LORD ABBETT SECURITIES TRUST
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 1996
================================================================================
U.S. GOVERNMENT SECURITIES TRUST
LIMITED DURATION U.S. GOVERNMENT SECURITIES TRUST
NATIONAL TAX-FREE INCOME TRUST
CALIFORNIA TAX-FREE INCOME TRUST
FLORIDA TAX-FREE INCOME TRUST
NEW YORK TAX-FREE INCOME TRUST
GLOBAL INCOME TRUST
BOND-DEBENTURE TRUST
BALANCED TRUST
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================================================================================
We are pleased to announce that, on June 19, 1996, shareholders approved
the merging of each Securities Trust portfolio (listed above) into its
counterpart in the Lord Abbett Family of Funds. These mergers will take
effect in July and will be reflected in the acquiring Fund's prospectus,
dated July 15, 1996. This will be the final shareholder report for the
above-listed portfolios of Lord Abbett Securities Trust.
================================================================================
<PAGE>
=============================================================================
REPORT TO SHAREHOLDERS For the Six Months Ended April 30, 1996
- - -----------------------------------------------------------------------------
[PHOTO]
RONALD P. LYNCH
Chairman
[PHOTO]
ROBERT S. DOW
President
June 21, 1996
Lord Abbett Securities Trust completed the first half of its fiscal year on
April 30, 1996 with aggregate net assets of $596.8 million (figure does not
include Lord Abbett Securities Trust - Growth & Income Trust). Performance
information for each Trust appears on the facing page.
Over these past six months, stock market averages remained near all-time
highs, despite weakness in bond markets. The weakness in the latter can best be
attributed to a reversal in investor expectations. Moderate economic growth and
low inflation paved the way for the Federal Reserve to make modest reductions in
short-term lending rates in December and January. Many investors anticipated
that additional reductions would be forthcoming. As it became clear there would
be no further, near-term actions by the Federal Reserve and as the prospects for
legislation requiring a balanced federal budget diminished, investor
disappointment set in, causing long-term bond rates to rise sharply in March and
April.
The increase in long-term bond rates in the U.S. comes at a time when,
around the world, long-term interest rates are declining. Consequently, it is
likely that high U.S. yields will attract global asset managers and encourage
them to increase their weightings in the U.S. Our forecast for the global
environment for the remainder of 1996 calls for slow economic growth, with
little threat of rising inflation.
Our outlook for the U.S. financial markets is also broadly positive. The
U.S. economy has not changed dramatically over these six months: economic growth
remains modest and inflation does not appear to be a big threat. It is becoming
increasingly clear that the U.S. economy is in the midst of a modest recovery.
We forecast the economy will grow at a rate averaging about 2 1/4% in 1996, with
inflation around 3%. Against this backdrop, it is likely the Federal Reserve
will remain neutral for the remainder of the year. Accordingly, we are
optimistic that the bond markets will stabilize over the next three to six
months and yields on long-term Government bonds should decline toward 6 1/2% -
6 1/4%. These factors should benefit the financial markets.
Talk of tax reform continues to be a major influence on the municipal bond
market. Although investors have reacted to the uncertain impact of tax reform on
the market, these concerns have actually increased the attractiveness
(cheapness) of municipal bonds relative to other securities. Additionally, the
supply of municipal bonds has decreased steadily; new issuance in 1995 was down
5% from 1994's level, and it is anticipated that 1996's level will be 5% lower
than 1995's. The outstanding supply of municipal bonds also continues to
decline, as many of the bonds issued during the 1982-1986 period have been
called away or prerefunded. While net asset values may fluctuate along the way,
we believe the overall outlook for municipal bonds is quite positive.
Thank you for the continued trust and confidence you have placed in us. We
look forward to helping you reach your investment goals.
<PAGE>
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FUND FACTS
- - --------------------------------------------------------------------------------
Lord Abbett Securities Trust's Record as of 4/30/96
<TABLE>
<CAPTION>
Total
Returns(1)
Date of Inception Distribution Rate Net Asset Value Monthly Dividend 6 Months
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. Government
Securities Trust 6/1/93 7.16% $4.36 $.026 -1.4%
- - ------------------------------------------------------------------------------------------------------------------------------------
Limited Duration U.S.
Government Securities Trust 1/3/94 4.97% $4.59 $.019 -0.8%
- - ------------------------------------------------------------------------------------------------------------------------------------
National Tax-Free
Income Trust 10/1/93 4.98% $4.70 $.0195 1.6%
- - ------------------------------------------------------------------------------------------------------------------------------------
California Tax-Free
Income Trust 10/1/93 4.89% $4.42 $.018 0.05%
- - ------------------------------------------------------------------------------------------------------------------------------------
Florida Tax-Free
Income Trust 10/1/93 4.68% $4.49 $.0175 0.03%
- - ------------------------------------------------------------------------------------------------------------------------------------
New York Tax-Free
Income Trust 10/1/93 4.73% $4.57 $.018 0.5%
- - ------------------------------------------------------------------------------------------------------------------------------------
Global Income Trust 1/3/94 6.59% $4.64 $.0255 0.4%
- - ------------------------------------------------------------------------------------------------------------------------------------
Bond-Debenture Trust 1/3/94 7.93% $4.84 $.032 5.8%
- - ------------------------------------------------------------------------------------------------------------------------------------
Balanced Trust 12/27/94 3.96% $11.68 $.0385 6.9%
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The results quoted herein represent past performance which is no indication of
future results. The investment return and principal value of an investment in
the Trusts will fluctuate so that shares, on any given day or when redeemed, may
be worth more or less than their original cost.
(1) Total return is the percent change in value with dividends and capital
gains reinvested. In the event a tax-free portfolio invests in private
activity bonds, the interest income derived therefrom may increase the
alternative minimum tax liability only for shareholders subject to that
tax. In the event a portfolio does not invest entirely in municipal bonds,
federal, state and/or local taxes (as applicable) may be applicable to
interest income of such Trust.
1
<PAGE>
Statement of Net Assets April 30, 1996
U.S. GOVERNMENT SECURITIES TRUST
<TABLE>
<CAPTION>
Principal Market Value
Security Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 97.54%
- - ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury U.S. Treasury Strips due 5/15/2002 $ 5,200M $ 3,535,188
40.26% U.S. Treasury Strips due 5/15/2003 15,200M 9,597,375
U.S. Treasury Strips due 8/15/2011 36,300M 12,381,703
U.S. Treasury Strips due 2/15/2012 36,500M 11,913,828
U.S. Treasury Bonds 7 1/2% due 11/15/2024 1,300M 1,372,313
U.S. Treasury Bonds 8 1/8% due 8/15/2021 7,300M 8,178,280
U.S. Treasury Bonds 8 3/4% due 8/15/2020 4,400M 5,233,938
U.S. Treasury Bonds 10 3/8% due 11/15/2012 9,500M 12,070,938
U.S. Treasury Notes 5 1/2% due 2/28/1999 22,800M 22,386,750
U.S. Treasury Notes 5 1/2% due 12/31/2000 4,300M 4,146,812
U.S. Treasury Notes 5 7/8% due 11/15/2005 21,900M 20,661,281
U.S. Treasury Notes 6 1/4% due 4/30/2001 11,200M 11,131,750
Total 122,610,156
- - ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government
Agencies 2.23% Federal National Mortgage Association 7.65% due 3/10/2005 6,500M 6,785,390
- - ------------------------------------------------------------------------------------------------------------------------------------
Federal National 6 1/2% due on an announced basis 83,500M 78,445,468
Mortgage Association 7% due on an announced basis 30,000M 28,879,687
Pass-Through Securities 7 1/2% due on an announced basis 6,500M 6,526,405
40.03% 8% due on an announced basis 8,000M 8,061,250
Total 121,912,810
- - ------------------------------------------------------------------------------------------------------------------------------------
Government National 6 1/2% due 3/15/2031 5,937M 5,514,177
Mortgage Association 7 1/2% due on an announced basis 12,000M 11,838,750
Pass-Through Securities 8% due 3/1/2024 4,132M 4,191,008
15.02% 8 1/4% due 6/15/2029 2,898M 2,886,006
8 3/8% due 9/15/2016 5,765M 5,815,646
8 1/2% due 1/15/2028 2,204M 2,264,101
9% due 2018 to 2020 9,003M 9,576,360
9 1/2% due 2019 to 2020 3,394M 3,661,517
Total 45,747,565
--------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $300,495,073) 297,055,921
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 2.46%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities, Federal Home Loan Banks 3 1/2% due 9/6/1996 50,000M 51,343,750
at Market Federal National Mortgage Association 14% due 11/22/1996 46,000M 48,113,125
U.S. Treasury Notes 4 1/4% due 5/15/1996 39,230M 39,223,870
Total (Cost $142,102,917) 138,680,745
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (131,168,791)
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 7,511,954
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.36 a share on 69,809,157 shares of beneficial
interest outstanding) $304,567,875
--------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
Statement of Net Assets April 30, 1996
LIMITED DURATION U.S. GOVERNMENT SECURITIES TRUST
<TABLE>
<CAPTION>
Principal Market Value
Security Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES 94.52%
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury U.S. Treasury Strips due 2/15/2002 $ 3,000M $ 2,074,219
59.86% U.S. Treasury Notes 5% due 2/15/1999 1,900M 1,843,594
U.S. Treasury Notes 5 1/2% due 12/31/2000 2,000M 1,928,750
Total 5,846,563
- - ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan
Mortgage Corporation
Pass-Through Securities
1.12% 9 1/2% CMO Class 175-F due 10/15/2019 109M 109,085
- - ------------------------------------------------------------------------------------------------------------------------------------
Federal National 6 1/2% due on an announced basis 1,800M 1,740,375
Mortgage Association 7.15% CMO Class 92-18-G due 11/25/2005 1,000M 1,011,875
Pass-Through Securities 8 1/2% CMO Class 90-106-H due 1/25/2019 37M 37,315
28.56% Total 2,789,565
- - ------------------------------------------------------------------------------------------------------------------------------------
Government National 10% due 6/15/2019 194M 213,520
Mortgage Association 10 1/2% due 9/15/2016 248M 272,805
Pass-Through Securities Total 486,325
4.98% --------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $9,410,028) 9,231,538
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 5.48%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities,
at Cost Federal Home Loan Banks 5.15% due 5/14/1996 1,993,706
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (1,457,800)
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 535,906
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.59 a share on 2,125,800 shares of beneficial
interest outstanding) $9,767,444
--------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
Statement of Net Assets April 30, 1996
NATIONAL TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN MUNICIPAL BONDS 94.86%
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prerefunded Colorado Springs Util Sys 9 7/8% 11/15/2012 AAA $2,000M $ 2,447,500
16.29% Maryland St 6.70% 3/1/2005 AAA 500M 545,625
Puerto Rico Commonwealth 8% 7/1/2007 AAA 500M 548,750
Puerto Rico Commonwealth Hwy Ser S 6 1/2% 7/1/2022 AAA 150M 166,313
Puerto Rico Pub Bldg Auth Ser L 6 7/8% 7/1/2012 AAA 1,000M 1,128,750
Wisconsin St Clean Wtr Rev Ser 1 6 3/4% 6/1/2008 AAA 2,175M 2,403,375
Total 7,240,313
- - ------------------------------------------------------------------------------------------------------------------------------------
General Obligation New York St Ser B 6% 8/15/2018 A 200M 201,500
State Ohio St 6.20% 8/1/2013 AA 750M 786,563
3.47% Texas St Wtr Dev Bd 7.15% 8/1/2035 AA 500M 555,000
Total 1,543,063
- - ------------------------------------------------------------------------------------------------------------------------------------
General Obligation Decatur TX Indpt Sch Dist 6 1/8% 8/1/2025 Aaa 1,000M 1,022,500
Local Detroit MI City Sch Dist Ser A AMBAC+ 6 1/2% 5/1/2010 AAA 1,000M 1,085,000
4.74% Total 2,107,500
--------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
Statement of Net Assets April 30, 1996
NATIONAL TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education
1.11% Rhode Island St Health & Ed Bldg Corp Rev CNLA+
6.10% 4/1/2026 AAA $ 500M $ 491,250
- - ------------------------------------------------------------------------------------------------------------------------------------
Finance Cumberland Co NC Ctfs AMBAC+ 6.40% 12/1/2024 AAA 500M 518,750
4.69% Iowa St Fin Auth Rev 6 1/4% 5/1/2024 A 500M 510,625
Victor CA Elem Sch Dist Ctfs Partn Sch Constr Ref Prjt
MBIA+ 6.45% 5/1/2018 AAA 1,000M 1,056,250
Total 2,085,625
- - ------------------------------------------------------------------------------------------------------------------------------------
Health and Hospital Flint MI Hosp Bldg Auth Rev 9 1/2% 7/1/2006 Baa 1,500M 1,524,270
9.69% Greenville SC Hosp Sys Hosp Facs Rev Ser B 5 1/4% 5/1/2023 Aa 1,000M 893,750
Illinois Health Facs Auth Rev Alexian Brothers Med Ctr
Prjt FSA+ 7 1/8% 1/1/2021 Aaa 1,000M 1,071,250
North Cent TX Health Fac Dev Corp Rev Ref Hosp Baylor
Health 6 1/4% 5/15/2010 AA 150M 157,500
St Cloud MN Hosp Facs Rev Ref St Cloud Ser B AMBAC+
5% 7/1/2020 AAA 750M 659,062
Total 4,305,832
- - ------------------------------------------------------------------------------------------------------------------------------------
Housing Arlington Co VA Ind Dev Auth Multi-Fam Rev HSG
Mtge 6.30% 7/1/2016 A 500M 508,125
4.59% Maine St Hsg Auth Mtge Pur Ser A-2 AMT+++
6 3/4% 11/15/2035 AA 980M 1,004,500
Tennessee Hsg Dev Agy Mtge Ser A AMT+++
7 1/8% 7/1/2026 A 500M 526,875
Total 2,039,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue Connecticut St Dev Auth Solid Waste Disp Facs Rev
Bonds AMT+++ 7% 7/1/2025 AAA 500M 547,500
6.32% Maryland St Ind Dev Fin Auth Econ Dev Rev LINK FSA+
5.929% 8/26/2022 AAA 1,500M 1,496,250
Texas City TX Ind Dev Corp Marine Term Rev/ARCO
7 3/8% 10/1/2020 A 650M 765,375
Total 2,809,125
- - ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous
1.20% West Virginia St Sch Bldg Auth Rev Cap Imp Ser B MBIA+
6 3/4% 7/1/2010 AAA 500M 535,624
- - ------------------------------------------------------------------------------------------------------------------------------------
Pollution Control Revenue Rhode Island Clean Wtr Protn Fin Agy Wtr Poll Ctrl Rev
2.56% MBIA+ 5.40% 10/1/2015 AAA 1,200M 1,140,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Power Kansas City KS Util Sys Rev FGIC+ 6 3/8% 9/1/2023 AAA 4,175M 4,409,843
18.56% Milwaukee WI Loc Dist AMT+++ 6.85% 10/1/2021 AA 500M 531,875
New York St Energy Res & Dev RIBS 8 3/4% 4/1/2020++ A 750M 791,250
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.267% 7/1/2023++ AAA 2,500M 2,518,750
Total 8,251,718
- - ------------------------------------------------------------------------------------------------------------------------------------
Transportation Capital Regl Arpt Comm VA Ser B AMBAC+ 8 1/8% 7/1/2014 AAA 2,380M 2,876,825
18.35% Metropolitan Atlanta Rapid Trans Auth GA Sales Tax Rev Ser P
AMBAC+ 6 1/4% 7/1/2020 AAA 1,000M 1,057,500
New Jersey St Turnpike Auth FSA+ 6 1/2% 1/1/2016 AAA 2,000M 2,182,500
Port Auth NY & NJ 6 7/8% 1/1/2025 AA 1,490M 1,584,988
Puerto Rico Commonwealth Hwy & Trans Auth Hwy Rev Ser Y
5 1/2% 7/1/2036 A 500M 456,250
Total 8,158,063
- - ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev
3.29% FGIC+ 6 3/4% 6/15/2014 AAA 390M 415,350
Springfield IL Wtr Rev 6 1/2% 3/1/2015 AA 1,000M 1,046,250
Total 1,461,600
- - ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Municipal Bonds (Cost $41,809,983) 42,169,213
--------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Statement of Net Assets April 30, 1996
NATIONAL TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OTHER ASSETS, LESS LIABILITIES 5.14%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities,
at Market Texas St Tax & Rev Anticipation Notes Ser A 4 3/4%
8/30/1996 (Cost $2,408,819) MIG1 $2,400M $ 2,408,448
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (123,405)
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 2,285,043
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.70 a share on 9,464,915 shares of
beneficial interest outstanding) $44,454,256
--------------------------------------------------------------------------------------------------------
+Insured or guaranteed by the indicated municipal bond insurance corporation.
++The interest rate is subject to change periodically and inversely to the prevailing market rate.
The interest rate shown is the rate in effect at April 30, 1996. See page 16 for additional
information.
