<PAGE>
1995 Annual Report
LORD ABBETT SECURITIES TRUST
- --------------------------------------------------------------------------------
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
Growth & Income Trust
Balanced Trust
- --------------------------------------------------------------------------------
LORD ABBETT
-------------
COUNSEL GROUP
-------------
<PAGE>
================================================================================
Report to Shareholders For the Fiscal Year Ended October 31, 1995
- --------------------------------------------------------------------------------
[PHOTO - of Ronald P. Lynch]
Ronald P. Lynch,
Chairman
[PHOTO of Robert S. Dow]
Robert S. Dow,
President
November 20, 1995
Lord Abbett Securities Trust closed fiscal 1995 on October 31 with combined
assets of $588.0 million. During the year, the Trust's portfolios and the
financial markets in general performed well. Investor confidence in the U.S.
equity and fixed-income markets increased as the Federal Reserve successfully
contained an overheating economy and rising inflation.
Early in 1995, industrial production and employment growth slowed in the
face of higher interest rates, while employment costs remained flat. The hoped
for "soft landing" (solid earnings growth with declining inflation) became a
reality, justifying higher valuations for both stocks and long-term bonds.
Many positive factors remain in place for continued strong performance in
fixed-income and equity markets. Inflationary expectations world wide continue
to abate, helping bond yields to remain near 6%, well below the 1994 peak of
over 8%. In the municipal market, concern over future tax policy helped bond
yields to remain at very attractive levels. Reduced supply of high-quality,
long-term municipal bonds should increase the likelihood of positive total
return. U.S. corporations' commitment to cost reductions, increased productivity
and new technology should increase global competitiveness and equity valuations.
Finally, the U.S. banking system's strong capital base and record profitability
lend support to U.S. business both at home and abroad.
Additionally, our forecast for continued low inflation and modest Gross
Domestic Product (GDP) growth bodes well for the bond market. Continued economic
growth will provide opportunities in the convertible and high-yield corporate
bond markets.
For 1996, we expect global short-term interest rates to resume their
decline. Many indicators of future economic performance in Japan and Europe have
suffered major reversals during the last six months. Moreover, with inflation
low and falling, real short-term rates are too high to encourage stronger
economic growth in many overseas markets.
Our value style of management, with its focus on out-of-favor securities,
is well-suited to the demands of a more selective marketplace. Please see the
facing page for each portfolio's fiscal 1995 performance, including its total
return (the percent change in net asset value, assuming the reinvestment of all
distributions).
We are pleased to announce that Lord Abbett Securities Trust's Board of
Trustees has elected Robert S. Dow as President of the Trust. Mr. Dow, who has
been a partner of Lord, Abbett & Co. for nine years, also serves as the Firm's
Chief Investment Officer.
We would like to thank all of our shareholders for their confidence in us.
We remain committed to helping you achieve your financial goals and look forward
to a long and prosperous relationship.
<PAGE>
================================================================================
Fund Facts
- --------------------------------------------------------------------------------
Lord Abbett Securities Trust's Record as of 10/31/95
<TABLE>
<CAPTION>
Date of Inception Distribution Rate Net Asset Value Monthly Dividend 1-Year Total Return/(1)/:
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. Government
Securities Trust 6/1/93 7.58% $4.59 $.029 12.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Limited Duration U.S.
Government Securities Trust 1/3/94 5.31% $4.75 $.021 8.0%
- -----------------------------------------------------------------------------------------------------------------------------------
National Tax-Free
Income Trust 10/1/93 4.94% $4.74 $.0195 16.4%
- -----------------------------------------------------------------------------------------------------------------------------------
California Tax-Free
Income Trust 10/1/93 5.17% $4.53 $.0195 12.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Florida Tax-Free
Income Trust 10/1/93 5.09% $4.60 $.0195 13.2%
- -----------------------------------------------------------------------------------------------------------------------------------
New York Tax-Free
Income Trust 10/1/93 5.02% $4.66 $.0195 14.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Global Income Trust 1/3/94 6.94% $4.84 $.028 12.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Bond-Debenture Trust 1/3/94 8.07% $4.76 $.032 11.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Growth & Income Trust 1/3/94 -- $6.04 -- 21.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Balanced Trust 12/27/94 4.07% $11.34 $.0385 16.6%/(2)/
- -----------------------------------------------------------------------------------------------------------------------------------
</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.
/(2)/ Since inception.
- --------------------------------------------------------------------------------
This report to shareholders inaugurates a new procedure whereby a single copy of
the report is sent to an address to which more than one registered shareholder
of the Trust with the same last name has indicated mail is to be delivered,
unless additional reports are specifically requested in writing or by telephone.
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES TRUST Principal Market Value
Security Amount (Note 1a)
======================================================================================================================
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 98.41%
- ----------------------------------------------------------------------------------------------------------------------
U.S. Treasury U.S. Treasury Strips due 5/15/2003 $20,000M $ 12,846,875
32.03% ------------------------------------------------------------------------------------------
U.S. Treasury Bonds 7 1/2% due 11/15/2024 5,000M 5,713,281
------------------------------------------------------------------------------------------
U.S. Treasury Bonds 7 5/8% due 11/15/2022 20,000M 23,046,875
------------------------------------------------------------------------------------------
U.S. Treasury Notes 7 1/4% due 8/15/2004 14,000M 15,163,750
------------------------------------------------------------------------------------------
U.S. Treasury Notes 9% due 5/15/1998 25,000M 26,937,500
------------------------------------------------------------------------------------------
U.S. Treasury Notes 11 5/8% due 11/15/2004 15,000M 20,753,906
------------------------------------------------------------------------------------------
Total 104,462,187
- ----------------------------------------------------------------------------------------------------------============
U.S. Government
Agencies 2.18% Federal National Mortgage Association 7.65% due 3/10/2005 6,500M 7,111,406
- ----------------------------------------------------------------------------------------------------------============
Federal National 6 1/2% due on an announced basis 20,000M 19,837,500
Mortgage Association ------------------------------------------------------------------------------------------
Pass-Through Securities 7% due 2010 to 2025 39,045M 39,004,342
51.52% ------------------------------------------------------------------------------------------
7 1/2% due 2025 50,492M 51,044,658
------------------------------------------------------------------------------------------
8% due 2010 to 2025 56,674M 58,171,406
------------------------------------------------------------------------------------------
Total 168,057,906
- ----------------------------------------------------------------------------------------------------------============
Government National 7% due 1/15/2024 10,812M 10,745,963
Mortgage Association ------------------------------------------------------------------------------------------
Pass-Through Securities 8% due 3/15/2024 4,344M 4,474,946
12.68% ------------------------------------------------------------------------------------------
8 1/4% due 6/15/2029 2,905M 2,949,518
------------------------------------------------------------------------------------------
8 3/8% due 9/15/2016 5,816M 5,904,971
------------------------------------------------------------------------------------------
8 1/2% due 1/15/2028 2,210M 2,254,688
------------------------------------------------------------------------------------------
9% due 2018 to 2020 10,204M 10,800,709
------------------------------------------------------------------------------------------
9 1/2% due 2019 to 2020 3,950M 4,222,030
------------------------------------------------------------------------------------------
Total 41,352,825
------------------------------------------------------------------------------============
Total Investments in Securities (Cost $314,433,070) 320,984,324
======================================================================================================================
OTHER ASSETS, LESS LIABILITIES 1.59%
======================================================================================================================
Short-Term Securities,
at Market U.S. Treasury Notes 9 3/8% due 4/15/1996 (Cost $21,834,984) 21,450M 21,808,617
======================================================================================================================
Cash and Receivables, Net of Liabilities (16,617,417)
------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 5,191,200
======================================================================================================================
Net Assets 100.00% (equivalent to $4.59 a share on 71,091,246 shares of
beneficial interest outstanding) $326,175,524
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
======================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
LIMITED DURATION U.S. GOVERNMENT SECURITIES TRUST Principal Market Value
Security Amount (Note 1a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 95.40%
- ----------------------------------------------------------------------------------------------------------------------
U.S. Treasury U.S. Treasury Notes 6% due 8/31/1997 $1,000M $ 1,006,250
25.62% ------------------------------------------------------------------------------------------
U.S. Treasury Notes 6 1/8% due 7/31/2000 2,000M 2,025,000
------------------------------------------------------------------------------------------
Total 3,031,250
- ----------------------------------------------------------------------------------------------------------============
U.S. Government
Agencies 12.69% Student Loan Marketing Association 5.65% due 2/22/1999+ 1,500M 1,500,938
- ----------------------------------------------------------------------------------------------------------============
Federal Home Loan
Mortgage Corporation
Pass-Through Securities
3.26% 9 1/2% CMO Class 175-F due 10/15/2019 426M 386,093
- ----------------------------------------------------------------------------------------------------------============
Federal National 7% due on an announced basis 1,800M 1,813,781
Mortgage Association ------------------------------------------------------------------------------------------
Pass-Through Securities 7.15% CMO Class 92-18-G due 11/25/2005 1,000M 1,016,875
32.75% ------------------------------------------------------------------------------------------
8 1/2% due 11/1/2002 821M 856,186
------------------------------------------------------------------------------------------
8 1/2% CMO Class 90-106-H due 1/25/2019 185M 186,075
------------------------------------------------------------------------------------------
Total 3,872,917
------------------------------------------------------------------------------============
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
LIMITED DURATION U.S. GOVERNMENT SECURITIES TRUST Principal Market Value
Security Amount (Note 1a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Government National 10% due 6/15/1995 $ 362M $ 397,899
Mortgage Association ------------------------------------------------------------------------------------------
Pass-Through Securities 10 1/2% due 9/15/2016 299M 331,405
6.16% ------------------------------------------------------------------------------------------
Total 729,304
- -----------------------------------------------------------------------------------------------------------===========
Other 7.92811% CMO Class 92-12-A2 due 12/25/2022 558M 572,013
14.92% ------------------------------------------------------------------------------------------
8.60% CMO Class 32-B due 5/1/2016 1,154M 1,193,534
------------------------------------------------------------------------------------------
Total 1,765,547
-------------------------------------------------------------------------------===========
Total Investments in Securities (Cost $11,187,999) 11,286,049
======================================================================================================================
OTHER ASSETS, LESS LIABILITIES 4.60%
======================================================================================================================
Short-Term Securities, Beneficial Corp. 5.72% due 11/6/1995 240M 240,000
at Cost ------------------------------------------------------------------------------------------
General Electric Co. 5.74% due 11/6/1995 200M 200,000
------------------------------------------------------------------------------------------
Total 440,000
======================================================================================================================
Short-Term Securities, U.S. Treasury Notes 9 1/4% due 1/15/1996 (Cost $1,623,394) 1,590M 1,601,428
at Market ------------------------------------------------------------------------------------------
Total Short-Term Securities 2,041,428
- ----------------------------------------------------------------------------------------------------------------------
Cash and Receivables, Net of Liabilities (1,497,606)
------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 543,822
======================================================================================================================
Net Assets 100.00% (equivalent to $4.75 a share on 2,492,636 shares of
beneficial interest outstanding) $11,829,871
======================================================================================================================
</TABLE>
+Floating rate note.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
==================================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
NATIONAL TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 103.40%
- ----------------------------------------------------------------------------------------------------------------------------------
Prerefunded Maryland St 6.70% 3/1/2005 AAA $ 500M $ 553,125
20.67% ---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 8% 7/1/2007 AAA 500M 558,750
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Ser S 6 1/2% 7/1/2022 AAA 150M 169,312
---------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth Ser L 6 7/8% 7/1/2012 AAA 1,000M 1,150,000
---------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth Ser L 6 7/8% 7/1/2021 AAA 450M 517,500
---------------------------------------------------------------------------------------------------------
Texas Muni Pwr Agy Rev 14 5/8% 9/1/2012 AAA 2,000M 2,270,000
---------------------------------------------------------------------------------------------------------
West Virginia St Sch Bldg Auth Rev Ser A MBIA+ 7 1/4% 7/1/2015 AAA 1,000M 1,132,500
---------------------------------------------------------------------------------------------------------
Wisconsin St Clean Wtr Rev Ser 1 6 3/4% 6/1/2008 AAA 2,175M 2,436,000
---------------------------------------------------------------------------------------------------------
Total 8,787,187
- ------------------------------------------------------------------------------------------------------------------------==========
General Obligation New York St Ser B 6% 8/15/2018 A 200M 203,000
State ---------------------------------------------------------------------------------------------------------
3.72% Ohio St 6.20% 8/1/2013 AA 750M 810,937
---------------------------------------------------------------------------------------------------------
Texas St Wtr Dev Bd 7.15% 8/1/2035 AA 500M 566,250
---------------------------------------------------------------------------------------------------------
Total 1,580,187
- ------------------------------------------------------------------------------------------------------------------------==========
General Obligation Colonial Beach VA 6% 5/1/2018 A 585M 587,194
Local ---------------------------------------------------------------------------------------------------------
3.78% Decatur TX Indpt Sch Dist 6 1/8% 8/1/2025 Aaa 1,000M 1,021,250
---------------------------------------------------------------------------------------------------------
Total 1,608,444
- ------------------------------------------------------------------------------------------------------------------------==========
Finance Cumberland Co NC Ctfs AMBAC+ 6.40% 12/1/2024 AAA 500M 531,250
3.71% ---------------------------------------------------------------------------------------------------------
Iowa St Fin Auth Rev 6 1/4% 5/1/2024 A 500M 531,875
---------------------------------------------------------------------------------------------------------
North Dakota St Bldg Auth Lease Rev Ser A CGIC+ 6% 12/1/2013 AAA 500M 512,500
---------------------------------------------------------------------------------------------------------
Total 1,575,625
- ------------------------------------------------------------------------------------------------------------------------==========
Health and Hospital Flint MI Hosp Bldg Auth Rev 9 1/2% 7/1/2006 Baa 1,500M 1,539,945
16.93% ---------------------------------------------------------------------------------------------------------
Massachusetts St Health & Ed Facs Auth Rev LINK MBIA+ 5.38% 7/1/2018 AAA 6,000M 5,655,000
---------------------------------------------------------------------------------------------------------
Total 7,194,945
-----------------------------------------------------------------------------------------------==========
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
NATIONAL TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing Arlington Co VA Ind Dev Auth Multi-Fam Rev Hsg Mtge
4.82% 6.30% 7/1/2016 A $ 500M $ 503,125
---------------------------------------------------------------------------------------------------------
Maine St Hsg Auth Mtge Pur Ser A-2 AMT+++ 6 3/4% 11/15/2035 AA 980M 1,013,075
---------------------------------------------------------------------------------------------------------
Tennessee Hsg Dev Agy Mtge Ser A AMT+++ 7 1/8% 7/1/2026 A 500M 531,875
---------------------------------------------------------------------------------------------------------
Total 2,048,075
- -----------------------------------------------------------------------------------------------------------------------===========
Industrial Revenue Connecticut St Dev Auth Solid Waste Disp Facs Rev AMT+++ 7% 7/1/2025 AAA 500M 555,625
Bonds ---------------------------------------------------------------------------------------------------------
4.89% Maryland St Ind Dev Fin Auth Economic Dev Rev
LINK FSA+ 5.929% 8/26/2022 AAA 1,500M 1,524,375
---------------------------------------------------------------------------------------------------------
Total 2,080,000
- -----------------------------------------------------------------------------------------------------------------------===========
Miscellaneous 1.26% West Virginia St Sch Bldg Auth Rev Cap Imp Ser B MBIA+ 6 3/4% 7/1/20 AAA 500M 535,625
- -----------------------------------------------------------------------------------------------------------------------===========
Pollution Control Monroe Co MI Poll Ctrl Rev AMBAC+ AMT+++ 7.30% 9/1/2019 AAA 500M 550,000
Revenue ---------------------------------------------------------------------------------------------------------
11.06% New Hampshire St Ind Dev Auth Rev AMT+++ 10 3/4% 10/1/2012 BBB 1,130M 1,274,075
---------------------------------------------------------------------------------------------------------
Ohio St Air Quality Dev Auth Rev FGIC+ 8% 12/1/2013 AAA 2,000M 2,400,000
---------------------------------------------------------------------------------------------------------
Ohio St Wtr Dev Auth Poll Ctrl Rev 5.95% 5/15/2029 BBB 500M 476,250
---------------------------------------------------------------------------------------------------------
Total 4,700,325
- -----------------------------------------------------------------------------------------------------------------------===========
Power Intermountain Pwr Agy UT Pwr Supply Rev Ser B MBIA+ 6 1/2% 7/1/2010 AAA 2,000M 2,230,000
18.76% ---------------------------------------------------------------------------------------------------------
Milwaukee WI Loc Dist Heat AMT+++ 6.85% 10/1/2021 AA 500M 538,750
---------------------------------------------------------------------------------------------------------
New York St Energy Res & Dev LINK 6.367% 4/1/2020 A 1,500M 1,563,750
---------------------------------------------------------------------------------------------------------
Piedmont Muni Pwr Agy SC Elec Rev Ref FGIC+ 6 3/4% 1/1/2019 AAA 500M 569,375
---------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth RIBS FSA+ 7.988% 7/1/2023++ AAA 2,000M 2,062,500
---------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev LINK FSA+ 5.929% 7/1/2023 AAA 1,000M 1,012,500
---------------------------------------------------------------------------------------------------------
Total 7,976,875
- -----------------------------------------------------------------------------------------------------------------------===========
Transportation Capital Regional Arpt Comm VA Ser B AMBAC+ 8 1/8% 7/1/2014 AAA 2,380M 2,939,300
12.83% ---------------------------------------------------------------------------------------------------------
Charlottesville-Albemarle VA Arpt Auth Arpt Rev Ref
AMT+++ 6 1/8% 12/1/2009 BBB 410M 414,100
---------------------------------------------------------------------------------------------------------
Melbourne FL Arpt Rev Ref MBIA+ 6 1/4% 10/1/2018 AAA 1,000M 1,006,250
---------------------------------------------------------------------------------------------------------
Metropolitan Atlanta Rapid Trans Auth GA Sales Tax Rev
AMBAC+ 6 1/4% 7/1/2020 AAA 1,000M 1,092,500
---------------------------------------------------------------------------------------------------------
Total 5,452,150
- -----------------------------------------------------------------------------------------------------------------------===========
Water and Sewer New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev
.97% FGIC+ 6 3/4% 6/15/2014 AAA 390M 412,913
----------------------------------------------------------------------------------------------===========
Total Investments in Municipal Bonds (Cost $43,069,893) 43,952,351
==================================================================================================================================
OTHER ASSETS, LESS LIABILITIES (3.40)%
==================================================================================================================================
Short-Term Texas St Tax & Rev Anticipation Notes Ser A
Securities, at Market 4 3/4% 8/30/1996 (Cost $705,054) MIG1 700M 705,663
==================================================================================================================================
Cash and Receivables, Net of Liabilities (2,147,643)
---------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities (1,441,980)
==================================================================================================================================
Net Assets 100.00% (equivalent to $4.74 a share on 8,974,279 shares of beneficial
interest outstanding) $42,510,371
==================================================================================================================================
</TABLE>
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ 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
October 31, 1995.
