LORD ABBETT SECURITIES TRUST, 485BPOS, 1998-11-30

LORD ABBETT SECURITIES TRUST
485BPOS, 1998-11-30

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1933 Act File No. 33-58846
1940 Act File No. 811-7538

SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Post-Effective Amendment No.24 |X|
And

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT |X|
OF 1940
Post-Effective Amendment No. 24 |X|

LORD ABBETT SECURITIES TRUST
----------------------------
Exact Name of Registrant as Specified in Charter

767 FIFTH AVENUE, NEW YORK, N. Y. 10153
---------------------------------------
Address of Principal Executive Office

Registrant's Telephone Number (212) 848-1800
--------------------------------------------

Thomas F. Konop, Vice President
767 FIFTH AVENUE, NEW YORK, N. Y. 10153
---------------------------------------
Name and Address of Agent for Service

It is proposed that this filing will become effective (check appropriate box)

|_| immediately on filing pursuant to paragraph (b) of Rule 485

|X| on November 30, 1998 pursuant to paragraph (b) of Rule 485

|_| 60 days after filing pursuant to paragraph (a)(1) of Rule 485

|_| on (date) pursuant to paragraph (a)(1) of Rule 485

|_| 75 days after filing pursuant to paragraph (a)(2) of rule 485

|_| on (date) pursuant to paragraph (a)(2) of rule 485

If appropriate, check the following box:

|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

1
<PAGE>

LORD ABBETT SECURITIES TRUST
N-1A
Cross Reference Sheet
Post-Effective Amendment No.24

Explanatory Note

This Post-Effective Amendment No. 24 (the "Amendment") to the Registrant's
Registration Statement relates only to Class Y shares of Lord Abbett Securities
Trust - International Fund.

The other Series and classes of shares of the Registrant are listed below and
are offered by the Prospectuses and Statements of Additional Information in
Parts A and B, respectively, of the Post-Effective Amendments to the
Registrant's Registration Statements as identified. The following are separate
series and classes of shares of the Registrant. This Amendment does not relate
to, amend or otherwise affect the Prospectuses and Statements of Additional
Information contained in the prior Post-Effective Amendments listed below, and
pursuant to Rule 485(d) under the Securities Act of 1933, does not affect the
effectiveness of such Post-Effective Amendments.

POST-EFFECTIVE
AMENDMENT NO.

Growth & Income Fund - Class A, B & C;
International Fund - A, B & C; and
World Bond-Debenture Fund - A, B & C 20

World Bond-Debenture Fund
Exhibits relating to Amendment No. 20 21

Large-Cap International Series 23

Alpha Series - A, B & C 17

Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- -------- -----------------------------------

1 Cover Page
2 Fee Table
3 Financial Highlights
4 (a)(i) Cover Page
4 (a)(ii)I Investment Objectives
4 (b)(c) How We Invest
5 (a)(b) (c) Our Management; Last Page
5 (d) N/A
5 (e) Our Management
5 (f) Our Management
5 (g) Purchases
6 (a) Cover Page
6 (b)(c) (d) N/A
6 (e) Cover Page; Purchases
6 (f)(g) Dividends, Capital Gains
Distributions and Taxes
6 (h) Purchases
7 (a) Back Cover Page

2
<PAGE>

Form N-1A Location in Prospectus or
Item No. Statement of Additional Information
- -------- -----------------------------------

7 (b)(c)(d) Purchases
8 (a)(b)(c)(d) Redemptions,
Purchases, and Shareholder Services
9 N/A
10 Cover Page
11 Cover Page -- Table of Contents
12 N/A
13 (a)(b)(c)(d) Investment Policies
14 Directors (Trustees) and Officers
15 (a)(b)(c) Directors (Trustees) and Officers
16 (a)(i) Investment Advisory and Other
Services
16 (a)(ii) Trustees and Officers
16 (a)(iii) Investment Advisory and Other
Services
16 (b) Investment Advisory and Other Services
16 (c)(d)(e)(g) N/A
16 (f) Purchases, Redemptions and Shareholder Services
16 (h) Investment Advisory and Other Services
16 (i) N/A
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) Portfolio Transactions
17 (d)(e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a)(b) Purchases; Redemptions and Shareholder Services;
Notes
to Financial Statements
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions and Shareholder Services
21 (b)(c) N/A
22 N/A
22 (b) Past Performance
23 Financial Statements; Supplementary Financial
Information
<PAGE>

November 30, 1998

Y SHARES PROSPECTUS

Application Inside

Lord Abbett
Affiliated Fund

Lord Abbett
Small-Cap Fund

Lord Abbett
Growth Opportunities
Fund

Lord Abbett
International Fund

Lord Abbett
High Yield Fund

[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
<PAGE>

Lord Abbett Affiliated Fund ("Affiliated Fund"), Lord Abbett Small-Cap Fund
("Small-Cap Fund"), Lord Abbett Growth Opportunities Fund ("Growth Opportunities
Fund"), Lord Abbett International Fund ("International Fund"), and Lord Abbett
High Yield Fund ("High Yield Fund"), individually ("we" or the "Fund"),
collectively (the "Funds"), are mutual funds each offering four or five classes
of shares, each class providing investors with different purchasing options.
Only Class Y shares of each Fund are offered by this Prospectus. See "Purchases"
for a description of this Class of shares.

Affiliated Fund's investment objective seeks long-term growth of capital
and income without excessive fluctuations in market value; Small-Cap Fund seeks
long-term capital appreciation; Growth Opportunities Fund seeks capital
appreciation; International Fund seeks long-term capital appreciation; and High
Yield Fund seeks high current income and the opportunity for capital
appreciation to produce a high total return. There can be no assurance that any
Fund will achieve its objective.

The Statement of Additional Information dated November 30, 1998 has been
filed with the Securities and Exchange Commission and is incorporated by
reference into this Prospectus. You may obtain it, without charge, by writing to
the Fund or by calling 800-874-3733 and asking for "Part B of the Prospectus --
the Statement of Additional Information." In addition, the Commission maintains
a website (http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
registrants that file electronically with the Commission.

Mutual Fund shares are not deposits or obligations of, or guaranteed or
endorsed by, any bank. Shares are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Fund involves risks, including the possible loss of principal.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The General Motors Building
767 Fifth Avenue o New York o New York o 10153
Broker-Dealer Division: (800) 426-1130
Financial Advisors Division: (888) 522-2388

LORD ABBETT AFFILIATED FUND
LORD ABBETT SMALL-CAP FUND
LORD ABBETT GROWTH OPPORTUNITIES FUND
LORD ABBETT INTERNATIONAL FUND
LORD ABBETT HIGH YIELD FUND

PROSPECTUS - Y Shares
November 30, 1998

TABLE OF CONTENTS PAGE

Affiliated Fund
How We Invest 3
Risk Factors 3
Portfolio Management 3
Investor Expenses 3
Small-Cap Fund
How We Invest 4
Risk Factors 4
Portfolio Management 4
Investor Expenses 4
Growth Opportunities Fund
How We Invest 5
Risk Factors 5
Portfolio Management 5
Investor Expenses 5
International Fund
How We Invest 6
Risk Factors 6
Portfolio Management 6
Investor Expenses 6
High Yield Fund
How We Invest 7
Risk Factors 7
Portfolio Management 7
Investor Expenses 7
Financial Highlights 8
Purchases 9
Shareholder Services 9
Redemptions 10
Dividends and Capital Gains 10
Our Management 11
Fund Performance 11
Investment Policies, Risks and Limits 12

LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
<PAGE>

AFFILIATED FUND

- --------------------------------------------------------------------------------
HOW WE INVEST

Normally, we invest in large, seasoned companies, in sound financial condition,
issuing common stocks (including securities convertible into common stocks)
which are expected to perform above average with respect to earnings and price
appreciation. Although the prices of common stocks fluctuate and their dividends
vary, historically, common stocks have appreciated in value and their dividends
have increased when the companies they represent have prospered and grown.

We try to anticipate major changes in the economy and select stocks which
we believe will benefit most from these changes. We also look for positive
change within market sectors, industries and individual companies.

See "Investment Policies, Risks and Limits."

RISKS FACTORS

An investment in the Fund is not intended as a complete investment program. The
value of your investment will fluctuate in response to stock market movements.
We constantly balance the opportunity for profit against the risk of loss, and
we believe it is important to take a flexible approach and adjust the portfolio
to reflect changes in the opportunities for sound investment relative to the
risks assumed. Therefore, we sell securities that we judge to be overpriced and
reinvest the proceeds in other securities which we believe offer better value.
Before you invest, please read "Investment Policies, Risks and Limits."

- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT

W. Thomas Hudson, Jr., Partner of Lord, Abbett & Co. ("Lord Abbett"), Executive
Vice President and Portfolio Manager of Affiliated Fund, is primarily
responsible for day-to-day management of the Fund. Mr. Hudson has been with Lord
Abbett since 1982 and has over 32 years of investment experience. Mr. Hudson is
assisted by, and may delegate management duties to, other Lord Abbett employees.

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.

- --------------------------------------------------------------------------------
AFFILIATED FUND Class Y
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Load on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) None
- --------------------------------------------------------------------------------
Deferred Sales Charge (See "Purchases") None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fee (See "Our Management") .32%
- --------------------------------------------------------------------------------
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses (See "Our Management") .08%
- --------------------------------------------------------------------------------
Total Operating Expenses .40%

Example

Assume an average annual return of 5% and no change in the level of expenses.
For a $1,000 investment with all dividends and distributions reinvested, you
would have paid the following total expenses assuming you sold your shares at
the end of each time period indicated.

- --------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class Y shares $4 $13 $22 $51
- --------------------------------------------------------------------------------

You would pay the same expenses on the same investment, assuming you kept your
shares.

