969
- ------------------------------------------------------------------------------------------------------------------------============
Health Care *Sierra Health Services Inc.-Provider of managed health
Management Services and workers' compensation plans
.46% in Nevada, Texas and the Northeast 224,200 2,101,875
- ------------------------------------------------------------------------------------------------------------------------============
Health Care Products 7.99% *Arrow International Inc.-Supplies disposable
catheters and related clinical products 231,100 6,918,556
*Haemonetics Corp.-Major manufacturer of blood collection systems 405,000 9,112,500
*ICU Medical Inc.-Manufacturer of proprietary disposable
medical connection devices for use in
intravenous therapy applications 330,000 4,991,250
Invacare Corp.-Manufacturer of medical equipment
for the home health care, retail and extended care markets 355,000 7,477,188
Mentor Corp.-Develops, makes and sells a broad range of
products for plastic and reconstructive surgery 355,000 8,298,125
Total 36,797,619
- ------------------------------------------------------------------------------------------------------------------------============
Machinery .82% CMI Corp. Class A-Manufactures equipment for
applications heavy-duty construction and infrastructure 153,200 1,244,750
*Gardner Denver Inc.-Manufactures stationary air
compressors and blowers for industrial applications 155,100 2,539,763
Total 3,784,513
- ------------------------------------------------------------------------------------------------------------------------============
Machinery: Oil Well Equipment *Marine Drilling Co. Inc.-Provides offshore contract drilling
4.61% services for independent and major oiland gas companies 585,000 9,871,875
*National-Oilwell Inc.-Domestic oil and gas drilling and
production company 585,000 8,336,250
*Oceaneering International Inc.-Sub-sea diving services 233,500 3,035,500
Total 21,243,625
- ------------------------------------------------------------------------------------------------------------------------============
Manufacturing 1.28% *SPS Technologies Inc.-Producer of industrial fasteners,
specialty and magnetic materials, aerospace structures,
and precision tools 180,000 5,895,000
- ------------------------------------------------------------------------------------------------------------------------============
Metal Fabricating 1.31% *Shaw Group Inc. (The)-Supplies piping systems and
provides industrial construction and maintenance services 290,000 6,053,750
- ------------------------------------------------------------------------------------------------------------------------============
Natural Gas .06% *Meridian Resource Corp.-U.S. gas and oil exploration,
development and production company 78,400 289,100
- ------------------------------------------------------------------------------------------------------------------------============
Office Furniture &
Business Equipment .05% *Neutral Posture Ergonomics Inc.+-Producer and
distributor of office chairs 1 91,700 239,625
- ------------------------------------------------------------------------------------------------------------------------============
Oil: Crude Producers 1.59% *Basin Exploration Inc.-U.S. gas and oil exploration,
development and production company 415,000 7,340,313
- ------------------------------------------------------------------------------------------------------------------------============
Production: *Electro Scientific Industries Inc.-Provides
Technology Equipment electronics manufacturers with equipment necessary to
3.56% produce key components used in wireless communications,
computers, automotive electronics and many other
electronic products 70,000 4,090,625
- ------------------------------------------------------------------------------------------------------------------------============
*GenRad Inc.-Manufacturer of electrical test and
measurement equipment, auto diagnostic equipment 694,500 12,283,969
- ------------------------------------------------------------------------------------------------------------------------============
Total 16,374,594
- ------------------------------------------------------------------------------------------------------------------------============
Publishing 3.46% *Scholastic Corp.-A leading publisher of children's
books and educational materials 290,000 15,913,750
- ------------------------------------------------------------------------------------------------------------------------============
Railroad Equipment .22% *ABC-NACO Inc.-Supplier of specialty products for major
freight railroads in the U.S. 90,000 1,006,875
- ------------------------------------------------------------------------------------------------------------------------============
Restaurants .53% *Buca Inc.-Owns and operates "BUCA di BEPPO" restaurants 215,000 2,445,625
- ------------------------------------------------------------------------------------------------------------------------============
Retail 2.09% *Coldwater Creek Inc.-A specialty direct mail retailer 178,000 4,984,000
*Shopko Stores Inc.-A specialty discount retailer operating
primarily in the Upper Midwest, Western Mountain and Pacific
Northwest regions of the United States 204,200 4,632,788
Total 9,616,788
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5
<PAGE>
STATEMENT OF NET ASSETS
SMALL-CAP VALUE SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty 1.97% Regis Corp.-Operates and franchises hair and retail product salons 315,000 $ 6,496,875
*United Retail Group Inc.-Retails large-size women's
apparel and accessories 280,000 2,590,000
Total 9,086,875
- ------------------------------------------------------------------------------------------------------------------------============
Soaps & House Chemicals .76% Church & Dwight Co. Inc.-Produces and sells sodium bicarbonate
and sodium bicarbonate-based products under the ARM & HAMMER trademark 125,000 3,500,000
- ------------------------------------------------------------------------------------------------------------------------============
- ------------------------------------------------------------------------------------------------------------------------============
Specialty Materials 6.40% *Cuno Inc.-Manufacturer of fluid filtration products for
healthcare, potable water and industrial fluid processing 134,000 2,730,250
*Rogers Corp.+-Manufacturer of specialty materials and
components used in the communications, computer and
transportation market 663,800 26,759,438
Total 29,489,688
- ------------------------------------------------------------------------------------------------------------------------============
Supermarkets .98% Ruddick Corp.-Manufactures sewing thread; operates
supermarkets in the Southeast 255,000 4,494,375
- ------------------------------------------------------------------------------------------------------------------------============
Telecommunication Equipment
1.85% *Commscope Inc.-Designs, makes and markets coaxial cables 202,000 8,509,250