+++Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
Statement of Net Assets April 30, 1996
CALIFORNIA TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 98.61%
- - ------------------------------------------------------------------------------------------------------------------------------------
Prerefunded East Bay CA Muni Util Dist Wtr Sys Rev AMBAC+
20.45% 6 1/2% 6/1/2017 AAA $ 435M $ 488,287
Los Angeles CA Convention Ctfs Ser A 7 3/8% 8/15/2018 AAA 300M 331,500
Los Angeles CA Trans Comm Sales Tax Rev Ser A 8% 7/1/2018 AAA 1,750M 1,920,625
Sacramento CA Muni Util Dist Elec Rev Ser V 7 7/8%
8/15/2016 AAA 600M 660,000
Total 3,400,412
- - ------------------------------------------------------------------------------------------------------------------------------------
General Obligation
Local 1.28% Arcadia CA Unified Sch Dist Ser B FGIC+ 6 1/2% 7/1/2015 AAA 200M 213,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Education California St Univ & College Students Union Rev Ser B
9.63% MBIA+ 6 1/8% 11/1/2024 AAA 700M 713,125
California St Univ Rev FGIC+ 5.90% 11/1/2021 AAA 250M 247,188
San Jose St Univ CA Rev Ser D AMBAC+ 5 7/8% 11/1/2019 AAA 650M 641,875
Total 1,602,188
- - ------------------------------------------------------------------------------------------------------------------------------------
Health and Hospital California Health Fac Auth Rev/Kaiser Permanente
5.07% Ser A 6 1/2% 12/1/2020 AA 285M 299,962
California Health Fac Auth Rev/San Diego Hosp Assn
MBIA+ 6.95% 10/1/2021 AAA 500M 542,500
Total 842,462
- - ------------------------------------------------------------------------------------------------------------------------------------
Housing
1.49% California Hsg Fin Agy Rev Home Mtge Ser A 7 3/8% 8/1/2017 Aa 235M 248,513
- - ------------------------------------------------------------------------------------------------------------------------------------
Pollution Control Revenue California Poll Ctrl Rev/Pacific Gas & Elec MBIA+ AMT+++
5.95% 8 3/4% 1/1/2007 AAA 650M 706,062
California Poll Ctrl Rev/So CA Edison AMBAC+ AMT+++
6.40% 12/1/2024 AAA 275M 284,280
Total 990,342
- - ------------------------------------------------------------------------------------------------------------------------------------
Power Northern CA Transmission Rev RIBS MBIA+ 6.77% 4/29/2024++ AAA 750M 645,938
10.26% Redding CA Jt Pwrs Fin Auth Elec Sys Rev Ser A MBIA+
5 1/4% 6/1/2015 AAA 450M 419,625
Riverside CA Elec Rev 6% 10/1/2015 Aa 445M 446,669
Santa Clara CA Elec Rev Ser A MBIA+ 5 3/4% 7/1/2024 AAA 200M 194,750
Total 1,706,982
- - ------------------------------------------------------------------------------------------------------------------------------------
Solid Waste California Poll Ctrl Fin Auth Solid Waste Rev/Browning
.63% Ferris AMT+++ 6 3/4% 9/1/2019 A 100M 104,125
- - ------------------------------------------------------------------------------------------------------------------------------------
Transportation Long Beach CA Harbor Rev Ser A AMT+++ 7 1/4% 5/15/2019 Aa 150M 159,750
14.11% Los Angeles CA Harbor Rev Ser B AMT+++ 6% 8/1/2015 AA 400M 393,000
Puerto Rico Commonwealth Hwy Rev Ser Q 6% 7/1/2020 A 500M 505,000
</TABLE>
5
<PAGE>
Statement of Net Assets April 30, 1996
CALIFORNIA TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
San Francisco CA Bay Area Rapid Trans Dist Sales Tax Rev
FGIC+ 6.60% 7/1/2012 AAA $ 240M $ 257,100
San Francisco CA City & Co Arpt Rev Ser I AMBAC+ AMT+++
6 1/2% 5/1/2018 AAA 200M 208,250
San Francisco CA City & Co Arpt Rev 2nd Ser MBIA+
6 3/4% 5/1/2020 AAA 500M 538,750
San Francisco CA City & Co Arpt Rev 2nd Ser MBIA+
AMT+++ 5.70% 5/1/2026 AAA 300M 283,875
Total 2,345,725
- - ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer Burbank CA Wastewtr Treatment Rev Ser A FGIC+
29.74% 5 1/2% 6/1/2015 AAA 355M 343,019
Contra Costa CA Wtr Dist Wtr Rev Ser G MBIA+ 5 1/2%
10/1/2019 AAA 750M 708,750
East Bay CA Muni Util Dist Wastewtr Treatment Sys Rev
RIBS AMBAC+ 7.12% 6/1/2020++ AAA 250M 223,125
East Bay CA Muni Util Dist Wtr Sys Rev FGIC+ 5% 6/1/2016 AAA 430M 385,388
Fairfield CA Wtr Rev AMBAC+ 5 1/4% 4/1/2014 AAA 520M 486,200
Fresno CA Sewer Rev Ser A MBIA+ 5% 9/1/2015 AAA 350M 316,312
Fresno CA Sewer Rev Ser A MBIA+ 5% 9/1/2023 AAA 200M 174,750
Los Angeles CA Wastewtr Rev Ser C 7.10% 6/1/2018 A 480M 520,200
Metropolitan Wtr Dist So CA Wtrwks Rev MBIA+ 5 3/4%
7/1/2021 AAA 250M 243,750
Metropolitan Wtr Dist So CA Wtrwks Rev RIBS 8.075%
8/5/2022++ AA 350M 351,313
San Francisco CA City & Co Pub Util Wtr Rev 6 1/2%
11/1/2017 AA 250M 265,313
Santa Rosa CA Wastewtr Rev FGIC+ 5.15% 9/1/2017 AAA 355M 328,375
Vallejo CA Rev Wtr Imp FGIC+ 6 1/2% 11/1/2014 AAA 565M 599,606
Total 4,946,101
--------------------------------------------------------------------------------------------------------
Total Investments in Municipal Bonds (Cost $16,306,325) 16,400,350
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 1.39%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities,
at Market Contra Costa Co CA Tax & Rev Anticipation Notes 4 1/2%
7/3/1996 (Cost $800,867) MIG1 800M 800,704
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (569,816)
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 230,888
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.42 a share on 3,759,783 shares of
beneficial interest outstanding) $16,631,238
--------------------------------------------------------------------------------------------------------
+Insured or guaranteed by the indicated municipal bond insurance corporation.
++The interest rate is subject to change periodically and inversely to the prevailing market rate.
The interest rate shown is the rate in effect at April 30, 1996. See page 16 for additional
information.
+++Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
Statement of Net Assets April 30, 1996
FLORIDA TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 98.58%
- - ------------------------------------------------------------------------------------------------------------------------------------
Prerefunded Dade Co FL Seaport Bd AMBAC+ 6 1/2% 10/1/2026 AAA $350M $ 385,000
22.65% Florida St Bd Ed Cap Outlay Ser A 7 1/4% 6/1/2023 AAA 200M 223,500
Puerto Rico Commonwealth 7 5/8% 7/1/2010 AAA 100M 113,625
Puerto Rico Commonwealth 7.70% 7/1/2020 AAA 450M 512,438
Puerto Rico Commonwealth Hwy Rev Ser Q 7 3/4% 7/1/2016 AAA 325M 370,906
Puerto Rico Elec Pwr Auth Rev Ser M 8% 7/1/2008 AAA 275M 301,813
Puerto Rico Elec Pwr Auth Rev Ser P 7% 7/1/2021 AAA 300M 338,250
Total 2,245,532
- - ------------------------------------------------------------------------------------------------------------------------------------
General Obligation
State 2.47% Florida St Bd Ed Cap Outlay Ser B 5 7/8% 6/1/2025 AA 250M 245,313
--------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
Statement of Net Assets April 30, 1996
FLORIDA TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Obligation
Local 4.28% Florida St Jacksonville Trans-SR Lien 6.40% 7/1/2022 AA $400M $ 424,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Finance
5.29% Puerto Rico Muni Fin Agy Ser A 6 1/2% 7/1/2019 A 500M 524,375
- - ------------------------------------------------------------------------------------------------------------------------------------
Health and Hospital Alachua Co FL Health Facs Rev/Shands Teaching Hosp
22.91% Ser A MBIA+ 5.70% 12/1/2017 AAA 150M 146,813
Altamonte Springs FL Health Fac Auth Hosp Rev/Adventist
Health AMBAC+ 7% 11/15/2014 AAA 350M 381,938
Lakeland FL Hosp Sys Rev MBIA+ 5 1/4% 11/15/2016 AAA 250M 232,500
Miami FL Health Facs Auth Rev RIBS AMBAC+ 6.62% 8/15/2015++ AAA 700M 593,250
Palm Beach Co FL Health Facs Auth Rev Hosp/Good Samaritan
MBIA+ 6.30% 10/1/2022 AAA 350M 366,625
St Petersburg FL Health Facs Auth Rev/Allegheny Health Sys
MBIA+ 7% 12/1/2015 AAA 250M 276,250
Tampa FL Health Rev/Allegheny Health Sys/St Joseph
MBIA+ 6.70% 12/1/2018 AAA 250M 274,063
Total 2,271,439
- - ------------------------------------------------------------------------------------------------------------------------------------
Housing Palm Beach Co FL Hsg Fin Auth Sing Fam Mtge Rev Ser A
2.07% GNMA+ AMT+++ 6.55% 4/1/2027 Aaa 200M 205,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue Bonds
1.75% Puerto Rico Tel Auth Rev RIBS MBIA+ 6.87% 1/25/2007++ AAA 175M 173,905
- - ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Jacksonville FL Sales Tax Rev River City Renaissance
3.80% Prjt FGIC+ 5 3/8% 10/1/2018 AAA 400M 377,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Pollution Control Revenue
2.70% Citrus Co FL Poll Ctrl Rev/FL Pwr Crystal Rivers MBIA+
6 5/8% 1/1/2027 AAA 250M 267,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Power Charlotte Co FL Util Rev FGIC+ 6 3/4% 10/1/2013 AAA 200M 220,000
9.06% Okeechobee FL Util Auth Sys Rev Acquisition & Imp MBIA+
5.60% 10/1/2025 AAA 350M 336,875
Sarasota Co FL Util Sys Rev Ref Ser A FGIC+ 5 1/4%
10/1/2025 AAA 375M 340,780
Total 897,655
- - ------------------------------------------------------------------------------------------------------------------------------------
Solid Waste
2.65% Orange Co FL Solid Waste Fac Rev FGIC+ 6 3/8% 10/1/2017 AAA 250M 262,188
- - ------------------------------------------------------------------------------------------------------------------------------------
Transportation Dade Co FL Aviation Rev Ser A MBIA+ AMT+++ 5 3/4%
7.40% 10/1/2018 AAA 150M 146,625
Greater Orlando FL Aviation Auth Arpt Fac Rev AMT+++
8 3/8% 10/1/2016 A 350M 385,437
Puerto Rico Commonwealth Hwy Rev Ser Q 6% 7/1/2020 A 200M 202,000
Total 734,062
- - ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer Atlantic Beach FL Util Sys Rev MBIA+ 5 1/2% 10/1/2016 AAA 125M 120,156
11.55% Dade Co FL Wtr & Sewer Sys Rev FGIC+ 5 1/2% 10/1/2025 AAA 500M 473,125
Miami Beach FL Wtr & Sewer Rev FSA+ 5 3/8% 9/1/2015 AAA 250M 235,625
Miami FL Sani Sewer Sys FGIC+ 6 1/2% 1/1/2015 AAA 300M 316,875
Total 1,145,781
--------------------------------------------------------------------------------------------------------
Total Investments in Municipal Bonds (Cost $9,712,693) 9,775,000
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 1.42%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities,
at Market Texas St Tax & Rev Anticipation Notes Ser A 4 3/4%
8/30/1996 (Cost $50,242) MIG1 50M 50,176
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities 90,844
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 141,020
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.49 a share on 2,210,824 shares of
beneficial interest outstanding) $9,916,020
--------------------------------------------------------------------------------------------------------
+Insured or guaranteed by the indicated municipal bond insurance corporation.
++The interest rate is subject to change periodically and inversely to the prevailing market rate.
The interest rate shown is the rate in effect at April 30, 1996. See page 16 for additional
information.
+++Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
7
<PAGE>
Statement of Net Assets April 30, 1996
NEW YORK TAX-FREE INCOME TRUST
<TABLE>
<CAPTION>
Rating: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 100.04%
- - ------------------------------------------------------------------------------------------------------------------------------------
Prerefunded Municipal Assistance Corp NY Ser 58 7 3/8% 7/1/2008 AAA $150M $ 153,918
20.16% New York St Dorm Auth Rev/City Univ Ser C FGIC+ 7%
7/1/2014 AAA 175M 194,688
New York St Dorm Auth Rev Ser A 7 5/8% 7/1/2020 AAA 250M 283,438
New York St Urban Dev 7 3/4% 1/1/2014 AAA 275M 309,375
Puerto Rico Commonwealth Pub Imp Ser A 7.70% 7/1/2008 AAA 600M 666,750
Total 1,608,169
- - ------------------------------------------------------------------------------------------------------------------------------------
General Obligation
State 1.76% Puerto Rico Commonwealth 5 1/2% 7/1/2017 A 150M 140,250
- - ------------------------------------------------------------------------------------------------------------------------------------
Education New York City Ind Dev Agy Civil Fac Rev MBIA+ 5 3/4%
17.25% 9/1/2015 AAA 250M 243,125
New York St Dorm Auth Rev/City Univ Ser U MBIA+ 6.45%
7/1/2005 AAA 300M 329,250
New York St Dorm Auth Rev/City Univ 2nd Ser MBIA+
6 7/8% 7/1/2014 AAA 250M 272,813
New York St Dorm Auth Rev/St Univ Ed Fac Ser B 7 1/2%
5/15/2011 BBB 200M 227,750
New York St Dorm Auth Rev Ser F 5% 7/1/2020 Baa 360M 302,850
Total 1,375,788
- - ------------------------------------------------------------------------------------------------------------------------------------
Finance
7.53% New York St Loc Govt Assistance Corp Ser A 6 7/8% 4/1/2019 A 550M 600,875
- - ------------------------------------------------------------------------------------------------------------------------------------
Health and Hospital New York St Med Care Facs Fin/Mental Health Ser A
7 1/2% 2/15/2021 BBB 225M 248,906
5.87% New York St Med Care Facs Fin/North Shore Univ Hosp
MBIA+ 7.20% 11/1/2020 AAA 200M 219,000
Total 467,906
- - ------------------------------------------------------------------------------------------------------------------------------------
Housing
4.17% New York St Mtge Agy Rev Ser 41 MBIA+ 6.45% 10/1/2014 AAA 325M 332,718
- - ------------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue
Bonds 8.00% Puerto Rico Tel Auth Rev RIBS MBIA+ 7.036% 1/16/2015++ AAA 700M 637,875
- - ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous New York St Urban Dev Corp Rev Correctional Cap Facs Ser 5
15.88% MBIA+ 5 1/2% 1/1/2025 AAA 300M 281,250
New York St Urban Dev Corp Rev Ser A MBIA+ 5 1/2% 4/1/2016 AAA 420M 401,625
United Nations Dev Corp Ser A 6% 7/1/2026 A 600M 584,250
Total 1,267,125
- - ------------------------------------------------------------------------------------------------------------------------------------
Power New York St Energy Res & Dev/Bklyn Union Gas Ser A
16.27% MBIA+ AMT+++ 6 3/4% 2/1/2024 AAA 200M 213,750
New York St Energy Res & Dev/Bklyn Union Gas 1st Ser
7 1/8% 12/1/2020 A 150M 154,795
New York St Energy Res & Dev/Central Hudson Gas & Elec
MBIA+ AMT+++ 8 3/8% 12/1/2028 AAA 250M 277,188
New York St Energy Res & Dev/Con Edison Ser A AMT+++
7 1/2% 7/1/2025 A 300M 321,750
New York St Energy Res & Dev/Con Edison Ser A
MBIA+ AMT+++ 7 1/8% 12/1/2029 AAA 150M 163,125
New York St Energy Res & Dev Poll Ctrl Rev/Niagara Mohawk
FGIC+ 7.20% 7/1/2029 AAA 150M 167,062
Total 1,297,670
- - ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev Ser A
3.15% FGIC+ 6% 6/15/2019 AAA 250M 251,562
--------------------------------------------------------------------------------------------------------
Total Investments in Municipal Bonds (Cost $7,964,564) 7,979,938
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES (.04)%
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (2,944)
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.57 a share on 1,745,050 shares of
beneficial interest outstanding) $7,976,994
--------------------------------------------------------------------------------------------------------
+Insured or guaranteed by the indicated municipal bond insurance corporation.
++The interest rate is subject to change periodically and inversely to the prevailing market rate.
The interest rate shown is the rate in effect at April 30, 1996. See page 16 for additional
information.