See page 16 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 97.39%
- ---------------------------------------------------------------------------------------------------------------------------------
Prerefunded Los Angeles CA Convention Ctfs Ser A 7 3/8% 8/15/2018 AAA $ 300M $ 336,375
20.92% --------------------------------------------------------------------------------------------------------
Los Angeles Trans Comm Sales Tax Rev Ser A 8% 7/1/2018 AAA 1,750M 1,951,250
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser P 8 1/8% 7/1/2013 AAA 250M 280,000
--------------------------------------------------------------------------------------------------------
Puerto Rico Pub Bldg Auth Ser H 7 7/8% 7/1/2007 AAA 250M 270,625
--------------------------------------------------------------------------------------------------------
Sacramento CA Muni Util Dist Elec Rev Ser V 7 7/8% 8/15/2016 AAA 600M 669,750
--------------------------------------------------------------------------------------------------------
Total 3,508,000
- ----------------------------------------------------------------------------------------------------------------------===========
General Obligation Arcadia CA Unified Sch Dist Ser B FGIC+ 6 1/2% 7/1/2015 AAA 200M 217,250
Local --------------------------------------------------------------------------------------------------------
4.30% Campbell CA Unified Elem Sch Dist Ser A MBIA+ 6 1/4% 8/1/2019 AAA 200M 209,750
--------------------------------------------------------------------------------------------------------
Fresno CA Unified Sch Dist Ser A MBIA+ 6 1/4% 8/1/2019 AAA 280M 293,650
--------------------------------------------------------------------------------------------------------
Total 720,650
- ----------------------------------------------------------------------------------------------------------------------===========
Education California St Univ & Coll Students Union Rev Ser B
4.30% MBIA+ 6 1/8% 11/1/2024 AAA 700M 721,875
- ----------------------------------------------------------------------------------------------------------------------===========
Health and Hospital California Health Fac Auth Rev/Kaiser Permanente Ser A
5.04% 6 1/2% 12/1/2020 AA 285M 293,906
--------------------------------------------------------------------------------------------------------
California Health Fac Auth Rev/San Diego Hosp Assn
MBIA+ 6.95% 10/1/2021 AAA 500M 550,625
--------------------------------------------------------------------------------------------------------
Total 844,531
- ----------------------------------------------------------------------------------------------------------------------===========
Housing California Hsg Fin Agy Rev Home Mtge Ser A 7 3/8% 8/1/2017 Aa 250M 268,750
4.54% --------------------------------------------------------------------------------------------------------
California Hsg Fin Agy Rev Home Mtge Ser G 7 1/4% 8/1/2017 AA 450M 492,750
--------------------------------------------------------------------------------------------------------
Total 761,500
- ----------------------------------------------------------------------------------------------------------------------===========
Pollution Control California Poll Ctrl Rev/Pacific Gas & Elec
Revenue MBIA+ AMT+++ 8 3/4% 1/1/2007 AAA 1,000M 1,112,500
15.54% --------------------------------------------------------------------------------------------------------
California Poll Ctrl Rev/Pacific Gas & Elec
MBIA+ AMT+++ 8 7/8% 1/1/2010 AAA 400M 444,000
--------------------------------------------------------------------------------------------------------
California Poll Ctrl Rev/So CA Edison
MBIA+ AMT+++ 6.90% 12/1/2017 AAA 700M 760,375
--------------------------------------------------------------------------------------------------------
California Poll Ctrl Rev/So CA Edison
AMBAC+ AMT+++ 6.40% 12/1/2024 AAA 275M 288,750
--------------------------------------------------------------------------------------------------------
Total 2,605,625
- ----------------------------------------------------------------------------------------------------------------------===========
Power Northern CA Transmission Rev RIBS MBIA+ 6.06% 4/29/2024++ AAA 600M 558,750
9.04% --------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev Ser X 6 1/8% 7/1/2021 A 300M 309,375
--------------------------------------------------------------------------------------------------------
Riverside CA Elec Rev 6% 10/1/2015 Aa 445M 448,337
--------------------------------------------------------------------------------------------------------
Santa Clara CA Elec Rev Ser A MBIA+ 5 3/4% 7/1/2024 AAA 200M 200,000
--------------------------------------------------------------------------------------------------------
Total 1,516,462
- ----------------------------------------------------------------------------------------------------------------------===========
Solid Waste California Poll Ctrl Fin Auth Solid Waste Rev/Browning Ferris
.63% AMT+++ 6 3/4% 9/1/2019 A 100M 105,875
- ----------------------------------------------------------------------------------------------------------------------===========
Transportation Long Beach CA Harbor Rev Ser A AMT+++ 7 1/4% 5/15/2019 Aa 150M 162,000
15.28% --------------------------------------------------------------------------------------------------------
Los Angeles CA Harbor Rev Ser A 6 1/2% 8/1/2025 AA 300M 316,500
--------------------------------------------------------------------------------------------------------
Port Oakland CA Port Rev Ser B MBIA+ 7 1/4% 11/1/2016 AAA 350M 371,437
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser Q 6% 7/1/2020 A 500M 505,000
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser X 5 1/2% 7/1/2019 A 200M 192,250
--------------------------------------------------------------------------------------------------------
San Francisco CA Bay Area Rapid Trans Dist Sales Tax Rev
FGIC+ 6.60% 7/1/2012 AAA 240M 258,900
--------------------------------------------------------------------------------------------------------
San Francisco CA City & Co Arpt Rev 2nd Ser
AMBAC+ AMT+++ 6 1/2% 5/1/2018 AAA 200M 211,750
--------------------------------------------------------------------------------------------------------
San Francisco CA City & Co Arpt Rev 2nd Ser MBIA+ 6 3/4% 5/1/2020 AAA 500M 545,000
--------------------------------------------------------------------------------------------------------
Total 2,562,837
- ----------------------------------------------------------------------------------------------------------------------===========
Water and Sewer Burbank CA Wastewtr Treatment Rev Ser A FGIC+ 5 1/2% 6/1/2015 AAA 355M 349,231
17.80% --------------------------------------------------------------------------------------------------------
East Bay CA Muni Util Dist Wtr Sys Rev AMBAC+ 6 1/2% 6/1/2017 AAA 435M 468,169
--------------------------------------------------------------------------------------------------------
Long Beach CA Wtr Rev 6 1/8% 5/1/2019 AA 150M 153,375
--------------------------------------------------------------------------------------------------------
Long Beach CA Wtr Rev 6 1/4% 5/1/2024 AA 250M 258,438
--------------------------------------------------------------------------------------------------------
Los Angeles CA Wastewtr Rev Ser C 7.10% 6/1/2018 A 480M 529,200
--------------------------------------------------------------------------------------------------------
Metropolitan Wtr Dist So CA Wtrwks Rev RIBS 7.559% 8/5/2022++ AA 350M 358,750
--------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
San Francisco CA City & Co Wtr Rev Ser A 6 1/2% 11/1/2017 AA $250M $ 266,250
--------------------------------------------------------------------------------------------------------
Vallejo CA Rev Wtr Imp FGIC+ 6 1/2% 11/1/2014 AAA 565M 603,138
--------------------------------------------------------------------------------------------------------
Total 2,986,551
---------------------------------------------------------------------------------------------===========
Total Investments in Municipal Bonds (Cost $15,754,021) 16,333,906
=================================================================================================================================
OTHER ASSETS, LESS LIABILITIES 2.61%
=================================================================================================================================
Cash and Receivables, Net of Liabilities 438,264
=================================================================================================================================
Net Assets 100.00% (equivalent to $4.53 a share on 3,700,251 shares of
beneficial interest outstanding) $16,772,170
=================================================================================================================================
</TABLE>
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ 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
October 31, 1995.
See page 16 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 97.67%
- ---------------------------------------------------------------------------------------------------------------------------------
Prerefunded Dade Co FL Health Facs Auth Hosp Rev/So Miami Hosp Prjt
21.01% MBIA+ 9 1/8% 7/1/2018 AAA $650M $ 685,093
--------------------------------------------------------------------------------------------------------
Florida St Bd Ed Cap Outlay Ser A 7 1/4% 6/1/2023 AAA 200M 227,000
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 7 5/8% 7/1/2010 AAA 100M 115,750
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser O 8% 7/1/2005 AAA 100M 111,750
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser Q 7 3/4% 7/1/2016 AAA 325M 377,813
--------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev Ser M 8% 7/1/2008 AAA 275M 307,312
--------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev Ser P 7% 7/1/2021 AAA 300M 342,750
--------------------------------------------------------------------------------------------------------
Total 2,167,468
- ----------------------------------------------------------------------------------------------------------------------===========
General Obligation
State 4.76% Florida St Bd Ed Cap Outlay Public Ed Ser C MBIA+
5.60% 6/1/2025 AAA 500M 490,625
- ----------------------------------------------------------------------------------------------------------------------===========
General Obligation
Local 4.11% Florida St Jacksonville Trans-SR Lien 6.40% 7/1/2022 AA 400M 424,500
- ----------------------------------------------------------------------------------------------------------------------===========
Finance 5.15% Puerto Rico Muni Fin Agy Ser A 6 1/2% 7/1/2019 A 500M 531,250
- ----------------------------------------------------------------------------------------------------------------------===========
Health and Hospital Altamonte Springs FL Health Fac Auth Hosp Rev/Adventist Health
17.89% AMBAC+ 7% 11/15/2014 AAA 350M 387,625
--------------------------------------------------------------------------------------------------------
Miami FL Health Fac Auth Rev RIBS AMBAC+ 6.37% 8/15/2015++ AAA 600M 531,750
--------------------------------------------------------------------------------------------------------
Palm Beach Co FL Health Facs Auth Rev/Hosp-Good Samaritan
MBIA+ 6.30% 10/1/2022 AAA 350M 368,375
--------------------------------------------------------------------------------------------------------
St Petersburg FL Health Facs Auth Rev/Allegheny Health
Sys Ser A MBIA+ 7% 12/1/2015 AAA 250M 279,687
--------------------------------------------------------------------------------------------------------
Tampa FL Health Rev/Allegheny Health Sys/St Joseph
MBIA+ 6.70% 12/1/2018 AAA 250M 278,438
--------------------------------------------------------------------------------------------------------
Total 1,845,875
- ----------------------------------------------------------------------------------------------------------------------===========
Housing Florida Hsg Fin Agy Homeowner Mtge Ser 1B 6% 1/1/2017 AA 350M 350,875
7.84% --------------------------------------------------------------------------------------------------------
Florida Hsg Fin Agy Sing Fam Mtge Ser B
GNMA+ AMT+++ 6.65% 7/1/2026 AAA 240M 250,500
--------------------------------------------------------------------------------------------------------
Palm Beach Co FL Hsg Fin Auth Sing Fam Mtge Rev Ser A
GNMA+ AMT+++ 6.55% 4/1/2027 Aaa 200M 207,750
--------------------------------------------------------------------------------------------------------
Total 809,125
- ----------------------------------------------------------------------------------------------------------------------===========
Pollution Control Citrus Co FL Poll Ctrl Rev FL Pwr/Crystal Rivers
Revenue MBIA+ 6 5/8% 1/1/2027 AAA 250M 269,688
4.15% --------------------------------------------------------------------------------------------------------
Pasco Co FL Poll Ctrl Rev FL Pwr/Anclote MBIA+ 6.35% 2/1/2022 AAA 150M 158,625
--------------------------------------------------------------------------------------------------------
Total 428,313
---------------------------------------------------------------------------------------------===========
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Power Charlotte Co FL Util Rev FGIC+ 6 3/4% 10/1/2013 AAA $200M $ 223,000
8.25% --------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev Ser X 5 1/2% 7/1/2025 A 425M 408,000
--------------------------------------------------------------------------------------------------------
Reedy Creek FL Imp Dist Util Rev MBIA+ AMT+++ 8 1/2% 10/1/2009 AAA 200M 219,500
--------------------------------------------------------------------------------------------------------
Total 850,500
- ----------------------------------------------------------------------------------------------------------------------===========
Solid Waste 2.57% Orange Co FL Solid Waste Fac Rev FGIC+ 6 3/8% 10/1/2017 AAA 250M 265,000
- ----------------------------------------------------------------------------------------------------------------------===========
Transportation Dade Co FL Aviation Rev Ser B MBIA+ AMT+++ 6.60% 10/1/2022 AAA 150M 159,562
16.88% --------------------------------------------------------------------------------------------------------
Dade Co FL Seaport Bd AMBAC+ 6 1/4% 10/1/2021 AAA 150M 156,375
--------------------------------------------------------------------------------------------------------
Dade Co FL Seaport Bd AMBAC+ 6 1/2% 10/1/2026 AAA 350M 374,500
--------------------------------------------------------------------------------------------------------
Greater Orlando FL Aviation Auth Arpt Fac Rev AMT+++
8 3/8% 10/1/2016 A 350M 392,000
--------------------------------------------------------------------------------------------------------
Lee Co FL Trans Facs Rev MBIA+ 5 3/4% 10/1/2027 AAA 200M 200,000
--------------------------------------------------------------------------------------------------------
Osceola Co FL Trans Rev MBIA+ 6.10% 4/1/2017 AAA 250M 256,875
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser Q 6% 7/1/2020 A 200M 202,000
--------------------------------------------------------------------------------------------------------
Total 1,741,312
- ----------------------------------------------------------------------------------------------------------------------===========
Water and Sewer Dade Co FL Wtr & Sewer Rev FGIC+ 5 3/4% 10/1/2022 AAA 200M 200,500
5.06% --------------------------------------------------------------------------------------------------------
Miami FL Sani Sewer Sys FGIC+ 6 1/2% 1/1/2015 AAA 300M 321,750
--------------------------------------------------------------------------------------------------------
Total 522,250
--------------------------------------------------------------------------------------------------------
Total Investments in Municipal Bonds (Cost $9,833,859) 10,076,218
=================================================================================================================================
OTHER ASSETS, LESS LIABILITIES 2.33%
=================================================================================================================================
Short-Term Texas St Tax & Rev Anticipation Notes Ser A
Securities, at Market 4 3/4% 8/30/1996 (Cost $302,486) MIG1 300M 302,427
=================================================================================================================================
Cash and Receivables, Net of Liabilities (62,406)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 240,021
=================================================================================================================================
Net Assets 100.00% (equivalent to $4.60 a share on 2,244,148 shares of
beneficial interest outstanding) $10,316,239
=================================================================================================================================
</TABLE>
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ 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
October 31, 1995.