- ------------------------------------------------------------------------------------------------------------------------============
Telecommunications .33% *Anixter International Inc.-Distributes multimedia technology
products throughout North America, Europe, Asia and Latin America 75,500 1,538,312
- ------------------------------------------------------------------------------------------------------------------------============
Transportation: Miscellaneous *Airnet System Inc.-Operates a national air transportation
.07% network to make time-critical deliveries 61,700 331,638
- ------------------------------------------------------------------------------------------------------------------------============
Truckers .25% *Smithway Motor Express Corp. Class A+-Truckload carrier
concentrating on the flatbed segment 271,400 1,153,450
- ------------------------------------------------------------------------------------------------------------------------============
Total Investments in Common Stocks and
Other Securities (Cost $449,639,450) 459,890,650
- ------------------------------------------------------------------------------------------------------------------------============
Short-Term Investment .18% Associates Corp. 5.68%, due 12/1/1999 (Cost $826,000) $826,000 826,000
- ------------------------------------------------------------------------------------------------------------------------============
Total Investments 100.04% (Cost $450,465,450) 460,716,650
- ------------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities (.04)% (167,612)
- ------------------------------------------------------------------------------------------------------------------------============
Net Assets 100.00% $ 460,549,038
- ------------------------------------------------------------------------------------------------------------------------============
Class A Shares-Net asset value ($209,515,847 / 13,402,402 shares outstanding) $15.63
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $16.58
Class B Shares-Net asset value ($155,495,202 / 10,133,789 shares outstanding) $15.34
Class C Shares-Net asset value ($45,928,947 / 2,993,150 shares outstanding) $15.34
Class P Shares-Net asset value ($1,085.31 / 69.442 shares outstanding) $15.63
Class Y Shares-Net asset value ($49,607,957 / 3,158,188 shares outstanding) $15.71
The descriptions of the companies are unaudited.
*Non-income producing security.
+Affiliated issuer (holdings represent 5% or more
of the outstanding voting securities).
ADR American Depositary Receipt.
See Notes to Financial Statements.
STATEMENT OF NET ASSETS
LARGE-CAP SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in Common Stocks 96.29%
- ------------------------------------------------------------------------------------------------------------------------============
Aluminum 2.05% Alcoa Inc.-Largest U.S. aluminum producer 80,000 $ 5,240,000
- ------------------------------------------------------------------------------------------------------------------------============
Automotive .89% Ford Motor Co.-World's second largest producer of cars and trucks 45,000 2,272,500
- ------------------------------------------------------------------------------------------------------------------------============
Banks: Money Center 2.31% Bank of America Corp.-Major money-center bank 35,000 2,047,500
Chase Manhattan Corp.-Major money-center bank holding company 50,000 3,862,500
Total 5,910,000
- ------------------------------------------------------------------------------------------------------------------------============
Banks: Regional 3.98% Bank One Corp.-Leading bank holding company 55,000 1,938,750
- ------------------------------------------------------------------------------------------------------------------------============
Fleet Boston Financial Corp.-Provides commercial
and investment banking services in the U.S.
and in other countries around the world 95,000 3,592,187
6
<PAGE>
STATEMENT OF NET ASSETS
LARGE-CAP SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Co.-Midwestern regional bank holding company 100,000 $ 4,650,000
Total 10,180,937
- ------------------------------------------------------------------------------------------------------------------------============
Cable Services 1.94% *MediaOne Group Inc.-Provides broadband and Internet services
to customers in the United States, Europe, and Asia 16,000 1,268,000
Time Warner Inc.-A major entertainment and communications firm 60,000 3,701,250
Total 4,969,250
- ------------------------------------------------------------------------------------------------------------------------============
Chemicals 2.66% Dow Chemical Co.-Leading global chemical producer 30,000 3,513,750
Rohm & Haas Co.-Manufacturer of specialty chemicals and plastics 90,000 3,296,250
Total 6,810,000
- ------------------------------------------------------------------------------------------------------------------------============
Communications *Loral Space & Communications-Major manufacturer of electronic
Technology 2.18% warfare and communications systems 170,000 3,049,375
*QUALCOMM Inc.-Leading producer of communications
technologies and products 7,000 2,536,187
Total 5,585,562
- ------------------------------------------------------------------------------------------------------------------------============
Computer Services 1.68% *Unisys Corp.-Provides information services, technology,
software and customer support 150,000 4,312,500
- ------------------------------------------------------------------------------------------------------------------------============
Computer Technology 2.83% *Apple Computer Inc.-Main personal computer producer 20,000 1,957,500
*Sun Microsystems Inc.-Supplier of network computer products
including workstations, servers, software, microprocessors and
a full range of services and support 40,000 5,290,000
Total 7,247,500
- ------------------------------------------------------------------------------------------------------------------------============
Computer: Hardware 3.04% Compaq Computer Corp.-Develops and markets hardware,
software, solutions and services 120,000 2,932,500
International Business Machines Corp.-World's largest
computer manufacturer 47,000 4,843,937
Total 7,776,437
- ------------------------------------------------------------------------------------------------------------------------============
Computer: Software 2.84% *Cadence Design Systems Inc.-Provides software technology and
comprehensive design and consulting services and technology 180,000 3,195,000
*Oracle Corp.-Supplies software for enterprise information management 60,000 4,068,750
Total 7,263,750
- ------------------------------------------------------------------------------------------------------------------------============
Conglomerates 1.19% Minnesota Mining & Manufacturing Co.-Diversified global
manufacturer of value-added industrial, consumer and medical products 32,000 3,058,000
- ------------------------------------------------------------------------------------------------------------------------============
Copper 1.42% Phelps Dodge Corp.-Produces copper, carbon black, and magnet wire 70,000 3,640,000