+++Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
</TABLE>
8
<PAGE>
Statement of Net Assets April 30, 1996
GLOBAL INCOME TRUST
<TABLE>
<CAPTION>
Principal
Amount
Rating: S&P in Local Market Value
Security or Moody's Currency (Notes 1a & 1b)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN SECURITIES 96.43%
- - ------------------------------------------------------------------------------------------------------------------------------------
FOREIGN 63.05%
- - ------------------------------------------------------------------------------------------------------------------------------------
Australia Australian Commonwealth 6 1/4% due 3/15/1999 AA $ 1,000M $ 747,920
12.09% Australian Commonwealth 7% due 4/15/2000 AA 225M 169,070
Total 916,990
- - ------------------------------------------------------------------------------------------------------------------------------------
Belgium 1.96% Government of Belgium 7 1/4% due 4/29/2004 AA 4,450M 148,986
- - ------------------------------------------------------------------------------------------------------------------------------------
Canada Canadian Government 7% due 12/1/2006 AAA 500M 343,920
11.33% Government of Canada 9% due 6/1/2025 AAA 650M 514,989
Total 858,909
- - ------------------------------------------------------------------------------------------------------------------------------------
Denmark Kingdom of Denmark 8% due 11/15/2001 AAA 800M 146,216
2.93% Kingdom of Denmark 8% due 5/15/2003 AAA 420M 75,974
Total 222,190
- - ------------------------------------------------------------------------------------------------------------------------------------
France 2.08% French Government 7 3/4% due 4/12/2000 AAA 750M 158,002
- - ------------------------------------------------------------------------------------------------------------------------------------
Germany Bundesrepublic 7 1/8% due 12/20/2002 AAA 715M 499,563
12.53% Bundesrepublic 7 3/8% due 1/3/2005 AAA 460M 322,419
Deutschland Republic 8% due 7/22/2002 AAA 175M 127,801
Total 949,783
- - ------------------------------------------------------------------------------------------------------------------------------------
Italy BTPS 11% due 6/1/2003 AA 120,000M 82,800
4.72% Republic of Italy (BTP) 11% due 6/1/1998 AA 430,000M 275,200
Total 358,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Netherlands
3.96% Dutch State Loan 8 1/4% due 2/15/2007 AAA 450M 300,347
- - ------------------------------------------------------------------------------------------------------------------------------------
Spain Government of Spain 10.90% due 8/30/2003 AA 22,870M 197,368
4.26% Government of Spain 12 1/4% due 3/25/2000 AA 14,200M 125,386
Total 322,754
- - ------------------------------------------------------------------------------------------------------------------------------------
Sweden 2.78% Government of Sweden 10 1/4% due 5/5/2000 AA 1,300M 211,016
- - ------------------------------------------------------------------------------------------------------------------------------------
United Kingdom 4.41% U.K. Treasury 6 3/4% due 11/26/2004 AAA 240M 334,336
- - ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Foreign Securities (Cost $4,887,861) 4,781,313
- - ------------------------------------------------------------------------------------------------------------------------------------
UNITED STATES 33.38%
- - ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Banks 6.59% due 3/26/2001 AAA 250M 247,266
Federal Home Loan Mortgage Corporation 6 3/4% due 8/1/2005 AAA 250M 246,445
Federal National Mortgage Association 8 1/2% due 2/1/2005 AAA 250M 261,055
Government National Mortgage Association 7% due on
an announced basis AAA 650M 625,930
U.S. Treasury Bonds 6 1/4% due 8/15/2023 AAA 150M 135,305
U.S. Treasury Bonds 7 7/8% due 2/15/2021 AAA 250M 272,617
U.S. Treasury Bonds 10 3/8% due 11/15/2012 AAA 350M 444,719
U.S. Treasury Notes 5 3/8% due 11/30/1997 AAA 300M 297,469
Total Investments in United States Securities (Cost $2,597,345) 2,530,806
--------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $7,485,206) 7,312,119
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 3.57%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities,
at Cost Federal Home Loan Mortgage Corporation 5.30% due 5/1/1996 1,999,706
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (1,729,104)
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 270,602
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.64 a share on 1,634,311 shares of
beneficial interest outstanding) $7,582,721
--------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
9
<PAGE>
Statement of Net Assets April 30, 1996
BOND-DEBENTURE TRUST
<TABLE>
<CAPTION>
Principal Market Value
Security Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 91.97%
- - ------------------------------------------------------------------------------------------------------------------------------------
LOWER RATED STRAIGHT DEBT (Note 2) 64.63%
- - ------------------------------------------------------------------------------------------------------------------------------------
Aerospace
1.03% BE Aerospace Inc. Sr. Sub. Notes 9 7/8/2006+ $2,000M $ 1,980,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Agricultural Agricultural Minerals & Chemical Inc. Sr. Notes 10 3/4/2003 1,000M 1,065,000
1.91% Arcadian Partner Sr. Notes 10 3/4/2005 1,500M 1,614,375
PMI Acquisition Corp. Sr. Sub. Notes 10 1/4/2003 1,000M 1,000,000
Total 3,679,375
- - ------------------------------------------------------------------------------------------------------------------------------------
Airlines
.15% US Air Inc. Equipment Trust Ser D 10.61/2007 300M 281,625
- - ------------------------------------------------------------------------------------------------------------------------------------
Building Materials Associated Materials, Inc. Sr. Sub. Notes 11 1/2/2003 1,500M 1,265,859
1.18% Southdown Inc. Sr. Sub. Notes 10/2006+ 1,000M 1,005,000
Total 2,270,859
- - ------------------------------------------------------------------------------------------------------------------------------------
Capital Equipment
.18% AAF-McQuay, Inc. Sr. Notes 8 7/8/2003 350M 339,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Chemicals Acetex Corp. 9 3/4/2003+ 2,000M 2,015,000
2.79% Borden Chemical Sr. Notes 9 1/2/2005 1,000M 1,008,750
Polymer Group Inc. Sr. Notes 12 1/4/2002 750M 819,375
UCC Investors Holdings Inc. Sr. Sub. Notes 11/2003 1,500M 1,533,750
Total 5,376,875
- - ------------------------------------------------------------------------------------------------------------------------------------
Communications Adelphia Communications Corp. Sr. Notes 9 7/8/2005 1,000M 942,500
13.54% Adelphia Communications Corp. Sr. Notes 12 1/2/2002 500M 508,750
Brooks Fiber Properties Zero Coupon Sr. Discount Notes due 2006+ ++ 3,000M 1,657,500
Cablevision System Sr. Sub. Notes 9 1/4/2005 1,000M 980,000
CAI Wireless System Inc. Sr. Notes 12 1/4/2002 650M 680,063
Cellular Inc. Zero Coupon Sr. Sub. Discount Notes 11 3/4/2003++ 3,000M 2,490,000
Cencall Communications Corp. Zero Coupon Sr. Discount Notes due 2004++ 1,000M 601,250
Comcast Cellular Corp. Zero Coupon Sr. Notes Ser B due 2000 1,250M 918,750
Comcast UK Cable Partners Limited Zero Coupon Sr. Discount Deb. due 2007++ 3,000M 1,792,500
C.S. Wireless Systems, Inc. Zero Coupon Sub. Discount Deb. due 2006+ ++ 1,740M 911,325
Fonorola Inc. Sr. Sub. Notes 12 1/2/2002 1,000M 1,075,000
Fundy Cable Ltd. Sr. Secured 2nd Priority Notes 11/2005 1,000M 1,018,750
Horizon Cellular Inc. Zero Coupon Sr. Sub. Discount Notes due 2000++ 1,000M 877,500
Intelcom Group (USA) Inc. Zero Coupon Sr. Discount Notes due
2005 w/Warrants++ 2,000M 1,312,500
Marcus Cable Co. Sr. Deb. 11 7/8/2005 500M 527,500
Metrocall Inc. Sr. Sub. Notes 10 3/8/2007 1,500M 1,507,500
MFS Communications Zero Coupon Sr. Discount Notes due 2006++ 3,000M 1,886,250
Mobile Media Communications Inc. Sr. Sub. Notes 9 3/8/2007 1,500M 1,445,625
Rifkin Acquisition Partners, LP Sr. Sub. Notes 11 1/8/2006+ 350M 349,125
Rogers Communications Inc. Sr. Sub. Deb. 10 7/8/2004 1,500M 1,546,875
Telewest plc Zero Coupon Sr. Discount Deb. due 2007++ 3,000M 1,852,500
Vanguard Cellular Systems Sr. Deb. 9 3/8/2006 1,230M 1,230,000
Total 26,111,763
- - ------------------------------------------------------------------------------------------------------------------------------------
Computer Systems and Digital Equipment Corp. Sr. Notes 7 3/4/2023 1,000M 898,281
Peripherals Exide Electronics Group, Inc. Sr. Sub. Notes 11 1/2/2006 w/Warrants+ 630M 664,650
.81% Total 1,562,931
- - ------------------------------------------------------------------------------------------------------------------------------------
Consumer Products American Standard Inc. Zero Coupon Sr. Sub. Deb. due 2005++ 2,500M 2,137,500
1.44% Ekco Group, Inc. Sr. Notes 9 1/4/2006+ 650M 646,750
Total 2,784,250
- - ------------------------------------------------------------------------------------------------------------------------------------
Container and Packaging Calmar Inc. Sr. Sub. Notes 11 1/2/2005 1,500M 1,477,500
3.18% Container Corp. of America Sr. Notes 11 1/4/2004 2,000M 2,080,000
</TABLE>
10
<PAGE>
Statement of Net Assets April 30, 1996
BOND-DEBENTURE TRUST
<TABLE>
<CAPTION>
Principal Market Value
Security Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Owens Illinois Inc. Sr. Sub. Notes 10/2002 $ 1,500M $ 1,548,750
Portola Packaging Inc. Sr. Notes 10 3/4/2005 1,000M 1,030,000
Total 6,136,250
- - ------------------------------------------------------------------------------------------------------------------------------------
Food Doane Products Co. Sr. Notes 10 5/8/2006 1,000M 1,020,000
1.36% Van de Kamp's Inc. Sr. Sub. Notes 12/2005 1,500M 1,597,500
Total 2,617,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Forest Products
.52% Pacific Lumber Co. Sr. Notes 10 1/2/2003 1,000M 995,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Hotel/Leisure Act III Theatres Inc. Sr. Sub. Notes 11 7/8/2003 1,000M 1,102,500
3.45% AMF Group Inc. Sr. Sub. Notes 10 7/8/2006+ 500M 497,500
Aztar Corp. Sr. Sub. Notes 11/2002 1,000M 1,022,500
HMC Acquisition Properties Sr. Notes 9/2007+ 1,000M 927,500
Prime Hospitality Corp. 9 1/4/2006 500M 480,625
Showboat Marina 1st Mtge. Notes 13 1/2/2003+ 1,500M 1,597,500
Trump Atlantic City Fdg 1st Mtge. Notes 11 1/4/2006 1,000M 1,027,500
Total 6,655,625
- - ------------------------------------------------------------------------------------------------------------------------------------
Household Products Knoll Inc. Sr. Sub. Notes 10 7/8/2006+ 650M 669,500
1.15% Sweetheart Cup Sr. Sub. Notes 10 1/2/2003 1,500M 1,541,250
Total 2,210,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Insurance 1.06% Penncorp Financial Sr. Sub. Notes 9 1/4/2003 2,000M 2,050,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Machinery Alvey Systems Inc. Sr. Sub. Notes 11 3/8/2003+ 1,150M 1,196,000
2.73% Carbide Graphite Group Inc. Sr. Notes 11 1/2/2003 454M 493,725
Essex Group Inc. Sr. Notes 10/2003 2,500M 2,550,000
IMO Industries Inc. Sr. Sub. Deb. 12/2001 1,000M 1,032,500
Total 5,272,225
- - ------------------------------------------------------------------------------------------------------------------------------------
Media American Radio System Sr. Sub. Notes 9/2006 1,000M 972,500
6.93% Benedek Broadcasting Corp. Sr. Secured Notes 11 7/8/2005 1,000M 1,057,500
CBS Inc. Sr. Sub. Deb. 8 7/8/2022 500M 478,359
Chancellor Broadcasting Sr. Sub. Notes 9 3/8/2004 2,000M 1,930,000
Granite Broadcasting Corp. Sr. Sub. Deb. 12 3/4/2002 1,000M 1,095,000
Granite Broadcasting Corp. Sr. Sub. Notes 10 3/8/2005 500M 502,500
Heritage Media Corp. Sr. Sub. Notes 8 3/4/2006 500M 477,500
Heritage Media Services, Inc. Sr. Secured Notes 11/2002 1,000M 1,071,250
NWCG Holdings Corp. Zero Coupon Sr. Secured Discount Notes due 1999++ 2,500M 1,812,500
Sinclair Broadcasting Group, Inc. Sr. Sub. Notes 10/2005 1,000M 976,250
Sullivan Broadcasting Sr. Sub. Notes 10 1/4/2005 1,000M 967,500
Viacom Inc. Sub. Deb. 8/2006 1,000M 935,000
Young Broadcasting Inc. Sr. Sub. Notes 11 3/4/2004 1,000M 1,090,000
Total 13,365,859
- - ------------------------------------------------------------------------------------------------------------------------------------
Medical/Health Genesis Health Ventures Sr. Sub. Notes 9 3/4/2005 1,000M 1,040,000
Care Paracelsus Health Care Corp. Sr. Sub. Notes 9 7/8/2003 1,000M 1,005,000
2.15% Quorum Health Group Inc. Sr. Sub. Notes 8 3/4/2005 1,000M 993,750
Quorum Healthcare Group Inc. Sr. Sub. Notes 11 7/8/2002 1,000M 1,108,750
Total 4,147,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous
.76% Interface Inc. Sr. Sub. Notes 9 1/2/2005+ 1,500M 1,462,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Oil and Gas Clark USA Inc. Zero Coupon Sr. Secured Notes due 2000 2,500M 1,687,500
5.73% Coda Energy Inc. Sr. Sub. Notes 10 1/2/2006+ 2,000M 2,025,000
Crown Central Petroleum Corp. Sr. Notes 10 7/8/2005 1,500M 1,571,250
Falcon Drilling Co. Sr. Notes 8 7/8/2003+ 500M 496,875
KCS Energy, Inc. Sr. Notes 11/2003+ 1,500M 1,612,500
</TABLE>
11
<PAGE>
Statement of Net Assets April 30, 1996
BOND-DEBENTURE TRUST
<TABLE>
<CAPTION>
Principal Market Value
Security Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Metro Gas, S.A. Sr. Sub. Notes 12/2000 $1,000M $ 1,070,000
Nuevo Energy Co. Sr. Sub. Notes 12 1/2/2002 500M 542,500
Nuevo Energy Co. Sr. Sub. Notes 9 1/2/2006 600M 603,000
Plains Resources, Inc. 10 1/4/2006+ 400M 408,000
United Meridian Corp. Sr. Sub. Notes 10 3/8/2005 1,000M 1,037,500
Total 11,054,125
- - ------------------------------------------------------------------------------------------------------------------------------------
Oil Service
.28% Rowan Cos. Inc. Sr. Notes 11 7/8/2001 500M 542,500
- - ------------------------------------------------------------------------------------------------------------------------------------
Paper and Pulp Crown Paper Co. Sr. Sub. Notes 11/2005 1,000M 932,500
3.85% Domtar Inc. Sub. Deb. 11 1/4/2017 1,500M 1,582,500
Repap Wisconsin Inc. Sr. Secured 2nd Priority 9 7/8/2006 2,000M 1,810,000
S.D. Warren Co. Sr. Sub. Notes 12/2004 640M 670,400
Stone Container Corp. 1st Mtge. Notes 10 3/4/2002 1,500M 1,503,750
Tembec Finance Corp. Sr. Notes 9 7/8/2005 1,000M 920,000
Total 7,419,150
- - ------------------------------------------------------------------------------------------------------------------------------------
Real Estate .42% Trizec Finance Sr. Notes 10 7/8/2005 800M 812,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Retail .86% United Stationers Supply Co. Sr. Sub. Notes 12 3/4/2005 1,500M 1,653,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Steel AK Steel Corp. Sr. Notes 10 3/4/2004 1,000M 1,093,750
2.61% G.S. Technologies Operating Co. Sr. Notes 12 1/4/2005 1,000M 1,035,000
Ivaco Inc. Sr. Notes 11 1/2/2005 500M 492,500
Republic Engineered Steel Inc. 1st Mtge. Notes 9 7/8/2001 1,000M 912,500
WCI Steel Inc. Sr. Notes 10 1/2/2002 1,500M 1,509,375
Total 5,043,125
- - ------------------------------------------------------------------------------------------------------------------------------------
Supermarket Bruno's Inc. Sr. Sub. Notes 10 1/2/2005 2,000M 1,982,500
2.77% Farm Fresh Holdings Sr. Notes P. I. K. 14 1/4/2002+++ 705M 342,109
Pathmark Stores Inc. Zero Coupon Sub. Notes due 2003++ 2,500M 1,546,875
Ralphs Supermarkets Inc. Sr. Notes 10.45/2004 1,500M 1,470,000
Total 5,341,484
- - ------------------------------------------------------------------------------------------------------------------------------------
Textile Dan River Inc. Sr. Sub. Notes 10 1/8/2003 1,000M 965,000
1.28% Fieldcrest Cannon Inc. Sr. Sub. Notes 11 1/4/2004 1,000M 995,000
Tultex Corp. Sr. Notes 10 5/8/2005 500M 513,750
Total 2,473,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Utility .51% Beaver Valley II Funding Corp. Secured Lease Obligation 9/2017 1,246M 975,968
- - ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Lower Rated Straight Debt (Cost $124,562,150) 124,616,239
- - ------------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE DEBT 10.76%
- - ------------------------------------------------------------------------------------------------------------------------------------
Automotive Exide Corp. Conv. Sub. Notes 2.9/2005+ 1,000M 581,406
.84% Magna Intl. Conv. Sub. Deb. 5/2002 1,000M 1,036,250
Total 1,617,656
- - ------------------------------------------------------------------------------------------------------------------------------------
Communications LDDS Communication Inc. Conv. Sub. Deb. 5/2003 1,000M 1,270,000