This example is for comparison and is not a representation of Affiliated Fund's
actual expenses and returns, either past or present.

(1) For Class Y shares, the annual operating expenses shown in the summary
have been restated from the Fund's fiscal-year-end amounts to reflect
current fees. The foregoing is provided to give investors a better
understanding of the expenses that are incurred by an investment in each
Fund.

2
<PAGE>

SMALL-CAP FUND

- --------------------------------------------------------------------------------
HOW WE INVEST

Normally, we invest primarily in a carefully selected portfolio of common stocks
which, in the opinion of Fund management, are selling below value, at prices not
reflecting their potential, and which can rise as a result of improved business
fundamentals or greater investor recognition. Dividend and investment income are
of incidental importance, and the Fund may invest in securities which do not
produce any income. Under normal circumstances, at least 65% of the Fund's total
assets will be invested in common stocks issues by smaller, less well-known
companies (with market capitalizations of less than $1 billion) selected on the
basis of fundamental investment analysis. The Fund may, however, invest up to
35% of its total assets in the securities of any issuer without regard to its
size or the market capitalization of its common stock. Companies in which the
Fund is likely to invest may have limited product lines, markets or financial
resources and may lack management depth or experience. The securities of these
companies may have limited marketability and may be subject to more abrupt or
erratic market movements than securities of larger, more established companies
or the market averages in general.

See "Investment Policies, Risks and Limits."

RISK FACTORS

Although the Fund may invest, from time to time, in stocks of large-sized and
small-sized companies guided by the policies mentioned above, the small
capitalized companies in which it primarily invests may offer significant
appreciation potential. However, smaller companies may carry more risk than
larger companies. Generally, small companies rely on limited product lines and
markets, financial resources, or other factors, and this may make them more
susceptible to setbacks or economic downturns. Small capitalized companies may
be more volatile in price, normally have fewer shares outstanding and trade less
frequently than large companies. Therefore, the securities of smaller companies
may be subject to wider price fluctuations. In many instances, the securities of
smaller companies are traded over the counter and may not be traded in the
volume typical of a national securities exchange. Before you invest, please read
"Investment Policies, Risks and Limits."

- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT

Robert P. Fetch has been primarily responsible for the day-to-day
management of the Small-Cap Fund since its inception. He is assisted by Gregory
M. Macosko, and may delegate management duties to other Lord Abbett employees.
Prior to joining Lord Abbett, Mr. Fetch was a Managing Director of Prudential
Investment Advisors.

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.

- --------------------------------------------------------------------------------
SMALL-CAP FUND Class Y
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Load on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) None
- --------------------------------------------------------------------------------
Deferred Sales Charge (See "Purchases") None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fee (See "Our Management") .75%
- --------------------------------------------------------------------------------
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses (See "Our Management") .11%
- --------------------------------------------------------------------------------
Total Operating Expenses .86%

Example

- --------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class Y shares $9 $27 $48 $106
- --------------------------------------------------------------------------------

You would pay the same expenses on the same investment, assuming you kept your
shares.

This example is for comparison and is not a representation of Small-Cap Fund's
actual expenses and returns, either past or present.

(1) For Class Y shares, the annual operating expenses shown in the summary
have been restated from the Fund's fiscal-year-end amount to reflect
current fees. The foregoing is provided to give investors a better
understanding of the expenses that are incurred by an investment in each
Fund.

3
<PAGE>

GROWTH OPPORTUNITIES FUND

- --------------------------------------------------------------------------------
HOW WE INVEST

Normally, we invest primarily in equity securities of mid-sized companies,
defined for this purpose as companies whose outstanding equity securities have
an aggregate market value of between $1 billion and $6 billion. We favor
companies that show the potential for stronger than expected earnings or growth.
Under normal circumstances, at least 65% of our total assets will consist of
investments made in growth companies, determined at the time of purchase.

See "Investment Policies, Risks and Limits."

- --------------------------------------------------------------------------------
RISK FACTORS

The value of your investment will fluctuate in response to stock market
movements. The Fund employs other investment practices such as investments in
foreign securities and other securities, that could adversely affect
performance.

Before you invest, please read "Investment Policies, Risks and Limits."

PORTFOLIO MANAGEMENT

Stephen J. McGruder, Executive Vice President and Senior Portfolio Manager of
the Fund, is primarily responsible for day-to-day management of the Fund. He
joined Lord Abbett in 1995 and has over 29 years of investment experience.

Prior to joining Lord Abbett, Mr. McGruder served since October of 1988 as
Vice President of Wafra Investment Advisory Group, a private investment company.
Mr. McGruder is assisted by, and may delegate management duties to, other Lord
Abbett employees who may be Fund officers.

When Mr. McGruder became the Senior Portfolio Manager of the Fund on July
15, 1998, he introduced a growth style of investing to the Fund. Under this
method, companies are favored that show the potential for stronger-than-expected
earnings growth. Gradually, as the opportunities present themselves, these kinds
of companies will be favored in the selection process. Under the former value
style of investing used to manage the Fund, companies were selected without
regard to current income under a process that sought to identify and invest in
undervalued securities.

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.

- --------------------------------------------------------------------------------
GROWTH OPPORTUNITIES FUND Class Y
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Load on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) None
- --------------------------------------------------------------------------------
Deferred Sales Charge (See "Purchases") None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fee (See "Our Management") .90%
- --------------------------------------------------------------------------------
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses (See "Our Management") .28%
- --------------------------------------------------------------------------------
Total Operating Expenses 1.18%

Example

- --------------------------------------------------------------------------------
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
Class Y shares $12 $37
- --------------------------------------------------------------------------------

You would pay the same expenses on the same investment, assuming you kept your
shares.

This example is for comparison and is not a representation of Growth
Opportunities Fund's actual expenses and returns, either past or present.

4
<PAGE>

INTERNATIONAL FUND

- --------------------------------------------------------------------------------
HOW WE INVEST

Portfolio investments will be made in equity securities of companies domiciled
in developed countries, but investments also may be made in the securities of
companies domiciled in developing countries. Equity securities include common
and preferred stocks, convertible securities, and rights and warrants to
purchase common stocks. Under normal circumstances, at least 80% of the total
assets of the Fund will be invested in such equity securities of companies which
are domiciled in at least three different countries outside the United States.
The Fund currently intends to diversify investments among countries to reduce
currency risk. Although the Fund will typically hold a number of diversified
securities, it does entail above-average investment risk in comparison to the
U.S. stock market.

The Fund may temporarily reduce its equity holdings for defensive purposes in
response to adverse market conditions and invest in domestic, Eurodollar and
foreign short-term money market instruments.

See "Investment Policies, Risks and Limits."

RISKS FACTORS

Although the International Fund intends to invest primarily in equity securities
of companies with market capitalization of less than $1 billion listed on stock
exchanges, it may also invest in equity securities of such companies traded in
over-the-counter markets, as well as large and middle capitalization securities.
Small capitalization securities involve greater risk and the markets for such
securities may be more volatile and less liquid than those of larger securities.
Securities of companies in developing countries may pose liquidity risks. For a
description of special considerations and certain risks associated with
investments in foreign issuers, before you invest see section headed "Investment
Policies, Risks and Limits."

- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT

Christopher Taylor serves as Portfolio Manager of the International Fund. Mr.
Taylor is Deputy Managing Director. He has been with the Sub-Adviser, Fuji-Lord
Abbett International, Ltd. and its predecessor since 1987 and has 15 years of
investment experience.

- --------------------------------------------------------------------------------
Investor Expenses

The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.

- --------------------------------------------------------------------------------
INTERNATIONAL FUND Class Y
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Load on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) None
- --------------------------------------------------------------------------------
Deferred Sales Charge (See "Purchases") None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fee (See "Our Management") .75%
- --------------------------------------------------------------------------------
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses (See "Our Management") .43%
- --------------------------------------------------------------------------------
Total Operating Expenses 1.18%

Example

- --------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
Class Y shares $12 $37 $65 $143
- --------------------------------------------------------------------------------

You would pay the same expenses on the same investment, assuming you kept your
shares.

This example is for comparison and is not a representation of International
Fund's actual expenses and returns, either past or present.

5
<PAGE>

HIGH YIELD FUND

- --------------------------------------------------------------------------------
HOW WE INVEST

Normally, we invest in lower-rated debt securities, which entail greater risks
than investments in higher-rated debt securities. The former are referred to
colloquially as "junk bonds."

We believe that a high total return (current income and capital
appreciation) may be derived from an actively managed, diversified security
portfolio. Under normal circumstances, we invest at least 65% of our total
assets in lower-rated debt securities, some of which are convertible into common
stock or have warrants to purchase common stock.

We seek unusual values, particularly in lower-rated debt securities, some
of which are convertible into common stocks or have warrants to purchase common
stocks. Higher yield on debt securities can occur during periods of inflation
when the demand for borrowed funds is high. Also, buying lower-rated bonds when
the credit risk is above average but, we think, likely to decrease, can generate
higher yields.

See "Investment Policies, Risks and Limits."

- --------------------------------------------------------------------------------
RISK FACTORS

The lower-rated bonds in which the Fund invests involve risks that interest and
principal payments may not be made. Some issuers may default as to principal
and/or interest payments subsequent to our purchase of their securities. Through
portfolio diversification, good credit analysis and attention to current
developments and trends in interest rates and economic conditions, investment
risk can be reduced, although there is no assurance that losses will not occur.
In addition, the value of your investment will change as the general levels of
interest rates fluctuate. When interest rates decline, share value may rise.
When interest rates rise, share value may decline. The Fund employs other
investment practices, such as investments in foreign securities, illiquid
securities and other securities, that could adversely affect performance. Before
you invest, please read "Investment Policies, Risks and Limits."

- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT

Christopher J. Towle, Executive Vice President and Co-Portfolio Manager of the
Fund, is primarily responsible for the day-to-day management of the Fund. Mr.
Towle has been with Lord Abbett since 1988 and has over 17 years of investment
experience. Mr. Towle is assisted by, and may delegate management duties to,
other Lord Abbett employees who may be Fund officers.

Michael Goldstein serves as Co-Portfolio Manager of the Fund. Mr.
Goldstein has been with Lord Abbett since April 1997. Prior to Joining Lord
Abbett, Mr. Goldstein was a bond trader for Credit Suisse BEA Associates from
August 1992 through April 1997.

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses shown below are based on historical expenses adjusted to reflect
current fees. Future expenses may be different than those shown.

- --------------------------------------------------------------------------------
HIGH YIELD FUND Class Y
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
Maximum Sales Load on Purchases
- --------------------------------------------------------------------------------
(as a % of offering price) None
- --------------------------------------------------------------------------------
Deferred Sales Charge (See "Purchases") None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Annual Fund Operating Expenses(1) (as a % of average net assets)
- --------------------------------------------------------------------------------
Management Fee (See "Our Management") 0.60%
- --------------------------------------------------------------------------------
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses (See "Our Management") 0.25%
- --------------------------------------------------------------------------------
Total Operating Expenses 0.85%

Example

You would pay the same expenses on the same investment, assuming you kept your
shares.

This example is for comparison and is not a representation of High Yield Fund
actual expenses and returns, either past or present.

6
<PAGE>

FINANCIAL HIGHLIGHTS The following financial highlights are unaudited except for
Affiliated Fund which has been audited by Deloitte & Touche LLP, independent
auditors, in connection with their annual audit of each Fund's Financial
Statements, whose report may be obtained on request. Call 800-821-5129 and ask
for each Fund's 1998 annual report.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Affiliated Fund Small-Cap Fund
Per Class Y Share Operating For the Period March 27, 1998(a) For the Period December 30, 1997(a)
Performance: to April 30, 1998 to May 31, 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 15.44 $ 16.34
- --------------------------------------------------------------------------------------------------------------
Income from investment operations
- --------------------------------------------------------------------------------------------------------------
Net investment income .016 .00
- --------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- --------------------------------------------------------------------------------------------------------------
gain on securities .014 1.06
- --------------------------------------------------------------------------------------------------------------
Total from investment operations .03 1.06
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.47 $ 17.40
- --------------------------------------------------------------------------------------------------------------
Total Return(b) .19% 6.49%
- --------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets(b)
- --------------------------------------------------------------------------------------------------------------
Expenses 0.04% .36%
- --------------------------------------------------------------------------------------------------------------
Net investment income 0.11% .00%
- --------------------------------------------------------------------------------------------------------------

<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Supplemental Data: Affiliated Fund Small-Cap Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets, end of year (000) $8,991,127 $657,889
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29.93% 25.58%
- --------------------------------------------------------------------------------------------------------------
Average commissions per share
- --------------------------------------------------------------------------------------------------------------
paid on equity transactions $ .060 $ .058
</TABLE>

- ---------------------------------------------------------------------------
International Fund
Per Class Y Share Operating For the Period December 30, 1997(a)
Performance: to April 30, 1998
- ---------------------------------------------------------------------------
Net asset value, beginning of period $ 11.28
- ---------------------------------------------------------------------------
Income from investment operations
- ---------------------------------------------------------------------------
Net investment income .09
- ---------------------------------------------------------------------------
Net realized and unrealized
- ---------------------------------------------------------------------------
gain on securities 3.23
- ---------------------------------------------------------------------------
Total from investment operations 3.32
- ---------------------------------------------------------------------------
Net asset value, end of period $ 14.60
- ---------------------------------------------------------------------------
Total Return(b) 29.43%
- ---------------------------------------------------------------------------
Ratios to Average Net Assets(b)
- ---------------------------------------------------------------------------
Expenses .33%
- ---------------------------------------------------------------------------
Net investment income .60%
- ---------------------------------------------------------------------------

- ---------------------------------------------------------------------------
Supplemental Data: International Fund
- ---------------------------------------------------------------------------
Net Assets, end of year (000) $ 90,153
Portfolio turnover rate 11.14%
- ---------------------------------------------------------------------------
Average commissions per share
- ---------------------------------------------------------------------------
paid on equity transactions $ .015

(a) Commencement of Operations.
(b) Not Annualized.
See Notes to Financial Statements.

7
<PAGE>

- --------------------------------------------------------------------------------
PURCHASES

Class Y shares. Class Y shares are purchased at net asset value with no sales
charge of any kind. The net asset value of our shares is calculated every
business day as of the close of the New York Stock Exchange ("NYSE") by dividing
net assets by the number of shares outstanding. Securities are valued at their
market value as more fully described in the Statement of Additional Information.

Who May Invest? Eligible purchasers of Class Y shares include: (i) certain
authorized brokers, dealers, registered investment advisers or other financial
institutions who have entered into an agreement with Lord Abbett Distributor in
accordance with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our Class Y shares in particular investment products
made available for a fee to clients of such brokers, dealers, registered
investment advisers or other financial institutions ("mutual fund wrap-fee
programs"), (ii) the trustee or custodian under any deferred compensation or
pension or profit-sharing plan or payroll deduction IRA established for the
benefit of the employees of any company with an account(s) in excess of $10
million managed by Lord Abbett or its sub-advisors on a private-advisory-account
basis, and (iii) institutional investors, including retirement plans, companies,
foundations, trusts, endowments and other entities where the total amount of
potential investable assets exceeds $50 million that were not introduced to Lord
Abbett by persons associated with a broker or dealer primarily involved in the
retail security business. Additional payments may be made by Lord Abbett out of
its own resources with respect to certain of these sales.

How Much Must You Invest? You may buy our shares through any independent
securities dealer having a sales agreement with Lord Abbett Distributor, our
exclusive selling agent. Place your order with your investment dealer or send it
to the Lord Abbett Fund you selected (P.O. Box 419100, Kansas City, Missouri
64141). The minimum initial investment is $1 million except for mutual fund
wrap-fee programs which have no minimum. This offering may be suspended, changed
or withdrawn by Lord Abbett Distributor which reserves the right to reject any
order.

Buying Shares Through Your Dealer. Orders for shares received by a Fund prior to
the close of the NYSE, or received by dealers prior to such close and received
by Lord Abbett Distributor prior to the close of its business day, will be
confirmed at net asset value effective at such NYSE close. Orders received by
dealers after the NYSE closes and received by Lord Abbett Distributor in proper
form prior to the close of its next business day are executed at the net asset
value effective as of the close of the NYSE on that next business day. The
dealer is responsible for the timely transmission of orders to Lord Abbett
Distributor. A business day is a day on which the NYSE is open for trading.

Buying Shares By Wire. To open an account, call 800 -821-5129 Ext. 34028,
Institutional Trade Dept., to set up your account and to arrange a wire
transaction. Wire to: United Missouri Bank of Kansas City, N.A., Routing number
- - 101000695, bank account number: 9878002611, FBO: (account name) and (your Lord
Abbett account number). Specify the complete name of the fund of your choice,
note Class Y shares and include your new account number and your name. To add to
an existing account, wire to: United Missouri Bank of Kansas City, N.A., routing
number - 101000695, bank account number: 9878002611, FBO: (account name) and
(your Lord Abbett account number). Specify the complete name of the fund of your
choice, note Class Y shares and include your account number and your name.

- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES

We offer the following shareholder services:

Telephone Exchange Privilege: Class Y shares may be exchanged without a
service charge for Class Y shares of any eligible Lord Abbett-sponsored fund.

You or your investment professional with proper identification can
instruct your Fund to exchange uncertificated shares of a class (held by the
transfer agent) by telephone. Shareholders have this privilege unless they
refuse it in writing. A Fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine and will
employ reasonable procedures to confirm that instructions received are genuine,
including requesting proper identification and recording all telephone
exchanges. Instructions must be received by a Fund in Kansas City (800-821-5129)
prior to the close of the NYSE to obtain a Fund's net asset value per class

8
<PAGE>

share on that day. Expedited exchanges by telephone may be difficult to
implement in times of drastic economic or market change. The exchange privilege
should not be used to take advantage of short-term swings in the market. Each
Fund reserves the right to terminate or limit the privilege of any shareholder
who makes frequent exchanges. Each Fund can revoke the privilege for all
shareholders upon 60 days' prior written notice. A prospectus for the other Lord
Abbett-sponsored fund selected by you should be obtained and read before an
exchange. Exercise of the Telephone Exchange Privilege will be treated as a sale
for federal income tax purposes and, depending on the circumstances, a capital
gain or loss may be recognized.

All correspondence should be directed to the Fund you selected (P.O. Box
419100, Kansas City, Missouri 64141; 800-821-5129).

- --------------------------------------------------------------------------------
REDEMPTIONS

To obtain the proceeds of an expedited redemption, you can telephone your Fund.
A Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine and will employ reasonable procedures
to confirm that instructions received are genuine, including requesting proper
identification, recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.

Send your written redemption request to the Fund you selected (P.O. Box
419100, Kansas City, Missouri 64141) with signature(s) and any legal capacity of
the signer(s) guaranteed by an eligible guarantor accompanied by any
certificates for shares to be redeemed and other required documentation. We will
make payment of the net asset value of the shares on the date the redemption
order was received in proper form. Payment will be made within three business
days. Each Fund may suspend the right to redeem shares for not more than three
days (or longer under unusual circumstances as permitted by Federal law). If you
have purchased a Fund's shares by check and subsequently submit a redemption
request, redemption proceeds will be paid upon clearance of your purchase check,
which may take up to 15 days. To avoid delays you may arrange for the bank upon
which a check was drawn to communicate to the Fund that the check has cleared.