- ------------------------------------------------------------------------------------------------------------------------============
Data Processing Equipment &
Components 1.05% First Data Corp.-Information supplier for credit card
processing and related services 62,000 2,681,500
- ------------------------------------------------------------------------------------------------------------------------============
Drugs 4.05% American Home Products Corp.-Producer of drugs, food,
housewares and packaged medicine and medical products 110,000 5,720,000
Pharmacia & Upjohn Inc.-Develops, makes and sells prescription
pharmaceutical and other related health-care products 85,000 4,648,437
Total 10,368,437
- ------------------------------------------------------------------------------------------------------------------------============
Electric Power 6.24% Carolina Power & Light-Electric utility company
serving North and South Carolina 110,000 3,313,750
Dominion Resources Inc.-Sells electric energy to customers
and wholesale customers in Virginia and Northeastern United States 85,000 3,856,875
Duke Energy Corp.-Electric utility company serving North
and South Carolina 100,000 5,068,750
FirstEnergy Corp.-Major midwestern electric utility holding company 160,000 3,730,000
Total 15,969,375
- ------------------------------------------------------------------------------------------------------------------------============
Electrical Equipment 3.57% *AlliedSignal Inc.-Major producer of aerospace components,
automotive parts and engineered materials 30,000 1,794,375
Emerson Electric Co.-Diversified manufacturer of consumer
and industrial electrical components 60,000 3,420,000
Honeywell Inc.-Manufacturer of automation and control systems 35,000 3,917,812
Total 9,132,187
- ------------------------------------------------------------------------------------------------------------------------============
Electronics: Texas Instruments Inc.-Major producer of semiconductors
Semiconductor 2.44% and electronic equipment 65,000 6,244,062
- ------------------------------------------------------------------------------------------------------------------------============
7
<PAGE>
STATEMENT OF NET ASSETS
LARGE-CAP SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Equipment Schlumberger Ltd.-Provider of oilfield services 65,000 $ 3,904,062
& Services 1.52%
- ------------------------------------------------------------------------------------------------------------------------============
Financial Services 1.18% Morgan Stanley Dean Witter & Co.-Major brokerage and credit card company 25,000 3,015,625
- ------------------------------------------------------------------------------------------------------------------------============
Financial: Miscellaneous .91% Fannie Mae-America's largest supplier of conventional home mortgages 35,000 2,331,875
- ------------------------------------------------------------------------------------------------------------------------============
Food 3.02% Archer-Daniels-Midland Co.-Leading processor and seller
of agricultural commodities 300,000 3,731,250
Ralston-Ralston Purina Group-Produces and sells dog and cat foods 135,000 4,007,813
Total 7,739,063
- ------------------------------------------------------------------------------------------------------------------------============
Health-Care Management Aetna Inc.-Major health-care and retirement services company 45,000 2,458,125
Services
2.08% Cigna Corp.-Multiline insurance and medical services company 35,000 2,878,750
Total 5,336,875
- ------------------------------------------------------------------------------------------------------------------------============
Health-Care Services 1.28% Columbia HCA Healthcare Corp.-A leading HMO 120,000 3,270,000
- ------------------------------------------------------------------------------------------------------------------------============
Household Equipment/Products Black & Decker Corp.-Manufactures products used
1.14% in and around the home, and for commercial applications 65,000 2,916,875
- ------------------------------------------------------------------------------------------------------------------------============
Insurance 6.85% ACE Ltd.-Insurance holding company specializing in
property and casualty coverage 275,000 4,675,000
AON Corp.-Multiline insurance company 130,000 4,639,375
American General Corp.-A leading provider of financial services,
including life/health insurance, annuities, consumer
credit and mortgage financing 75,000 5,498,438
Jefferson-Pilot Corp.-Life insurance holding company 40,000 2,715,000
Total 17,527,813
- ------------------------------------------------------------------------------------------------------------------------============
Machinery: Agriculture 1.76% Deere & Co.-World's largest manufacturer of farm equipment 105,000 4,508,438
- ------------------------------------------------------------------------------------------------------------------------============
Natural Gas 1.51% Coastal Corp.-A diversified gas pipeline company 110,000 3,877,500
- ------------------------------------------------------------------------------------------------------------------------============
Oil: Integrated Domestic
1.32% Atlantic Richfield Co.-Major integrated oil and natural gas company 35,000 3,373,125
- ------------------------------------------------------------------------------------------------------------------------============
Oil: Integrated BP Amoco plc ADR-Major integrated petroleum and natural
International 7.08% gas company with sizeable interests in chemicals 60,000 3,656,250
*Exxon Corp.-World's largest integrated oil company 27,000 2,141,437
Mobil Corp.-Large international oil company 45,000 4,694,063
Texaco Inc.-Major integrated oil and natural gas company 55,000 3,351,563
Total Fina SA-Leading French international oil and gas company 65,000 4,298,125
Total 18,141,438
- ------------------------------------------------------------------------------------------------------------------------============
Paper and Forest
Products 2.65% International Paper Co.-Producer of paper and forest products 130,000 6,784,375
- ------------------------------------------------------------------------------------------------------------------------============
- ------------------------------------------------------------------------------------------------------------------------============
Publishing 3.13% Dow Jones & Co. Inc.-Publisher of The Wall Street Journal
and Barron's, and operator of news wires and
information retrieval services 55,000 3,334,375
Gannett Co. Inc.-Major U.S. newspaper publisher 25,000 1,789,063
Tribune Co.-Major Chicago-based newspaper company 60,000 2,883,750
Total 8,007,188
- ------------------------------------------------------------------------------------------------------------------------============
Radio & TV Broadcast 1.42% *CBS Corp.-Largest pure-play radio and broadcasting company 70,000 3,640,000
- ------------------------------------------------------------------------------------------------------------------------============