See page 16 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL BONDS 97.43%
- ---------------------------------------------------------------------------------------------------------------------------------
Prerefunded New York City Wtr Fin Auth 7 3/4% 6/15/2020 AAA $1,085M $1,273,519
30.24% --------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev Ser A 7 5/8% 7/1/2020 AAA 250M 288,125
--------------------------------------------------------------------------------------------------------
New York St Urban Dev Ser 1 7 3/4% 1/1/2014 AAA 275M 314,875
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth 7.30% 7/1/2020 AAA 350M 400,313
--------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Hwy Auth Rev Ser P 8 1/8% 7/1/2013 AAA 125M 140,000
--------------------------------------------------------------------------------------------------------
Puerto Rico Elec Pwr Auth Rev 7% 7/1/2021 AAA 250M 285,625
--------------------------------------------------------------------------------------------------------
Total 2,702,457
- -----------------------------------------------------------------------------------------------------------------------==========
Education New York NY City Ind Dev Agy Civil Fac Rev Ser A MBIA+
19.73% 5 3/4% 9/1/2015 AAA 250M 249,375
--------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev Ser A 6% 5/15/2016 BBB 500M 500,625
--------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev Ser F 5% 7/1/2020 Baa 360M 309,150
--------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev/City Univ MBIA+ 6 7/8% 7/1/2014 AAA 250M 277,500
--------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev/City Univ Ser C FGIC+ 7% 7/1/2014 AAA 175M 191,844
--------------------------------------------------------------------------------------------------------
New York St Dorm Auth Rev/St Univ Ed Fac Ser B 7 1/2% 5/15/2011 BBB 200M 235,250
--------------------------------------------------------------------------------------------------------
Total 1,763,744
- -----------------------------------------------------------------------------------------------------------------------==========
Finance Municipal Assistance Corp NY Ser 58 7 3/8% 7/1/2008 AA 150M 156,331
8.54% --------------------------------------------------------------------------------------------------------
New York St Loc Govt Assistance Corp Ser A 6 7/8% 4/1/2019 A 550M 607,063
--------------------------------------------------------------------------------------------------------
Total 763,394
----------------------------------------------------------------------------------------------==========
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK TAX-FREE INCOME TRUST Rating*: S&P Principal Market Value
Security or Moody's Amount (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Health and Hospital New York St Med Care Facs Fin/Mental Health Ser A
5.31% 7 1/2% 2/15/2021 BBB $225M $ 253,406
---------------------------------------------------------------------------------------------------------
New York St Med Care Facs Fin/North Shore Univ Hosp
MBIA+ 7.20% 11/1/2020 AAA 200M 221,500
---------------------------------------------------------------------------------------------------------
Total 474,906
- -----------------------------------------------------------------------------------------------------------------------===========
Housing 3.77% New York St Mtge Agy Rev Ser 41 MBIA+ 6.45% 10/1/2014 AAA 325M 336,781
- -----------------------------------------------------------------------------------------------------------------------===========
Industrial Revenue
Bonds 4.22% Puerto Rico Tel Auth Rev RIBS MBIA+ 6.834% 1/16/2015++ AAA 400M 377,000
- -----------------------------------------------------------------------------------------------------------------------===========
Miscellaneous 6.84% United Nations Dev Corp Ser A 6% 7/1/2026 A 600M 611,250
- -----------------------------------------------------------------------------------------------------------------------===========
Power New York St Energy Res & Dev/Bklyn Union Gas 7 1/8% 12/1/2020 A 150M 156,835
14.71% ---------------------------------------------------------------------------------------------------------
New York St Energy Res & Dev/Bklyn Union Gas Ser A
MBIA+ AMT+++ 6 3/4% 2/1/2024 AAA 200M 212,500
---------------------------------------------------------------------------------------------------------
New York St Energy Res & Dev/Central Hudson Gas & Elec
MBIA+ AMT+++ 8 3/8% 12/1/2028 AAA 250M 282,500
---------------------------------------------------------------------------------------------------------
New York St Energy Res & Dev/Con Edison Ser A AMT+++ 7 1/2% 7/1/2025 A 300M 326,625
---------------------------------------------------------------------------------------------------------
New York St Energy Res & Dev/Con Edison Ser A
MBIA+ AMT+++ 7 1/8% 12/1/2029 AAA 150M 166,125
---------------------------------------------------------------------------------------------------------
New York St Energy Res & Dev/Poll Ctrl Rev/Niagara Mohawk Ser A
FGIC+ 7.20% 7/1/2029 AAA 150M 170,250
---------------------------------------------------------------------------------------------------------
Total 1,314,835
- -----------------------------------------------------------------------------------------------------------------------===========
Water and Sewer New York City Muni Wtr Fin Auth Wtr & Sewer Sys Rev Ser A
4.07% FGIC+ 6% 6/15/2019 AAA 250M 252,813
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Aqu & Sewer Rev Ser A 7 7/8% 7/1/2017 A 100M 111,000
---------------------------------------------------------------------------------------------------------
Total 363,813
----------------------------------------------------------------------------------------------===========
Total Investments in Municipal Bonds (Cost $8,476,379) 8,708,180
==================================================================================================================================
OTHER ASSETS, LESS LIABILITIES 2.57%
==================================================================================================================================
Cash and Receivables, Net of Liabilities 229,558
==================================================================================================================================
Net Assets 100.00% (equivalent to $4.66 a share on 1,919,890 shares of Beneficial interest outstanding) $8,937,738
==================================================================================================================================
</TABLE>
* Ratings have not been audited by Deloitte & Touche LLP.
+ Insured or guaranteed by the indicated municipal bond insurance corporation
or Federal agency.
++ 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
October 31, 1995.
See page 16 for additional information.
+++ Income from these securities may be subject to the Alternative Minimum Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
GLOBAL INCOME TRUST 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 94.98%
- ---------------------------------------------------------------------------------------------------------------------------------
FOREIGN 52.57%
- ---------------------------------------------------------------------------------------------------------------------------------
Australia 1.10% Australian Commonwealth Government Loan Stock 8 3/4% due 1/15/2001 AAA $ 110M $ 82,721
- -----------------------------------------------------------------------------------------------------------------------==========
Belgium 3.00% Government of Belgium 8 3/4% due 6/25/2002 AA 6,000M 226,500
- ---------------------------------------------------------------------------------------------------------------------------------
Denmark 3.14% Kingdom of Denmark 8% due 11/15/2001 AAA 1,250M 237,187
- -----------------------------------------------------------------------------------------------------------------------==========
France 3.41% French Government 7 3/4% due 4/12/2000 AAA 1,200M 256,968
- -----------------------------------------------------------------------------------------------------------------------==========
Germany Bundesrepublic 6% due 6/20/2016 AAA 700M 434,770
----------------------------------------------------------------------------------------------==========
17.32% Bundesrepublic 7 3/8% due 1/3/2005 AAA 1,160M 871,403
--------------------------------------------------------------------------------------------------------
Total 1,306,173
- -----------------------------------------------------------------------------------------------------------------------==========
Italy 3.59% Republic of Italy (BTP) 11% due 6/1/1998 AA 430,000M 270,900
- -----------------------------------------------------------------------------------------------------------------------==========
Japan International Bank for Reconstruction & Development
7.21% 5 1/4% due 3/20/2002 AAA 28,000M 320,040
--------------------------------------------------------------------------------------------------------
Republic of Austria (Yen) 5% due 1/22/2001 AAA 20,000M 223,800
--------------------------------------------------------------------------------------------------------
Total 543,840
----------------------------------------------------------------------------------------------==========
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
Statement of Net Assets October 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
Principal
Amount
GLOBAL INCOME TRUST Rating*: S&P in Local Market Value
Security or Moody's Currency (Notes 1a & 1b)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Netherlands 3.85% Netherlands Government 6 1/2% due 4/15/2003 AAA $ 450M $ 290,119
- -----------------------------------------------------------------------------------------------------------------------==========
Spain 2.28% Government of Spain 11.30% due 1/15/2002 AA 21,000M 172,200
- -----------------------------------------------------------------------------------------------------------------------==========
Sweden 2.34% Kingdom of Sweden 13% due 6/15/2001 AA 1,000M 176,330
- -----------------------------------------------------------------------------------------------------------------------==========
United Kingdom 5.33% U.K. Government Conv. 9% due 3/3/2000 AAA 240M 402,223
----------------------------------------------------------------------------------------------==========
Total Investments in Foreign Securities (Cost $3,865,152) 3,965,161
=================================================================================================================================
UNITED STATES 42.41%
=================================================================================================================================
Federal Home Loan Banks 6.11% due 10/17/1997 AAA 250M 250,234
--------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 6 1/2% due on an
announced basis AAA 250M 247,969
--------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 6.85% due 8/22/2005 AAA 450M 467,438
--------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 7% due on an announced basis AAA 250M 247,930
--------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 8 1/2% due 2/1/2005 AAA 250M 270,156
--------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 8 1/2% due 9/1/2006 AAA 246M 256,055
--------------------------------------------------------------------------------------------------------
Government National Mortgage Association 6 1/2% due on an
announced basis AAA 550M 540,891
--------------------------------------------------------------------------------------------------------
Government National Mortgage Association 7% due on an
announced basis AAA 600M 595,969
--------------------------------------------------------------------------------------------------------
U.S. Treasury Notes 6 7/8% due 8/15/2025 AAA 300M 322,031
--------------------------------------------------------------------------------------------------------
Total Investments in United States Securities (Cost $3,188,398) 3,198,673
----------------------------------------------------------------------------------------------==========
Total Investments in Securities (Cost $7,053,550) 7,163,834
=================================================================================================================================
OTHER ASSETS, LESS LIABILITIES 5.02%
=================================================================================================================================
Other Short-Term Beneficial Corp. 5.73% due 11/6/1995 300M 300,000
Assets Securities, --------------------------------------------------------------------------------------------------------
at Cost Chevron Oil Finance Co. 5.58% due 11/1/1995 300M 300,000
--------------------------------------------------------------------------------------------------------
Total 600,000
- -----------------------------------------------------------------------------------------------------------------------==========
Short-Term
Securities,
at Market U.S. Treasury Notes 11 1/2% due 11/15/1995 (Cost $257,777) AAA 250 250,508
----------------------------------------------------------------------------------------------==========
Total Short-Term Securities 850,508
- -----------------------------------------------------------------------------------------------------------------------==========
Receivable Securities sold 7,615,756
for: --------------------------------------------------------------------------------------------------------
Other 286,724
--------------------------------------------------------------------------------------------------------
Total Other Assets 8,752,988
=================================================================================================================================
Liabilities
Payable Securities purchased 8,339,319
for: --------------------------------------------------------------------------------------------------------
Other 35,218
--------------------------------------------------------------------------------------------------------
Total Liabilities 8,374,537
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 378,451
=================================================================================================================================
Net Assets 100.00% (equivalent to $4.84 a share on 1,557,203 shares of
beneficial interest outstanding) $7,542,285
=================================================================================================================================
</TABLE>
* Ratings have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
=======================================================================================================================
Statement of Net Assets October 31, 1995
- -----------------------------------------------------------------------------------------------------------------------
BOND-DEBENTURE TRUST Principal Market Value
Security Amount (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 91.84%
- -----------------------------------------------------------------------------------------------------------------------
LOWER RATED STRAIGHT DEBT (Note 3) 60.75%
- -----------------------------------------------------------------------------------------------------------------------
Agricultural Agricultural Minerals & Chemical Inc. Sr. Notes 10 3/4/2003 $1,000M $ 1,081,250
2.90% -------------------------------------------------------------------------------------------
Arcadian Partner Sr. Notes Ser B 10 3/4/2005 1,500M 1,627,500
-------------------------------------------------------------------------------------------
PMI Acquisition Corp. Sr. Sub. Notes 10 1/4/2003 1,000M 1,036,250
-------------------------------------------------------------------------------------------
Total 3,745,000
- -------------------------------------------------------------------------------------------------------------==========
Airlines .23% US Air Inc. Equipment Trust Ser D 10.61/2007 300M 302,859
- -------------------------------------------------------------------------------------------------------------==========
Building Materials .98% Associated Materials, Inc. Sr. Sub. Notes 11 1/2/2003 1,500M 1,266,094
---------------------------------------------------------------------------------==========
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
BOND-DEBENTURE TRUST Principal Market Value
Security Amount (Note 1a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Chemicals Borden Chemical Sr. Notes 9 1/2/2005 $1,000M $ 1,030,000
3.45% -------------------------------------------------------------------------------------------
Huntsman Corp. 1st Mtge. Notes 11/2004 1,000M 1,120,000
-------------------------------------------------------------------------------------------
Polymer Group Inc. Sr. Notes 12 3/4/2002+ 750M 765,000
-------------------------------------------------------------------------------------------
UCC Investors Holdings Sr. Sub. Notes 11/2003 1,500M 1,535,625
-------------------------------------------------------------------------------------------
Total 4,450,625
- -----------------------------------------------------------------------------------------------------------============
Communications Adelphia Communications Corp. Sr. Notes Ser B 9 7/8/2005 1,000M 895,000
8.83% -------------------------------------------------------------------------------------------
Adelphia Communications Corp. Sr. Notes 12 1/2/2002 500M 490,000
-------------------------------------------------------------------------------------------
CAI Wireless System Inc. Sr. Notes 12 1/4/2002 650M 697,938
-------------------------------------------------------------------------------------------
Cellular Inc. Zero Coupon Sr. Sub. Discount Notes due 2003++ 2,500M 1,950,000
-------------------------------------------------------------------------------------------
Cencall Communications Zero Coupon Sr. Discount Notes due 2004++ 1,000M 522,500
-------------------------------------------------------------------------------------------
Horizon Cellular Inc. Zero Coupon Sr. Sub. Discount Notes due 2000++ 1,000M 857,500
-------------------------------------------------------------------------------------------
IntelCom Group (USA) Inc. Zero Coupon Sr. Discount Notes due 2005+++ 2,000M 1,130,000
-------------------------------------------------------------------------------------------
Marcus Cable Co. Sr. Deb. 11 7/8/2005 500M 517,500
-------------------------------------------------------------------------------------------
Metrocall Inc. Sr. Sub. Notes 10 3/8/2007 1,000M 1,030,000
-------------------------------------------------------------------------------------------
Rogers Communications Inc. Sr. Sub. Deb. 10 7/8/2004 1,500M 1,563,750
-------------------------------------------------------------------------------------------
Telewest PLC Zero Coupon Sr. Discount Deb. due 2007 3,000M 1,756,875
-------------------------------------------------------------------------------------------
Total 11,411,063
- -----------------------------------------------------------------------------------------------------------============
Computer Systems and
Peripherals .74% Digital Equipment Sr. Notes 7 3/4/2023 1,000M 955,781
- -----------------------------------------------------------------------------------------------------------============
Consumer Products
1.62% American Standard Inc. Zero Coupon Sr. Sub. Deb. due 2005++ 2,500M 2,096,875
- -----------------------------------------------------------------------------------------------------------============
Container and Calmar Inc. Sr. Sub. Notes 11 1/2/2005+ 1,000M 1,021,250
Packaging -------------------------------------------------------------------------------------------
3.62% Container Corp. of America Sr. Notes Ser A 11 1/4/2004 1,000M 1,055,000
-------------------------------------------------------------------------------------------
Owens Illinois Inc. Sr. Sub. Notes 10/2002 1,500M 1,571,250
-------------------------------------------------------------------------------------------
Portola Packaging Inc. Sr. Notes 10 3/4/2005 1,000M 1,025,000
-------------------------------------------------------------------------------------------
Total 4,672,500