Wire. In order to receive funds by wire, our servicing agent must have the
wiring instruction on file. To verify that this feature is in place, call
800-821-5129 Ext. 34028, Institutional Trade Dept. Minimum wire: $1,000. Your
wire redemption request must be received by your Fund before the close of the
NYSE for money to be wired on the next business day.

Tax-qualified Plans: For redemptions of $50,000 or less, follow normal
redemption procedures. Redemptions over $50,000 must be in writing from the
employer, broker or plan administrator stating the reason for the redemption.
The reason for the redemption must be received by the Fund prior to, or
concurrent with, the redemption request.

- --------------------------------------------------------------------------------
DIVIDENDS AND CAPITAL GAINS

Dividends/Capital Gains Distributions. Dividends from net investment income, if
any, are expected to be paid in February, May, August and November for
Affiliated Fund. A supplemental dividend may also be paid in December. For
Small-Cap Fund, Growth Opportunities Fund and International Fund, payments will
be made annually; High Yield Fund, monthly. A second distribution may be made in
order to comply with Federal income tax requirements that a certain percentage
of capital gains be distributed during the year.

Capital Gains Distributions. Any capital gains distribution is expected to be
made annually and may be taken in cash or reinvested. Distributions of any net
long-term capital gains will be taxable to a shareholder as long-term capital
gains regardless of how long the shareholder has held the shares. Under recently
enacted legislation, the maximum tax rate on long-term capital gains for a U.S.
individual, estate or trust is reduced to 20% for distributions derived from the
sale of assets held by the Fund for more than 18 months. (If the taxpayer is in
the 15% tax bracket, the rate is 10%.) For distributions derived from the sale
of assets held by the Fund between 12 and 18 months, the tax rate remains at
28%. (If the taxpayer is in the 15% tax bracket, the tax rate is 15%.)

Dividends/Capital Gains Receipt or Reinvestment. If you elect to receive
dividends or capital gains in cash, a check will be mailed to you as soon as
possible after the reinvestment date. If you arrange for

9
<PAGE>

direct deposit, your payment will be electronically transmitted to your bank
account within one day after the payable date. Most investors reinvest their
dividends and capital gains. If you choose this option, or if you do not
indicate any choice, your dividends and capital gains distributions will be
automatically reinvested in additional shares.

Taxes. The Funds pay no federal income tax on the earnings distributed to
shareholders. Consequently, dividends you receive, whether reinvested or taken
in cash, are generally considered taxable. Dividends declared in December of any
year will be treated for federal income tax purposes as having been received by
shareholders in that year if they are paid before February 1 of the following
year.

Each January, you will be mailed, if applicable, a Form 1099 tax
information statement detailing your dividends and capital gain distributions.
You should consult your tax adviser concerning applicable state and local taxes.

For more information about the tax consequences from dividends and
distributions, see the Statement of Additional Information.

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OUR MANAGEMENT

Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Directors/Trustees with the advice of Lord Abbett.
Each Fund employs Lord Abbett as investment manager pursuant to a management
Agreement. Lord Abbett has been an investment manager for over 69 years and
currently manages approximately $28 billion in a family of mutual funds and
other advisory accounts. Under the Management Agreement, Lord Abbett provides us
with investment management services and personnel, pays the remuneration of our
officers and of our Directors/Trustees affiliated with Lord Abbett, provides us
with office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and supervision of our
portfolios and certain other costs. Lord Abbett provides similar services to
nine other Lord Abbett-sponsored funds having various investment objectives and
also advises other investment clients.

Each Fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. In addition, each Fund pays all expenses not expressly assumed
by Lord Abbett. For the fiscal year ended October 31, 1997, the fee paid by
Affiliated Fund to Lord Abbett as a percentage of average daily net assets was
at the annual rate of .32 of 1%. For the fiscal year ended November 30, 1997,
the fee paid by Small-Cap Fund to Lord Abbett as a percentage of average daily
net assets was at the annual rate of .75 of 1%. For the fiscal year ended
November 30, 1997, Growth Opportunities Fund's fee to Lord Abbett was waived.
The International Fund, for the fiscal year ended October 31, 1997, paid Lord
Abbett as a percentage of daily net assets at the annual rate of .75 of 1%.

The services provided to the Fund and its shareholders by Lord Abbett,
Lord Abbett Distributor, the Fund's transfer agent and the Fund's custodian
depend on the proper functioning of their computer systems and those of their
outside service providers. Many computer systems, and many imbedded
microprocessors now in use cannot distinguish between the year 2000 and the year
1900, an inability that could disrupt the services provided to the Fund. Lord
Abbett, Lord Abbett Distributor, the Fund's transfer agent and the Fund's
custodian all have advised the Fund that they have been actively working on
changes to their computer systems to prepare for the year 2000 and expect that
their systems, and those of their outside service providers, will be adapted in
time. However, because the year 2000 problem is unprecedented, there can be no
assurance that they will be successful. Neither can there be any assurance that
their services will not be impaired by interactions with other computer systems
that have not been adapted for the year 2000.

In addition, it is possible that the markets for securities in which the
Fund invests may be detrimentally affected by computer and microprocessor
failures throughout the financial services industry beginning January 1, 2000.
Also, corporate and governmental data processing errors may result in problems
for individual companies and may create overall economic uncertainties.
Accordingly, the Fund's investments may be adversely affected.

The Funds will not hold annual meetings of shareholders unless required to
by the Investment Company Act of 1940, the Board of Directors/Trustees or the
shareholders with one-quarter of the outstanding stock of each Fund entitled to
vote. See the Statement of Additional Information for each Fund for more
details.

10
<PAGE>

The Funds. Affiliated Fund, a diversified open-end management investment
company, was incorporated under Maryland law in 1975; Small-Cap Fund and Growth
Opportunities Fund is a diversified separate series of Lord Abbett Research
Fund, Inc., a diversified open-end management investment company which was
incorporated under Maryland law in 1992; International Fund, a diversified
separate series of Lord Abbett Securities Trust, a diversified open-end
management investment company, was organized as a Delaware Business Trust in
1993. High Yield Fund is a diversified separate series of Lord Abbett Investment
Trust, a diversified open-end management investment company, which was
incorporated under Maryland law in 1976.

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FUND PERFORMANCE

About the Affiliated Fund. The Fund completed its fiscal year on October 31,
1997. During this time, it enjoyed returns above historical averages due to an
environment of solid economic growth, low inflation and strong corporate profit
gains. Throughout most of the period, the portfolio has been evenly diversified,
but with a moderate overweighting in financial stocks. Furthermore, we have
shifted our focus within this group of stocks towards insurance companies, which
are benefiting from industry-wide consolidation and cost-cutting efforts.

About the Small-Cap Fund. The Fund completed its fiscal year on November 30,
1997. Its exceptional performance over the past fiscal year can be attributed to
select industrial and technology stocks in the portfolio. During the year,
valuations of small-cap stocks were favorable, providing many opportunities in
the marketplace to purchase companies with performance characteristics that
drive toward consistent, strong performance with low volatility. We look for
companies with long operating histories, strong market positions within their
industry and financial strength. These characteristics help to reduce business
risk and protect companies form both economic and competitive pressures. We
continue to seek issues with solid fundamental prospects in the small-cap
universe to add value to the Fund.

About the Growth Opportunities Fund (formerly, Lord Abbett Research Fund -
Mid-Cap Series). The Fund completed its fiscal year on November 30, 1997. Over
the past year, the stock market experienced several corrections before
rebounding to new heights. This occurred against a background of surprising
strength in the economy, concerns of inflation and a volatile interest-rate
environment. The positive performance of your Fund over the past year can be
attributed to the use of the best ideas generated by the Fund's research team.
Specifically, individual issues in the technology, finance and consumer sectors
proved to be rewarding.

About the International Fund. The Fund completed its fiscal year on October 31,
1997. It enjoyed a strong performance over the past year due in large part to
gains made by industrial companies which are domiciled in Germany and Canada.
One company that helped portfolio performance during the year manufactures "zero
emission" hydrogen powered fuel cells that produce water and oxygen as waste
materials. Another is the world's largest supplier of database software tools
used for information integration. These are some examples of what we believe are
industry leaders. In addition, due to our selective investment process, we had
minimal exposure to companies located in the emerging and Far Eastern markets
that fell sharply during the period.

About the High Yield Fund. This Fund was effective as of November 30, 1998 and,
subsequently, has no reportable performance history at this time.

INVESTMENT POLICIES, RISKS AND LIMITS

The Funds are permitted to utilize, within limits established by the Board of
Directors, the following investment policies, in an effort to enhance
performance. These policies have risks associated with them. However, certain
practices may reduce these risks. To the extent the Funds utilize these
policies, overall performance may be positively or negatively affected.

POLICIES COMMON TO ALL FUNDS

Securities Lending: This entails lending securities to financial institutions
which provide continuous collateral equal to the market value of the securities
loaned.

Risk: Delay in recovery of collateral and loss should the borrower of the
security fail financially.

Limit: Loans, in the aggregate, may not exceed 30% of Affiliated Fund's,
International Fund's, and

11
<PAGE>

High Yield Growth Fund's total assets, and 5% of Small-Cap Fund's and Growth
Opportunities Fund's total assets.

Illiquid Securities. These securities are not traded on the open market. May
include illiquid Rule 144A securities.

Risk: Certain securities may be difficult or impossible to sell at the
time and price the seller would like.

Limit: Each Fund may invest up to 15% of its assets in illiquid
securities. Securities determined by the Board of Directors to be liquid are not
subject to this limitation.

Borrowing: Each Fund may borrow money.

Risk: Depending on the circumstances, the interest paid on borrowed money
may reduce a Fund's return.