Retail 2.46% *Consolidated Stores Corp.-Major U.S. retailer specializing
in closeouts and toys 175,000 2,756,250
*Federated Department Stores Inc.-Leading department store retailer 75,000 3,529,688
Total 6,285,938
- ------------------------------------------------------------------------------------------------------------------------============
Telecommunications 5.88% Alltel Corp.-Regional telephone holding company 65,000 5,622,500
Bell Atlantic Corp.-Regional telephone company 75,000 4,748,438
SBC Communications Inc.-Regional telephone monopoly 90,000 4,674,375
Total 15,045,313
- ------------------------------------------------------------------------------------------------------------------------============
Telephone: Long Distance 4.56% AT&T Corp.-Global telecommunications giant 120,000 6,705,000
*MCI WorldCom Inc.-Diversified telecommunications company 60,000 4,961,250
Total 11,666,250
- ------------------------------------------------------------------------------------------------------------------------============
8
<PAGE>
STATEMENT OF NET ASSETS
LARGE-CAP SERIES November 30, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation: United Parcel Service Inc. Class B-Delivers packages and documents
Miscellaneous .18% throughout the United States and in other countries 7,000 $ 462,438
- ------------------------------------------------------------------------------------------------------------------------============
Total Investments in Common Stocks (Cost $214,457,726) 246,496,188
- ------------------------------------------------------------------------------------------------------------------------============
Short-Term Investment 3.57% Associates Corp. 5.68%, due 12/1/1999 (Cost $9,135,000) $9,135,000 9,135,000
- ------------------------------------------------------------------------------------------------------------------------============
Total Investments 99.86% (Cost $223,592,726) 255,631,188
- ------------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities .14% 372,007
- ------------------------------------------------------------------------------------------------------------------------============
Net Assets 100.00% $256,003,195
- ------------------------------------------------------------------------------------------------------------------------============
Class A Shares-Net asset value ($169,844,073 / 6,707,627 shares outstanding) $25.32
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $26.86
Class B Shares-Net asset value ($68,589,678 / 2,740,741 shares outstanding) $25.03
Class C Shares-Net asset value ($17,567,174 / 701,353 shares outstanding) $25.05
Class P Shares-Net asset value ($1,147.95 / 45.259 shares outstanding) $25.36
Class Y Shares-Net asset value ($1,121.86 / 44.346 shares outstanding) $25.30
The descriptions of the companies are unaudited.
*Non-income producing security.
ADR American Depositary Receipt.
See Notes to Financial Statements.
</TABLE>
9
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Year Ended November 30, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Large-Cap
Investment Income Series Series
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income Dividends $ 2,899,980 $ 3,087,453
Interest 435,962 424,620
Foreign taxes withheld (3,240) (2,000)
Total income 3,332,702 3,510,073
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 3,562,324 1,498,289
12b-1 distribution plan-Class A 676,312 459,880
12b-1 distribution plan-Class B 1,733,727 534,727
12b-1 distribution plan-Class C 528,749 123,491
12b-1 distribution plan-Class P 2 3
Shareholder servicing 1,522,464 448,924
Registration 177,898 97,777
Reports to shareholders 153,042 89,320
Professional 45,237 29,627
Directors' fees 9,755 2,404
Other 167,868 22,128
Total expenses before reductions 8,577,378 3,306,570
- -----------------------------------------------------------------------------------------------------------------------------------
Expense reductions (46,802) (8,405)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 8,530,576 3,298,165
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (5,197,874) 211,908
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)on Investments
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment transactions (8,631,538) 13,423,990
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 44,960,551 13,428,381
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 36,329,013 26,852,371
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $31,131,139 $27,064,279
- -----------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
10
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1999 November 30, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Large-Cap Small-Cap Large-Cap
Increase (Decrease) in Net Assets Series Series Value Series Series
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations Net investment income (loss) $ (5,197,874) $ 211,908 $ (4,088,565) $ 544,083
Net realized gain (loss) from investment transactions (8,631,538) 13,423,990 (30,380,175) 1,225,829
Net change in unrealized appreciation (depreciation) of 44,960,551 13,428,381 (49,772,112) 10,300,214
investments
Net increase (decrease) in net assets resulting from 31,131,139 27,064,279 (84,240,852) 12,070,126
operations
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price of share transactions 550,688
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders from:
Net investment income Class A (477,863) (217,361)
Net investment income Class B (172)
Net investment income Class C (40)
Net investment income Class P (1)
Net investment income Class Y (2)
Net realized gain from investment transactions Class A (747,010) (3,626,593) (1,758,495)
Net realized gain from investment transactions Class B (272,906) (2,865,444) (683,991)
Net realized gain from investment transactions Class C (60,913) (808,272) (60,358)
Total (1,558,907) (7,300,309) (2,720,205)
- -----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from the sales of shares 105,814,165 120,696,797 276,645,136 78,226,590
Net asset value of shares issued in reinvestment of dividends
and distributions - 1,507,539 6,933,940 2,588,508
Total 105,814,165 122,204,336 283,579,076 80,815,098
- -----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (191,775,139) (34,859,734) (112,434,885) (17,358,805)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from capital
share transactions (85,960,974) 87,344,602 171,144,191 63,456,293
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (54,829,835) 112,849,974 79,603,030 73,356,902
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of year 515,378,873 143,153,221 435,775,843 69,796,319
- -----------------------------------------------------------------------------------------------------------------------------------
End of year+ $460,549,038 $256,003,195) $515,378,873 $143,153,221
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+Including undistributed (overdistributed) net investment income of $(1,774) and
$12,582, respectively, as of November 30, 1999 and $(1,774) and $278,752,
respectively, as of November 30, 1998.