1.06% United Communication, Ind. Conv. Sub. Deb. 2 3/4/2006+ 750M 765,000
Total 2,035,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Computer Systems and Applied Magnetics Corp. Conv. Sub. Deb. 7/2006+ 800M 1,029,875
Peripherals SCI Systems, Inc. Conv. Sub. Deb. 5/2006+ 1,100M 1,210,000
1.93% Xilinx Inc. Conv. Sub. Notes 5 1/4/2002+ 1,500M 1,475,859
Total 3,715,734
- - ------------------------------------------------------------------------------------------------------------------------------------
Data Processing Equipment Automatic Data Processing Zero Coupon Conv. Sub. Deb. due 2012 2,000M 1,039,688
and Components EMC Corp. Conv. Sub. Notes 4 1/4/2001 1,000M 1,153,750
1.14% Total 2,193,438
--------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Statement of Net Assets April 30, 1996
BOND-DEBENTURE TRUST
<TABLE>
<CAPTION>
Principal Amount or Market Value
Security Number of Shares (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Drugs/Pharmaceuticals Elan International Finance, Ltd. Zero Coupon Conv. Sub. Deb. due 2012 $ 2,000M $ 1,444,375
3.00% Roche Holdings Inc. Zero Coupon Conv. Notes due 2010+ 5,000M 2,206,250
Sandoz Capital, BVI, Ltd. Conv. Sub. Deb. 2/2002+ 2,000M 2,135,000
Total 5,785,625
- - ------------------------------------------------------------------------------------------------------------------------------------
Electronics Analog Devices Conv. Sub. Deb. 3 1/2/2000 750M 855,234
.94% VLSI Technology, Inc. Conv. Sub. Deb. 8 1/4/2005 1,000M 952,500
Total 1,807,734
- - ------------------------------------------------------------------------------------------------------------------------------------
Medical/Health Care Healthsource, Inc. Conv. Sub. Notes 5/2003+ 1,000M 975,469
1.30% Integrated Health Service Conv. Sub. Deb. 6/2003 1,500M 1,534,688
Total 2,510,157
- - ------------------------------------------------------------------------------------------------------------------------------------
Oil and Gas .55% Pennzoil (Exch. Chevron) Conv. Sub. Deb. 4 3/4/2003 1,000M 1,063,905
--------------------------------------------------------------------------------------------------------
Total Investments in Convertible Debt (Cost $18,749,584) 20,729,249
- - ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED, CONVERTIBLE-PREFERRED AND COMMON STOCKS 6.69%
- - ------------------------------------------------------------------------------------------------------------------------------------
Banking .44% Ahmanson, H.F. & Co. $6.00 Conv. Pfd. Ser D 15,000 840,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Chemicals .51% Atlantic Richfield Co. (Exch. Lyondell Petrochemical) $2.23 Conv. Pfd. 35,000 988,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Data Processing
Equipment and
Components .29% General Motors Corp. (Electronic Data Systems) Class E 10,000 563,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment
.57% Westinghouse Electric Corp. $1.30 Conv. Pfd. Ser C+ 60,000 1,095,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Financial American Express Co. $6.25 Conv. Pfd. Notes 25,000 1,559,375
1.86% Jefferson-Pilot Corp. (NationsBank) 7 1/4% Conv. Pfd. Notes 25,000 2,025,000
Total 3,584,375
- - ------------------------------------------------------------------------------------------------------------------------------------
Insurance American General $3.00 Conv. Pfd. Ser A 20,000 1,030,000
1.09% St. Paul's Capital, LLC $3.00 Conv. Pfd. 20,000 1,080,000
Total 2,110,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous
.27% Corning Del. LP $3.00 Conv. Pfd. 10,000 528,750
- - ------------------------------------------------------------------------------------------------------------------------------------
Oil and Gas .44% Unocal Corp. $3.50 Conv. Pfd. 15,000 846,094
- - ------------------------------------------------------------------------------------------------------------------------------------
Paper and Pulp .72% International Paper Co. 5.25% Conv. Pfd. 30,000 1,391,250
- - ------------------------------------------------------------------------------------------------------------------------------------
Utility .50% Calenergy, C.T. $3.125 Conv. Pfd.+ 17,800 964,815
--------------------------------------------------------------------------------------------------------
Total Investments in Preferred, Convertible-Preferred and
Common Stocks (Cost $11,851,134) 12,912,784
- - ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY ISSUES 9.89%
- - ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 6% due on an announced basis 5,000M 4,553,125
Federal National Mortgage Association 6 1/2% due on an announced basis 5,000M 4,689,063
Government National Mortgage Association 8% due 5/15/2024 932M 944,592
U.S. Treasury Strips due 11/15/2004 2,000M 1,129,375
U.S. Treasury Notes 5 7/8% due 11/15/2005 3,000M 2,830,312
U.S. Treasury Notes 6 1/2% due 8/15/2005 5,000M 4,932,813
--------------------------------------------------------------------------------------------------------
Total Investments in U.S. Government and Agency Issues (Cost $19,692,198) 19,079,280
--------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $174,855,066) 177,337,552
--------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Statement of Net Assets April 30, 1996
BOND-DEBENTURE TRUST
<TABLE>
<CAPTION>
Principal Market Value
Security Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OTHER ASSETS, LESS LIABILITIES 8.03%
- - ------------------------------------------------------------------------------------------------------------------------------------
Other Short-Term Federal Home Loan Banks 13% due 7/19/1996 $ 3,000M $ 3,049,219
Assets Securities, Federal National Mortgage Association 14% due 9/25/1996 12,000M 12,403,125
at Market U.S. Treasury Notes 8% due 10/15/1996 1,050M 1,062,141
Total (Cost $17,102,009) 16,514,485
------------------------------------------------------------------------------------------------------------------------
Short-Term American Express Credit Corp. 5.28% due 5/3/1996 2,000M 2,000,000
Securities, Chevron Oil Finance Co. 5.10% due 5/2/1996 400M 400,000
at Cost Prudential Funding Corp. 5.13% due 5/1/1996 700M 700,000
Total 3,100,000
--------------------------------------------------------------------------------------------------------
Total Short-Term Securities 19,614,485
------------------------------------------------------------------------------------------------------------------------
Cash 550,488
------------------------------------------------------------------------------------------------------------------------
Receivable for: Securities sold 354,825
Other 5,346,923
Total Other Assets 25,866,721
- - ------------------------------------------------------------------------------------------------------------------------------------
Liabilities Payable for: Securities purchased 10,170,692
Other 162,140
Total Liabilities 10,332,832
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 15,533,889
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.84 a share on 39,848,167 shares of
beneficial interest outstanding) $192,871,441
--------------------------------------------------------------------------------------------------------
*Non-income producing security.
+Restricted security under Rule 144A.
++Deferred interest debentures pay no interest for a stipulated number of years, after which they
pay the indicated coupon rate.
+++Represents a payment-in-kind security, which may pay interest/dividends in additional face/shares.
See Notes to Financial Statements.
</TABLE>
Statement of Net Assets April 30, 1996
BALANCED TRUST
<TABLE>
<CAPTION>
Number of Market Value
Security Shares (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 99.44%
- - ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS 53.79%
- - ------------------------------------------------------------------------------------------------------------------------------------
Aerospace .82% Boeing Co. 300 $ 24,638
- - ------------------------------------------------------------------------------------------------------------------------------------
Auto Parts 1.54% Genuine Parts Company 1,050 46,463
- - ------------------------------------------------------------------------------------------------------------------------------------
Automobiles 1.80% General Motors Corp. 1,000 54,250
- - ------------------------------------------------------------------------------------------------------------------------------------
Banks: Money Center Chase Manhattan Corp. 450 30,994
1.44% First Chicago NBD 300 12,375
Total 43,369
- - ------------------------------------------------------------------------------------------------------------------------------------
Banks: Regional BankAmerica Corp. 400 30,300
2.94% Comerica Inc. 700 30,450
First Union Corp. 450 27,675
Total 88,425
- - ------------------------------------------------------------------------------------------------------------------------------------
Chemicals Dow Chemical Co. 700 62,213
3.13% Union Carbide Corp. 700 31,850
Total 94,063
- - ------------------------------------------------------------------------------------------------------------------------------------
Data Processing
Equipment 1.58% Hewlett-Packard Co. 450 47,644
--------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Statement of Net Assets April 30, 1996
BALANCED TRUST
<TABLE>
<CAPTION>
Number of Market Value
Security Shares (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Data Processing Services
1.03% General Motors Corp. (Electronic Data Systems) Class E 550 $ 31,006
- - ------------------------------------------------------------------------------------------------------------------------------------
Drugs/Health Care SmithKline Beecham plc ADS 650 35,100
Products Tambrands Inc. 400 19,150
3.10% Warner-Lambert Co. 350 39,113
Total 93,363
- - ------------------------------------------------------------------------------------------------------------------------------------
Electric Power Baltimore Gas & Electric Co. 1,000 26,375
2.11% CINergy Corp. 850 24,650
DTE Energy 400 12,400
Total 63,425
- - ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment
2.36% Emerson Electric Co. 850 71,081
- - ------------------------------------------------------------------------------------------------------------------------------------
Electronics: Components
.74% AMP Inc. 500 22,375
- - ------------------------------------------------------------------------------------------------------------------------------------
Financial: Miscellaneous
1.14% Transamerica Corp. 450 34,200
- - ------------------------------------------------------------------------------------------------------------------------------------
Food Conagra Inc. 700 27,038
3.22% Hershey Foods Corp. 350 26,556
Supervalu Inc. 1,350 43,200
Total 96,794
- - ------------------------------------------------------------------------------------------------------------------------------------
Insurance Aetna Life & Casualty Co. 700 49,875
4.98% Chubb Corp. 450 42,581
CIGNA Corp. 200 22,675
SAFECO Corp. 1,050 34,650
Total 149,781
- - ------------------------------------------------------------------------------------------------------------------------------------
Machinery: Diversified
1.29% Deere & Co. 1,000 38,875
- - ------------------------------------------------------------------------------------------------------------------------------------
Natural Gas Transmission
1.65% The Coastal Corporation 1,250 49,531
- - ------------------------------------------------------------------------------------------------------------------------------------
Oil: Domestic Amoco Corp. 650 47,450
1.99% Ultramar Corp. 400 12,550
Total 60,000
- - ------------------------------------------------------------------------------------------------------------------------------------
Oil: International Chevron Corp. 700 40,600
2.11% Mobil Corp. 200 23,000
Total 63,600
- - ------------------------------------------------------------------------------------------------------------------------------------
Paper and Forest James River Corp. 1,350 36,113
Products Kimberly Clark Corp. 584 42,413
3.92% Westvaco Corporation 1,275 39,525
Total 118,051
- - ------------------------------------------------------------------------------------------------------------------------------------
Retail .58% Sears, Roebuck & Co. 350 17,456
- - ------------------------------------------------------------------------------------------------------------------------------------
Savings and Loan Ahmanson, H.F. & Co. 1,050 24,938
1.63% Great Western Financial Corp. 1,050 24,150
Total 49,088
- - ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications AT&T Corp. 800 49,000
3.34% MCI Communications Corp. 1,750 51,516
Total 100,516
- - ------------------------------------------------------------------------------------------------------------------------------------
Tire and Rubber Goods Cooper Tire & Rubber Company 1,700 41,650
2.94% Goodyear Tire & Rubber Co. 900 46,913
Total 88,563
--------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Statement of Net Assets April 30, 1996
BALANCED TRUST
<TABLE>
<CAPTION>
Number of Shares or Market Value
Security Principal Amount (Note 1a)
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tobacco American Brands Inc. 700 $ 29,138
2.01% RJR Nabisco 1,050 31,369
Total 60,507
- - ------------------------------------------------------------------------------------------------------------------------------------
Waste Management
.40% WMX Technologies Inc. 350 12,162
--------------------------------------------------------------------------------------------------------
Total Investments in Common Stocks (Cost $1,424,249) 1,619,226
- - ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS 45.65%
- - ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 7% to be announced 650M 626,741
U.S. Treasury Bonds 6% due 2/15/2025 60M 53,325
U.S. Treasury Bonds 6 7/8% due 8/15/2025 140M 138,271
U.S. Treasury Notes 5 1/4% due 1/31/2001 220M 210,065
U.S. Treasury Notes 6 1/2% due 8/15/2005 350M 345,296
Total Investments in U.S. Government Obligations (Cost $1,403,111) 1,373,698
--------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $2,827,360) 2,992,924
- - ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES .56%
- - ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Securities,
at Market Federal National Mortgage Association 14% due 9/25/1996 (Cost $447,578) 425M 439,277
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (422,292)
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 16,985
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $11.68 a share on 257,781 shares of beneficial interest outstanding) $3,009,909
--------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
Important Information
See the Trust's prospectus for a history of fees waived and expenses assumed.
As of 4/30/96, each of the National Tax-Free Income Trust, California Tax-Free
Income Trust, Florida Tax-Free Income Trust and New York Tax-Free Income Trust
had no more than 8% of its net assets invested in residual interest bonds
("RIBs") although each of such portfolios may invest up to 20% of its net assets
in such securities. Currently each of the Trusts targets a range of between 6%
and 8% of its net assets being invested in these securities. A RIB, sometimes
referred to as an inverse floater, is a debt instrument with a floating or
variable interest rate that moves in the opposite direction of the interest rate
on another security or the value of an index. Changes in the interest rate on
the other security or index inversely affect the residual interest paid on the
RIB, with the result that when interest rates rise, RIBs give lower interest
payments and their values fall faster than other similar fixed-rate bonds. But
when interest rates fall, not only do RIBs give higher interest payments, their
values also rise faster than other similar fixed-rate bonds. The market for RIBs
is relatively new. A portion of income derived from the portfolios mentioned
above may be subject to the Alternative Minimum Tax.
It is the intent of the Trust to merge each portfolio contained herein into its
counterpart in the Lord Abbett Family of Funds; classes of shares, with distinct
pricing options, will be issued in July 1996. For a full discussion of the
differences in pricing alternatives, please call 800-874-3733 and ask for the
acquiring Fund's July 15, 1996 prospectus.
16
<PAGE>
Statements of Operations For the Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
Limited
Duration
U.S. U.S.