- -----------------------------------------------------------------------------------------------------------============
Food Heilman Acquisition Co. Sr. Sub. Notes 9 5/8/2004 1,000M 275,000
1.60% -------------------------------------------------------------------------------------------
Seven-Up/R.C. Bottling Co. Sr. Secured Notes 11 1/2/1999* 500M 237,500
-------------------------------------------------------------------------------------------
Van de Kamp's Inc. Sr. Sub. Notes 12/2005+ 1,500M 1,548,750
-------------------------------------------------------------------------------------------
Total 2,061,250
- -----------------------------------------------------------------------------------------------------------============
Forest Products .74% Pacific Lumber Sr. Notes 10 1/2/2003 1,000M 960,000
- -----------------------------------------------------------------------------------------------------------============
Hotel/Leisure Act III Inc. Sr. Sub. Notes 11 7/8/2003 1,000M 1,075,000
1.64% -------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority 1st Mtge. Notes 13 1/2/2002+ 1,000M 1,050,000
-------------------------------------------------------------------------------------------
Total 2,125,000
- -----------------------------------------------------------------------------------------------------------============
Industrial and
Capital Goods .83% SPX Corp. Sr. Sub. Notes 11 3/4/2002 1,000M 1,070,000
- -----------------------------------------------------------------------------------------------------------============
Machinery Carbide Graphite Group Inc. Sr. Notes 11 1/2/2003 454M 491,455
3.91% -------------------------------------------------------------------------------------------
Eagle Industries Inc. Zero Coupon Sr. Discount Notes due 2003++ 2,000M 1,600,000
-------------------------------------------------------------------------------------------
Essex Group Inc. Sr. Notes 10/2003 2,000M 1,935,000
-------------------------------------------------------------------------------------------
IMO Industries Sr. Sub. Deb. 12/2001 1,000M 1,030,000
-------------------------------------------------------------------------------------------
Total 5,056,455
- -----------------------------------------------------------------------------------------------------------============
Media Benedek Broadcasting Corp. Sr. Secured Notes 11 7/8/2005+ 1,000M 1,065,000
4.58% -------------------------------------------------------------------------------------------
Granite Broadcasting Co. Sr. Sub. Notes Ser A 10 3/8/2005+ 500M 516,875
-------------------------------------------------------------------------------------------
Granite Broadcasting Co. Sr. Sub. Deb. 12 3/4/2002 1,000M 1,112,500
-------------------------------------------------------------------------------------------
Heritage Media Services, Inc. Sr. Secured Notes 11/2002 1,000M 1,068,750
-------------------------------------------------------------------------------------------
Sinclair Broadcasting Group, Inc. Sr. Notes 10/2005 1,000M 1,032,500
-------------------------------------------------------------------------------------------
Young Broadcasting Inc. Sr. Sub. Notes 11 3/4/2004 1,000M 1,115,000
-------------------------------------------------------------------------------------------
Total 5,910,625
-------------------------------------------------------------------------------============
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
Statement of Net Assets October 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
BOND-DEBENTURE TRUST Principal Market Value
Security Amount (Note 1a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Medical/Health Genesis Health Ventures Sr. Sub. Notes 9 3/4/2005 $1,000M $ 1,040,000
Care -------------------------------------------------------------------------------------------
2.87% Paracelsus Health Care Corp. Sr. Sub. Notes 9 7/8/2003 1,000M 1,015,000
-------------------------------------------------------------------------------------------
Quorum Healthcare Sr. Sub. Notes 11 7/8/2002 1,000M 1,116,250
-------------------------------------------------------------------------------------------
Tenet Healthcare Sr. Sub. Notes 10 1/8/2005 500M 540,000
-------------------------------------------------------------------------------------------
Total 3,711,250
- -----------------------------------------------------------------------------------------------------------============
Oil and Gas Clark USA Inc. Zero Coupon Sr. Collateralized Notes due 2000 2,500M 1,603,125
4.81% -------------------------------------------------------------------------------------------
Crown Central Petroleum Corp. Sr. Notes 10 7/8/2005 1,500M 1,567,500
-------------------------------------------------------------------------------------------
Gulf Canada Resources Sr. Sub. Notes 9 1/4/2004 600M 603,000
-------------------------------------------------------------------------------------------
Metro Gas, S.A. Sr. Sub. Notes Ser A 12/2000+ 1,000M 972,500
-------------------------------------------------------------------------------------------
Nuevo Energy Co. Sr. Sub. Notes 12 1/2/2002 500M 547,500
-------------------------------------------------------------------------------------------
United Meridian Corp. Sr. Sub. Notes 10 3/8/2005 900M 920,250
-------------------------------------------------------------------------------------------
Total 6,213,875
- -----------------------------------------------------------------------------------------------------------============
Oil Service .42% Rowan Cos. Sr. Notes 11 7/8/2001 500M 542,500
- -----------------------------------------------------------------------------------------------------------============
Paper and Pulp Crown Paper Co. Sr. Sub. Notes 11/2005 1,000M 957,500
4.60% -------------------------------------------------------------------------------------------
Domtar Inc. Deb. 11 1/4/2017 1,500M 1,590,000
-------------------------------------------------------------------------------------------
Repap Wisconsin Inc. Sr. Secured 2nd Priority 9 7/8/2006 1,500M 1,458,750
-------------------------------------------------------------------------------------------
S.D. Warren Co. Sr. Sub. Notes Ser B 12/2004+ 450M 497,250
-------------------------------------------------------------------------------------------
Stone Container Corp. 1st Mtge. 10 3/4/2002 1,000M 1,048,750
-------------------------------------------------------------------------------------------
Tembec Finance Corp. Sr. Notes 9 7/8/2005 400M 394,500
-------------------------------------------------------------------------------------------
Total 5,946,750
- -----------------------------------------------------------------------------------------------------------============
Printing and
Publishing .73% Webcraft Technologies Inc. Sub. Notes 9 3/8/2002 1,000M 940,000
- -----------------------------------------------------------------------------------------------------------============
Real Estate .63% Trizec Finance Sr. Notes 10 7/8/2005 800M 808,000
- -----------------------------------------------------------------------------------------------------------============
Retail 1.26% United Stationers Supply Co. Sr. Sub. Notes 12 3/4/2005+ 1,500M 1,631,250
- ----------------------------------------------------------------------------------------------------------------------
Steel AK Steel Corp. Sr. Notes 10 3/4/2004 1,000M 1,095,000
3.15% -------------------------------------------------------------------------------------------
G.S. Technologies Operating Co. Sr. Notes 12 1/4/2005 1,000M 1,015,000
-------------------------------------------------------------------------------------------
Ivaco Inc. Sr. Notes Ser B 11 1/2/2005 500M 497,500
-------------------------------------------------------------------------------------------
WCI Steel Inc. Sr. Notes 10 1/2/2002 1,500M 1,456,875
-------------------------------------------------------------------------------------------
Total 4,064,375
- -----------------------------------------------------------------------------------------------------------============
Supermarket Bruno's Inc. Sr. Sub. Notes 10 1/2/2005 1,000M 981,250
3.04% -------------------------------------------------------------------------------------------
Farm Fresh Holdings Sr. Notes P.I.K.+++ 14 1/4/2002 658M 309,479
-------------------------------------------------------------------------------------------
Pathmark Stores Inc. Zero Coupon Sub. Notes due 2003 2,500M 1,628,125
-------------------------------------------------------------------------------------------
Ralphs Grocery Store Co. Sr. Notes 10.45/2004 1,000M 1,005,000
-------------------------------------------------------------------------------------------
Total 3,923,854
- -----------------------------------------------------------------------------------------------------------============
Textile Dan River Inc. Sr. Sub. Notes 10 1/8/2003 1,000M 1,008,750
2.77% -------------------------------------------------------------------------------------------
Fieldcrest Cannon Inc. Sr. Sub. Notes 11 1/4/2004 1,000M 1,035,000
-------------------------------------------------------------------------------------------
Tultex Corp. Sr. Notes 10 5/8/2005 500M 526,250
-------------------------------------------------------------------------------------------
Westpoint Stevens Sr. Sub. Deb. 9 3/8/2005 1,000M 1,002,500
-------------------------------------------------------------------------------------------
Total 3,572,500
- -----------------------------------------------------------------------------------------------------------============
Utility .81% Beaver Valley Funding Corp. Secured Lease Obligation 9/2017 1,246M 1,042,551
-------------------------------------------------------------------------------============
Total Investments in Lower Rated Straight Debt (Cost $84,519,520) 78,481,032
=======================================================================================================================
CONVERTIBLE DEBT 8.59%
=======================================================================================================================
Automotive 1.22% Magna Intl. Conv. Sub. Deb. 5/2002 1,550M 1,581,000
- -----------------------------------------------------------------------------------------------------------============
Communications LDDS Communication Inc. Conv. Sub. Deb. 5/2003 500M 512,500
.93% -------------------------------------------------------------------------------------------
Telekom Malaysia Conv. Sub. Deb. 4/2004+ 750M 690,000
-------------------------------------------------------------------------------------------
Total 1,202,500
- -----------------------------------------------------------------------------------------------------------============
Data Processing Automatic Data Processing Zero Coupon Conv. Sub. Deb. due 2012 2,000M 950,000
Equipment and -------------------------------------------------------------------------------------------
Components 1.90% EMC Corp. Conv. Sub. Deb. 4 1/4/2001 1,500M 1,501,875
-------------------------------------------------------------------------------------------
Total 2,451,875
-------------------------------------------------------------------------------============
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
==========================================================================================================================
Statement of Net Assets October 31, 1995
- --------------------------------------------------------------------------------------------------------------------------
BOND-DEBENTURE TRUST Principal
Amount
or Number Market Value
Security of Shares (Note 1a)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Drugs/Pharmaceuticals Elan International Finance, Ltd. Zero Coupon Conv. Sub. Deb. due 2012 $2,000M $ 910,000
2.76% -----------------------------------------------------------------------------------------------
Roche Holdings Inc. Zero Coupon Conv. Sub. Deb. due 2010+ 4,000M 1,665,000
-----------------------------------------------------------------------------------------------
Sandoz Capital, BVI, Ltd. Conv. Sub. Deb. 2/2002+ 1,125M 992,812
-----------------------------------------------------------------------------------------------
Total 3,567,812
- ---------------------------------------------------------------------------------------------------------------============
Electronics .39% Checkpoint Systems Inc. Conv. Sub. Deb. 5 1/4/2005+ 500M 503,750
- ---------------------------------------------------------------------------------------------------------------============
Medical/Health
Care .74% Integrated Health Svs. Conv. Sub. Deb. 6/2003 1,000M 950,000
- ---------------------------------------------------------------------------------------------------------------============
Waste Management .65% WMX Technologies Inc. Conv. Sub. Notes 2/2005 1,000M 845,000
-----------------------------------------------------------------------------------============
Total Investments in Convertible Debt (Cost $8,776,582) 11,101,937
===========================================================================================================================
PREFERRED AND CONVERTIBLE-PREFERRED STOCKS, COMMON STOCKS AND WARRANTS 7.63%
===========================================================================================================================
Banking .66% Ahmanson, H.F. & Co. $3.00 Conv. Pfd. D 15,000 858,750
- ---------------------------------------------------------------------------------------------------------------============
Chemicals .61% Atlantic Richfield (Lyondell Petrochemical) $2.23 Conv. Pfd. C 35,000 783,125
- ---------------------------------------------------------------------------------------------------------------============
Data Processing Equip-
ment and Components
1.04% General Motors Corp. (Electronic Data Systems) $3.25 Conv. Pfd. Ser C 20,000 1,340,000
- ---------------------------------------------------------------------------------------------------------------============
Financial .42% American Express Company $2.30 Conv. Pfd. Notes 10,000 548,750
- ---------------------------------------------------------------------------------------------------------------============
Insurance American General $3.00 Conv. Pfd. A 20,000 1,035,000
1.94% -----------------------------------------------------------------------------------------------
Penncorp Financial $3.375 Conv. Pfd. 6,500 391,625
-----------------------------------------------------------------------------------------------
St. Paul's Capital $3.00 Conv. Pfd. M 20,000 1,080,000
-----------------------------------------------------------------------------------------------
Total 2,506,625
- ---------------------------------------------------------------------------------------------------------------============
Medical/Health
Care .69% Beverly Enterprises $2.75 Conv. Pfd. 17,500 892,500
- ---------------------------------------------------------------------------------------------------------------============
Oil and Gas .60% Unocal Corp. $3.50 Conv. Pfd.+ 15,000 780,000
- ---------------------------------------------------------------------------------------------------------------============
Paper and Pulp 1.03% International Paper Co. $2.625 Conv. Pfd. Notes+ 30,000 1,327,500
- ---------------------------------------------------------------------------------------------------------------============
Waste Management Browning Ferris Industries Inc. $2.58 Conv. Pfd. 25,000 821,875
.64% -----------------------------------------------------------------------------------============
Total Investments in Preferred and Convertible-Preferred Stocks
(Cost $5,601,839) 9,859,125
===========================================================================================================================
U.S. GOVERNMENT AND AGENCY OBLIGATIONS 14.87%
===========================================================================================================================
Federal National Mortgage Association due on an announced basis 5,000M 4,958,594
-----------------------------------------------------------------------------------------------
Federal National Mortgage Association 8 7/8% due 7/10/2001 4,500M 4,595,625
-----------------------------------------------------------------------------------------------
Government National Mortgage Association due on an announced basis 3,000M 2,914,688
-----------------------------------------------------------------------------------------------
Government National Mortgage Association 8% due 5/15/2024 937M 964,452
-----------------------------------------------------------------------------------------------
U.S. Treasury Notes 6 1/2% due 8/15/2005 2,000M 2,071,562
-----------------------------------------------------------------------------------------------
U.S. Treasury Notes 8 3/4% due 10/15/1997 3,500M 3,699,062
-----------------------------------------------------------------------------------------------
Total Investments in U.S. Government and Agency Obligations
(Cost $19,170,527) 19,203,983
-----------------------------------------------------------------------------------============
Total Investments in Securities (Cost $118,068,468) 118,646,077
===========================================================================================================================
OTHER ASSETS, LESS LIABILITIES 8.16%
===========================================================================================================================
Other Short-Term Federal Home Loan Banks Ser UA 13% due 7/19/1996 3,000M 3,156,563
Assets Securities, -----------------------------------------------------------------------------------------------
at Market Federal Home Loan Mortgage Corporation Ser A 12% due 3/13/1996 3,000M 3,064,688
-----------------------------------------------------------------------------------------------
Federal National Mortgage Association Ser A 14% due 9/25/1996 7,000M 7,507,500
-----------------------------------------------------------------------------------------------
U.S. Treasury Notes 11 1/2% due 11/15/1995 3,400M 3,406,906
-----------------------------------------------------------------------------------------------
Total (Cost $17,381,918) 17,135,657
-----------------------------------------------------------------------------------============
Short-Term Beneficial Corp. 5.72% due 11/6/1995 700M 700,000
Securities, -----------------------------------------------------------------------------------------------
at Cost Prudential Funding Corp. 5.82% due 11/1/1995 300M 300,000
-----------------------------------------------------------------------------------------------
Total 1,000,000
-----------------------------------------------------------------------------------============
Total Short-Term Securities 18,135,657
- ---------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 3,021,539
-----------------------------------------------------------------------------------------------
Other 4,871,379
-----------------------------------------------------------------------------------------------
Total Other Assets 26,028,575
-----------------------------------------------------------------------------------============
</TABLE>
12
<PAGE>
================================================================================
Statement of Net Assets October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND-DEBENTURE TRUST Market Value
(Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Liabilities Payable for: Securities purchased $ 15,438,657
--------------------------------------------------------------------------------------------------------
Other 47,798
--------------------------------------------------------------------------------------------------------
Total Liabilities 15,486,455
--------------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 10,542,120
====================================================================================================================================
Net Assets 100.00% (equivalent to $4.76 a share on 27,118,423 shares of
beneficial interest outstanding) $129,188,197
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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 an indicated coupon rate.