Limit: Not in excess of 33 1/3% of total assets (including the amount
borrowed), and then only as a temporary measure for extraordinary or emergency
purposes. Up to an additional 5% of total assets are available for temporary
purposes. Each Fund may obtain such short-term credit as may be necessary for
the clearance of purchases and sales of portfolio securities. Foreign
Securities:

Foreign securities are securities primarily traded in countries outside the
United States.

Risk: These securities are not subject to the same degree of regulation
and may be more volatile and less liquid than securities traded in major U.S.
markets. Other considerations include political and social instability,
expropriations, higher transaction costs, currency fluctuations, nondeductable
withholding taxes and different settlement practices.

Limit: Affiliated Fund may invest up to 10% of its assets, Small Cap Fund
and Growth Opportunities Fund up to 35% of their net assets, International Fund
at least 80%, and High Yield Fund up to 20% of assets at the time of investment
in foreign securities (of the type described herein).

Diversification. Generally, the diversification rules under Subchapter M of the
Internal Revenue Code require that at the end of each quarter of the taxable
year, (a) not more than 25% of each Fund's total assets be invested in any one
issuer and (b) with respect to 50% of each Fund's total assets, no more than 5%
of each Fund's total assets be invested in any one issuer, except U.S.
Government securities. Each Fund intends to meet these rules.

Each Fund, as a "diversified" Fund, is prohibited, with respect to 75% of
the value of its total assets, from investing more than 5% of its total assets
in securities of any one issuer other than U.S. Government securities.

When the assets and revenues of a sovereign state's political subdivision
are separate from those of the sovereign state government creating the
subdivision, and the security is backed only by the assets and revenues of the
subdivision, the subdivision would be considered the sole issuer. Similarly, if
a revenue bond is backed only by the assets and revenues of a nongovernmental
user, then such user would be considered the sole issuer.

POLICIES COMMON TO AFFILIATED FUND,
SMALL-CAP FUND, GROWTH OPPORTUNITIES
FUND AND INTERNATIONAL FUND.

Selling Covered Call Options: A covered call option on stock gives the buyer of
the option, upon payment of a premium to the seller (writer) of the option, the
right to call upon the writer to deliver a specified number of shares of a stock
owned by the writer on or before a fixed date at a predetermined price.

Risk: Although each Fund receives income based on receipt of the premium,
it gives up participation in the appreciation of the stock above the
predetermined price if it is called away by the buyer.

Limit: Each Fund may write covered call options on securities having an
aggregate market value not to exceed 10% of Affiliated Fund's gross assets, 5%
of Small-Cap Fund's gross assets, 5% of Growth Opportunities Fund's gross assets
and International Fund's net assets.

POLICIES COMMON TO AFFILIATED FUND,
SMALL-CAP FUND, HIGH YIELD FUND AND
GROWTH OPPORTUNITIES FUND.

Rule 144A Securities: These securities are determined by the
Directors to be liquid pursuant to Securities and Exchange Commission Rule 144A
(the "Rule"). Under the Rule, a qualifying unregistered security may be resold
to a qualified institutional buyer without registration and without regard to
whether the seller originally purchased the security for investment.

Risk: Investments in Rule 144A securities initially

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<PAGE>

determined to be liquid could have the effect of diminishing the level of a
Fund's liquidity during periods of decreased market interest in such securities.

POLICIES COMMON TO SMALL-CAP FUND, GROWTH
OPPORTUNITIES FUND, AND INTERNATIONAL FUND

When-Issued or Delayed Delivery Transactions: Such transactions arise when
securities are purchased or sold by a Fund with payment and delivery taking
place as much as a month or more in the future in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering other liquid high-grade debt obligations having a value equal to or
greater than the Fund's purchase commitments; the custodian will likewise
designate as segregated those securities sold on a delayed delivery basis.

Risk: The securities so purchased are subject to market fluctuation and no
interest accrues to the purchaser during the period between purchase and
settlement. At the time of delivery of the securities the value may be more or
less than the purchase price and an increase in the percentage of the Fund's
assets committed to the purchase of securities on a when-issued or delayed
delivery basis may increase the volatility of the Fund's net asset value.

Rights and Warrants: The Funds may hold or sell any property or securities which
it may obtain through the exercise of conversion rights or warrants. The term
"warrants" includes warrants which are not listed on the New York or American
Stock Exchanges.

Limit: Growth Opportunities Fund has no present intention to commit more
than 5% of its gross assets to rights and warrants, Small-Cap Fund 5% of its
gross assets, and International Fund 5% of its net assets.

Repurchase Agreements: The Funds may, on occasion, enter into repurchase
agreements whereby the seller of a security agrees to repurchase that security
at a mutually agreed-upon time and price. The period of maturity is usually
quite short, possibly overnight or a few days, although it may extend over a
number of months. The resale price is in excess of the purchase price,
reflecting an agreed-upon rate of return effective for the period of time a
Fund's money is invested in the security. Each Fund's repurchase agreements will
at all times be fully collateralized in an amount at least equal to the purchase
price, including accrued interest earned on the underlying securities. The
instruments held as collateral are valued daily, and if the value of the
instruments declines, each Fund's will require additional collateral.

Risk: If the seller defaults and the value of the collateral securing the
repurchase agreement declines, each Fund may incur a loss.

Forward Foreign Currency Contracts: The Funds may utilize a forward foreign
currency contract which involves an obligation to purchase or sell a specific
amount of a currency at a set price on a future date. A Fund may enter into
forward foreign currency contracts in primarily two circumstances. First, when a
Fund desires to "lock in" the U.S. dollar price of the security, by entering
into a forward contract for the purchase or sale of the amount of foreign
currency involved in the underlying security transaction, a Fund will be able to
protect against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the subject foreign currency during the
period between the date of purchase or sale and the date of settlement.

Second, when Fund management believes that the currency of a particular
foreign country may suffer a decline against the U.S. dollar, a Fund may enter
into a forward contract to sell the amount of foreign currency approximating the
value of some or all of the portfolio securities denominated in such foreign
currency or, in the alternative, may use a cross-currency-hedging technique
whereby it enters into such a forward contract to sell another currency
(obtained in exchange for the currency in which the portfolio securities are
denominated if such securities are sold) which it expects to decline in a
similar manner.

Risk: Precise matching of the forward contract and the value of the
securities involved will generally not be possible.

Currency Put and Call Options: The International Fund may transact in
currency put and call options on U.S. exchanges or U.S. over-the-counter markets
("OTC") to protect the dollar against foreign currency exposure. Small-Cap Fund
and Growth Opportunities Fund may purchase foreign currency put options and
write foreign currency call options on U.S. exchanges or U.S. over-the-counter
markets ("OTC"). A put option gives a Fund, upon payment of a premium, the right
to sell a currency at the exercise price until the expiration

13
<PAGE>

of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency.

A foreign currency call option written by a Fund gives the purchaser, upon
payment of a premium, the right to purchase from a Fund a currency at the
exercise price until the expiration of the option. Each Fund may write a call
option on a foreign currency only in conjunction with a purchase of a put option
on that currency ("Cross Hedging"). Such a strategy is designed to reduce the
cost of downside currency protection by limiting currency appreciation
potential.

Risk: OTC options are generally less liquid and involve issuer credit
risk. The staff of the SEC has taken the position that purchased OTC options and
the assets used as "cover" for written OTC options are illiquid securities
unless a Fund and the counterparty have provided for the Fund, at the Fund's
election, to unwind the OTC option. The exercise of such an option ordinarily
would involve the payment by a Fund of an amount designed to reflect the
counterparty's economic loss from an early termination, but does allow the Fund
to treat the assets used as "cover" as "liquid."

Limit: The premiums paid for such foreign currency put options will not
exceed 5% of the net assets of a Fund. Unlisted options, together with other
illiquid securities, may comprise no more than 15% of a Fund's net assets. The
face value of such currency call option writing or cross-hedging may not exceed
90% of the value of the securities denominated in such currency (a) invested in
by a Fund to cover such call writing or (b) to be crossed.

The Funds will segregate cash or permitted liquid securities in an amount
not less than that required by SEC Release 10666 and SEC staff interpretations
thereof with respect to assets committed to (a) currency put and call options,
(b) forward foreign currency contracts, and (c) cross hedges entered into by
each Fund. If the value of the securities segregated declines, additional cash
or permitted securities will be added on a daily basis (i.e., marked to market),
so that that segregated amount will not be less than the amount of each Fund's
commitments with respect to such options, forward foreign currency contracts and
cross hedges.

POLICIES COMMON TO SMALL-CAP FUND, GROWTH
OPPORTUNITIES FUND AND INTERNATIONAL FUND

Closed-End Investment Companies: The Funds may invest in closed-end
investment companies.

Risk: Shares of such investment companies sometimes trade at a discount or
premium in relation to their net asset value and there may be duplication of
fees, for example, to the extent that a Fund and the closed-end investment
company both charge a management fee.

Limit: Except for International Fund which has no limit, no more than 5%
of the gross assets of each Fund may be invested in closed-end investment
companies.

POLICIES COMMON TO GROWTH OPPORTUNITIES
FUND AND INTERNATIONAL FUND

Financial Futures: A financial futures transaction is an exchange-traded
contract to buy or sell a standard quantity and quality of a financial
instrument or index at a specific future date and price. Each Fund may deal in
financial futures transactions with respect to the type of securities described
for it, herein, including indices of such securities and options on such
financial futures and indices.

Risk: The price behavior of the futures contract may not correlate with
that of the item being hedged.

Limit: Each Fund will not enter into any futures contracts, or options
thereon, if the aggregate market value of the securities covered by futures
contracts plus options on such financial futures exceeds 50% of its total
assets.