Government Government
Securities Securities National California Florida
Investment Income Trust Trust Trust Trust Trust
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income
- - ------------------------------------------------------------------------------------------------------------------------------------
Interest $14,621,133 $ 356,096 $ 1,370,090 $ 521,750 $ 305,539
- - ------------------------------------------------------------------------------------------------------------------------------------
Dividends -- -- -- -- --
- - ------------------------------------------------------------------------------------------------------------------------------------
Total 14,621,133 356,096 1,370,090 521,750 305,539
- - ------------------------------------------------------------------------------------------------------------------------------------
Expenses (Note 5)
- - ------------------------------------------------------------------------------------------------------------------------------------
Management fee 820,053 29,126 110,887 42,270 25,474
- - ------------------------------------------------------------------------------------------------------------------------------------
Management fee waived -- (13,424) (110,887) (42,270) (25,474)
- - ------------------------------------------------------------------------------------------------------------------------------------
12b-1 distribution plan 1,663,511 58,067 214,004 81,404 48,765
- - ------------------------------------------------------------------------------------------------------------------------------------
Shareholder servicing 103,000 5,350 14,500 4,950 3,010
- - ------------------------------------------------------------------------------------------------------------------------------------
Registration 30,000 4,000 12,000 1,200 1,474
- - ------------------------------------------------------------------------------------------------------------------------------------
Reports to shareholders 36,000 1,500 6,750 1,500 3,784
- - ------------------------------------------------------------------------------------------------------------------------------------
Audit and tax 33,750 6,750 8,250 5,832 5,960
- - ------------------------------------------------------------------------------------------------------------------------------------
Legal 14,250 600 2,250 375 689
- - ------------------------------------------------------------------------------------------------------------------------------------
Organization (Note 1e) 11,442 4,056 3,456 594 910
- - ------------------------------------------------------------------------------------------------------------------------------------
Other 66,630 2,579 8,750 6,440 4,654
- - ------------------------------------------------------------------------------------------------------------------------------------
Expenses assumed by
Lord, Abbett & Co. -- -- -- (20,891) --
- - ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 2,778,636 98,604 269,960 81,404 69,246
- - ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 11,842,497 257,492 1,100,130 440,346 236,293
- - ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Securities and Foreign Currency Transactions (Notes 1g & 8)
- - ------------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) from
securities and foreign
currency transactions
- - ------------------------------------------------------------------------------------------------------------------------------------
Proceeds from sales 1,607,474,583 25,771,717 68,979,522 10,554,300 8,537,521
- - ------------------------------------------------------------------------------------------------------------------------------------
Cost of securities sold 1,610,037,897 25,819,083 68,886,544 10,508,941 8,587,602
- - ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (2,563,314) (47,366) 92,978 45,359 (50,081)
- - ------------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of
securities and foreign
currency holdings
- - ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period 6,524,887 76,084 883,067 579,885 242,300
- - ------------------------------------------------------------------------------------------------------------------------------------
End of period (6,861,324) (178,490) 358,859 93,862 62,241
- - ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) (13,386,211) (254,574) (524,208) (486,023) (180,059)
- - ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on securities
and foreign currency transactions (15,949,525) (301,940) (431,230) (440,664) (230,140)
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Net Assets Resulting
from Operations $ (4,107,028) $ (44,448) $ 668,900 $ (318) $ 6,153
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Global Bond-
New York Income Debenture Balanced
Investment Income Trust Trust Trust Trust
- - -----------------------------------------------------------------------------------------------
Income
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest $ 266,787 $ 239,770 $ 7,343,256 $ 18,026
- - -----------------------------------------------------------------------------------------------
Dividends -- -- 306,928 39,730
- - -----------------------------------------------------------------------------------------------
Total 266,787 239,770 7,650,184 57,756
- - -----------------------------------------------------------------------------------------------
Expenses (Note 5)
- - -----------------------------------------------------------------------------------------------
Management fee 22,127 19,014 371,713 9,438
- - -----------------------------------------------------------------------------------------------
Management fee waived (22,127) (19,014) -- (7,566)
- - -----------------------------------------------------------------------------------------------
12b-1 distribution plan 43,232 34,991 732,559 4,713
- - -----------------------------------------------------------------------------------------------
Shareholder servicing 3,450 8,411 71,363 2,400
- - -----------------------------------------------------------------------------------------------
Registration 1,500 3,000 5,205 3,000
- - -----------------------------------------------------------------------------------------------
Reports to shareholders 1,500 1,200 12,684 500
- - -----------------------------------------------------------------------------------------------
Audit and tax 6,000 5,700 18,652 4,500
- - -----------------------------------------------------------------------------------------------
Legal 375 450 3,537 --
- - -----------------------------------------------------------------------------------------------
Organization (Note 1e) 912 3,670 3,666 3,678
- - -----------------------------------------------------------------------------------------------
Other 3,923 1,232 23,466 178
- - -----------------------------------------------------------------------------------------------
Expenses assumed by
Lord, Abbett & Co. (17,660) -- -- (10,128)
- - -----------------------------------------------------------------------------------------------
Net expenses 43,232 58,654 1,242,845 10,713
- - -----------------------------------------------------------------------------------------------
Net investment income 223,555 181,116 6,407,339 47,043
- - -----------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------
Realized gain (loss) from
securities and foreign
currency transactions
- - -----------------------------------------------------------------------------------------------
Proceeds from sales 3,798,040 28,582,679 99,798,232 3,178,993
- - -----------------------------------------------------------------------------------------------
Cost of securities sold 3,747,023 28,560,848 99,393,219 3,116,582
- - -----------------------------------------------------------------------------------------------
Net realized gain (loss) 51,017 21,831 405,013 62,411
- - -----------------------------------------------------------------------------------------------
Unrealized appreciation
(depreciation) of
securities and foreign
currency holdings
- - -----------------------------------------------------------------------------------------------
Beginning of period 231,801 49,526 331,348 138,174
- - -----------------------------------------------------------------------------------------------
End of period 15,374 (127,163) 1,894,962 157,263
- - -----------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) (216,427) (176,689) 1,563,614 19,089
- - -----------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on securities
and foreign currency transactions (165,410) (154,858) 1,968,627 81,500
- - -----------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Net Assets Resulting
from Operations $ 58,145 $ 26,258 $ 8,375,966 $ 128,543
- - -----------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
----------------------------------------------------
Tax-Free Income Trusts
Limited Duration ----------------
U.S. Government U.S.Government National
Increase (Decrease) in Net Assets Securities Trust Securities Trust Trust
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations Net investment income $ 11,842,497 $ 257,492 $ 1,100,130
-------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities transactions (2,563,314) (47,366) 92,978
-------------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (13,386,211) (254,574) (524,208)
-------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (4,107,028) (44,448) 668,900
- - ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (11,880,950) (283,835) (1,072,094)
- - ---------------------------------------------------------------------------------------------------------------------------
Share transactions (Note 6)
-------------------------------------------------------------------------------------------------------
Net proceeds from sales of shares 31,423,199 809,315 6,490,097
-------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in reinvestment of net investment income 5,875,221 214,004 669,440
-------------------------------------------------------------------------------------------------------
Total 37,298,420 1,023,319 7,159,537
-------------------------------------------------------------------------------------------------------
Cost of shares reacquired (42,918,091) (2,757,463) (4,812,458)
-------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from
share transactions (5,619,671) (1,734,144) 2,347,079
- - ---------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (21,607,649) (2,062,427) 1,943,885
- - ---------------------------------------------------------------------------------------------------------------------------
Net Assets
- - ---------------------------------------------------------------------------------------------------------------------------
Beginning of period 326,175,524 11,829,871 42,510,371
-------------------------------------------------------------------------------------------------------
End of period+ $304,567,875 $ 9,767,444 $44,454,256
- - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes undistributed (overdistributed) net investment income of $273,129,
$55,507, $(84,489), $1,185, $(7,959) and $2,961, respectively, as of April 30,
1996.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
--------------------------------------------
Tax-Free Income Trusts
--------------------------------------------
California Florida New York
Increase (Decrease) in Net Assets Trust Trust Trust
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations Net investment income $ 440,346 $ 236,293 $ 223,555
-------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities transactions 45,359 (50,081) 51,017
-------------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (486,023) (180,059) (216,427)
-------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (318) 6,153 58,145
- - ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (422,081) (249,048) (215,536)
- - ---------------------------------------------------------------------------------------------------------------------------
Share transactions (Note 6)
-------------------------------------------------------------------------------------------------------
Net proceeds from sales of shares 2,197,966 608,037 305,738
-------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in reinvestment of net investment income 225,509 92,313 100,101
-------------------------------------------------------------------------------------------------------
Total 2,423,475 700,350 405,839
-------------------------------------------------------------------------------------------------------
Cost of shares reacquired (2,142,008) (857,674) (1,209,192)
-------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets derived from
share transactions 281,467 (157,324) (803,353)
- - ---------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (140,932) (400,219) (960,744)
- - ---------------------------------------------------------------------------------------------------------------------------
Net Assets
- - ---------------------------------------------------------------------------------------------------------------------------
Beginning of period 16,772,170 10,316,239 8,937,738
- - -----------------------------------------------------------------------------------------------------------------------------------
End of period+ $16,631,238 $ 9,916,020 $7,976,994
- - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months Ended April 30, 1996
- - ------------------------------------------------------------------------------------------------------------------------------------
Global Bond-
Income Debenture Balanced
Increase (Decrease) in Net Assets Trust Trust Trust
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations Net investment income $ 181,116 $ 6,407,339 $ 47,043
- - -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain from securities and foreign
currency transactions 21,831 405,013 62,411
- - -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and foreign currency holdings (176,689) 1,563,614 19,089
- - -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 26,258 8,375,966 128,543
- - -----------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price of shares sold
and reacquired (Note 1f) -- 492 7,236
- - -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
- - -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (258,006) (6,286,588) (48,229)
---------------------------------------------------------------------------------------------------------------
Net realized gain from securities and foreign
currency transactions (96,082) -- (35,635)
---------------------------------------------------------------------------------------------------------------
Total (354,088) (6,286,588) (83,864)
---------------------------------------------------------------------------------------------------------------
Share transactions (Note 6)
- - -----------------------------------------------------------------------------------------------------------------------------------
Net proceeds from sales of shares 1,257,259 68,352,492 932,353
---------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in
reinvestment of net investment income and realized gain
from securities and foreign currency transactions 238,476 3,506,450 74,797
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 1,495,735 71,858,942 1,007,150
---------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (1,127,469) (10,265,568) (8,939)
---------------------------------------------------------------------------------------------------------------
Increase in net assets derived from share transactions 368,266 61,593,374 998,211
- - -----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 40,436 63,683,244 1,050,126
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- - -----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 7,542,285 129,188,197 1,959,783
---------------------------------------------------------------------------------------------------------------
End of period+ $ 7,582,721 $ 192,871,441 $ 3,009,909
---------------------------------------------------------------------------------------------------------------
</TABLE>
+Includes undistributed (overdistributed) net investment income of $75,646,
$(56,682) and $22,577, respectively, as of April 30, 1996.
See Notes to Financial Statements.
18
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31, 1995
---------------------------------------------------------------------------------
Tax-Free Income Trusts
Limited Duration ---------------------------------------------
U.S. Government U.S. Government National California Florida
Increase (Decrease) in Net Assets Securities Trust Securities Trust Trust Trust Trust
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations Net investment income $ 25,896,015 $ 738,131 $ 2,149,808 $ 1,045,145 $ 580,743
--------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from
securities transactions (7,413,842) 6,770 (442,113) (513,573) (459,426)
--------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
of investments 20,127,195 244,345 4,435,878 1,756,569 1,134,275
--------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 38,609,368 989,246 6,143,573 2,288,141 1,255,592
- - ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
net investment income (25,762,868) (699,768) (2,221,895) (1,001,887) (546,268)
- - ------------------------------------------------------------------------------------------------------------------------------------
Share transactions (Note 6)
--------------------------------------------------------------------------------------------------------------------
Net proceeds from sales of shares 52,594,202 4,754,538 13,103,491 5,598,906 2,591,079
--------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to
shareholders in reinvestment of net
investment income 6,061,706 251,629 1,005,599 168,928 57,466
--------------------------------------------------------------------------------------------------------------------
Total 58,655,908 5,006,167 14,109,090 5,767,834 2,648,545
--------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (88,870,766) (8,131,970) (14,720,132) (9,835,251) (4,388,044)
--------------------------------------------------------------------------------------------------------------------
Decrease in net assets
derived from share transactions (30,214,858) (3,125,803) (611,042) (4,067,417) (1,739,499)
- - ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (17,368,358) (2,836,325) 3,310,636 (2,781,163) (1,030,175)
- - ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- - ------------------------------------------------------------------------------------------------------------------------------------
Beginning of year 343,543,882 14,666,196 39,199,735 19,553,333 11,346,414
--------------------------------------------------------------------------------------------------------------------
End of year+ $326,175,524 $11,829,871 $42,510,371 $16,772,170 $10,316,239
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes undistributed (overdistributed) net investment income of $311,582,
$81,851, $(112,525), $(17,080), $4,796 and $(5,058), respectively, as of
October 31, 1995.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Year Ended October 31, 1995
---------------------------
Tax-Free Income Trusts
---------------------------
Increase (Decrease in New York
Net Assets Trust
- - ----------------------------------------------------------------------
<S> <C>
Operations Net investment income $ 453,156
------------------------------------------------------
Net realized gain (loss) from
securities transactions (241,894)
------------------------------------------------------
Net unrealized appreciation
of investments 874,937
------------------------------------------------------
Net increase in net assets
resulting from operations 1,086,199
- - ----------------------------------------------------------------------
Distributions to shareholders from
net investment income (438,277)
- - ----------------------------------------------------------------------
Share transactions (Note 6)
------------------------------------------------------
Net proceeds from sales of shares 1,903,786
------------------------------------------------------
Net asset value of shares issued to
shareholders in reinvestment of net
investment income 166,120
------------------------------------------------------
Total 2,069,906
------------------------------------------------------
Cost of shares reacquired (2,148,692)
------------------------------------------------------
Decrease in net assets
derived from share transactions (78,786)
- - ----------------------------------------------------------------------
Total increase (decrease) in net assets 569,136
- - ----------------------------------------------------------------------
Net Assets
- - ----------------------------------------------------------------------
Beginning of year 8,368,602
------------------------------------------------------
End of year+ $ 8,937,738
- - ----------------------------------------------------------------------
+ Includes undistributed (overdistributed) net investment income of $311,582,
$81,851, $(112,525), $(17,080), $4,796 and $(5,058), respectively, as of
October 31, 1995.
See Notes to Financial Statements.
</TABLE>
19
<PAGE>
Financial Highlights
U.S. Government Securities Trust
<TABLE>
<CAPTION>
For the Period
6/1/93
Six Months Year Ended October 31, (Commencement
Ended ------------------------------- of Operations)
Per Share Operating Performance: 4/30/96 1995 1994 to 10/31/93
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.59 $ 4.41 $ 5.08 $ 5.00
- - ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
----------------------------------------------------------------------------------------------------------------------
Net investment income .167+ .352 .364 .149+
-----------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (.229) .178 (.6731) .082
-----------------------------------------------------------------------------------------------------------
Total from investment operations (.062) .530 (.3091) .231
----------------------------------------------------------------------------------------------------------------------
Distributions
----------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.168) (.350) (.3609) (.151)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.36 $ 4.59 $ 4.41 $ 5.08
- - ---------------------------------------------------------------------------------------------------------------------------------
Total Return (1.43)%+ 12.47% (6.25)% 4.65%+
- - ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- - ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 304,568 $ 326,176 $ 343,544 $ 267,740
-----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
-----------------------------------------------------------------------------------------------------------------------
Expenses .86%+ 1.73% 1.64% .71%+
------------------------------------------------------------------------------------------------------------
Net investment income 3.67%+ 8.59% 7.68% 2.68%+
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 404.66% 565.20% 995.50% 141.97%
- - ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+Not annualized.
See Notes to Financial Statements.
Financial Highlights
Limited Duration U.S. Government Securities Trust
<TABLE>
<CAPTION>
For the Period
1/3/94
Six Months (Commencement
Ended Year Ended of Operations) to
Per Share Operating Performance: 4/30/96 10/31/95 10/31/94
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 4.75 $ 4.64 $ 5.00
- - ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
----------------------------------------------------------------------------------------------------------------------
Net investment income .112+ .267 .210+
-----------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments (.150) .0941 (.3613)
-----------------------------------------------------------------------------------------------------------
Total from investment operations (.038) .3611 (.1513)
----------------------------------------------------------------------------------------------------------------------
Distributions
----------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.122) (.2511) (.2087)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.59 $ 4.75 $ 4.64
- - ---------------------------------------------------------------------------------------------------------------------------------
Total Return (.84)%+ 7.98% (3.04)%+
- - ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- - ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 9,767 $ 11,830 $ 14,666
-----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
----------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .90%+ 1.82% 1.31%+
-----------------------------------------------------------------------------------------------------------
Expenses, excluding waiver 1.02%+ 1.82% 1.52%+
-----------------------------------------------------------------------------------------------------------
Net investment income 2.36%+ 5.68% 4.33%+
-----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 190.62% 427.69% 630.52%
- - ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+Not annualized.
See Notes to Financial Statements.
20
<PAGE>
National Tax-Free Income Trust
California Tax-Free Income Trust
<TABLE>
<CAPTION>
Six Months Ended 4/30/96 Year Ended 10/31/95
---------------------------- --------------------------------
National California National California
Per Share Operating Performance: Trust Trust Trust Trust
- - -------------------------------------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.74 $ 4.53 $ 4.30 $ 4.23
- - -------------------------------------------------------------------------------------------------- --------------------------------
Income from investment operations
------------------------------------------------------------------------------------------ --------------------------------
Net investment income .120+ .119+ .239 .2419
------------------------------------------------------------------------------- --------------------------------
Net realized and unrealized
gain (loss) on investments (.044) (.115) .448 .2916
------------------------------------------------------------------------------- --------------------------------
Total from investment
operations .076 .004 .687 .5335
------------------------------------------------------------------------------------------ --------------------------------
Distributions
------------------------------------------------------------------------------------------ --------------------------------
Dividends from net investment income (.116) (.114) (.247) (.2335)
- - -------------------------------------------------------------------------------------------------- --------------------------------
Net asset value, end of period $ 4.70 $ 4.42 $ 4.74 $ 4.53
- - -------------------------------------------------------------------------------------------------- --------------------------------
Total Return 1.58%+ .05%+ 16.37% 12.92%
- - -------------------------------------------------------------------------------------------------- --------------------------------
Ratios/Supplemental Data:
- - -------------------------------------------------------------------------------------------------- --------------------------------
Net assets, end of period (000) $44,454 $16,631 $42,510 $16,772
------------------------------------------------------------------------------- --------------------------------
Ratios to Average Net Assets:
------------------------------------------------------------------------------------------ --------------------------------
Expenses, including waiver .61%+ .48%+ 1.33% .93%
------------------------------------------------------------------------------- --------------------------------
Expenses, excluding waiver .86%+ .86%+ 1.83% 1.67%
------------------------------------------------------------------------------- --------------------------------
Net investment income 2.48%+ 2.60%+ 5.27% 5.57%
------------------------------------------------------------------------------------------ --------------------------------
Portfolio turnover rate 110.60% 50.73% 166.94% 101.19%
- - -------------------------------------------------------------------------------------------------- --------------------------------
</TABLE>
+Not annualized.
See Notes to Financial Statements.