See Notes to Financial Statements.
11
<PAGE>
Financial Highlights
Small-Cap Value Series
<TABLE>
<CAPTION>
Class A Shares Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/13/95(a) Year Ended 11/15/96(b) to
11/30/ to 11/30/ November 30, 11/30/
Per Share Operating Performance: 1999 1998 1997 1996 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.36 $16.56 $12.01 $10.00 $14.20 $16.44 $12.00 $11.67
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment income (loss) (.12)(c) (.06)(c) .02(c) .127 (.22)(c) (.17)(c) (.09)(c) .001
Net realized and unrealized
gain (loss) on investments 1.39 (1.85) 4.53 2.658 1.36 (1.82) 4.53 .329
Total 1.27 (1.91) 4.55 2.785 1.14 (1.99) 4.44 .33
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment - - - (.075) - - - -
income
Distributions from net realized - (.29) - (.700) - (.25) - -
gain
Total - (.29) - (.775) - (.25) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $15.63 $14.36 $16.56 $12.01 $15.34 $14.20 $16.44 $12.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(d) 8.84% (11.71)% 37.89% 28.24%(e) 8.03% (12.27)% 37.00% 2.84%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver and
reimbursements 1.52%(f) 1.28% 1.17% .01%(e) 2.19%(f) 2.00% 1.86% .04%(e)
Expenses, excluding waiver and
reimbursements 1.52%(f) 1.28% 1.17% 1.00%(e) 2.19%(f) 2.00% 1.86% .07%(e)
Net investment income (loss) (.80)% (.37)% .10% 1.02%(e) (1.48)% (1.09)% (.56)% .01%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Class P Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended April 1, 1997(b) to June 23, 1999(b) to
November 30, November 30, November 30,
Per Share Operating Performance: 1999 1998 1997 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.20 $16.44 $12.81 $16.41
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment loss(c) (.22) (.17) (.05) (.06)
Net realized and unrealized gain
(loss)on investments 1.36 (1.82) 3.68 (.72)
Total 1.14 (1.99) 3.63 (.78)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Distributions from net realized - (.25) - -
gain
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $15.34 $14.20 $16.44 $15.63
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(d) 8.03% (12.27)% 28.34%(e) (4.75)%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 2.19%(f) 2.00% 1.25%(e) .72%(e)(f)
Net investment loss (1.48)%(f) (1.09)% (.30)%(e) (.41)%(e)(f)
- ------------------------------------------------------------------------------------------------------------------------------------
Class Y Shares
Year Ended 12/30/97(b)
November 30, to 11/30/
Per Share Operating Performance: 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.40 $16.34
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment loss(c) (.07) (.01)
Net realized and unrealized gain
(loss)on investments 1.38 (1.93)
Total 1.31 (1.94)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Distributions from net realized - -
gain
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $15.71 $14.40
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(d) 9.10% (11.87)%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.19%(f) .96%(e)
Net investment loss (.47)%(f) (.05)%(e)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 13, 1995(a) to
November 30, November 30,
Supplemental Data for All Classes: 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net assets, end of year (000) $460,549 $515,379 $435,776 $8,772
Portfolio turnover rate 83.93% 67.86% 45.24% 110.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Commencement of offering respective class of shares.
(c) Calculated using average shares outstanding during the period.
(d) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(e) Not annualized.
(f) The ratio includes expenses paid through an expense offset arrangement.
See Notes to Financial Statements.