+++ Represents a payment-in-kind security, which may pay interest/dividends in
additional face/shares.
See Notes to Financial Statements.
================================================================================
Statement of Net Assets October 31, 1995
- --------------------------------------------------------------------------------
GROWTH & INCOME TRUST
<TABLE>
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
===================================================================================================================================
<S> <C> <C> <C>
INVESTMENTS IN COMMON AND
CONVERTIBLE-PREFERRED STOCKS 94.46%
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace Boeing Co. 8,400 $ 551,250
2.28% ------------------------------------------------------------------------------------------------
Lockheed Martin Corp. 2,878 196,064
------------------------------------------------------------------------------------------------
Total 747,314
- --------------------------------------------------------------------------------------------------------------------------==========
Airlines .76% British Airways plc ADR 3,500 250,250
- --------------------------------------------------------------------------------------------------------------------------==========
Apparel 1.30% VF Corp. 8,900 426,087
- --------------------------------------------------------------------------------------------------------------------------==========
Auto Parts Genuine Parts Company 19,900 788,538
4.38% ------------------------------------------------------------------------------------------------
Snap-On, Inc. 9,200 389,850
------------------------------------------------------------------------------------------------
TRW Inc. 3,900 256,425
------------------------------------------------------------------------------------------------
Total 1,434,813
- --------------------------------------------------------------------------------------------------------------------------==========
Automobiles Ford Motor Co.
1.92% $4.20 Cum. Conv. Pfd. A 500 47,000
------------------------------------------------------------------------------------------------
General Motors Corp. 13,300 581,875
------------------------------------------------------------------------------------------------
Total 628,875
- --------------------------------------------------------------------------------------------------------------------------==========
Banks: Bank of Boston Corp. 6,100 271,450
Money Center ------------------------------------------------------------------------------------------------
2.92% Chemical Banking Corp. 6,700 381,063
------------------------------------------------------------------------------------------------
First Chicago Corp. 4,500 305,438
------------------------------------------------------------------------------------------------
Total 957,951
- -------------------------------------------------------------------------------------------------------------------------===========
Banks: BankAmerica Corp. 6,900 396,750
Regional ------------------------------------------------------------------------------------------------
2.69% Comerica Inc. 8,100 272,363
------------------------------------------------------------------------------------------------
Fleet Financial Group, Inc. 5,500 213,125
------------------------------------------------------------------------------------------------
Total 882,238
- --------------------------------------------------------------------------------------------------------------------------==========
Chemicals Dow Chemical Co. 6,200 425,475
2.96% ------------------------------------------------------------------------------------------------
Union Carbide Corp. 14,400 545,400
------------------------------------------------------------------------------------------------
Total 970,875
- --------------------------------------------------------------------------------------------------------------------------==========
Data Processing Hewlett-Packard Co. 4,300 398,288
Equipment ------------------------------------------------------------------------------------------------
1.87% Seagate Technology Inc. 4,800 214,800
------------------------------------------------------------------------------------------------
Total 613,088
---------------------------------------------------------------------------------------=========
Data Processing General Motors Corp.
Services (Electronic Data Systems)
2.00% $3.25 Conv. Pfd. 6,400 $ 428,800
------------------------------------------------------------------------------------------------
General Motors Corp.
(Electronic Data
Systems) Class E 4,800 226,200
------------------------------------------------------------------------------------------------
Total 655,000
- --------------------------------------------------------------------------------------------------------------------------==========
Drugs/Health Baxter International Inc. 7,500 289,688
Care Products ------------------------------------------------------------------------------------------------
5.46% Lilly, Eli & Co. 3,500 338,188
------------------------------------------------------------------------------------------------
Merck & Co., Inc. 8,000 460,000
------------------------------------------------------------------------------------------------
SmithKline Beecham
plc ADS 13,500 700,313
------------------------------------------------------------------------------------------------
Total 1,788,189
- --------------------------------------------------------------------------------------------------------------------------==========
Electric Power Baltimore Gas &
5.68% Electric Co. 17,000 454,750
------------------------------------------------------------------------------------------------
CINergy Corp. 22,900 649,788
------------------------------------------------------------------------------------------------
Detroit Edison Co. 9,700 327,375
------------------------------------------------------------------------------------------------
Public Service
Enterprises Group Inc. 14,600 428,875
------------------------------------------------------------------------------------------------
Total 1,860,788
- --------------------------------------------------------------------------------------------------------------------------==========
Electrical
Equipment
2.20% Emerson Electric Co. 10,100 719,625
- --------------------------------------------------------------------------------------------------------------------------==========
Electronics:
Communications
.59% Harris Corp. 3,300 191,812
- --------------------------------------------------------------------------------------------------------------------------==========
Electronics:
Components
2.41% AMP Inc. 20,100 788,925
- --------------------------------------------------------------------------------------------------------------------------==========
Electronics:
Equipment .42% Perkin-Elmer Corp. 3,900 136,987
--------------------------------------------------------------------------------------==========
</TABLE>
13
<PAGE>
================================================================================
Statement of Net Assets October 31, 1995
- --------------------------------------------------------------------------------
GROWTH & INCOME TRUST
<TABLE>
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
====================================================================================================================================
<S> <C> <C> <C>
Financial: American Express Company 8,000 $ 325,000
Miscellaneous ------------------------------------------------------------------------------------------------
2.25% Transamerica Corp. 6,100 413,275
------------------------------------------------------------------------------------------------
Total 738,275
- --------------------------------------------------------------------------------------------------------------------------==========
Food Conagra Inc. 7,670 296,254
8.11% ------------------------------------------------------------------------------------------------
Dean Foods Co. 16,700 465,513
------------------------------------------------------------------------------------------------
Hershey Foods Corp. 9,300 555,675
------------------------------------------------------------------------------------------------
RJR Nabisco 25,200 774,900
------------------------------------------------------------------------------------------------
Sara Lee Corp. 4,000 117,500
------------------------------------------------------------------------------------------------
Supervalu Inc. 14,600 448,950
------------------------------------------------------------------------------------------------
Total 2,658,792
- --------------------------------------------------------------------------------------------------------------------------==========
Hotel/Motel Patriot American
1.77% Hospitality Inc. Real
Estate Investment Trust 12,600 307,125
------------------------------------------------------------------------------------------------
Starwood Lodging Trust
Real Estate
Investment Trust 10,000 272,500
------------------------------------------------------------------------------------------------
Total 579,625
- --------------------------------------------------------------------------------------------------------------------------==========
Insurance Aetna Life & Casualty Co. 8,750 615,780
3.97% ------------------------------------------------------------------------------------------------
CIGNA Corp. 5,900 584,837
------------------------------------------------------------------------------------------------
Lincoln National Corp. 200 8,925
------------------------------------------------------------------------------------------------
SAFECO Corp. 1,400 89,862
------------------------------------------------------------------------------------------------
Total 1,299,404
- --------------------------------------------------------------------------------------------------------------------------==========
Machinery: Deere & Co. 6,500 580,937
Diversified ------------------------------------------------------------------------------------------------
2.76% Goulds Pumps, Inc. 13,600 323,000
------------------------------------------------------------------------------------------------
Total 903,937
- --------------------------------------------------------------------------------------------------------------------------==========
Miscellaneous Minnesota Mining
2.55% & Mfg. Co. 8,100 460,688
------------------------------------------------------------------------------------------------
Moore Corp. Ltd. 6,000 114,750
------------------------------------------------------------------------------------------------
National Service
Industries, Inc. 8,700 258,825
------------------------------------------------------------------------------------------------
Total 834,263
- --------------------------------------------------------------------------------------------------------------------------==========
Natural Gas Coastal Corp. 11,000 356,125
Transmission ------------------------------------------------------------------------------------------------
2.32% Eastern Enterprises 4,000 119,500
------------------------------------------------------------------------------------------------
Equitable Resources, Inc. 9,700 283,725
------------------------------------------------------------------------------------------------
Total 759,350
- --------------------------------------------------------------------------------------------------------------------------==========
Office
Equipment/
Supplies 1.14% Apple Computer Inc. 10,300 374,018
- --------------------------------------------------------------------------------------------------------------------------==========
Oil:
Domestic
.39% Ultramar Corp. 5,300 129,187
- --------------------------------------------------------------------------------------------------------------------------==========
Oil: Chevron Corp. 13,600 635,800
International ------------------------------------------------------------------------------------------------
4.79% Exxon Corp. 5,900 450,612
------------------------------------------------------------------------------------------------
Mobil Corp. 4,800 483,600
------------------------------------------------------------------------------------------------
Total 1,570,012
- --------------------------------------------------------------------------------------------------------------------------==========
Paper and Crown Vantage Inc. 690 13,714
Forest Products ------------------------------------------------------------------------------------------------
5.99% Federal Paper Board Inc. 13,300 558,600
------------------------------------------------------------------------------------------------
James River Corp. 13,900 446,537
------------------------------------------------------------------------------------------------
Kimberly Clark Corp. 4,900 355,862
------------------------------------------------------------------------------------------------
Scott Paper Co. 5,500 292,875
------------------------------------------------------------------------------------------------
Westvaco Corporation 10,600 294,150
------------------------------------------------------------------------------------------------
Total 1,961,738
- --------------------------------------------------------------------------------------------------------------------------==========
Printing and Deluxe Corp. 6,700 180,063
Publishing ------------------------------------------------------------------------------------------------
2.75% Donnelley, R.R. &
Sons Co. 16,800 613,200
------------------------------------------------------------------------------------------------
Gannett Co., Inc. 2,000 108,750
------------------------------------------------------------------------------------------------
Total 902,013
- --------------------------------------------------------------------------------------------------------------------------==========
Retail Dayton Hudson Corp. 5,050 347,188
2.31% ------------------------------------------------------------------------------------------------
Sears, Roebuck & Co. 12,100 411,400
------------------------------------------------------------------------------------------------
Total 758,588
- --------------------------------------------------------------------------------------------------------------------------==========
Savings and Ahmanson, H.F. & Co. 23,900 597,500
Loan ------------------------------------------------------------------------------------------------
3.79% Great Western Financial
Corp. 28,500 644,813
------------------------------------------------------------------------------------------------
Total 1,242,313
- --------------------------------------------------------------------------------------------------------------------------==========
Telecommu- AT&T Corp. 7,900 505,600
nications ------------------------------------------------------------------------------------------------
4.56% MCI Communications
Corp. 39,700 990,018
------------------------------------------------------------------------------------------------
Total 1,495,618
- --------------------------------------------------------------------------------------------------------------------------==========
Tire and Rubber Cooper Tire & Rubber
Goods 1.46% Company 20,700 478,687
- --------------------------------------------------------------------------------------------------------------------------==========
Tobacco 1.31% American Brands Inc. 10,000 428,750
- --------------------------------------------------------------------------------------------------------------------------==========
Waste Browning Ferris
Management Industries Inc. 21,600 629,100
2.40% ------------------------------------------------------------------------------------------------
WMX Technologies Inc. 5,600 157,500
------------------------------------------------------------------------------------------------
Total 786,600
--------------------------------------------------------------------------------------==========
Total Investments in Securities
(Cost $27,661,121) 30,953,987
====================================================================================================================================
OTHER ASSETS, LESS LIABILITIES 5.54%
====================================================================================================================================
Corporate Obligations, at Cost
====================================================================================================================================
Ford Motor Credit Co.
5.72% due 11/2/1995 200M 200,000
------------------------------------------------------------------------------------------------
Prudential Funding Corp.
5.72% due 11/3/1995 700M 700,000
------------------------------------------------------------------------------------------------
Total 900,000
====================================================================================================================================
Cash and Receivables, Net of Liabilities 915,937
--------------------------------------------------------------------------------------==========
Total Other Assets, Less Liabilities 1,815,937
====================================================================================================================================
Net Assets (equivalent to $6.04 a share on
100.00% 5,428,222 shares of beneficial
interest outstanding) $32,769,924
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
================================================================================
Statement of Net Assets October 31, 1995
- --------------------------------------------------------------------------------
BALANCED TRUST
<TABLE>
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
====================================================================================================================================
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES 95.87%
====================================================================================================================================
COMMON STOCKS 52.69%
====================================================================================================================================
Aerospace 1.51% Boeing Co. 450 $ 29,531
- --------------------------------------------------------------------------------------------------------------------------==========
Apparel .61% VF Corp. 250 11,969
- --------------------------------------------------------------------------------------------------------------------------==========
Auto Parts Genuine Parts Company 550 21,794
1.62% ------------------------------------------------------------------------------------------------
TRW Inc. 150 9,863
------------------------------------------------------------------------------------------------
Total 31,657
- --------------------------------------------------------------------------------------------------------------------------==========
Automobiles
1.34% General Motors Corp. 600 26,250
- --------------------------------------------------------------------------------------------------------------------------==========
Banks: Money
Center 1.16% Chemical Banking Corp. 400 22,750
- --------------------------------------------------------------------------------------------------------------------------==========
Banks: BankAmerica Corp. 400 23,000
Regional ------------------------------------------------------------------------------------------------
1.52% Comerica Inc. 200 6,725
------------------------------------------------------------------------------------------------
Total 29,725
- --------------------------------------------------------------------------------------------------------------------------==========
Chemicals Dow Chemical Co. 500 34,313
2.81% ------------------------------------------------------------------------------------------------
Union Carbide Corp. 550 20,831
------------------------------------------------------------------------------------------------
Total 55,144
- --------------------------------------------------------------------------------------------------------------------------==========
Data Processing
Equipment .95% Hewlett-Packard Co. 200 18,525
- --------------------------------------------------------------------------------------------------------------------------==========
Data Processing General Motors Corp.