<PAGE>
Financial Highlights
National Tax-Free Income Trust
California Tax-Free Income Trust
<TABLE>
<CAPTION>
For the Period 10/1/93
(Commencement
of Operations)
Year Ended 10/31/94 to 10/31/93
---------------------------- -----------------------
National California National California
Per Share Operating Performance: Trust Trust Trust Trust
- - --------------------------------------------------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.99 $ 04.97 $ 5.00 $ 5.00
- - --------------------------------------------------------------------------------------------------- -----------------------
Income from investment operations
------------------------------------------------------------------------------------------- -----------------------
Net investment income .253 .273 .017+ .018+
-------------------------------------------------------------------------------- -----------------------
Net realized and unrealized
gain (loss) on investments (.6903) (.7603) (.0061) (.0271)
-------------------------------------------------------------------------------- -----------------------
Total from investment
operations (.4373) (.4873) .0109 (.0091)
-------------------------------------------------------------------------------- -----------------------
Distributions
------------------------------------------------------------------------------------------- -----------------------
Dividends from net investment income (.2527) (.2527) (.0209) (.0209)
- - --------------------------------------------------------------------------------------------------- -----------------------
Net asset value, end of period $ 4.30 $ 4.23 $ 4.99 $ 4.97
- - --------------------------------------------------------------------------------------------------- -----------------------
Total Return (9.02)% (10.07)% .35%+ .08%+
- - --------------------------------------------------------------------------------------------------- -----------------------
Ratios/Supplemental Data:
- - --------------------------------------------------------------------------------------------------- -----------------------
Net assets, end of period (000) $39,200 $19,553 $8,460 $3,721
-------------------------------------------------------------------------------- -----------------------
Ratios to Average Net Assets:
------------------------------------------------------------------------------------------- -----------------------
Expenses, including waiver .91% .99% .05%+ .04%+
-------------------------------------------------------------------------------- -----------------------
Expenses, excluding waiver 1.65% 1.79% .35%+ .60%+
-------------------------------------------------------------------------------- -----------------------
Net investment income 5.28% 5.07% .14%+ .16%+
-------------------------------------------------------------------------------- -----------------------
Portfolio turnover rate 381.17% 159.44% .00% .00%
- - --------------------------------------------------------------------------------------------------- -----------------------
</TABLE>
+Not annualized.
See Notes to Financial Statements.
Financial Highlights
Florida Tax-Free Income Trust
New York Tax-Free Income Trust
<TABLE>
<CAPTION>
Six Months Ended 4/30/96 Year Ended 10/31/95
------------------------- ---------------------------
Florida New York Florida New York
Per Share Operating Performance: Trust Trust Trust Trust
- - -------------------------------------------------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.60 $ 4.66 $ 4.28 $ 4.30
- - -------------------------------------------------------------------------------------------- ----------------------------
Income from investment operations
------------------------------------------------------------------------------------ -----------------------------
Net investment income .107+ .118+ .2465 .2407
------------------------------------------------------------------------- -----------------------------
Net realized and unrealized
gain (loss) on investments (.104) (.094) .3067 .3524
------------------------------------------------------------------------- -----------------------------
Total from investment operations .003 .024 .5532 .5931
------------------------------------------------------------------------- -----------------------------
Distributions
------------------------------------------------------------------------------------ -----------------------------
Dividends from net investment income (.113) (.114) (.2332) (.2331)
------------------------------------------------------------------------- -----------------------------
Net asset value, end of period $ 4.49 $ 4.57 $ 4.60 $ 4.66
- - -------------------------------------------------------------------------------------------- -----------------------------
Total Return .03%+ .49%+ 13.24% 14.12%
- - -------------------------------------------------------------------------------------------- -----------------------------
Ratios/Supplemental Data:
- - -------------------------------------------------------------------------------------------- -----------------------------
Net assets, end of period (000) $9,916 $7,977 $10,316 $8,938
------------------------------------------------------------------------- -----------------------------
Ratios to Average Net Assets:
------------------------------------------------------------------------------------ -----------------------------
Expenses, including waiver .68%+ .49%+ .94% .92%
------------------------------------------------------------------------- -----------------------------
Expenses, excluding waiver .93%+ .94%+ 1.78% 1.83%
------------------------------------------------------------------------- -----------------------------
Net investment income 2.32%+ 2.53%+ 5.60% 5.38%
------------------------------------------------------------------------- -----------------------------
Portfolio turnover rate 64.87% 37.38% 153.84% 124.95%
- - -------------------------------------------------------------------------------------------- -----------------------------
</TABLE>
+Not annualized.
See Notes to Financial Statements.
Financial Highlights
Florida Tax-Free Income Trust
New York Tax-Free Income Trust
<TABLE>
<CAPTION>
For the Period 10/1/93
(Commencement
of Operations)
Year Ended 10/31/94 to 10/31/93
------------------------ ---------------------
Florida New York Florida New York
Per Share Operating Performance: Trust Trust Trust Trust
- - ----------------------------------------------------------------------------------------------- ---------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.99 $ 5.00 $ 5.00 $ 5.00
- - ----------------------------------------------------------------------------------------------- ---------------------
Income from investment operations
--------------------------------------------------------------------------------------- ---------------------
Net investment income .246 .246 .017+ .018+
---------------------------------------------------------------------------- ---------------------
Net realized and unrealized
gain (loss) on investments (.7045) (.6933) (.0061) .0029
---------------------------------------------------------------------------- ---------------------
Total from investment operations (.4585) (.4473) .0109 .0209
---------------------------------------------------------------------------- ---------------------
Distributions
--------------------------------------------------------------------------------------- ---------------------
Dividends from net investment income (.2515) (.2527) (.0209) (.0209)
---------------------------------------------------------------------------- ---------------------
Net asset value, end of period 4.28 $ 4.30 $ 4.99 $ 5.00
- - ----------------------------------------------------------------------------------------------- ---------------------
Total Return (9.44)% (9.19)% .22%+ .55%+
- - ----------------------------------------------------------------------------------------------- ---------------------
Ratios/Supplemental Data:
- - ----------------------------------------------------------------------------------------------- ---------------------
Net assets, end of period (000) $11,346 $8,369 $2,427 $2,488
---------------------------------------------------------------------------- ---------------------
Ratios to Average Net Assets:
--------------------------------------------------------------------------------------- ---------------------
Expenses, including waiver .89% .84% .04%+ .05%+
---------------------------------------------------------------------------- ---------------------
Expenses, excluding waiver 1.88% 1.79% .82%+ .81%+
---------------------------------------------------------------------------- ---------------------
Net investment income 5.07% 5.16% .13%+ .18%+
---------------------------------------------------------------------------- ---------------------
Portfolio turnover rate 224.59% 200.13% .00% .00%
- - ----------------------------------------------------------------------------------------------- ---------------------
</TABLE>
+Not annualized.
See Notes to Financial Statements.
21
<PAGE>
Financial Highlights
Global Income Trust
Bond-Debenture Trust
Balanced Trust
<TABLE>
<CAPTION>
Six Months Ended 4/30/96 Year Ended 10/31/95
------------------------------------------------------------------
Global Bond- Global Bond-
Income Debenture Balanced Income Debenture
Per Share Operating Performance: Trust Trust Trust Trust Trust
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.84 $4.76 $11.34 $ 4.60 $4.65
- - -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
- - -----------------------------------------------------------------------------------------------------------------------------------
Net investment income .118+ .197+ .223+ .318 .40
----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on securities
and foreign currency holdings (.095) .075 .548 .257 .13
----------------------------------------------------------------------------------------------------------------
Total from investment
operations .023 .272 .771 .575 .53
- - -----------------------------------------------------------------------------------------------------------------------------------
Distributions
----------------------------------------------------------------------------------------------------------------
Dividends from net
investment income (.163) (.192) (.231) (.335) (.42)
----------------------------------------------------------------------------------------------------------------
Distribution from net
realized gain - - (.20) - -
----------------------------------------------------------------------------------------------------------------
Special distribution from foreign
currency transactions (.06) - - - -
- - -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.64 $4.84 $11.68 $ 4.84 $4.76
- - -----------------------------------------------------------------------------------------------------------------------------------
Total Return .41%+ 5.81%+ 6.85%+ 12.92% 11.84%
- - -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- - ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $7,583 $192,871 $3,010 $7,542 $129,188
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
----------------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .77%+ .77%+ .43%+ 1.05% 1.67%
-----------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver 1.02%+ .77%+ .73%+ 2.07% 1.67%
-----------------------------------------------------------------------------------------------------------------
Net investment income 2.38%+ 3.95%+ 1.87%+ 6.70% 8.11%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 281.83% 52.47% 123.49% 805.46% 100.08%
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Not annualized.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
For the Period 1/3/94
For the Period (Commencement
12/27/94 of Operations)
(Commencement to 10-31-94
of Operations) -----------------------------
to 10-31-95 Global Bond-
--------------- Income Debenture
Per Share Operating Performance: Balanced Trust Trust Trust
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.00 $ 5.00 $ 5.00
---------------------------------------------------------------------------------------------------
Income from investment operations
----------------------------------------------------------------------------------------
Net investment income .38+ .276+ .294+
----------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on securities
and foreign currency holdings 1.24 (.3763) (.364)
- - -----------------------------------------------------------------------------------------------------------
Total from investment
operations 1.62 (.1003) (.070)
- - -----------------------------------------------------------------------------------------------------------
Distributions
----------------------------------------------------------------------------------------
Dividends from net
investment income (.28) (.2997) (.28)
----------------------------------------------------------------------------------------
Distribution from net
realized gain - - -
----------------------------------------------------------------------------------------
Special distribution from foreign
currency transactions - - -
- - ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.34 $ 4.60 $ 4.65
- - ------------------------------------------------------------------------------------------------------------
Total Return 16.62%+ (1.90)%+ (1.38)%+
- - ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- - ------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $1,960 $6,710 $58,743
-----------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- - ------------------------------------------------------------------------------------------------------------
Expenses, including waiver .22%+ 1.09%+ 1.23%+
-----------------------------------------------------------------------------------------
Expenses, excluding waiver 1.85%+ 1.69%+ 1.43%+
-----------------------------------------------------------------------------------------
Net investment income 3.78%+ 5.58%+ 6.70%+
------------------------------------------------------------------------------------------
Portfolio turnover rate 166.53% 1,348.68% 52.34%
- - -------------------------------------------------------------------------------------------------------------
</TABLE>
+ Not Annualized.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES The Company was organized as a Delaware
business trust on February 26, 1993, and is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
Effective December 22, 1994, Lord Abbett Balanced Trust was added and the
Company received a capital contribution of $1,000 and issued 100 shares of the
Balanced Trust to the partners of Lord, Abbett & Co.
The following is a summary of significant accounting policies consistently
followed by the Company. The policies are in conformity with generally accepted
accounting principles. (a) Market value is determined as follows: Securities
listed or admitted to trading privileges on any securities exchange are valued
at the last sales price on the exchange on which such securities are traded, as
of the close of business on the day the securities are being valued or, lacking
any sales, at the latest price on the basis of current quotations from dealers
(as in the case of bonds), from valuations furnished by an independent pricing
service or, in their absence, fair value as determined under procedures approved
by the Board of Trustees. (b) Transactions denominated in foreign currencies are
recorded in the Company's records at the rate prevailing when earned or
incurred. Asset and liability accounts that are denominated in foreign
currencies are adjusted to reflect current exchange rates. (c) It is the policy
of the Company to meet the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income in
taxable distributions. Therefore, no federal income tax provision is required.
(d) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date and interest is recorded on
the accrual basis. Discounts on strips are accrued to maturity using the
constant yield method. The Trusts have elected not to amortize premiums on
taxable bonds, which is consistent with the treatment for federal income tax
purposes. (e) The organization expenses of each Trust of the Company are
amortized evenly over a period of five years from their respective commencements
of operations. (f) With respect to the Bond-Debenture Trust and Balanced Trust,
a portion of the proceeds from sales and costs of repurchases of shares,
equivalent to the amount of distributable net investment income on the date of
the transaction, is credited or charged to undistributed income. Undistributed
net investment income per share thus is unaffected by sales or repurchases of
shares. (g) The Global Income Trust enters into forward currency contracts in
order to hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. A forward contract is a commitment to purchase or
sell a foreign currency at a future date (usually the security transaction
settlement date) at a negotiated forward rate. The contracts are valued daily at
22
<PAGE>
Notes to Financial Statements
current exchange rates and any unrealized gain or loss is included in net
unrealized appreciation or depreciation of investments and foreign currency
holdings. The gain or loss, if any, arising from the difference between the
settlement value of the forward contract and the closing of such contract is
included in net realized gain or loss from security and foreign currency
transactions. Risks may arise as a result of the potential inability of the
counterparties to meet the terms of their contracts.
2. REPURCHASE AGREEMENTS The Company may enter into repurchase agreements with
certain banks and broker/dealers whereby the Company, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100% of the resale
price.
3. INVESTMENT GRADES INVESTMENT-GRADE corporate bonds consist of securities
rated within one of the four highest ratings determined either by Moody's
Investors Service, Inc. or Standard & Poor's Corporation. Lower rated straight
debt consists of securities rated lower than the four highest ratings or that
have not been rated.
4. DISTRIBUTIONS DIVIDENDS from net investment income are declared daily and
paid monthly, except for the Bond-Debenture Trust which is declared quarterly
and paid monthly. Taxable net realized gains from security transactions, and
foreign currency transactions, if any, will be distributed to shareholders in
December 1996. At April 30, 1996, accumulated net realized (loss) gain for
financial reporting purposes, which is substantially the same as for federal
income tax purposes, aggregated $(47,289,142) for the U.S. Government Securities
Trust, $(707,640) for the Limited Duration U.S. Government Securities Trust,
$(2,491,553) for the National Tax-Free Income Trust, $(2,180,779) for the
California Tax-Free Income Trust, $(1,293,426) for the Florida Tax-Free Income
Trust, $(794,990) for the New York Tax-Free Income Trust, $(307,810) for the
Global Income Trust, $(88,197) for the Bond-Debenture Trust and $61,989 for the
Balanced Trust. The losses incurred through the fiscal year ended October 31,
1995 will expire in the year 2002. Income and capital gains dis tributions are
determined in accordance with income tax regulations which may differ from
methods used to determine the corresponding income and capital gains amounts in
accordance with generally accepted accounting principles. These differences are
primarily caused by differences in the timing of recognition of certain
components of income, expenses or capital gains and losses. Where such
differences are permanent in nature, they are reclassified based upon their
ultimate characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations or
net asset values of the funds.
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Lord, Abbett & Co.
received a management fee of $820,053 from the U.S. Government Securities
Trust, $15,702 from the Limited Duration U.S. Government Securities Trust,
$371,713 from the Bond-Debenture Trust and $1,872 from the Balanced Trust for
which it provided the Company with investment management services and executive
and other personnel, paid the remuneration of officers, provided office space
and paid for ordinary and necessary office and clerical expenses relating to
research, statistical work and the supervision of the investment portfolios.
On March 19, 1996, Edinburgh Fund Managers Group plc ("Edinburgh") acquired
all of the ordinary share capital of DFM Holdings Limited ("DFM Holdings") which
holds 100% of the ordinary share capital of Dunedin Fund Managers Limited
("Dunedin"). Prior to such acquisition, Dunedin had served as the Company's
sub-investment manager under a sub-investment management agreement between Lord
Abbett and Dunedin with respect to the Global Income Trust. As required by the
Investment Company Act of 1940, as amended, this Agreement was terminated as a
result of the change in control of Dunedin caused by such acquisition.
At a meeting of the Board of Directors of the Trust held on March 14, 1996 the
directors of the Company, unanimously determined that, in view of Lord Abbett's
anticipated capability with respect to foreign debt investments, a
sub-investment adviser was no longer desirable with respect to the Global Income
Trust, and so Lord Abbett will continue as the investment manager of the Global
Income Trust under the Management Agreement, without the assistance of a
sub-adviser.
Lord Abbett paid for the cost of Dunedin's services through March 19, 1996.
From January 1, 1996 to April 30, 1996, Lord, Abbett & Co. waived $13,424 in
Limited Duration U.S.Government Securities Trust management fees. For the six
months ended April 30, 1996, Lord, Abbett & Co. waived $110,887 in National
Tax-Free Income Trust management fees. With respect to the California Tax-Free
Income Trust, Lord, Abbett & Co. waived $42,270 in management fees and assumed
$20,891 of other expenses. With respect to the Florida Tax-Free Income Trust,
Lord, Abbett & Co. waived $25,474 in management fees. With respect to the New
York Tax-Free Income Trust, Lord, Abbett & Co. waived $22,127 in management fees
and assumed $17,660 of other expenses. With respect to the Global Income Trust,
Lord, Abbett &Co. waived $19,014 in management fees. For the six months ended
April 30, 1996, Lord, Abbett & Co. waived $7,566 of the Balanced Trust
management fees and assumed $10,128 of other expenses. The management fee is
based on average daily net assets for each month at the annual rate of .50 of 1%
for each of the above-mentioned Trusts, except for the Balanced Trust, which has
a management fee of .75 of 1% of average daily net assets. Lord, Abbett & Co.
may waive its management fees and pay or reimburse the Company for certain of
its other expenses. Any such expenses paid are subject to repayment by each
Trust, pursuant to a formula based on the asset size and expense ratio of each
Trust. Each Trust shall not be obligated to repay Lord, Abbett & Co. after five
full fiscal years after the commencement of the repayment formula or the
termination of the Management Agreement, whichever is earlier.