POLICIES RELATING TO SMALL-CAP FUND AND
GROWTH OPPORTUNITIES FUND

Options Transactions: The Funds may purchase and write (i.e., sell) put and call
options on equity securities or stock indices that are traded on national
securities exchanges.

A put option on equity securities gives the purchaser, in return for a
premium, the right, for a specified period of time, to sell the securities
subject to the option to the writer of the put at the specified exercise price.
The writer of the put option, in return for the premium, has the obligation,
upon exercise of the option, to acquire the securities underlying the option at
the exercise price.

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<PAGE>

A call option on equity securities gives the purchaser, in return for a
premium paid, the right for a specified period of time to purchase the
securities subject to the option at a specified price (the "exercise price" or
"strike price"). The writer of a call option, in return for the premium, has the
obligation, upon exercise of the option, to deliver, depending upon the terms of
the option contract, the underlying securities to the purchaser upon receipt of
the exercise price.

Options on stock indices are similar to options on equity securities
except that, rather than the right to take or make delivery of stock at a
specified price, an option on a stock index gives the holder the right, in
return for a premium paid, to receive, upon exercise of the option, an amount of
cash if the closing level of the stock index upon which the option is based is
greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The writer of an index option, in return for a
premium, is obligated to pay the amount of cash due upon exercise of the option.

Risk: Each Fund, as the writer of a put option, might therefore be
obligated to purchase underlying securities for more than their current market
value.

When a Fund writes a call option, it gives up the potential for gain on
the underlying securities in excess of the exercise price of the option during
the period that the option is open.

Limit: The Funds may only write covered put options to the extent that
cover for such options does not exceed 25% of the Fund's net assets. The Fund
will not purchase an option if, as a result of such purchase, more than 20% of
its total assets would be invested in premiums for such options. With respect to
Growth Opportunities Fund, provided they are traded on a national securities
exchange and used to increase the Fund's income and to provide greater
flexibility in the disposition of the Fund's portfolio securities, the Fund may
write covered call options on securities having an aggregate market value not to
exceed 5% of the Fund's gross assets.

Each Fund will write only "covered" options. An option is covered if, so
long as the Fund is obligated under the option, it owns an offsetting position
in the underlying securities or maintains cash, U.S. Government securities or
other liquid high-grade debt obligations with a value sufficient at all times to
cover its obligations in a segregated account.

See "Investment Objective and Policies -- Limitation on Purchase and Sale of
Stock Options, Options on Stock Indices and Stock Index Futures" in the
Statement of Additional Information.

Temporary Investments: For temporary defensive purposes or to create reserve
purchasing power pending other investments, the Fund may invest in high-quality,
short-term debt obligations of banks, corporations or the U.S. Government of the
type normally owned by a money market fund. Neither an issuer's ceasing to be
rated investment grade nor a rating reduction below that grade will require
elimination of a bond from our portfolios.

POLICIES RELATING TO AFFILIATED FUND AND HIGH
YIELD FUND

High Yield Debt Securities: High yield debt securities or "junk bonds" are rated
BB/Ba or lower and typically pay a higher yield than investment-grade debt
securities.

Risk: The market for lower-rated bonds generally is less liquid than that
for higher-rated bonds. Market prices of lower-rated bonds may fluctuate more
than those of higher-rated bonds, particularly in times of economic change and
stress. In addition, because the market for lower-rated corporate debt
securities has in past years experienced wide fluctuations in the values of
certain of these securities, past experience may not provide an accurate
indication of the future performance of that market or of the frequency of
default, especially during periods of recession. Objective pricing data for
lower-rated bonds may be more limited than for higher-rated bonds and valuation
of such securities may be more difficult and require greater reliance upon
judgment. While the market for lower-rated bonds may be relatively insensitive
to interest rate changes, the market prices of these bonds structured as zero
coupon or pay-in-kind securities may be affected to a greater extent by such
changes and thus may be more volatile than prices of lower-rated securities
paying interest periodically in cash. Lower-rated bonds that are callable prior
to maturity may be more susceptible to refunding during periods of falling
interest rates, requiring replacement with lower-yielding securities.

Limit: Affiliated Fund will not invest more than 5% of assets at the time
of investment in high-yield debt

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<PAGE>

securities. High Yield Fund has no limit on the amount of high-yield securities
it will invest in; in no event will it invest more than 10% of gross assets at
the time of investment in debt securities which are in default as to interest or
principal.

POLICIES RELATING TO SMALL-CAP FUND ONLY

Debt Securities: The Small-Cap Fund may engage in investing in straight bonds or
other debt securities, including lower rated, high-yield bonds.

Risk: When interest rates rise the value of debt securities tend to fall
and when interest rates fall the value of debt securities tend to rise. The
longer the maturity of a debt security, the more this volatility tends to occur.

Limit: The Small-Cap Fund will not invest more than 5% of its assets (at
the time of investment) in lower rated (BB/Ba or lower), high-yield bonds.

Stock Index Futures: A stock index futures contract is an agreement in which one
party agrees to deliver to another an amount of cash equal to a specific dollar
amount times the difference between a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made.

Risk: Participation in the options or futures markets involves investment
risks and transaction costs to which the Small-Cap Fund would not be subject
absent the use of these strategies. If the Small-Cap Fund management's
prediction of movement in the direction of the securities markets is inaccurate,
the adverse consequences to the Fund may leave it in a worse position than if
such strategies were not used. Risks inherent in the use of options and stock
index futures include: (1) dependence on management's ability to predict
correctly movements in the direction of specific securities being hedged or the
movement in stock indices; (2) imperfect correlation between the price of
options and stock index futures and options thereon and movements in the prices
of the securities being hedged; (3) the fact that skills needed to use these
strategies are different from those needed to select portfolio securities; (4)
the possible absence of a liquid secondary market for any particular instrument
at any time; (5) the possible need to defer closing out certain hedged positions
to avoid adverse tax consequences; and (6) daily limits on price variance for a
futures contract or related options imposed by certain futures exchanges and
boards of trade may restrict transactions in such securities on a particular
day.

Short Sales: The Fund may make short sales of securities or maintain a short
position, provided that at all times when a short position is open the Fund owns
an equal amount of such securities or securities convertible into or
exchangeable, without payment of any further consideration, for an equal amount
of the securities of the same issuer as the securities sold short (a "short sale
against-the-box").

Risk: There may not always be perfect correlation between a short sale
against-the-box and the deferral of realization of gain or loss for federal tax
purposes.

Limit: Short sales will be made primarily to defer realization of gain or
loss for federal tax purposes. The Fund does not intend to have more than 5% of
its net assets (determined at the time of the short sale) subject to short sales
against-the-box.

POLICIES RELATING TO INTERNATIONAL FUND ONLY

Investment Funds. Some emerging countries have laws and regulations that
currently preclude direct foreign investment in the securities of their
companies. However, indirect foreign investment in the securities of such
countries is permitted through investment funds which have been specifically
authorized. The Fund may invest in these investment funds subject to the
provisions of the Investment Company Act of 1940, as amended, and other
applicable restrictions as discussed herein or in the Statement of Additional
Information.

Risk: If the Fund invests in such investment funds, shareholders will bear
not only their proportionate share of the expenses of the Fund (including
operating expenses and the fees of Lord Abbett), but also will indirectly bear
similar expenses of the underlying investment funds.

Limit: Normally, the Fund may invest not more than 5% of its total assets.

Depository Receipts. The Fund may invest in American Depository Receipts
("ADRs"), Global Depository Receipts ("GDRs"), European Depository Receipts
("EDRs") and other Depository Receipts (which, together with ADRs, GDRs and
EDRs, are hereinafter

16
<PAGE>

collectively referred to as "Depository Receipts"), to the extent that such
Depository Receipts become available. ADRs are securities, typically issued by a
U.S. financial institution (a "depository"), that evidence ownership interests
in a security or a pool of securities issued by a foreign issuer (the
"underlying issuer") and deposited with the depository. ADRs may be established
by a depository without participation by the underlying issuer. GDRs, EDRs and
other types of Depository Receipts are typically issued by foreign depositories,
although they may also be issued by U.S. depositories, and evidence ownership
interests in a security or pool of securities issued by either a foreign or U.S.
corporation. Generally, Depository Receipts in registered form are designed for
use in the U.S. securities market and Depository Receipts in bearer form are
designed for use in securities markets outside the United States. The Fund may
invest in sponsored and unsponsored Depository Receipts. For purpose of the
Fund's investment policies, the Fund's investments in Depository Receipts will
be deemed to be investments in the underlying securities.

POLICIES RELATING TO HIGH YIELD FUND ONLY

Options and Financial Futures Transactions: The Fund may deal in options on
securities, securities indexes and financial futures transactions, including
options on financial futures to increase or decrease its exposure to changing
securities prices or interest rates or for bona fide hedging purposes.

An option is the right of the Fund to buy or sell securities of a company
which was granted in exchange for an agreed upon price.

A security index is an index which reflects the market price and number of
shares outstanding for the shares of the index.

A financial futures transaction is an exchange - traded contract to buy or
sell a standard quantity and quality of a financial instrument or index at a
specific future date and price.

Risk: The use of options and financial futures to achieve a Fund's
investment objective could result in a loss due to unanticipated market
conditions and could increase the volatility of the Fund. These transactions may
involve a small investment of cash relative to the risks assumed.

Limit: The Fund may write (sell) covered call options and secured put
options on up to 25% of its net assets and may purchase put and call options and
purchase and sell futures contracts provided that no more than 5% of its assets
(at the time of purchase) may be invested in premiums on such options and
initial margin deposits on such futures contracts.

Equity Securities: Securities which may include stocks and preferred stocks. The
common stocks represent an equity ownership interest in a corporation.

Risk: Equity security prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.