Services (Electronic Data
1.44% Systems) Class E 600 28,275
- --------------------------------------------------------------------------------------------------------------------------==========
Drugs/Health Merck & Co., Inc. 450 25,875
Care Products ------------------------------------------------------------------------------------------------
2.64% SmithKline Beecham
plc ADS 500 25,938
------------------------------------------------------------------------------------------------
Total 51,813
- --------------------------------------------------------------------------------------------------------------------------==========
Electric Baltimore Gas
Power & Electric Co. 650 17,388
2.94% ------------------------------------------------------------------------------------------------
CINergy Corp. 900 25,538
------------------------------------------------------------------------------------------------
Public Service Enterprises
Group Inc. 500 14,688
------------------------------------------------------------------------------------------------
Total 57,614
- --------------------------------------------------------------------------------------------------------------------------==========
Electrical
Equipment
1.27% Emerson Electric Co. 350 24,938
- --------------------------------------------------------------------------------------------------------------------------==========
Electronics:
Components
1.90% AMP Inc. 950 37,288
- --------------------------------------------------------------------------------------------------------------------------==========
Financial: American Express Company 450 18,281
Miscellaneous ------------------------------------------------------------------------------------------------
1.62% Transamerica Corp. 200 13,550
------------------------------------------------------------------------------------------------
Total 31,831
- --------------------------------------------------------------------------------------------------------------------------==========
Food Conagra Inc. 500 19,313
4.29% ------------------------------------------------------------------------------------------------
Dean Foods Co. 250 6,969
------------------------------------------------------------------------------------------------
Hershey Foods Corp. 350 20,913
------------------------------------------------------------------------------------------------
RJR Nabisco 800 24,600
------------------------------------------------------------------------------------------------
Supervalu Inc. 400 12,300
------------------------------------------------------------------------------------------------
Total 84,095
- --------------------------------------------------------------------------------------------------------------------------==========
Insurance Aetna Life & Casualty Co. 300 21,112
4.03% ------------------------------------------------------------------------------------------------
Chubb Corp. 150 13,480
------------------------------------------------------------------------------------------------
CIGNA Corp. 350 34,694
------------------------------------------------------------------------------------------------
SAFECO Corp. 150 9,628
------------------------------------------------------------------------------------------------
Total 78,914
- --------------------------------------------------------------------------------------------------------------------------==========
Machinery:
Diversified
1.60% Deere & Co. 350 31,280
- --------------------------------------------------------------------------------------------------------------------------==========
Miscellaneous Minnesota Mining &
.58% Mfg. Co. 200 11,374
- --------------------------------------------------------------------------------------------------------------------------==========
Natural Gas
Transmission
.66% Coastal Corp. 400 12,950
- --------------------------------------------------------------------------------------------------------------------------==========
Office Equipment/
Supplies .46% Apple Computer Inc. 250 9,077
- --------------------------------------------------------------------------------------------------------------------------==========
Oil: Domestic
.50% Ultramar Corp. 400 9,750
- --------------------------------------------------------------------------------------------------------------------------==========
Oil: Chevron Corp. 450 21,038
International ------------------------------------------------------------------------------------------------
3.54% Exxon Corp. 500 38,188
------------------------------------------------------------------------------------------------
Mobil Corp. 100 10,075
------------------------------------------------------------------------------------------------
Total 69,301
- --------------------------------------------------------------------------------------------------------------------------==========
Paper and Forest Federal Paper Board Inc. 550 23,100
Products ------------------------------------------------------------------------------------------------
2.48% James River Corp. 100 3,213
------------------------------------------------------------------------------------------------
Scott Paper Co. 300 15,975
------------------------------------------------------------------------------------------------
Westvaco Corporation 225 6,244
------------------------------------------------------------------------------------------------
Total 48,532
- --------------------------------------------------------------------------------------------------------------------------==========
Printing and
Publishing Donnelley, R.R.
1.21% & Sons Co. 650 23,725
- --------------------------------------------------------------------------------------------------------------------------==========
Retail Dayton Hudson Corp. 200 13,750
1.66% ------------------------------------------------------------------------------------------------
Sears, Roebuck & Co. 550 18,700
------------------------------------------------------------------------------------------------
Total 32,450
- --------------------------------------------------------------------------------------------------------------------------==========
Savings and Ahmanson, H.F. & Co. 750 18,750
Loan ------------------------------------------------------------------------------------------------
2.05% Great Western
Financial Corp. 950 21,493
------------------------------------------------------------------------------------------------
Total 40,243
- --------------------------------------------------------------------------------------------------------------------------==========
Telecommu- AT&T Corp. 350 22,400
nications ------------------------------------------------------------------------------------------------
2.92% MCI Communications
Corp. 1,400 34,912
------------------------------------------------------------------------------------------------
Total 57,312
- --------------------------------------------------------------------------------------------------------------------------==========
Tire and
Rubber Goods Cooper Tire &
.82% Rubber Company 700 16,187
- --------------------------------------------------------------------------------------------------------------------------==========
Tobacco
1.09% American Brands Inc. 500 21,437
- --------------------------------------------------------------------------------------------------------------------------==========
Waste Browning Ferris
Management Industries Inc. 650 18,930
1.47% ------------------------------------------------------------------------------------------------
WMX Technologies Inc. 350 9,844
------------------------------------------------------------------------------------------------
Total 28,774
--------------------------------------------------------------------------------------==========
</TABLE>
15
<PAGE>
================================================================================
Statement of Net Assets October 31, 1995
- --------------------------------------------------------------------------------
BALANCED TRUST
<TABLE>
<CAPTION>
Market
Number Value
Security of Shares (Note 1a)
====================================================================================================================================
<S> <C> <C> <C>
Total Investments in Common Stocks
(Cost $913,062) $1,032,711
====================================================================================================================================
U.S. GOVERNMENT OBLIGATIONS 43.18%
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National
Mortgage Association
8 1/2% due 4/1/2025 $304M 314,759
------------------------------------------------------------------------------------------------
Federal National
Mortgage Association
7% due 10/1/2025 98M 97,143
------------------------------------------------------------------------------------------------
U.S. Treasury Notes
7 1/2% due 11/15/2001 210M 227,161
- --------------------------------------------------------------------------------------------------------------------------==========
U.S. Treasury Notes
6 1/2% due 8/15/2005 200M 207,156
------------------------------------------------------------------------------------------------
Total Investments in
U.S. Government Obligations
(Cost $827,694) 846,219
--------------------------------------------------------------------------------------==========
Total Investments in Securities
(Cost $1,740,756) 1,878,930
====================================================================================================================================
OTHER ASSETS, LESS LIABILITIES 4.13%
====================================================================================================================================
Cash and Receivables, Net of Liabilities 80,853
====================================================================================================================================
Net Assets (equivalent to $11.34 a share on
100.00% 172,752 shares of beneficial
interest outstanding) $1,959,783
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================================================================
Important Information
- --------------------------------------------------------------------------------
See the Trust's prospectus for a history of fees waived and expenses assumed.
As of 10/31/95, 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 6% 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.
16
<PAGE>
===============================================================================
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended 10/31/95
- -----------------------------------------------------------------------------------------------------------------------------------
Limited
Duration
U.S. U.S. Tax-Free Income Trusts
Government Government ----------------------------------------------- Global
Securities Securities National California Florida New York Income
Investment Income Trust Trust Trust Trust Trust Trust Trust
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Income
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Interest $ 31,115,250 $ 975,124 $ 2,690,140 $ 1,219,605 $ 678,334 $ 530,509 $ 549,358
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Dividends - - - - - - -
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Total 31,115,250 975,124 2,690,140 1,219,605 678,334 530,509 $ 549,358
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Expenses (Note 5)
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Management fee 1,680,537 67,840 203,901 93,852 51,764 45,387 35,444
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
12b-1 distribution plan 3,050,712 109,984 379,461 174,460 94,090 77,353 66,113
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Shareholder servicing 126,000 9,497 18,323 12,000 7,700 8,000 8,478
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Registration 50,000 15,500 12,317 3,000 3,250 3,000 12,532
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Reports to shareholders 83,000 4,250 5,306 2,000 2,020 1,500 2,000
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Audit and tax 66,000 14,850 11,328 13,650 12,650 10,450 11,000
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Organization (Note 1e) 22,884 8,112 4,655 1,188 1,291 1,140 7,332
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Legal 9,000 1,950 849 859 575 500 400
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Trustees' fees 6,000 210 195 - - - -
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Other 125,102 4,800 9,930 12,710 11,573 6,871 3,746
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Management fee waived
and expenses assumed by
Lord, Abbett & Co. - - (203,901) (139,259) (87,322) (76,848) (72,891)
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Expenses reimbursed
to Manager - - 97,968 - - - -
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net expenses 5,219,235 236,993 540,332 174,460 97,591 77,353 74,154
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net investment income 25,896,015 738,131 2,149,808 1,045,145 580,743 453,156 475,204
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net Realized and Unrealized Gain (Loss) from Security Transactions and Foreign Currency Transactions (Notes 1g & 8)
===================================================================================================================================
Net realized gain (loss)
from security transactions
and foreign currency
transactions
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Proceeds from sales 2,759,938,938 62,980,815 94,199,630 26,370,091 22,315,903 10,516,068 64,540,379
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Cost of securities sold 2,767,352,780 62,974,045 94,641,743 26,883,664 22,775,329 10,757,962 64,238,042
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net realized gain (loss) (7,413,842) 6,770 (442,113) (513,573) (459,426) (241,894) 302,337
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net unrealized
appreciation
(depreciation) of
investments and foreign
currency holdings
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Beginning of period (13,602,308) (168,261) (3,552,811) (1,176,684) (891,975) (643,136) (26,361)
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
End of period 6,524,887 76,084 883,067 579,885 242,300 231,801 49,526
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net unrealized appreciation 20,127,195 244,345 4,435,878 1,756,569 1,134,275 874,937 75,887
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net realized and unrealized
gain on investments and
foreign currency transactions 12,713,353 251,115 3,993,765 1,242,996 674,849 633,043 378,224
- ------------------------------------- --------------- ------------- ------------- ------------ ------------ ----------- -----------
Net Increase in Net Assets
Resulting from Operations $ 38,609,368 $ 989,246 $ 6,143,573 $ 2,288,141 $ 1,255,592 $1,086,199 $ 853,428
===================================================================================================================================
<CAPTION>
- --------------------------------------------------------------- For the Period
12/27/94
(Commencement
of Operations)
to 10/31/95
Bond- Growth & -----------
Debenture Income Balanced
Investment Income Trust Trust Trust
=================================================================================
<S> <C> <C> <C>
Income
- ------------------------------------- --------------- ------------- -------------
Interest $ 8,205,510 $ 56,649 $ 44,058
- ------------------------------------- --------------- ------------- -------------
Dividends 298,142 559,819 17,502
- ------------------------------------- --------------- ------------- -------------
Total 8,503,652 616,468 61,560
- ------------------------------------- --------------- ------------- -------------
Expenses (Note 5)
- ------------------------------------- --------------- ------------- -------------
Management fee 440,913 143,551 9,859
- ------------------------------------- --------------- ------------- -------------
12b-1 distribution plan 791,709 169,003 3,463
- ------------------------------------- --------------- ------------- -------------
Shareholder servicing 90,000 16,729 2,819
- ------------------------------------- --------------- ------------- -------------
Registration 35,000 10,827 2,800
- ------------------------------------- --------------- ------------- -------------
Reports to shareholders 25,000 2,800 500
- ------------------------------------- --------------- ------------- -------------
Audit and tax 24,000 9,585 2,500
- ------------------------------------- --------------- ------------- -------------
Organization (Note 1e) 7,332 6,866 6,130
- ------------------------------------- --------------- ------------- -------------
Legal 3,500 510 -
- ------------------------------------- --------------- ------------- -------------
Trustees' fees - - -
- ------------------------------------- --------------- ------------- -------------
Other 33,644 5,727 500
- ------------------------------------- --------------- ------------- -------------
Management fee waived
and expenses assumed by
Lord, Abbett & Co. - (143,551) (25,108)
- ------------------------------------- --------------- ------------- -------------
Expenses reimbursed
to Manager - - -
- ------------------------------------- --------------- ------------- -------------
Net expenses 1,451,098 222,047 3,463
- ------------------------------------- --------------- ------------- -------------
Net investment income 7,052,554 394,421 58,097
- ------------------------------------- --------------- ------------- -------------
Net Realized and Unrealized Gain (Loss) from Security Transactions and Foreign Currency Transactions (Notes 1g & 8)
=================================================================================
Net realized gain (loss)
from security transactions
and foreign currency
transactions
- ------------------------------------- --------------- ------------- -------------
Proceeds from sales 91,306,022 4,021,708 2,970,739
- ------------------------------------- --------------- ------------- -------------
Cost of securities sold 91,350,320 3,805,407 2,935,526
- ------------------------------------- --------------- ------------- -------------
Net realized gain (loss) (44,298) 216,301 35,213
- ------------------------------------- --------------- ------------- -------------
Net unrealized
appreciation
(depreciation) of
investments and foreign
currency holdings
- ------------------------------------- --------------- ------------- -------------
Beginning of period (2,232,303) 144,498 -
- ------------------------------------- --------------- ------------- -------------
End of period 331,348 3,292,866 138,174
- ------------------------------------- --------------- ------------- -------------
Net unrealized appreciation 2,563,651 3,148,368 138,174
- ------------------------------------- --------------- ------------- -------------
Net realized and unrealized
gain on investments and
foreign currency transactions 2,519,353 3,364,669 173,387
- ------------------------------------- --------------- ------------- -------------
Net Increase in Net Assets
Resulting from Operations $ 9,571,907 $ 3,759,090 $ 231,484
=================================================================================
</TABLE>
See Notes to Financial Statements
17
<PAGE>
================================================================================
Statements of Changes in Net Assets For the Year Ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Tax-Free Income Trusts
Limited Duration ------------------------------------------------
U.S. Government U.S. Government National California Florida New York
Increase (Decrease) in Net Assets Securities Trust Securities Trust Trust Trust Trust Trust
============================================ ================ ================ ================================================
<S> <C> <C> <C> <C> <C> <C>
Operations Net investment income $ 25,896,015 $ 738,131 $ 2,149,808 $ 1,045,145 $ 580,743 $ 453,156
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Net realized gain (loss) from
securities transactions (7,413,842) 6,770 (442,113) (513,573) (459,426) (241,894)
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Net unrealized appreciation
of investments 20,127,195 244,345 4,435,878 1,756,569 1,134,275 874,937
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Net increase in net assets
resulting from operations 38,609,368 989,246 6,143,573 2,288,141 1,255,592 1,086,199
- -------------------------------------------- ---------------- ---------------- ------------ ------------ ----------- ----------
Distributions to shareholders from
net investment income (25,762,868) (699,768) (2,221,895) (1,001,887) (546,268) (438,277)
- -------------------------------------------- ---------------- ---------------- ------------ ------------ ----------- ----------
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 1,903,786
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Net asset value of shares issued
to shareholders in reinvestment
of net investment income and
realized gain from security
transactions 6,061,706 251,629 1,005,599 168,928 57,466 166,120
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Total 58,655,908 5,006,167 14,109,090 5,767,834 2,648,545 2,069,906
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Cost of shares reacquired (88,870,766) (8,131,970) (14,720,132) (9,835,251) (4,388,044)(2,148,692)
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
Decrease in net assets
derived from share transactions (30,214,858) (3,125,803) (611,042) (4,067,417) (1,739,499) (78,786)
- -------------------------------------------- ---------------- ---------------- ------------ ------------ ----------- ----------
Total increase (decrease) in net assets (17,368,358) (2,836,325) 3,310,636 (2,781,163) (1,030,175) 569,136
- -------------------------------------------- ---------------- ---------------- ------------ ------------ ----------- ----------
Net Assets
============================================ ================ ================ ================================================
Beginning of year 343,543,882 14,666,196 39,199,735 19,553,333 11,346,414 8,368,602
------------------------------ ---------------- ---------------- ------------ ------------ ----------- ----------
End of year+ $326,175,524 $11,829,871 $42,510,371 $16,772,170 $10,316,239 $8,937,738
===================================================================================================================================
</TABLE>
+ Includes undistributed (overdistributed) net investment income of $311,582,
$105,075, $(112,525), $(17,080), $4,796 and $(5,058), respectively,
as of October 31, 1995.
See Notes to Financial Statements.