12
<PAGE>
Financial Highlights
Large-Cap Series
<TABLE>
<CAPTION>
Class A Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30,
Per Share Operating Performance: 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $21.91 $20.08 $17.86 $15.54 $12.79
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .08(a) .15(a) .08(a) .270 .42
Net realized and unrealized gain on investments 3.60 2.45 3.21 3.505 3.44
Total 3.68 2.60 3.29 3.775 3.86
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.10) (.06) (.12) (.57) (.29)
Distributions from net realized gain (.17) (.71) (.95) (.885) (.82)
Total (.27) (.77) (1.07) (1.455) (1.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $25.32 $21.91 $20.08 $17.86 $15.54
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 16.99% 13.45% 19.87% 26.25% 32.82%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver and reimbursements 1.43%(e) 1.24% 1.52% .36% .00%
Expenses, excluding waiver and reimbursements 1.43%(e) 1.24% 1.52% .96% 1.02%
Net investment income .33% .74% .42% 2.24% 3.27%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Class C Shares
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/1/96(c) Year Ended 4/1/97(c)
November 30, to 11/30/ November 30, to 11/30/
Per Share Operating Performance: 1999 1998 1997 1996 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $21.71 $20.00 $17.83 $15.24 $21.73 $20.01 $16.90
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations
Net investment income (loss) (.09)(a) -(a)(f) (.06)(a) .12 (.09)(a) (.01)(a) (.07)(a)
Net realized and unrealized gain
on investments 3.58 2.42 3.20 2.66 3.58 2.44 3.18
Total 3.49 2.42 3.14 2.78 3.49 2.43 3.11
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income - - (.02) (.19) - - -
Distributions from net realized gain (.17) (.71) (.95) - (.17) (.71) -
Total (.17) (.71) (.97) (.19) (.17) (.71) -
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $25.03 $21.71 $20.00 $17.83 $25.05 $21.73 $20.01
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 16.21% 12.56% 18.92% 18.39%(d) 16.20% 12.61% 18.40%(d)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 2.11%(e) 2.00% 2.28% .59%(d) 2.11%(e) 2.00% 1.54%(d)
Net investment income (loss) (.35)% (.01)% (.34)% .22%(d) (.35)% (.04)% (.37)%(d)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Financial Highlights
Large-Cap Series
<TABLE>
<CAPTION>
Class P Shares Class Y Shares
- -----------------------------------------------------------------------------------------------------------------------------------
4/28/99(c) 5/4/99(c)
Per Share Operating Performance: to 11/30/99 to 11/30/99
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $25.09 $25.21
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income(a) .09 .04
Net realized and unrealized gain on investments .21 .09
Total .30 .13
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.03) (.04)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $25.36 $25.30
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) (d) 1.20% .52%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets(d):
Expenses .92%(e) .63%(
Net investment income .34% .15%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended November 30,
Supplemental Data for AllClasses: 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets, end of year (000) $256,003 $143,153 $69,796 $23,592 $7,549
Portfolio turnover rate 60.59% 99.14% 30.81% 62.25% 37.17%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes
the reinvestment of all distributions.
(c) Commencement of offering respective class of shares.
(d) Not annualized.
(e) The ratio includes expenses paid through an expense offset
arrangement.
(f) Amount less than $.01.
See Notes to Financial Statements.
14
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Research Fund, Inc. (the "Company") is an open-end manage ment
investment company incorporated under Maryland law on April 26, 1992. The
Company consists of three separate portfolios. This report covers two of the
portfolios ("Series") - Small-Cap Value Series (formerly Small-Cap Series) and
Large-Cap Series. Each Series is diversified as defined under the Investment
Company Act of 1940. 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) Securites are valued as follows: Portfolio securities listed or admitted to
trading 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 price
on such exchange, or, in the case of bonds, in the over-the-counter market if,
in the judgment of the Company's officers, that market more accurately reflects
the market value of the bonds. Securities traded only in the over-the-counter
market are valued at the mean between the 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 securities. 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 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) 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.
(d) Prior to December 1, 1998, Large-Cap Series followed the accounting practice
of equalization whereby a portion of the proceeds from the sales and costs of
repurchases of capital shares was allocated to undistributed net investment
income. Effective December 1, 1998, the Large-Cap Series discontinued the use of
equalization. Discontinuing the use of equalization results in a simpler and
more meaningful financial statement presentation.
(e) The organization expenses of Small-Cap Value Series are amortized evenly
over a period of five years.
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. The management fee paid is based on average
daily net assets for each month at the annual rate of .75 of 1%. At November 30,
1999, management fees payable were $304,454 for Small-Cap Value Series and
$111,108 for Large-Cap Series.
Each Series of the Company has Rule 12b-1 plans and agreements (the "Class A,
Class B, Class C and Class P Plans") with Lord Abbett Distributor LLC
("Distributor"), an affiliate of Lord Abbett. Each Series makes payments to
Distributor which uses or passes on such payments to authorized institutions.
Pursuant to the Class A Plan, each 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 Plan, each 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 Class B shares. Pursuant to the Class C Plan, each
Series 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. Pursuant to the Class P Plan,
each Series pays Distributor an annual service and distribution fee of 0.20% and
0.25%, respectively, of the average daily net asset value of the Class P shares.
Class Y of each Series does not have a Rule 12b-1 plan. At November 30, 1999,
the 12b-1 fees payable were $182,932 for Small-Cap Value Series and $60,939 for
Large-Cap Series.
Small-Cap Value Series, along with certain other funds managed by Lord Abbett
(the "Underlying Funds"), has entered into a Servicing Arrangement with the
Alpha Series of Lord Abbett Securities Trust pursuant to which the Underlying
Funds will pay a portion of the expenses of the Alpha Series in proportion to
the average daily value of Underlying Funds' shares owned by the Alpha Series.
Other expenses include approximately $140,000 accrued pursuant to this Servicing
Arrangement.
Distributor received the following commissions on sales of Class A shares of
each Series after concessions were paid to authorized dealers:
Distributor Dealers'
Series Commissions Concessions
- -------------------------------------------------------------------------------
Small-Cap Value $ 56,661 $ 335,370
Large-Cap 292,321 1,696,099
- -------------------------------------------------------------------------------
Certain of the Company's officers and directors have an interest in Lord Abbett.