Each Trust of the Company has adopted a distribution plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940 which authorizes
the payment of fees to dealers in order to provide additional incentives for
them (a) to maintain Trust shareholder accounts and/or to provide Trust
shareholders with per sonal services, including shareholder liaison services,
such as responding to customer inquiries and providing information on their
investments and (b) to sell shares of the Trusts. Under the Plan, the Trusts pay
dealers through Lord, Abbett & Co. (1) a service fee and a distribution fee, at
the time shares are sold, not to exceed .25% and .75%, respectively, of the net
asset value of such shares and (2) at each quarter-end after the first
anniversary of the sale of such shares, fees for services and distribution at
annual rates not to exceed .25% and .75%, respectively, of the average annual
net asset value of shares outstanding (payments with respect to shares not
outstanding during the full quarter to be prorated). Lord, Abbett & Co. may
retain from the quarterly distribution fee, for payment of distribution expenses
incurred directly by it, an amount not to exceed .10% of the average annual net
asset value of such shares outstanding.
Certain of the Company's officers and trustees have an interest in Lord, Abbett
& Co.
23
<PAGE>
Notes to Financial Statements
6. Share Transactions
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended April 30, 1996
-----------------------------------------------------------------------------------
Tax-Free Income Trusts
Limited Duration ---------------------------------------------
U.S. Government U.S. Government National California Florida New York
Securities Trust Securities Trust Trust Trust Trust Trust
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 6,176,441 172,045 1,350,861 480,599 131,573 64,920
- - -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in reinvestment
of net investment income 1,977,127 45,370 139,790 49,636 20,027 21,426
- - -----------------------------------------------------------------------------------------------------------------------------------
Total 8,153,568 217,415 1,490,651 530,235 151,600 86,346
- - -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (9,435,657) (584,251) (1,000,015) (470,702) (184,924) (261,186)
- - -----------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in shares (1,282,089) (366,836) 490,636 59,533 (33,324) (174,840)
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31, 1995
----------------------------------------------------------------------------------------
Tax-Free Income Trusts
Limited Duration --------------------------------------------------
U.S. Government U.S. Government National California Florida New York
Securities Trust Securities Trust Trust Trust Trust Trust
- - -------------------------------------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 11,691,353 1,023,334 2,930,633 1,274,219 586,537 426,104
- - -------------------------------------------------------------------------------- --------------------------------------------------
Shares issued to shareholders in reinvestment
of net investment income 1,351,152 53,696 221,689 38,720 12,982 37,140
- - -------------------------------------------------------------------------------- --------------------------------------------------
Total 13,042,505 1,077,030 3,152,322 1,312,939 599,519 463,244
- - -------------------------------------------------------------------------------- --------------------------------------------------
Shares reacquired (19,832,283) (1,745,894) (3,298,880) (2,233,868) (1,005,511) (490,607)
- - -------------------------------------------------------------------------------- --------------------------------------------------
Decrease in shares (6,789,778) (668,864) (146,558) (920,929) (405,992) (27,363)
- - -------------------------------------------------------------------------------- --------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
For the Period
Six Months Ended Year Ended 12/27/94
April 30, 1996 October 31, 1995 (Commencement
- - -------------------------------------------------------------------------------- -------------------------------- of Operations)
Global Bond- Global Bond- to 20/31/95
Income Debenture Balanced Income Debenture ----------------
Trust Trust Trust Trust Trust Balanced Trust
- - -------------------------------------------------------------------------------- -------------------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 262,677 14,126,065 78,994 696,918 16,417,604 169,376
- - -------------------------------------------------------------------------------- -------------------------------- -----------------
Shares issued to shareholders in
reinvestment of net investment income
and realized gain from securities
and foreign currency transactions 49,619 728,257 6,463 34,959 464,791 3,734
- - -------------------------------------------------------------------------------- -------------------------------- -----------------
Total 312,296 14,854,322 85,457 731,877 16,882,395 173,110
- - -------------------------------------------------------------------------------- -------------------------------- -----------------
Shares reacquired (235,188) (2,124,578) (428) (631,855) (2,398,499) (458)
- - -------------------------------------------------------------------------------- -------------------------------- -----------------
Increase in shares 77,108 12,729,744 85,029 100,022 14,483,896 172,652
- - -------------------------------------------------------------------------------- -------------------------------- -----------------
</TABLE>
24
<PAGE>
7. CAPITAL PAID IN
At April 30, 1996, capital paid in aggregated $358,445,212 for the U.S.
Government Securities Trust, $10,598,067 for the Limited Duration U.S.
Government Securities Trust, $44,671,439 for the National Tax-Free Income Trust,
$18,716,970 for the California Tax-Free Income Trust, $11,155,164 for the
Florida Tax-Free Income Trust, $8,754,115 for the New York Tax-Free Income
Trust, $7,942,048 for the Global Income Trust, $191,121,358 for the
Bond-Debenture Trust and $2,768,080 for the Balanced Trust.
8. PURCHASES AND SALES OF SECURITIES
(a) Purchases and sales of investment securities (other than short-term
investments) were as follows:
<TABLE>
<CAPTION>
Series Purchases Sales
- - --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Securities Trust $1,475,837,424 $1,438,038,237
- - --------------------------------------------------------------------------------
Limited Duration
U.S. Government Securities Trust $ 20,400,765 $ 22,108,604
- - --------------------------------------------------------------------------------
National Tax-Free Income Trust $ 49,434,910 $ 49,958,998
- - --------------------------------------------------------------------------------
California Tax-Free Income Trust $ 8,921,459 $ 8,400,754
- - --------------------------------------------------------------------------------
Florida Tax-Free Income Trust $ 6,487,403 $ 6,550,681
- - --------------------------------------------------------------------------------
New York Tax-Free Income Trust $ 3,245,477 $ 3,798,040
- - --------------------------------------------------------------------------------
Global Income Trust $ 21,327,206 $ 20,659,184
- - --------------------------------------------------------------------------------
Bond-Debenture Trust $ 138,902,135 $ 85,750,092
- - --------------------------------------------------------------------------------
Balanced Trust $ 3,990,686 $ 2,970,699
- - --------------------------------------------------------------------------------
Security gains and losses are computed on the identified cost basis.
As of April 30, 1996, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were as follows:
<CAPTION>
Unrealized Unrealized
Series Appreciation Depreciation
- - --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Securities Trust $ 819,434 $7,680,758
- - --------------------------------------------------------------------------------
Limited Duration U.S. Government
Securities Trust $ 9,192 $ 187,682
- - --------------------------------------------------------------------------------
National Tax-Free Income Trust $ 874,661 $ 515,802
- - --------------------------------------------------------------------------------
California Tax-Free Income Trust $ 418,252 $ 324,390
- - --------------------------------------------------------------------------------
Florida Tax-Free Income Trust $ 266,811 $ 204,570
- - --------------------------------------------------------------------------------
New York Tax-Free Income Trust $ 173,316 $ 157,942
- - --------------------------------------------------------------------------------
Global Income Trust $ 17,660 $ 190,747
- - --------------------------------------------------------------------------------
Bond-Debenture Trust $5,831,808 $3,936,846
- - --------------------------------------------------------------------------------
Balanced Trust $ 200,861 $ 43,598
- - --------------------------------------------------------------------------------
</TABLE>
The cost of investments for federal income tax purposes is substantially the
same as that used for financial statement purposes.
(b) At April 30, 1996, the Global Income Trust had outstanding forward currency
contracts to sell and buy foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Sell Contracts Receivable Value Appreciation
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
Deutsche Marks
expiring 5/23/96 $ 870,000 $ 830,552 $39,448
- - --------------------------------------------------------------------------------
French Francs
expiring 5/23/96 $ 690,000 $ 674,915 $15,085
- - --------------------------------------------------------------------------------
Total $1,560,000 $1,505,467 $54,533
- - --------------------------------------------------------------------------------
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Buy Contracts Payable Value Depreciation
- - --------------------------------------------------------------------------------
<S> <C> <C> <C>
Deutsche Marks
expiring 5/23/96 $196,082 $189,358 $6,724
- - --------------------------------------------------------------------------------
French Francs
expiring 5/23/96 $101,951 $100,066 $1,885
- - --------------------------------------------------------------------------------
Total $298,033 $289,424 $8,609
- - --------------------------------------------------------------------------------
</TABLE>
9. TRUSTEES' REMUNERATION
The Trustees of the Company associated with Lord, Abbett & Co. and all officers
of the Company receive no compensation from the Company for acting as such.
Outside Trustees' fees, including attendance fees for board and committee
meetings, and outside Trustees' retirement costs, are allocated among all funds
in the Lord Abbett group based on net assets of each fund. The direct
remuneration accrued during the period for outside Trustees of the Company as a
group was $5,162 (exclusive of expenses), a portion of which has been deemed
invested in shares of the Company under a deferred compensation plan
contemplating future payment of the value of those shares. As of April 30, 1996,
the aggregate amount in Trustees' accounts maintained under the plan was
$14,823. Retirement costs accrued during the period amounted to $3,252.
Copyright (C) 1996 by Lord Abbett Securities Trust, 767 Fifth Avenue, New York,
NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Securities Trust, is to be distributed only if preceded or
accompanied by a current prospectus which includes information concerning each
Trust's investment objective and policies and other matters. There is no
guarantee that the forecasts contained within this publication will come to
pass.
All rights reserved. Printed in the U.S.A.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
OUR MANAGEMENT
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Board of Trustees Officers Investment Manager and
Underwriter
Ronald P. Lynch Ronald P. Lynch, Chairman
Robert S. Dow Robert S. Dow, President Lord, Abbett & Co.
E. Thayer Bigelow*+ David Seto, Executive Vice The General Motors Building
Stewart S. Dixon* President 767 Fifth Avenue
John C. Jansing* Kenneth B. Cutler, Vice President New York, NY 10153-0203
C. Alan MacDonald*+ and Secretary 212-848-1800
Hansel B. Millican, Jr.*+ Stephen I. Allen, Vice President
Thomas J. Neff* Daniel E. Carper, Vice President
*Outside Trustee Thomas S. Henderson, Vice President
+Audit Committee Robert G. Morris, Vice President
E. Wayne Nordberg, Vice President
John J. Walsh, Vice President
John J. Gargana, Jr., Vice President
Paul A. Hilstad, Vice President
and Assistant Secretary
Thomas F. Konop, Vice President
and Assistant Secretary
Victor W. Pizzolato, Vice President
Keith F. O'Connor, Treasurer Numbers to Keep Handy
Joseph Van Dyke, Assistant
Treasurer For Literature: 800-874-3733
Lydia Guzman, Assistant For Account Information: 800-821-5129
Secretary For Fund Information: 800-426-1130
Robert M. Hickey, Assistant
Secretary
A. Edward Oberhaus III, Assistant
Secretary
</TABLE>
[LOGO] LORD, ABBETT & Co.
Investment Management
A Tradition of Performance Through Disciplined Investing
LST-3-496
The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 (6/96)
<PAGE>
<PAGE>
LORD ABBETT SECURITIES TRUST
Growth & Income Trust
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 1996
An investment designed
to help you capture
capital growth over the
long term
[LOGO]
<PAGE>
REPORT TO SHAREHOLDERS
For the Six Months Ended April 30, 1996
[PHOTO]
Ronald P. Lynch
Chairman
[PHOTO]
Robert S. Dow
President
June 20, 1996
- - --------------------------------------------------------------------------------
We would like to thank all shareholders who voted their proxy ballots. We
are pleased to announce that, on June 19, 1996, shareholders approved all the
proposals recommended by your Board of Trustees.
- - --------------------------------------------------------------------------------
Lord Abbett Securities Trust -- Growth & Income Trust completed the first half
of its fiscal year on April 30, 1996 with a net asset value of $6.71 versus
$6.00 six months ago. The latter figure has been adjusted for capital gains
distributions totaling $.04 per share paid last November. Including the
reinvestment of two quarterly dividends (that totaled $.06) and the capital
gains distributions, the Growth & Income Trust produced a total return of 12.9%
over the six-month period.
Over the past six months, stock market averages remained near all-time highs,
despite weakness in bond markets. The weakness in the latter can best be
attributed to a reversal in investor expectations. Moderate economic growth and
low inflation paved the way for the Federal Reserve to make modest reductions in
short-term lending rates in December and January. Many investors anticipated
that additional reductions would be forthcoming. As it became clear there would
be no further, near-term action by the Federal Reserve, and as the prospects for
legislation requiring a balanced federal budget diminished, investor
disappointment set in, causing long-term bond rates to rise sharply in March and
April.
We remain broadly positive in our outlook for the stock market. The U.S. economy
has not changed dramatically over these six months: economic growth remains
modest and inflation does not appear to be a big threat. It is becoming
increasingly clear that the U.S. economy is in the midst of a modest recovery.
We forecast the economy will grow at a rate averaging about 2 1/4% in 1996, with
inflation around 3%. Against this backdrop, it is likely the Federal Reserve
will remain neutral for the remainder of the year. Accordingly, we are
optimistic that the bond markets will stabilize over the next three to six
months and yields on long-term Government bonds should decline toward 6 1/2% -
6 1/4%. These factors should benefit the stock market.
Over the last six months, we maintained a modestly below-average exposure (when
compared to the S&P 500) to cyclical stocks (companies whose stock tends to rise
when the economy is expanding and fall when the economy turns down). We slightly
increased our holdings of technology stocks which experienced a price drop late
in 1995. Finally, the unexpected rise of long-term interest rates late in the
period allowed us to increase our holdings of stocks of financial companies at
what we believe are attractive prices. With 1996's corporate earnings expected
to be little changed from last year's, and with few areas in the market
representing broadly compelling value, your Fund's performance will be driven by
individual stock selection.
Shareholders should understand that the consistently high market returns over
the last 18 months are well above the market's long-term trend, and are not
sustainable. We are confident, however, that our disciplined, value investment
style should help shareholders earn competitive returns while reducing
volatility.
We are pleased that Lord Abbett Securities Trust - Growth & Income Trust is a
part of your investment portfolio and thank you for the confidence and trust you
have placed in us.
<PAGE>
FUND FACTS
LORD ABBETT GROWTH & INCOME TRUST -- A STRONG PERFORMER
AVERAGE ANNUAL TOTAL RETURN(1) AS OF 4/30/96:
[GRAPH APPEARS HERE]
1 YEAR LIFE OF FUND(2)
------ ---------------
25.2% 16.0%
(1)Reflects the percent change in net asset value, which includes the
reinvestment of all distributions.
(2)The Fund commenced operations on 1/3/94.
Average annual total returns for the periods ended 3/31/96, with all
distributions reinvested:
1 YEAR: 27.4%
LIFE OF FUND: 16.4%
Past performance is not an indication of future results. 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.
IMPORTANT INFORMATION
Results quoted herein reflect appropriate Rule 12b-1 Plan expenses from
commencement of the Plan. Tax consequences are not reflected. If used as
sales material after 6/30/96, this report must be accompanied by Lord
Abbett's Performance Quarterly for the most recently completed calendar
quarter.
It is the intent of the Trust to issue additional classes of shares,
with distinct pricing options, in July 1996. For a full discussion of
the differences in pricing alternatives, please call 800-874-3733 and
ask for the Trust's July 15, 1996 prospectus.
<PAGE>
STATEMENT OF NET ASSETS April 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET VALUE
SECURITY SHARES (NOTE 1a)
- - ---------------------------------------------------------------------------------------------
INVESTMENTS IN COMMON STOCKS 94.45%
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aerospace 1.20% Boeing Co. 8,400 $ 689,850
----------------------- ------ -----------
Airlines .48% British Airways plc ADR 3,500 273,875
----------------------- ------ -----------
Apparel 1.01% VF Corp. 10,100 575,700
----------------------- ------ -----------
Auto Parts Genuine Parts Company 31,100 1,376,175
4.00% Snap-On, Inc. 11,400 547,200
TRW Inc. 3,900 366,113
Total 2,289,488
----------------------- ------ -----------
Automobiles Ford Motor Co. 15,600 559,650
2.93% General Motors Corp. 20,600 1,117,550
Total 1,677,200
----------------------- ------ -----------
Banks: Chase Manhattan Corp. 12,400 $ 854,050
Money Center First Chicago NBD 17,745 731,980
2.77% Total 1,586,030
----------------------- ------ -----------
Banks: Bank of Boston Corp. 10,200 493,425
Regional BankAmerica Corp. 9,400 712,050
4.40% Comerica Inc. 13,100 569,850
First Union Corp. 12,100 744,150
Total 2,519,475
----------------------- ------ -----------
Chemicals Dow Chemical Co. 10,500 933,188
2.88% Union Carbide Corp. 15,700 714,350
Total 1,647,538
----------------------- ------ -----------
</TABLE>
<PAGE>
STATEMENT OF NET ASSETS April 30, 1996
Number of Market Value
Security Shares (Note 1a)
- - --------------------------------------------------------------------------------
Data Processing Hewlett-Packard Co. 10,700 1,132,863
Equipment Seagate Technology Inc. 10,300 597,400
3.02% Total 1,730,263
- - --------------------------------------------------------------------------------
Data Processing General Motors Corp.