================================================================================
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
1/3/94
(Commencement
of Operations) to
Year Ended 10/31/94 Year Ended 10/31/94
10/31/94 ----------------- Tax-Free Income Trusts
------------------ Limited Duration ---------------------------------------------------
U.S. Government U.S. Government National California Florida New York
Increase (Decrease) in Net Assets Securities Trust Securities Trust Trust Trust Trust Trust
========================================== ================== ================= ===================================================
<S> <C> <C> <C> <C> <C> <C>
Operations Net investment income $ 27,030,370 $ 526,110 $ 1,838,402 $ 868,631 $ 515,405 $ 408,813
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Net realized loss from
security transactions (37,187,536) (673,244) (2,142,246) (1,712,556) (783,954) (604,185)
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Net unrealized depreciation
of investments (13,586,704) (168,261) (3,493,283) (1,158,944) (884,478) (636,357)
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Net decrease in net assets
resulting from operations (23,743,870) (315,395) (3,797,127) (2,002,869) (1,153,027) (831,729)
- ------------------------------------------ ------------------ ----------------- ------------ ----------- ------------ -----------
Distributions to shareholders from
net investment income (26,783,987) (521,579) (1,871,600) (926,697) (543,056) (427,198)
- ------------------------------------------ ------------------ ----------------- ------------ ----------- ------------ -----------
Share transactions (Note 6)
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Net proceeds from sales of
shares 199,301,843 19,940,716 46,197,456 21,905,912 12,220,832 9,477,574
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Net asset value of shares
issued to shareholders in
reinvestment of net
investment income 6,386,072 146,135 697,273 170,156 39,293 127,310
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Total 205,687,915 20,086,851 46,894,729 22,076,068 12,260,125 9,604,884
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Cost of shares reacquired (79,355,750) (4,584,681) (10,487,169) (3,314,615) (1,636,253) (2,465,092)
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
Increase in net assets
derived from share
transactions 126,332,165 15,502,170 36,407,560 18,761,453 10,623,872 7,139,792
- ------------------------------------------ ------------------ ----------------- ------------ ----------- ------------ -----------
Total increase in net assets 75,804,308 14,665,196 30,738,833 15,831,887 8,927,789 5,880,865
- ------------------------------------------ ------------------ ----------------- ------------ ----------- ------------ -----------
Net Assets
- ------------------------------------------ ------------------ ----------------- ------------ ----------- ------------ -----------
Beginning of period 267,739,574 1,000 8,460,902 3,721,446 2,418,625 2,487,737
---------------------------- ------------------ ----------------- ------------ ----------- ------------ -----------
End of period+ $343,543,882 $14,666,196 $39,199,735 $19,553,333 $11,346,414 $8,368,602
====================================================================================================================================
</TABLE>
+ Includes undistributed (overdistributed) net investment income of $178,435,
$4,531, $(40,438), $(60,338), $(29,679) and $(19,937), respectively,
as of October 31, 1994.
See Notes to Financial Statements.
18
<PAGE>
================================================================================
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
12/27/94
(Commencement
Year Ended 10/31/95 of Operations)
------------------------------------- to 10/31/95
Global Bond- Growth & --------------
Income Debenture Income Balanced
Increase (Decrease) in Net Assets Trust Trust Trust Trust
=============================================== ===================================== ==============
<S> <C> <C> <C> <C>
Operations Net investment income $ 475,204 $ 7,052,554 $ 394,421 $ 58,097
------------------------------- ----------- ----------- ----------- --------------
Net realized gain (loss) from
securities transactions and
foreign currency transactions 302,337 (44,298) 216,301 35,213
------------------------------- ----------- ----------- ----------- --------------
Net unrealized appreciation
(depreciation) of investments
and foreign currency holdings 75,887 2,563,651 3,148,368 138,174
------------------------------- ----------- ----------- ----------- --------------
Net increase (decrease) in net
assets resulting from operations 853,428 9,571,907 3,759,090 231,484
- ----------------------------------------------- ----------- ----------- ----------- --------------
Undistributed net investment income in-
cluded in price of shares reacquired (Note 1f) - 32,601 102,375 4,356
- ----------------------------------------------- ----------- ----------- ----------- --------------
Distributions to shareholders from
net investment income (503,231) (7,436,015) (369,231) (45,926)
- ----------------------------------------------- ----------- ----------- ----------- --------------
Share transactions (Note 6)
------------------------------- ----------- ----------- ----------- --------------
Net proceeds from sales
of shares 3,301,803 77,328,608 22,484,213 1,733,075
------------------------------- ----------- ----------- ----------- --------------
Net asset value of shares
issued to shareholders in rein-
vestment of net investment
income and realized gain
from security transactions 166,255 2,176,835 309,319 40,892
------------------------------- ----------- ----------- ----------- --------------
Total 3,468,058 79,505,443 22,793,532 1,773,967
------------------------------- ----------- ----------- ----------- --------------
Cost of shares reacquired (2,985,548) (11,229,440) (2,676,007) (5,098)
------------------------------- ----------- ----------- ----------- --------------
Increase in net assets derived
from share transactions 482,510 68,276,003 20,117,525 1,768,869
- ----------------------------------------------- ----------- ----------- ----------- --------------
Total increase in net assets 832,707 70,444,496 23,609,759 1,958,783
- ----------------------------------------------- ----------- ----------- ----------- --------------
Net Assets
======================================================================================================
Beginning of period 6,709,578 58,743,701 9,160,165 1,000
------------------------------- ----------- ----------- ----------- --------------
End of period+ $7,542,285 $129,188,197 $32,769,924 $1,959,783
======================================================================================================
<CAPTION>
For the Period 1/3/94
(Commencement of Operations) to
10/31/94
-----------------------------------------
Global Bond- Growth &
Income Debenture Income
Increase (Decrease) in Net Assets Trust Trust Trust
=============================================== =========================================
<S> <C> <C> <C>
Operations Net investment income $ 293,221 $ 2,328,322 $ 93,364
------------------------------- ----------- ------------- -------------
Net realized gain (loss) from
securities transactions and
foreign currency transactions (307,394) (448,912) (9,220)
------------------------------- ----------- ------------- -------------
Net unrealized appreciation
(depreciation) of investments
and foreign currency holdings (26,361) (2,232,303) 144,498
------------------------------- ----------- ------------- -------------
Net increase (decrease) in net
assets resulting from operations (40,534) (352,893) 228,642
- ----------------------------------------------- ----------- ------------- -------------
Undistributed net investment income in-
cluded in price of shares reacquired (Note 1f) - 136,242 26,426
- ----------------------------------------------- ----------- ------------- -------------
Distributions to shareholders from
net investment income (327,890) (2,291,629) (68,201)
- ----------------------------------------------- ----------- ------------- -------------
Share transactions (Note 6)
------------------------------- ----------- ------------- -------------
Net proceeds from sales
of shares 7,808,743 64,189,791 9,456,716
------------------------------- ----------- ------------- -------------
Net asset value of shares
issued to shareholders in rein-
vestment of net investment
income and realized gain
from security transactions 66,497 639,214 52,223
------------------------------- ----------- ------------- -------------
Total 7,875,240 64,829,005 9,508,939
------------------------------- ----------- ------------- -------------
Cost of shares reacquired (798,238) (3,578,024) (536,641)
------------------------------- ----------- ------------- -------------
Increase in net assets derived
from share transactions 7,077,002 61,250,981 8,972,298
- ----------------------------------------------- ----------- ------------- -------------
Total increase in net assets 6,708,578 58,742,701 9,159,165
- ----------------------------------------------- ----------- ------------- -------------
Net Assets
==========================================================================================
Beginning of period 1,000 1,000 1,000
-------------------------------- ----------- ------------- -------------
End of period+ $6,709,578 $58,743,701 $9,160,165
==========================================================================================
</TABLE>
+ Includes undistributed (overdistributed) net investment income of $375,605,
$471,839, $185,499 and $16,527, respectively, as of October 31, 1995 and
$(34,669), $172,935 and $51,589, respectively, as of October 31, 1994.
See Notes to Financial Statements.
================================================================================
Financial Highlights
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES TRUST
<TABLE>
<CAPTION>
For the Period
6/1/93
Year ended (Commencement
------------------------- of Operations) to
Per Share operating Performance: 10/31/95 10/31/94 10/31/93
================================================================================= =============================================
<S> <C> <C> <C>
Net asset value, beginning of period $ 4.41 $ 5.08 $ 5.00
---------------------------------------------------------------------------- ----------- ---------- ------------
Income from investment operations
----------------------------------------------------------------------- ----------- ---------- ------------
Net investment income .352 .364 .149+
----------------------------------------------------------------------- ----------- ---------- ------------
Net realized and unrealized gain (loss) on investments .178 (.6731) .082
----------------------------------------------------------------------- ----------- ---------- ------------
Total from investment operations .530 (.3091) .231
---------------------------------------------------------------------------- ----------- ---------- ------------
Distributions
----------------------------------------------------------------------- ----------- ---------- ------------
Dividends from net investment income (.350) (.3609) (.151)
---------------------------------------------------------------------------- ----------- ---------- ------------
Net asset value, end of period $ 4.59 $ 4.41 $ 5.08
- --------------------------------------------------------------------------------- ----------- ---------- ------------
Total Return 12.47% (6.25)% 4.65%+
- --------------------------------------------------------------------------------- ----------- ---------- ------------
Ratios/Supplemental Data:
- --------------------------------------------------------------------------------- ----------- ---------- ------------
Net assets, end of period (000) $ 326,176 $343,544 $ 267,740
----------------------------------------------------------------------- ----------- ---------- ------------
Ratios to Average Net Assets:
---------------------------------------------------------------------------- ----------- ---------- ------------
Expenses 1.73% 1.64% .71%+
----------------------------------------------------------------------- ----------- ---------- ------------
Net investment income 8.59% 7.68% 2.68%+
---------------------------------------------------------------------------- ----------- ---------- ------------
Portfolio turnover rate 565.20% 995.50% 141.97%
================================================================================================================================
</TABLE>
+Not annualized.
Notes to Financial Statements.
19
<PAGE>
================================================================================
Financial Highlights
- --------------------------------------------------------------------------------
LIMITED DURATION U.S. GOVERNMENT SECURITIES TRUST
<TABLE>
<CAPTION>
For the Period
1/3/94
(Commencement
Year Ended of Operations) to
Per Share Operating Performance: 10/31/95 10/31/94
========================================================================================== ============= ====================
<S> <C> <C>
Net asset value, beginning of period $ 4.64 $ 5.00
------------------------------------------------------------------------------------- ------------- --------------------
Income from investment operations
-------------------------------------------------------------------------------- ------------- --------------------
Net investment income .267 .210+
-------------------------------------------------------------------------------- ------------- --------------------
Net realized and unrealized gain (loss) on investments .0941 (.3613)
-------------------------------------------------------------------------------- ------------- --------------------
Total from investment operations .3611 (.1513)
------------------------------------------------------------------------------------- ============= ====================
Distributions
-------------------------------------------------------------------------------- ------------- --------------------
Dividends from net investment income (.2511) (.2087)
- ------------------------------------------------------------------------------------------ ------------- --------------------
Net asset value, end of period $ 4.75 $ 4.64
- ------------------------------------------------------------------------------------------ ============= ====================
Total Return 7.98% (3.04)%+
========================================================================================== ============= ====================
Ratios/Supplemental Data:
========================================================================================== ============= ====================
Net assets, end of period (000) $ 11,830 $ 14,666
-------------------------------------------------------------------------------- ------------- --------------------
Ratios to Average Net Assets:
===================================================================================== ============= ====================
Expenses, including waiver 1.82% 1.31%+
-------------------------------------------------------------------------------- ------------- --------------------
Expenses, excluding waiver 1.82% 1.52%+
-------------------------------------------------------------------------------- ------------- --------------------
Net investment income 5.68% 4.33%+
------------------------------------------------------------------------------------- ------------- --------------------
Portfolio turnover rate 427.69% 630.52%
===============================================================================================================================
</TABLE>
+Not annualized.
See Notes to Financial Statements.
================================================================================
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 10/31/95 Year Ended 10/31/94 to 10/31/93
------------------------- ------------------------- -------------------------
National California National California National California
Per Share Operating Performance: Trust Trust Trust Trust Trust Trust
========================================== ========== ============ ========== ============ ========== ============
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.30 $ 4.23 $ 4.99 $ 4.97 $ 5.00 $ 5.00
------------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Income from investment operations
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Net investment income .239 .2419 .253 .273 .017+ .018+
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Net realized and unrealized
gain (loss) on investments .448 .2916 (.6903) (.7603) (.0061) (.0271)
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Total from investment
operations .687 .5335 (.4373) (.4873) .0109 (.0091)
------------------------------------- ========== ============ ========== ============ ========== ============
Distributions
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Dividends from net
investment income (.247) (.2335) (.2527) (.2527) (.0209) (.0209)
- ------------------------------------------ ---------- ------------ ---------- ------------ ---------- ------------
Net asset value, end of period $ 4.74 $ 4.53 $ 4.30 $ 4.23 $ 4.99 $ 4.97
- ------------------------------------------ ========== ============ ========== ============ ========== ============
Total Return 16.37%+ 12.92%+ (9.02)% (10.07)% .35%+ .08%+
========================================== ========== ============ ========== ============ ========== ============
Ratios/Supplemental Data:
========================================== ========== ============ ========== ============ ========== ============
Net assets, end of period (000) $ 42,510 $ 16,772 $ 39,200 $ 19,553 $ 8,460 $ 3,721
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Ratios to Average Net Assets:
===================================== ========== ============ ========== ============ ========== ============
Expenses, including waiver 1.33% .93% .91% .99% .05%+ .04%+
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Expenses, excluding waiver 1.83% 1.67% 1.65% 1.79% .35%+ .60%+
-------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Net investment income 5.27% 5.57% 5.28% 5.07% .14%+ .16%+
------------------------------------- ---------- ------------ ---------- ------------ ---------- ------------
Portfolio turnover rate 166.94% 101.19% 381.17% 159.44% .00% .00%
==================================================================================================================================
</TABLE>
+Not annualized.
See Notes to Financial Statements.
20
<PAGE>
================================================================================
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 10/31/95 Year Ended 10/31/94 to 10/31/93
--------------------------- --------------------------- ---------------------------
Florida New York Florida New York Florida New York
Per Share Operating Performance: Trust Trust Trust Trust Trust Trust
========================================= ========== ========== ========== ========== ========== ==========
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.28 $ 4.30 $ 4.99 $ 5.00 $ 5.00 $ 5.00
------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Income from investment operations
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net investment income .2465 .2407 .246 .246 .017+ .018+
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net realized and unrealized
gain (loss) on investments .3067 .3524 (.7045) (.6933) (.0061) .0029
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations .5532 .5931 (.4585) (.4473) .0109 .0209
------------------------------------ ========== ========== ========== ========== ========== ==========
Distributions
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Dividends from net
investment income (.2332) (.2331) (.2515) (.2527) (.0209) (.0209)
- ----------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 4.60 $ 4.66 $ 4.28 $ 4.30 $ 4.99 $ 5.00
- ----------------------------------------- ========== ========== ========== ========== ========== ==========
Total Return 13.24% 14.12% (9.44)% (9.19)% .22%+ .55%+
========================================= ========== ========== ========== ========== ========== ==========
Ratios/Supplemental Data:
========================================= ========== ========== ========== ========== ========== ==========
Net assets, end of period (000) $10,316 $ 8,938 $11,346 $ 8,369 $ 2,427 $ 2,488
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Ratios to Average Net Assets:
==================================== ========== ========== ========== ========== ========== ==========
Expenses, including waiver .94% .92% .89% .84% .04%+ .05%+
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Expenses, excluding waiver 1.78% 1.83% 1.88% 1.79% .82%+ .81%+
------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Net investment income 5.60% 5.38% 5.07% 5.16% .13%+ .18%+
------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Portfolio turnover rate 153.84% 124.95% 224.59% 200.13% .00% .00%
=================================================================================================================================
</TABLE>
+ Not annualized.