3. Capital
The Company has authorized 240 million shares of $.001 par value capital stock
for the Series, designated as follows: Small-Cap Value Series: Class A-20
million, Class B-30 million, Class C-20 million, Class P-20 million, Class Y-30
million; Large-Cap Series: Class A -20 million, Class B-30 million, Class C-20
million, Class P-20 million, Class Y-30 million. Paid in capital for the Company
amounted to $489,311,325 for the Small-Cap Value Series and $210,421,354 for the
Large-Cap Series at November 30, 1999. Transactions in capital stock were as
follows:
Year Ended 11/30/99
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 4,651,787 $ 75,759,779 3,072,501 $74,412,345
- --------------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of dividends and
distributions - - 54,377 1,192,790
- --------------------------------------------------------------------------------
Total 4,651,787 75,759,779 3,126,878 75,605,135
- --------------------------------------------------------------------------------
Shares reacquired (6,476,363) (95,848,509) (1,015,292) (23,925,525)
- --------------------------------------------------------------------------------
Increase (Decrease) (1,824,576) $(20,088,730) 2,111,586 $51,679,610
- --------------------------------------------------------------------------------
15
<PAGE>
Notes to Financial Statements
Year Ended 11/30/98
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 6,447,168 $106,238,429 2,662,006 $54,926,487
- --------------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of dividends and
distributions 214,484 3,431,712 97,208 1,896,265
- --------------------------------------------------------------------------------
Total 6,661,652 109,670,141 2,759,214 56,822,752
- --------------------------------------------------------------------------------
Shares reacquired (3,627,964) (54,893,698) (605,676) (12,303,172)
- --------------------------------------------------------------------------------
Increase 3,033,688 $54,776,443 2,153,538 $44,519,580
- --------------------------------------------------------------------------------
Year Ended 11/30/99
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 828,910 $ 12,470,571 1,429,541 $34,164,653
- --------------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of distributions - - 11,962 255,502
- --------------------------------------------------------------------------------
Total 828,910 12,470,571 1,441,503 34,420,155
- --------------------------------------------------------------------------------
Shares reacquired (4,647,173) (67,423,653) (301,029) (7,175,003)
- --------------------------------------------------------------------------------
Increase (Decrease)(3,818,263) $(54,953,082)1,140,474 $27,245,152
- --------------------------------------------------------------------------------
Year Ended 11/30/98
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 5,076,837 $83,914,314 822,431 $17,009,086
- --------------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of distributions 171,715 2,735,421 32,991 633,431
- --------------------------------------------------------------------------------
Total 5,248,552 86,649,735 855,422 17,642,517
- --------------------------------------------------------------------------------
Shares reacquired (2,413,115) (35,334,535) (212,259) (4,357,417)
- --------------------------------------------------------------------------------
Increase 2,835,437 $51,315,200 643,163 $13,285,100
- --------------------------------------------------------------------------------
Year Ended 11/30/99
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 507,260 $ 7,620,650 502,800 $12,117,536
- --------------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of distributions - - 2,771 59,247
- --------------------------------------------------------------------------------
Total 507,260 7,620,650 505,571 12,176,783
- --------------------------------------------------------------------------------
Shares reacquired (1,944,301) (28,400,305) (158,988) (3,759,206)
- --------------------------------------------------------------------------------
Increase (Decrease)(1,437,041) $(20,779,655) 346,583 $ 8,417,577
- --------------------------------------------------------------------------------
Year Ended 11/30/98
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 2,714,384 $ 45,179,963 306,208 $6,291,017
- --------------------------------------------------------------------------------
Shares issued to share-
holders in reinvestment
of distributions 48,136 766,807 3,059 58,812
- --------------------------------------------------------------------------------
Total 2,762,520 45,946,770 309,267 6,349,829
- --------------------------------------------------------------------------------
Shares reacquired (1,441,481) (21,034,948) (34,936) (698,216)
- --------------------------------------------------------------------------------
Increase 1,321,039 $ 24,911,822 274,331 $5,651,613
- --------------------------------------------------------------------------------
4/28/99
(Commencement of
Offering Class P Shares) to
11/30/99
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class P Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 69 $1,126 45 $1,131
- --------------------------------------------------------------------------------
Increase 69 $1,126 45 $1,131
- --------------------------------------------------------------------------------
5/4/99
(Commencement of
Offering Class Y Shares) to
Year Ended 11/30/99 11/30/99
- --------------------------------------------------------------------------------
Small-Cap Value Series Large-Cap Series
- --------------------------------------------------------------------------------
Class Y Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 686,634 $9,962,039 44 $1,132
- --------------------------------------------------------------------------------
Shares reacquired (6,482) (102,672) - -
- --------------------------------------------------------------------------------
Increase 680,152 $9,859,367 44 $1,132
- --------------------------------------------------------------------------------
12/30/97
(Commencement of
Offering Class Y Shares) to
11/30/98
- --------------------------------------------------------------------------------
Small-Cap Value Series
- --------------------------------------------------------------------------------
Class Y Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 2,570,909 $41,312,430
- --------------------------------------------------------------------------------
Shares reacquired (92,873) (1,171,704)
- --------------------------------------------------------------------------------
Increase 2,478,036 $40,140,726
- --------------------------------------------------------------------------------
4. Distributions
Dividends from net investment income are declared annually for the Small-Cap
Value Series and semi-annually for the Large-Cap Series. Net realized gain from
investment transactions, if any, is distributed to shareholders annually. At
November 30, 1999, accumulated net realized gain (loss) for each Series was as
follows:
- --------------------------------------------------------------------------------
Small-Cap Value Series $(39,011,713)
Large-Cap Series 13,530,797
- --------------------------------------------------------------------------------
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 gain amounts in accordance with generally
accepted accounting principles. Distributions declared on December 9, 1999 and
paid on December 17, 1999, to shareholders of record on December 9, 1999 were as
follows:
Rate Aggregate
Per Share Amount
- --------------------------------------------------------------------------------
Large-Cap Series-Net Investment Income-Class A $0.0304 $ 205,477
Large-Cap Series-Net Investment Income-Class P 0.0077 0.35
Large-Cap Series-Net Investment Income-Class Y 0.1058 5
Large-Cap Series-Capital Gains-Class A 1.3065 8,830,762
Large-Cap Series-Capital Gains-Class B 1.3065 3,603,002
Large-Cap Series-Capital Gains-Class C 1.3065 919,660
Large-Cap Series-Capital Gains-Class P 1.3065 59
Large-Cap Series-Capital Gains-Class Y 1.3065 58
- --------------------------------------------------------------------------------
At November 30, 1999, the Small-CapValue Series had a capital loss carryforward
of $39,011,713, of which $30,380,175 will expire in 2006 and $8,631,538 in 2007.