Limit: The Fund may not invest more that 20% of its total assets in equity
securities.

OTHER POLICIES. (1) We may hold or sell any property or securities which we may
obtain through the exercise of conversion rights or warrants or as a result of
any reorganization, recapitalization or liquidation proceedings for any issuer
of securities owned by us. In no event will we voluntarily purchase any
securities other than debt securities, if, at the time of such purchase or
acquisition, the value of the property and securities, other than debt
securities, in our portfolio is greater than 35% of the value of our gross
assets. A purchase or acquisition will not be considered "voluntary" if made in
order to avoid loss in value of a conversion or other premium.

(2) We may not borrow in excess of 33 1/3% of our gross assets taken at
cost or market value, whichever is lower at the time of borrowing, and then only
as a temporary measure for extraordinary or emergency purposes.

Objective, Restriction and Policy Changes. A Fund will not change its investment
objective or its fundamental restrictions without shareholder approval. If a
Fund determines that its objective can best be achieved by a substantive change
in investment policy, which may be changed without shareholder approval, a Fund
may make such change by disclosing it in the prospectus.

For more information about investment policies, restrictions and risk factors,
see the Statement of Additional Information.

17
<PAGE>

- --------------------------------------------------------------------------------
This Prospectus does not constitute an offering in any jurisdiction in
which such offer is not authorized or in which the person making such offer is
not qualified to do so or to anyone to whom it is unlawful to make such offer.

No person is authorized to give any information or to make any
representations not contained in this Prospectus or in supplemental sales
material authorized by the Fund and no person is entitled to rely upon any
information or representation not contained herein or therein.

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<PAGE>

Investment Manager and Underwriter

Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800

Custodian

The Bank of New York
48 Wall Street
New York, New York 10286

Transfer Agent and Dividend
Disbursing Agent

United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141

Shareholder Servicing Agent

DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129

Auditors
Deloitte & Touche LLP

Counsel

Debevoise & Plimpton

Printed in the U.S.A.

LARF-1- 11/98

(11/98)

LORD, ABBETT & Co.
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203

<PAGE>

Lord, Abbett & Co.
Statement of Additional Information November 30, 1998

Lord Abbett Affiliated Fund, Inc.
Lord Abbett Research Fund, Inc. - Small-Cap Fund
Lord Abbett Research Fund, Inc. - Growth Opportunities Fund
Lord Abbett Securities Trust - International Fund
Lord Abbett Investment Trust - High Yield Fund

- --------------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus. A Prospectus for
the Class Y shares of Lord Abbett Affiliated Fund, Inc. ("Affiliated Fund"),
Lord Abbett Research Fund, Inc.-Small-Cap ("Small-Cap Fund"), Lord Abbett
Research Fund, Inc.-Growth Opportunities Fund ("Growth Opportunities Fund"),
Lord Abbett Securities Trust - International Fund ("International Fund"), and
Lord Abbett Investment Trust - High Yield Fund ("High Yield Fund"), individually
("we" or the "Fund"), collectively (the "Funds"), may be obtained from your
securities dealer or from Lord Abbett Distributor LLC ("Lord Abbett
Distributor") at The General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203. This Statement of Additional Information relates to, and should
be read in conjunction with, theProspectus dated November 30, 1998 (the
"Prospectus").

Our Boards of Directors/Trustees have authority to create and classify shares in
separate series, without further action by shareholders. To date, the Boards of
Directors/Trustees have authorized four classes of shares for Small-Cap Fund,
Growth Opportunities Fund, International Fund and High Yield Fund (Class A, B, C
and Y), and five classes of shares for Affiliated Fund (Class A, B, C, Y and P).
The Board of a Fund will allocate a Fund's shares among its classes from time to
time. All shares of a Fund have equal noncumulative voting rights and equal
rights with respect to dividends, assets and liquidation, except for certain
class-specific expenses. They are fully paid and nonassessable when issued and
have no preemptive or conversion rights. Although no present plans exist to do
so, further series may be added to one or more of the Funds in the future. The
Investment Company Act of 1940, as amended (the "Act"), requires that where more
than one series exists for a Fund, each series must be preferred over all other
series in respect of assets specifically allocated to such series.

Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as a Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the matter are substantially identical or the matter does not affect any
interest of such class or series. However, the Rule exempts the selection of
independent public accountants, the approval of principal distribution contracts
and the election of directors from the separate voting requirements of the Rule.

Shareholder inquiries should be made by writing directly to your Fund or by
calling 800-821-5129. In addition, you can make inquiries through Lord Abbett
Distributor.

TABLE OF CONTENTS PAGE

1. Investment Policies 2
2. Directors (Trustees) and Officers 10
3. Investment Advisory and Other Services 14
4. Portfolio Transactions 16
5. Purchases, Redemptions
and Shareholder Services 17
6. Past Performance 18
7. Taxes 19
8. Information About The Funds 20
9. Financial Statements 20
10. Appendix 21

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<PAGE>

Investment Policies

Fundamental Investment Restrictions. Each Fund is subject to the following
investment restrictions which cannot be changed without approval of the holders
of a majority of a Fund's outstanding shares. Each Fund may not: (1) borrow
money, except that (i) each Fund may borrow from banks (as defined in the
Investment Company Act of 1940, as amended (the "Act")) in amounts up to 33 1/3%
of its total assets (including the amount borrowed), (ii) each Fund may borrow
up to an additional 5% of its total assets for temporary purposes, (iii) each
Fund may obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities and (iv) each Fund may purchase
securities on margin to the extent permitted by applicable law; (2) pledge its
assets (other than to secure borrowings, or to the extent permitted by the
Fund's investment policies as permitted by applicable law); (3) engage in the
underwriting of securities, except pursuant to a merger or acquisition or to the
extent that, in connection with the disposition of its portfolio securities, it
may be deemed to be an underwriter under federal securities laws; (4) make loans
to other persons, except that the acquisition of bonds, debentures or other
corporate debt securities and investment in government obligations, commercial
paper, pass-through instruments, certificates of deposit, bankers acceptances,
repurchase agreements or any similar instruments shall not be subject to this
limitation, and except further that each Fund may lend its portfolio securities,
provided that the lending of portfolio securities may be made only in accordance
with applicable law; (5) buy or sell real estate (except that each Fund may
invest in securities directly or indirectly secured by real estate or interests
therein or issued by companies which invest in real estate or interests therein)
or commodities or commodity contracts (except to the extent each Fund may do so
in accordance with applicable law and without registering as a commodity pool
operator under the Commodity Exchange Act as, for example, with futures
contracts); (6) with respect to 75% of the gross assets of each Fund, buy
securities of one issuer representing more than (i) 5% of each Fund's gross
assets, except securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or (ii) 10% of the voting securities of such
issuer; (7) invest more than 25% of its assets, taken at market value, in the
securities of issuers in any particular industry (excluding securities of the
U.S. Government, its agencies and instrumentalities); or (8) issue senior
securities to the extent such issuance would violate applicable law.

With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.

Non-Fundamental Investment Restrictions. In addition to the investment
restrictions above which cannot be changed without shareholder approval, each
Fund also is subject to the following non-fundamental investment policies which
may be changed by the Boards of Directors (Trustees) without shareholder
approval. Each Fund may not: (1) borrow in excess of 33 1/3% of its total assets
(including the amount borrowed), and then only as a temporary measure for
extraordinary or emergency purposes; (2) make short sales of securities or
maintain a short position except to the extent permitted by applicable law; (3)
invest knowingly more than 15% of its net assets (at the time of investment) in
illiquid securities, except for securities qualifying for resale under Rule 144A
of the Securities Act of 1933, deemed to be liquid by the Boards of Directors
(Trustees); (4) invest in the securities of other investment companies as
defined under the Act, (in the case of the International Fund, as long as the
Fund is an underlying fund in a fund-of-funds structure) except as permitted by
applicable law; (5) invest in securities of issuers which, with their
predecessors, have a record of less than three years of continuous operation, if
more than 5% of each Fund's total assets would be invested in such securities
(this restriction shall not apply to mortgaged-backed securities, asset-backed
securities or obligations issued or guaranteed by the U. S. Government, its
agencies or instrumentalities); (6) hold securities of any issuer if more than
1/2 of 1% of the securities of such issuer are owned beneficially by one or more
of each Fund's officers or directors (trustees) or by one or more partners or
members of the Fund's underwriter or investment adviser if these owners in the
aggregate own beneficially more than 5% of the securities of such issuer; (7)
invest in warrants if, at the time of the acquisition, its investment in
warrants, valued at the lower of cost or market, would exceed 5% of each Fund's
total assets (included within such limitation, but not to exceed 2% of each
Fund's total assets, are warrants which are not listed on the New York or
American Stock Exchange or a major foreign exchange); (8) invest in real estate
limited partnership interests or interests in oil, gas or other mineral leases,
or exploration or other development programs, except that each Fund may invest
in securities issued by companies that engage in oil, gas or other mineral
exploration or other development activities; (9) write, purchase or sell puts,
calls, straddles, spreads or combinations thereof, except to the extent
permitted in a Fund's prospectus and statement of additional information, as
they may be amended from time to time; (10) buy from or sell to any of a Fund's
officers, directors (trustees), employees, or its investment adviser or any of a
Fund's officers, directors (trustees), partners or employees, any securities
other than shares of a Fund; and (11) with respect to Affiliated Fund, pledge,
mortgage or hypothecate its assets; however, this provision does

2
<PAGE>

not apply to the grant of escrow receipts or the entry into other similar escrow
arrangements arising out of the writing of covered call options.