See Notes to Financial Statements.
================================================================================
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL INCOME TRUST For the Period
BOND-DEBENTURE TRUST 12/27/94 For the Period 1/3/94
GROWTH & INCOME TRUST Year Ended 10/31/95 (Commencement of (Commencement of Operations) to 10/31/94
BALANCED TRUST ---------------------------------- Operations) ----------------------------------------
Global Bond- Growth & to 10/31/95 Global Bond- Growth &
Income Debenture Income ---------------- Income Debenture Income
Per Share Operating Performance: Trust Trust Trust Balanced Trust Trust Trust Trust
==================================== ========= =========== ========== ================ ========== ============ =========
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.60 $ 4.65 $ 5.07 $ 10.00 $ 5.00 $ 5.00 $ 5.00
- ------------------------------------ --------- ----------- ---------- ---------------- ----------- ------------ ---------
Income from investment
operations
- ------------------------------------ --------- ----------- ---------- ---------------- ----------- ------------ ---------
Net investment income .318 .40 .12 .38+ .276+ .294+ .089+
-------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Net realized and
unrealized gain (loss) on
investments and foreign
currency holdings .257 .13 .97 1.24 (.3763) (.364) .041
-------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Total from investment
operations .575 .53 1.09 1.62 (.1003) (.070) .013
------------------------------- ========= =========== ========== ================ =========== ============ =========
Distributions
-------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Dividends from net
investment income (.335) (.42) (.12) (.28) (.2997) (.28) (.06)
- ------------------------------------ --------- ----------- ---------- ---------------- ----------- ------------ ---------
Net asset value, end of period $ 4.84 $ 4.76 $ 6.04 $11.34 $ 4.60 $ 4.65 $ 5.07
- ------------------------------------ ========= =========== ========== ================ =========== ============ =========
Total Return 12.92%+ 11.84%+ 21.83%+ 16.62%+ (1.90)%+ (1.38)%+ 2.62%+
==================================== ========= =========== ========== ================ =========== ============ =========
Ratios/Supplemental Data:
==================================== ========= =========== ========== ================ =========== ============ =========
Net assets, end of
period (000) $ 7,542 $ 129,188 $ 32,770 $1,960 $ 6,710 $ 58,743 $ 9,160
-------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Ratios to Average Net Assets:
=============================== ========= =========== ========== ================ =========== ============ =========
Expenses, including waiver 1.05% 1.67% 1.16% .22%+ 1.09%+ 1.23%+ .61%+
-------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Expenses, excluding waiver 2.07% 1.67% 1.91% 1.85%+ 1.69%+ 1.43%+ 1.94%+
-------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Net investment income 6.70% 8.11% 2.06% 3.78%+ 5.58%+ 6.70%+ 2.03%+
------------------------------- --------- ----------- ---------- ---------------- ----------- ------------ ---------
Portfolio turnover rate 805.46% 100.08% 23.17% 166.53% 1,348.68% 52.34% 31.95%
==================================== ========= =========== ========== ================ =========== ============ =========
</TABLE>
+ Not annualized.
See Notes to Financial Statements.
21
<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. On
June 1, 1993, Lord Abbett U.S. Government Securities Trust commenced operations
when the Company received an initial capital contribution of $100,000 and issued
20,000 shares of the Government Trust to the partners of Lord, Abbett & Co. On
October 1, 1993, Lord Abbett National Tax-Free Income Trust, Lord Abbett
California Tax-Free Income Trust, Lord Abbett Florida Tax-Free Income Trust and
Lord Abbett New York Tax-Free Income Trust and, on January 3, 1994, Lord Abbett
Limited Duration U.S. Government Securities Trust, Lord Abbett Global Income
Trust, Lord Abbett Bond-Debenture Trust and Lord Abbett Growth & Income Trust
commenced operations, respectively, when the Company received an initial capital
contribution of $1,000 for each of the above-mentioned series (sometimes
referred to herein as the "Series") and issued 200 shares of each series to the
partners of Lord, Abbett & Co. On December 22, 1994, Lord Abbett Balanced Trust
received an initial 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 Series 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 series 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,
Growth & Income 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 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 and the Growth & Income Trust which is declared and paid
quarterly. Taxable net realized gains from security transactions, if any,
will be distributed to shareholders in December 1995. At October 31, 1995,
accumulated net realized (loss) gain for financial statement purposes
aggregated $(44,725,828) for the U.S. Government Securities Trust, $(683,498)
for the Limited Duration U.S. Government Securities Trust, $(2,584,531) for the
National Tax-Free Income Trust, $(2,226,138) for the California Tax-Free Income
Trust, $(1,243,380) for the Florida Tax-Free Income Trust, $(846,007) for the
New York Tax-Free Income Trust, $(456,612) for the Global Income Trust,
$(1,142,974) for the Bond-Debenture Trust, $200,736 for the Growth & Income
Trust and $35,213 for the Balanced Trust. The losses will expire in the year
2002. A distribution was declared on November 15, 1995 from net realized gains
from sales of securities as follows:
Series Per Share Aggregate Amount
- --------------------------------------------------------------------------------
Growth & Income Trust $ .04 $220,849
- --------------------------------------------------------------------------------
Balanced Trust $ .20 $ 35,635
- --------------------------------------------------------------------------------
The distributions for the Growth & Income Trust will be paid November 21, 1995
to each shareholder of record November 15, 1995 and for the Balanced Trust will
be paid on December 15, 1995 to
22
<PAGE>
================================================================================
Notes to Financial Statements
- --------------------------------------------------------------------------------
each shareholder of record on December 6, 1995, in shares of the
respective series or in cash, in accordance with the shareholder's election.
A dividend of $.03 a share from net investment income aggregating $165,637
was declared on the Growth & Income Trust on November 15, 1995 and paid on
November 21, 1995 to each shareholder of record on November 15, 1995. 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 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 fund.
5. Management Fee and Other Transactions with Affiliates Lord, Abbett & Co.
received a management fee of $1,680,537 from the U.S. Government Securities
Trust, $67,840 from the Limited Duration U.S. Government Securities Trust and
$440,913 from the Bond-Debenture 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. Lord Abbett has entered into a
sub-advisory agreement with Dunedin Fund Managers Limited ("Dunedin"); Dunedin
furnishes investment advisory services in connection with the management of the
Global Income Trust. Lord Abbett pays for the cost of Dunedin's services. From
November 1, 1994 to October 31, 1995, Lord, Abbett & Co. waived $203,901 in
National Tax-Free Income Trust management fees. With respect to the California
Tax-Free Income Trust, Lord, Abbett & Co. waived $93,852 in management fees and
assumed $45,407 of other expenses. With respect to the Florida Tax-Free Income
Trust, Lord, Abbett & Co. waived $51,764 in management fees and assumed $35,558
of other expenses. With respect to the New York Tax-Free Income Trust, Lord,
Abbett & Co. waived $45,387 in management fees and assumed $31,461 of other
expenses. With respect to the Global Income Trust, Lord, Abbett & Co. waived
$35,444 in management fees and assumed $37,447 of other expenses. With respect
to the Growth & Income Trust, Lord, Abbett & Co. waived $143,551 in management
fees. From December 27, 1994 to October 31, 1995, Lord, Abbett & Co. waived
$9,859 of the Balanced Trust management fees and assumed $15,249 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 Series, except
for the Growth & Income Trust and the Balanced Trust, which have a management
fee of .75 of 1% of average daily net assets for each month, respectively. 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 Series, pursuant to a formula based on the asset size and expense ratio
of each Series. Each Series 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 Series 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 Series shareholder accounts and/or to provide Series
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 Series. Under the Plan, the Series 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>
Year Ended 10/31/95
-------------------------------------------------------------------------------------
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
1/3/94
(Commencement
Year of Operations) to Year Ended 10/31/94
Ended 10/31/94
10/31/94 ---------------- 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 40,979,580 4,106,627 9,578,110 4,557,723 2,519,506 1,956,272
- ---------------------------------------------- ---------------- ---------------- ----------- ----------- ----------- -----------
Shares issued to shareholders in reinvestment
of net investment income 1,359,996 30,999 151,394 37,427 8,576 27,678
- ---------------------------------------------- ---------------- ---------------- ----------- ----------- ----------- -----------
Total 42,339,576 4,137,626 9,729,504 4,595,150 2,528,082 1,983,950
- ---------------------------------------------- ---------------- ---------------- ----------- ----------- ----------- -----------
Shares reacquired (17,135,893) (976,326) (2,304,802) (722,147) (363,021) (534,521)
- ---------------------------------------------- ---------------- ---------------- ----------- ----------- ----------- -----------
Increase in shares 25,203,683 3,161,300 7,424,702 3,873,003 2,165,061 1,449,429
- ---------------------------------------------- ---------------- ---------------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
For the Period For the Period 1/3/94
12/27/94 (Commencement of Operations) to
Year Ended 10/31/95 (Commencement 10/31/94
--------------------------------- of Operations) -----------------------------------
Global Bond- Growth & to 10/31/95 Global Bond- Growth &
Income Debenture Income -------------- Income Debenture Income
Trust Trust Trust Balanced Trust Trust Trust Trust
- ---------------------------------------------- ---------- ----------- ---------- -------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 696,918 16,417,604 4,043,647 169,376 1,612,842 13,252,808 1,900,839
- ---------------------------------------------- ---------- ----------- ---------- -------------- ---------- ----------- ----------
Shares issued to shareholders in reinvestment
of net investment income 34,959 464,791 56,327 3,734 14,467 135,481 10,345
- ---------------------------------------------- ---------- ----------- ---------- -------------- ---------- ----------- ----------
Total 731,877 16,882,395 4,099,974 173,110 1,627,309 13,388,289 1,911,184
- ---------------------------------------------- ---------- ----------- ---------- -------------- ---------- ----------- ----------
Shares reacquired (631,855) (2,398,499) (477,215) (458) (170,328) (753,962) (105,921)
- ---------------------------------------------- ---------- ----------- ---------- -------------- ---------- ----------- ----------
Increase in shares 100,022 14,483,896 3,622,759 172,652 1,456,981 12,634,327 1,805,263
- ---------------------------------------------- ---------- ----------- ----------- -------------- ---------- ----------- ----------
</TABLE>
7. Capital Paid In
At October 31, 1995, capital paid in aggregated $364,064,883 for the U.S.
Government Securities Trust, $12,332,210 for the Limited Duration U.S.
Government Securities Trust, $44,324,360 for the National Tax-Free Income Trust,
$18,435,503 for the California Tax-Free Income Trust, $11,312,523 for the
Florida Tax-Free Income Trust, $9,557,002 for the New York Tax-Free Income
Trust, $7,573,766 for the Global Income Trust, $129,527,984 for the Bond-
Debenture Trust, $29,090,823 for the Growth & Income Trust and $1,769,869 for
the Balanced Trust.
24
<PAGE>
================================================================================
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 $2,226,398,139 $2,360,432,555
- --------------------------------------------------------------------------------
Limited Duration
U.S. Government Securities Trust $ 57,862,460 $ 60,149,473
- --------------------------------------------------------------------------------
National Tax-Free Income Trust $ 70,431,836 $ 68,385,247
- --------------------------------------------------------------------------------
California Tax-Free Income Trust $ 18,673,935 $ 22,588,641
- --------------------------------------------------------------------------------
Florida Tax-Free Income Trust $ 15,572,212 $ 17,114,869
- --------------------------------------------------------------------------------
New York Tax-Free Income Trust $ 10,454,819 $ 10,316,082
- --------------------------------------------------------------------------------
Global Income Trust $ 54,413,911 $ 53,934,555
- --------------------------------------------------------------------------------
Bond-Debenture Trust $ 154,655,150 $ 84,575,241
- --------------------------------------------------------------------------------
Growth & Income Trust $ 23,371,036 $ 4,021,708
- --------------------------------------------------------------------------------
Balanced Trust $ 4,212,070 $ 2,506,924
- --------------------------------------------------------------------------------
</TABLE>
Security gains and losses are computed on the identified cost basis.
As of October 31, 1995, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Unrealized Unrealized
Series Appreciation Depreciation
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Securities Trust $7,038,861 $ 513,974
- --------------------------------------------------------------------------------
Limited Duration U.S. Government
Securities Trust $ 103,564 $ 27,480
- --------------------------------------------------------------------------------
National Tax-Free Income Trust $1,514,454 $ 631,387
- --------------------------------------------------------------------------------
California Tax-Free Income Trust $ 673,208 $ 93,323
- --------------------------------------------------------------------------------
Florida Tax-Free Income Trust $ 353,642 $ 111,342
- --------------------------------------------------------------------------------
New York Tax-Free Income Trust $ 287,655 $ 55,854
- --------------------------------------------------------------------------------
Global Income Trust $ 149,754 $ 46,739
- --------------------------------------------------------------------------------
Bond-Debenture Trust $3,445,931 $3,114,583
- --------------------------------------------------------------------------------
Growth & Income Trust $3,619,771 $ 326,905
- --------------------------------------------------------------------------------
Balanced Trust $ 143,865 $ 5,691
- --------------------------------------------------------------------------------
</TABLE>
The cost of investments for federal income tax purposes is substantially the
same as that used for financial statement purposes.
(b) At October 31, 1995, 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 Appreciation
Sell Contracts Receivable Value (Depreciation)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Deutsche Marks
expiring 11/16/95 $1,132,841 $1,192,319 $(59,478)
- --------------------------------------------------------------------------------
Deutsche Marks
expiring 12/27/95 $253,300 $260,304 $(7,004)
- --------------------------------------------------------------------------------
French Francs
expiring 11/16/95 $361,318 $368,246 $(6,928)
- --------------------------------------------------------------------------------
Japanese Yen
expiring 11/16/95 $574,371 $554,578 $19,793
- --------------------------------------------------------------------------------
Total $2,321,830 $2,375,447 $(53,617)
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Buy Contracts Payable Value Appreciation
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Deutsche Marks
expiring 11/16/95 $511,563 $511,691 $128
</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 $9,129 (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 October 31,
1995, the aggregate amount in Trustees' accounts maintained under the plan was
$11,768. Retirement costs accrued during the period amounted to $3,660.
- --------------------------------------------------------------------------------
Copyright (C) 1995 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 objectives and policies and other matters.
All rights reserved. Printed in the U.S.A.
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders,
Lord Abbett Securities Trust:
We have audited the accompanying statements of net assets of Lord Abbett
Securities Trust-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, Growth & Income Trust and Balanced
Trust as of October 31, 1995, the related statements of operations and of
changes in net assets and the financial highlights for each of the periods
presented. These financial statements and the financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1995 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett
Securities Trust-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, Growth & Income Trust and Balanced
Trust at October 31, 1995, the results of their operations, the changes in
their net assets and the financial highlights for each of the periods presented
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
December 8, 1995
================================================================================
Our Management
- --------------------------------------------------------------------------------
Board of Trustees
Ronald P. Lynch
Robert S. Dow
E. Thayer Bigelow*
Stewart S. Dixon*
John C. Jansing*+
C. Alan MacDonald*+
Hansel B. Millican, Jr.*+
Thomas J. Neff*
*Outside Trustee
+Audit Committee
Officers
Ronald P. Lynch, Chairman
Robert S. Dow, President
David Seto, Executive Vice President
Kenneth B. Cutler, Vice President and Secretary
Stephen I. Allen, Vice President
Daniel E. Carper, Vice President
Thomas S. Henderson, Vice President
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 Secretatry
Thomas F. Konop, Vice President and Assistant Secretary
Victor W. Pizzolato, Vice President
Keith F. O'Connor, Treasurer
Joseph Van Dyke, Assistant Treasurer
Lydia Guzman, Assistant Secretary
Robert M. Hickey, Assistant Secretary
A. Edward Oberhaus III, Assistant Secretary
Investment Manager and
Underwriter
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Lord Abbett Counsel Group
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
LST-2-1095
Lord, Abbett & Co. Investment Management (12/95)