5. Purchases and Sales of Securities
Purchases and sales of securities (other than short-term investments) for the
year ended November 30, 1999 were as follows:
Series Purchases Sales
- --------------------------------------------------------------------------------
Small-Cap Value $392,511,888 $465,852,224
Large-Cap 202,327,059 116,560,879
- --------------------------------------------------------------------------------
16
<PAGE>
Notes to Financial Statements
As of November 30, 1999, net unrealized appreciation, gross unrealized
appreciation and gross unrealized depreciation of investments based on cost for
federal income tax purposes were as follows:
Net Unrealized Unrealized Unrealized
Series Appreciation Appreciation (Depreciation)
- --------------------------------------------------------------------------------
Small-Cap Value $10,251,200 $62,299,127 $(52,047,927)
Large-Cap 32,038,462 40,671,359 (8,632,897)
- --------------------------------------------------------------------------------
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 theCompany 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. Directors' fees payable at
November 30, 1999 under a deferred compensation plan, were $16,254.
7. Line of Credit
Each Series, 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. Effective December 17, 1999, this fee was increased to
0.09% per annum. There were no loans outstanding pursuant to this Facility at
November 30, 1999, nor was the Facility utilized at any time during the year.
8. 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 the Company's expenses.
9. Transactions with Affiliated Companies
An affiliated company is a company in which a Series has ownership of at least
5% of the voting securities of the underlying issuer. Small-Cap Value Series had
the following transactions during the year with companies that are affiliates:
<TABLE>
<CAPTION>
Balance of Balance of
Shares Held Gross Gross Shares Held Value
Affiliates Nov. 30, 1998 Purchases Sales Nov. 30, 1999 Nov. 30, 1999
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BEI Technologies Inc. 400,000 25,000 (10,000) 415,000 $ 5,343,125
- ----------------------------------------------------------------------------------------------------
Baker (Michael) Corp. 550,000 - (38,500) 511,500 3,324,750
- ----------------------------------------------------------------------------------------------------
Good Guys Inc.
Warrants expiring 8/19/2002 - 387,500 - 387,500 1,822,710
- ----------------------------------------------------------------------------------------------------
Good Guys Inc. - 1,399,100 - 1,399,100 11,367,688
- ----------------------------------------------------------------------------------------------------
Ivex Packaging Corp. 28,100 1,021,900 - 1,050,000 11,090,625
- ----------------------------------------------------------------------------------------------------
Moog Inc. Class A 547,100 - (91,900) 455,200 11,949,000
- ----------------------------------------------------------------------------------------------------
Neutral Posture Ergonomics Inc. 310,000 - (118,300) 191,700 239,625
- ----------------------------------------------------------------------------------------------------
Rogers Corp. 685,000 - (21,200) 663,800 26,759,438
- ----------------------------------------------------------------------------------------------------
Smithway Motor Express Corp. Class A 325,000 25,000 (78,600) 271,400 1,153,450
- ----------------------------------------------------------------------------------------------------
</TABLE>
Realized Gain (Loss) Dividend Income
Dec. 1, 1998 to Dec. 1, 1998 to
Affiliates Nov. 30, 1999 Nov. 30, 1999
- -------------------------------------------------------------------------------
BEI Technologies Inc. $ 21,588 $40,980
- -------------------------------------------------------------------------------
Baker (Michael) Corp. (19,360) -
- -------------------------------------------------------------------------------
Good Guys Inc.
Warrants expiring 8/19/2002 - -
- -------------------------------------------------------------------------------
Good Guys Inc. - -
- -------------------------------------------------------------------------------
Ivex Packaging Corp. - -
- -------------------------------------------------------------------------------
Moog Inc. Class A 178,975 -
- -------------------------------------------------------------------------------
Neutral Posture Ergonomics Inc. (483,242) -
- -------------------------------------------------------------------------------
Rogers Corp. 94,721 -
- -------------------------------------------------------------------------------
Smithway Motor Express Corp. Cla (576,781) -
- -------------------------------------------------------------------------------
Copyright (C) 2000 by Lord Abbett Research Fund, Inc., 90 Hudson Street, Jersey
City, NJ 07302-3973
This publication, when not used for the general information of shareholders of
Lord Abbett Research 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 in this publication will come
to pass.
All rights reserved. Printed in the U.S.A.
17
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders,
Lord Abbett Research Fund, Inc.:
We have audited the accompanying statements of net assets of Lord Abbett
Research Fund, Inc.-Small-Cap Value Series and Large-Cap Series as of Novem ber
30, 1999, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the periods presented. These financial
statements and the financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at November
30, 1999 by cor res pondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett Research
Fund, Inc.-Small-Cap Value Series and Large-Cap Series at November 30, 1999, the
results of their operations, the changes in their net assets and their financial
highlights for each of the periods presented in conformity with generally
accepted accounting principles.
[GRAPHIC OMITTED]
Deloitte & Touche LLP
New York, New York
January 28, 2000
[LOGO]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
90 Hudson Street, Jersey City, New Jersey 07302
LARF-2-1199
(1/00)