Services (Electronic Data Systems)
1.60% Class E 16,210 913,834
- - --------------------------------------------------------------------------------
Drugs/Health Baxter International Inc. 7,500 331,875
Care Products Lilly, Eli & Co. 7,000 413,000
7.29% Merck & Co., Inc. 8,000 484,000
SmithKline Beecham
plc ADR 18,000 972,000
Tambrands Inc. 18,600 890,475
Warner-Lambert Co. 9,700 1,083,975
Total 4,175,325
- - --------------------------------------------------------------------------------
Electric Power American Electric
5.54% Power Co., Inc. 12,000 487,500
Baltimore Gas &
Electric Co. 29,200 770,150
Central & South West
Corp. 19,300 525,925
CINergy Corp. 22,900 664,100
DTE Energy 23,300 722,300
Total 3,169,975
- - --------------------------------------------------------------------------------
Electrical
Equipment 2.89% Emerson Electric Co. 19,800 1,655,775
- - --------------------------------------------------------------------------------
Electronics:
Communications
.36% Harris Corp. 3,300 203,775
- - --------------------------------------------------------------------------------
Electronics:
Components 1.57% AMP Inc. 20,100 899,475
- - --------------------------------------------------------------------------------
Electronics:
Equipment .37% Perkin-Elmer Corp. 3,900 214,012
- - --------------------------------------------------------------------------------
Financial:
Miscellaneous
1.27% Transamerica Corp. 9,600 729,600
- - --------------------------------------------------------------------------------
Food Conagra Inc. 16,470 636,154
4.47% Hershey Foods Corp. 12,600 956,025
Sara Lee Corp. 4,000 124,000
Supervalu Inc. 26,300 841,600
Total 2,557,779
- - --------------------------------------------------------------------------------
Hotel/Motel Patriot American 17,900 498,962
1.70% Hospitality, Inc.
Real Estate Investment Trust
Starwood Lodging Trust
Real Estate Investment Trust 14,400 477,000
Total 975,962
- - --------------------------------------------------------------------------------
Insurance Aetna Life & Casualty Co. 16,150 1,150,688
6.97% Chubb Corp. 7,900 747,537
CIGNA Corp. 7,600 861,650
SAFECO Corp. 20,100 663,300
The Progressive Corporation 12,200 568,825
Total 3,992,000
- - --------------------------------------------------------------------------------
Machinery: Deere & Co. 23,800 $ 925,225
Diversified Goulds Pumps, Inc. 13,600 316,200
2.17% Total 1,241,425
- - --------------------------------------------------------------------------------
Miscellaneous Minnesota Mining &
1.75% Mfg. Co. 5,500 361,625
Moore Corp. Ltd. 6,000 109,500
National Service
Industries, Inc. 14,400 532,800
Total 1,003,925
- - --------------------------------------------------------------------------------
Natural Gas
Transmission
1.51% The Coastal Corporation 21,800 863,825
- - --------------------------------------------------------------------------------
Oil: Domestic
1.26% Amoco Corp. 9,900 722,700
- - --------------------------------------------------------------------------------
Oil: Chevron Corp. 13,600 788,800
International Exxon Corp. 5,900 501,500
3.56% Mobil Corp. 6,500 747,500
Total 2,037,800
- - --------------------------------------------------------------------------------
Paper and International Paper Co. 11,750 468,531
Forest Products James River Corp. 27,100 724,925
5.18% Kimberly Clark Corp. 16,590 1,204,849
Schweitzer-Mauduit 490 13,290
Westvaco Corporation 17,900 554,900
Total 2,966,495
- - --------------------------------------------------------------------------------
Printing and Deluxe Corp. 17,300 605,500
Publishing Donnelley, R.R. & Sons Co. 16,800 604,800
3.02% Gannett Co., Inc. 7,600 519,650
Total 1,729,950
- - --------------------------------------------------------------------------------
Railroads Canadian National Railway
.21% (Partially Paid) 6,300 119,700
- - --------------------------------------------------------------------------------
Restaurants .98% Brinker International Inc. 32,000 560,000
- - --------------------------------------------------------------------------------
Retail Dayton Hudson Corp. 5,050 482,275
1.77% Sears, Roebuck & Co. 10,700 533,663
Total 1,015,938
- - --------------------------------------------------------------------------------
Savings Ahmanson, H.F. & Co. 39,600 940,500
and Loan Great Western
3.45% Financial Corp. 45,100 1,037,300
Total 1,977,800
- - --------------------------------------------------------------------------------
Telecommu- AT&T Corp. 20,900 1,280,125
nications MCI Communications
5.20% Corp. 57,700 1,698,544
Total 2,978,669
---------------------------------------------------------
<PAGE>
STATEMENT OF NET ASSETS April 30, 1996
Number of Market Value
Security Shares (Note 1a)
- - --------------------------------------------------------------------------------
Tire and Rubber Cooper Tire &
Goods Rubber Company 38,000 $ 931,000
2.60% Goodyear Tire &
Rubber Co. 10,700 557,738
Total 1,488,738
- - --------------------------------------------------------------------------------
Tobacco American Brands Inc. 24,900 1,036,463
3.51% RJR Nabisco 32,600 973,925
Total 2,010,388
- - --------------------------------------------------------------------------------
Waste Browning Ferris
Management Industries Inc. 21,600 696,600
1.56% WMX Technologies Inc. 5,600 194,600
Total 891,200
----------------------------------------------------------
Total Investments in
Common Stocks
(Cost $46,778,284) 54,085,484
- - --------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 5.55%
- - --------------------------------------------------------------------------------
Corporate American Express
Obligations, Credit Corp.
at Cost 5.15% due 5/2/1996 1,900M $ 1,900,000
General Electric Co.
5.20% due 5/1/1996 2,200M 2,200,000
Total 4,100,000
- - --------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (922,304)
----------------------------------------------------------
Total Other Assets,
Less Liabilities 3,177,696
- - --------------------------------------------------------------------------------
Net Assets (equivalent to $6.71 a share on
100.00% 8,531,430 shares of beneficial
interest outstanding) $57,263,180
- - --------------------------------------------------------------------------------
See Notes to Financial Statements.
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1996
Investment Income
---------------------------------------------------------------------------
Income Dividends $ 578,164
Interest 55,771
Total income $ 633,935
---------------------------------------------------------------------------
Expenses Management fee (Note 3) 168,557
Management fee waived (168,329)
12b-1 distribution plan (Note 3) 203,439
Expenses reimbursed to manager 58,560
Shareholder servicing 26,904
Registration 8,951
Audit and tax 6,867
Organization (Note 1e) 3,646
Reports to shareholders 3,287
Legal 1,797
Other 4,329
Net expenses 318,008
Net investment income 315,927
Realized and Unrealized Gain on Investments (Note 5)
---------------------------------------------------------------------------
Realized gain from security transactions
Proceeds from sales 4,859,936
Cost of securities sold 4,401,916
Net realized gain 458,020
---------------------------------------------------------------------------
Unrealized appreciation of investments
Beginning of period 3,292,866
End of period 7,307,199
Net unrealized appreciation 4,014,333
Net realized and unrealized gain on investments 4,472,353
Net Increase in Net Assets Resulting from Operations $4,788,280
---------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
Increase in Net Assets 1996 1995
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations Net investment income $ 315,927 $ 394,421
Net realized gain from securities transactions 458,020 216,301
Net unrealized appreciation of investments 4,014,333 3,148,368
Net increase in net assets resulting from operations 4,788,280 3,759,090
-------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income included in price of shares sold (Note 1d) 82,360 102,375
-------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from (Note 2)
Net investment income (380,067) (369,231)
Net realized gain from securities transactions (220,851) --
Total distributions (600,918) (369,231)
-------------------------------------------------------------------------------------------------------------------------------
Share transactions
Net proceeds from sales of 3,411,448 and 4,043,647 shares, respectively 22,244,589 22,484,213
Net asset value of 88,395 and 56,327 shares issued to shareholders in reinvestment
of net investment income and realized gain from securities transactions 561,447 309,319
Total 22,806,036 22,793,532
Cost of 396,635 and 477,215 shares reacquired, respectively (2,582,502) (2,676,007)
Increase in net assets derived from share transactions
(net increase of 3,103,208 and 3,622,759 shares, respectively) 20,223,534 20,117,525
-------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 24,493,256 23,609,759
-------------------------------------------------------------------------------------------------------------------------------
Net Assets
-------------------------------------------------------------------------------------------------------------------------------
Beginning of period 32,769,924 9,160,165
End of period (including undistributed net investment income of $197,374
and $179,154, respectively) $57,263,180 $32,769,924
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Period
1/3/94
Six Months (Commencement
Ended Year Ended of Operations)
Per Share Operating Performance: 4/30/96 10/31/95 to 10/31/94
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 6.04 $ 5.07 $ 5.00
---------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .06+ .12 .089+
Net realized and unrealized gain on investments .71 .97 .041
Total from investment operations .77 1.09 .130
---------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.06) (.12) (.06)
Distribution from net realized gain (.04) -- --
Net asset value, end of period $ 6.71 $ 6.04 $ 5.07
Total Return 12.85%+ 21.83% 2.62%+
-------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
-------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 57,263 $ 32,770 $ 9,160
Ratios to Average Net Assets:
---------------------------------------------------------------------------------------------------------------------
Expenses, including waiver .71%+ 1.16% .61%+
Expenses, excluding waiver 1.08%+ 1.91% 1.94%+
Net investment income .70%+ 2.06% 2.03%+
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 9.98% 23.17% 31.95%
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Not annualized.
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES The Company was organized as a Delaware
business trust on February 26, 1993, and is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Growth & Income Trust commenced operations on January 3, 1994. The
following is a summary of significant accounting policies consistently followed
by the Trust. The policies are in conformity with generally accepted accounting
principles. (a) Market value is determined as follows: Securities listed or
admitted to trading privileges on any 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 asked prices on such exchange. Securities traded in the over-the-counter
market are valued at the mean between the last bid and asked prices in such
market, 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. Securities for
which market quotations are not available are valued at fair value under
procedures approved by the Board of Trustees. Short-term securities are carried
at cost which approximates market. (b) It is the policy of the Trust to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income in taxable
distributions. Therefore, no federal income tax provision is required. (c)
Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income is recorded
on the accrual basis. (d) A portion of the proceeds from sales and costs of
repurchases of shares, equivalent to the amount of distributable net investment
income on the date of the transaction, is credited or charged to undistributed
income. Undistributed net investment income per share thus is unaffected by
sales or repurchases of shares. (e) The organization expenses are amortized
evenly over a period of five years. 2. DISTRIBUTIONS Dividends from net
investment income are declared and paid quarterly. Net realized gain from
security transactions, if any, will be distributed to shareholders in December
1996. At October 31, 1995 the accumulated undistributed net realized gain for
financial reporting purposes, which is substantially the same as for federal
income tax purposes, aggregated $444,249. A dividend of $.03 a share from net
investment income aggregating $258,219 was declared on May 8, 1996 and paid on
May 15, 1996 to each shareholder of record on May 8, 1996. Income and capital
gains distributions are determined in accordance with income tax regulations
which may differ from methods used to determine the corresponding income and
capital gains amounts in accordance with generally accepted accounting
principles. These differences are primarily caused by differences in the timing
of recognition of certain components of income, expenses or capital gains and
losses. Where such differences are permanent in nature, they are reclassified
based upon their ultimate characterization for federal income tax purposes. Any
such reclassifications will have no effect on net assets, results of operations
or net asset value of the Trust. 3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH
AFFILIATES Lord, Abbett & Co. provided the Trust with investment management
services and executive and other personnel, paid the remuneration of officers,
provided office space and paid for ordinary and necessary office and clerical
expenses relating to research and statistical work and supervision of the
Trusts investment portfolio. The management fee paid to Lord, Abbett & Co. is
based on average daily net assets at the rate of .75 of 1% per annum. For the
six months ending April 30, 1996, Lord, Abbett & Co. waived $168,329 of the
management fee. Lord, Abbett & Co. may waive its management fee and pay or
reimburse the Trust for certain of its other expenses. Any such expenses paid
are subject to repayment by the Trust, pursuant to a formula based on the asset
size and expense ratio of the Trust. The Trust shall not be obligated to repay
Lord, Abbett & Co. after five full fiscal years after the commencement of the
repayment formula or the termination of the Management Agreement, whichever is
earlier. The Growth & Income Trust has adopted a distribution plan (the Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940 which authorizes
the payment of fees to dealers in order to provide additional incentives for
them (a) to maintain shareholder accounts and/or to provide shareholders with
personal services, including shareholder liaison services, such as responding
to customer inquiries and providing information on their investments and (b) to
sell shares of the Trust. Under the Plan, the Trust pays dealers through Lord,
Abbett & Co. (1) a service fee and a distribution fee, at the time shares are
sold, not to exceed .25% and .75%, respectively, of the net asset value of such
shares and (2) at each quarter-end after the first anniversary of the sale of
such shares, fees for services and distributions at annual rates not to exceed
.25% and .75%, respectively, of the average annual net asset value of shares
outstanding (payments with respect to shares not outstanding during the full
quarter to be prorated). Lord, Abbett & Co. may retain from the quarterly
distribution fee, for payment of distribution expenses incurred directly by it,
an amount not to exceed .10% of the average annual net asset value of such
shares outstanding. Certain of the Companys officers and trustees have an
interest in Lord, Abbett & Co. 4. CAPITAL PAID IN At April 30, 1996, capital
paid in aggregated $49,314,358. 5. PURCHASES AND SALES OF SECURITIES Purchases
and sales of investment securities (other than short-term investments)
aggregated $22,552,669 and $4,213,702, respectively. Security gains and losses
are computed on the identified cost basis. As of April 30, 1996, unrealized
appreciation for federal income tax purposes for the Company aggregated
$7,307,199 of which $7,552,808 related to appreciated securities and $245,609
related to depreciated securities. For federal income tax purposes, the
identified cost of investments owned at April 30, 1996 was substantially the
same as the cost for financial reporting purposes. 6. TRUSTEES' REMUNERATION
The Trustees of the Company associated with Lord, Abbett & Co. and
all officers of the Company receive no compensation from the Company for acting
as such. Outside Trustees fees, including attendance fees for board and
committee meetings, and outside Trustees retirement costs, are allocated among
all funds in the Lord Abbett group based on net assets of each fund. The direct
remuneration accrued during the period for outside Trustees was $331 (exclusive
of expenses), a portion of which has been deemed invested in shares of the
Company under a deferred compensation plan __contemplating future payment of the
value of those shares. As of April 30, 1996, the aggregate amount in Trustees
accounts maintained under the plan was $350. Retirement costs accrued during the
six months ended April 30, 1996 amounted to $190.
Copyright (c) 1996 by Lord Abbett Securities Trust Growth & Income Trust, 767
Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Securities Trust Growth & Income Trust, is to be distributed only if
preceded or accompanied by a current prospectus which includes information
concerning the Trust's investment objective, policies and other matters. There
is no guarantee that the forecasts contained within this publication will come
to pass.
All rights reserved. Printed in the U.S.A.
<PAGE>
INVESTING IN THE
LORD ABBETT
FAMILY OF FUNDS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Growth
------------------------------------------------------------------------------------------------------------------------
Income
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Growth & Balanced Income Tax-Free Money
Funds Income Funds Fund Funds Income Funds Market Fund
Developing Affiliated Fund Balanced Series U.S. Government . National U.S. Government
Growth Fund Growth & Securities . California Securities
Mid-Cap Value Income Trust Series* . Connecticut Money Market
Fund Bond-Debenture . Florida Fund*+
Global Fund -- Fund . Georgia
Equity Series Global Fund-- . Hawaii
Income Series . Michigan
Limited Duration U.S. . Minnesota
Government . Missouri
Securities . New Jersey
Series* . New York
. Pennsylvania
. Texas
. Washington
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FINDING THE RIGHT MUTUAL FUND CAN BE CONFUSING. AT LORD, ABBETT & CO., WE
BELIEVE YOUR FINANCIAL ADVISER PROVIDES VALUE IN HELPING YOU IDENTIFY AND
UNDERSTAND YOUR INVESTMENT OBJECTIVES AND, ULTIMATELY, OFFERING FUND
RECOMMENDATIONS SUITABLE FOR YOUR INDIVIDUAL NEEDS.
This publication, when used as sales literature, is to be distributed only
if preceded or accompanied by a current prospectus for Lord Abbett Securities
Trust -- Growth & Income Trust.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your financial adviser or Lord, Abbett & Co. at
800-874-3733 for a prospectus. Read it carefully before investing.
WHEN YOU INVEST IN A FAMILY OF FUNDS, YOU BENEFIT FROM:
DIVERSIFICATION. You and your financial adviser can diversify your
investments between equity and income funds.
FLEXIBILITY. As your investment goals change, your financial adviser can
help you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 25
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your financial adviser to help you customize your investment plan.
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ There can be no assurance that this Fund will be able to maintain a stable
net asset value of $1.00 per share. This Fund is managed to maintain, and
has maintained, its stable $1.00 per share price.
NUMBERS TO KEEP HANDY
For Literature: 800-874-3733
For Account Information: 800-821-5129
For Fund Information: 800-426-1130
[LOGO] LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LAG&I-3-496
The GM Building . 767 Fifth Avenue . New York, NY 10153-0203 (6/96)