For the year ended October 31, 1997, Affiliated Fund's portfolio turnover rate
was 46.41% versus 47.06% for the prior year. For the year ended November 30,
1997, the Small-Cap Fund's portfolio turnover rate was 45.24% and 110.09% for
the period December 13, 1997 (commencement of operations) to November 30, 1997.
For the period December 13, 1996 (commencement of operations) to October 31,
1997, the International Fund's' portfolio turnover rate was 29.72%.

Although they have no current intention to do so, each Fund may invest in
financial futures & options on financial futures.

Each Fund did not invest in repurchase agreements or lend portfolio securities
during the last fiscal year and have no present intent to do so.

INVESTMENT POLICIES (WHICH CAN BE CHANGED WITHOUT SHAREHOLDER APPROVAL.)

Financial Futures Contracts (International Fund). The International Fund may
enter into contracts for the future delivery of a financial instrument, such as
a security or the cash value of a securities index. This investment technique is
designed primarily to hedge (i.e., protect) against anticipated future changes
in interest rates or market conditions which otherwise might adversely affect
the value of securities which the International Fund holds or intends to
purchase. A "sale" of a futures contract means the undertaking of a contractual
obligation to deliver the securities or the cash value of an index called for by
the contract at a specified price during a specified delivery period. A
"purchase" of a futures contract means the undertaking of a contractual
obligation to acquire the securities or cash value of an index at a specified
price during a specified delivery period. At the time of delivery pursuant to
the contract, adjustments are made to recognize differences in value arising
from the delivery of securities which differ from those specified in the
contract. In some cases, securities called for by a futures contract may not
have been issued at the time the contract was written. The International Fund
will not enter into any futures contracts or options on futures contracts if the
aggregate of the market value of the securities covered by its outstanding
futures contracts and securities covered by futures contracts subject to the
outstanding options written by it would exceed 50% of its total assets.

Although some financial futures contracts by their terms call for the actual
delivery or acquisition of securities, in most cases, a party will close out the
contractual commitment before delivery without having to make or take delivery
of the security by purchasing (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, if effected through a member of an exchange, cancels the
obligation to make or take delivery of the securities. All transactions in the
futures market are made, offset or fulfilled through a clearing house associated
with the exchange on which the contracts are traded. The International Fund will
incur brokerage fees when it purchases or sells contracts and will be required
to maintain margin deposits. At the time it enters into a futures contract, it
is required to deposit with its custodian, on behalf of the broker, a specified
amount of cash or eligible securities called "initial margin." The initial
margin required for a futures contract is set by the exchange on which the
contract is traded. Subsequent payments, called "variation margin," to and from
the broker are made on a daily basis as the market price of the futures contract
fluctuates. The costs incurred in connection with futures transactions could
reduce the Fund's return. Futures contracts entail risks. If the investment
adviser's judgment about the general direction of interest rates or markets is
wrong, the overall performance may be poorer than if no such contracts had been
entered into.

There may be an imperfect correlation between movements in prices of futures
contracts and portfolio securities being hedged. The degree of difference in
price movements between futures contracts and the securities (or securities
indices) being hedged depends upon such things as variations in demand for
futures contracts and securities underlying the contracts and differences
between the liquidity of the markets for such contracts and the securities
underlying them. In addition, the market prices of futures contracts may be
affected by certain factors not directly related to the underlying securities.
At any given time, the availability of futures contracts, and hence their
prices, are influenced by credit conditions and margin requirements. Due to the
possibility of price distortions in the futures market and because of the
imperfect correlation between movements in the prices of securities and
movements in the prices of futures contracts, a correct forecast of market
trends by the investment adviser may not result in a successful hedging
transaction.

3
<PAGE>

Options on Financial Futures Contracts (International Fund). The International
Fund may purchase and write call and put options on financial futures contracts.
An option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at a specified exercise
price at any time during the period of the option. Upon exercise, the writer of
the option delivers the futures contract to the holder at the exercise price.
The International Fund would be required to deposit with our custodian initial
margin and maintenance margin with respect to put and call options on futures
contracts written by us. Options on futures contracts involve risks similar to
the risks relating to transactions in financial futures contracts described
above. Generally speaking, a given dollar amount used to purchase an option on a
financial futures contract can hedge a much greater value of underlying
securities than if that amount were used to directly purchase the same financial
futures. Should the event that the International Fund intends to hedge (or
protect) against not materialize, however, the option may expire worthless, in
which case the International Fund would lose the premium paid therefor.

Segregated Accounts (International Fund). To the extent required to comply with
Securities and Exchange Commission Release 10666 and any related SEC policies,
when purchasing a futures contract, or writing a put option, International Fund
will maintain in a segregated account at its custodian bank cash, U.S.
Government and other permitted securities to cover its position.

Forward Foreign Currency Contracts (Small-Cap Fund, Growth Opportunities Fund).
A forward foreign currency contract involves an obligation to purchase or sell a
specific amount of a specific currency at a set price at a future date. Each
Fund expects to enter into forward foreign currency contracts in primarily two
circumstances. First, when the Small-Cap Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, it may desire
to "lock in" the U.S. dollar price of the security. By entering into a forward
contract for the purchase or sale of the amount of foreign currency involved in
the underlying security transaction, each Fund will be able to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the date
the security is purchased or sold and the date on which payment is made or
received.

Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, each Fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of each Fund's portfolio securities denominated in such foreign
currency or, in the alternative, each Fund may use a cross-hedging technique
whereby it sells another currency which each Fund expects to decline in a
similar way but which has a lower transaction cost. Precise matching of the
forward contract amount and the value of the securities involved will not
generally be possible since the future value of such securities denominated in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the forward contract is entered into and
the date it matures. Each Fund does not intend to enter into such forward
contracts under this second circumstance on a continuous basis.

Stock Options, Options on Stock Indices and Stock Index Futures (Small-Cap
Fund). The Small-Cap Fund may write put and call options on stocks only if they
are covered, and such options must remain covered so long as the Small-Cap Fund
is obligated as a writer. The Small-Cap Fund will not (a) write puts having an
aggregate exercise price greater than 25% of the Fund's total net assets; or (b)
purchase (i) put options on stocks not held in the Small-Cap Fund's portfolio,
(ii) put options on stock indices or (iii) call options on stocks or stock
indices if, after any such purchase, the aggregate premiums paid for such
options would exceed 20% of the Small-Cap Fund's total net assets.

Call Options on Stock (Small-Cap Fund). The Small-Cap Fund may, from time to
time, write call options on its portfolio securities. The Small-Cap Fund may
write only call options which are "covered," meaning that the Small-Cap Fund
either owns the underlying security or has an absolute and immediate right to
acquire that security, without additional cash consideration, upon conversion or
exchange of other securities currently held in its portfolio. In addition, the
Small-Cap Fund will not permit the call to become uncovered prior to the
expiration of the option or termination through a closing purchase transaction
as described below. If the Small-Cap Fund writes a call option, the purchaser of
the option has the right to buy (and the Fund has the obligation to sell) the
underlying security at the exercise price throughout the term of the option. The
amount paid to the Small-Cap Fund by the purchaser of the option is the
"premium." The Small-Cap Fund's obligation

4
<PAGE>

to deliver the underlying security against payment of the exercise price would
terminate either upon expiration of the option or earlier if the Small-Cap Fund
were to effect a "closing purchase transaction" through the purchase of an
equivalent option on an exchange. There can be no assurance that a closing
purchase transaction can be effected. The Small-Cap Fund does not intend to
write covered call options with respect to securities with an aggregate market
value of more than 5% of it's gross assets at the time an option is written.
This percentage limitation will not be increased without prior disclosure in our
current prospectus.

The Small-Cap Fund would not be able to effect a closing purchase transaction
after it had received notice of exercise. In order to write a call option, the
Small-Cap Fund is required to comply with the rules of The Options Clearing
Corporation and the various exchanges with respect to collateral requirements.
The Small-Cap Fund may not purchase call options except in connection with a
closing purchase transaction. It is possible that the cost of effecting a
closing purchase transaction may be greater than the premium received by the
Small-Cap Fund for writing the option.

Generally, the Small-Cap Fund intends to write listed covered call options
during periods when it anticipates declines in the market values of portfolio
securities because the premiums received may offset to some extent the decline
in the Small-Cap Fund's net asset value occasioned by such declines in market
value. Except as part of the "sell discipline" described below, the Small-Cap
Fund will generally not write listed covered call options when it anticipates
that the market values of it's portfolio securities will increase.

One reason for the Small-Cap Fund to write call options is as part of a "sell
discipline." If the Small-Cap Fund decides that a portfolio security would be
overvalued and should be sold at a certain price higher than the current price,
it could write an option on the stock at the higher price. Should the stock
subsequently reach that price and the option be exercised, the Small-Cap Fund
would, in effect, have increased the selling price of that stock, which it would
have sold at that price in any event, by the amount of the premium. In the event
the market price of the stock declined and the option were not exercised, the
premium would offset all or some portion of the decline. It is possible that the
price of the stock could increase beyond the exercise price; in that event, the
Small-Cap Fund would forego the opportunity to sell the stock at that higher
price.

In addition, call options may be used as part of a different strategy in
connection with sales of portfolio securities. If, in the judgment of the Fund
Management, the market price of a stock is overvalued and it should be sold, the
Small-Cap Fund may elect to write a call option with an exercise price
substantially below the current market price. As long as the value of the
underlying security remains above the exercise price during the term of the
option, the option will, in all probability, be exercised, in which case the
Small-Cap Fund will be required to sell the stock at the exercise price. If the
sum of the premium and the exercise price exceeds the market price of the stock
at the time the call option is written, the Small-Cap Fund would, in effect,
have increased the selling price of the stock. The Small-Cap Fund would not
write a call option in these circumstances if the sum of the premium and the
exercise price were less than the current market price of the stock.

Put Options on Stock (Small-Cap Fund). The Small-Cap Fund may also write listed
put options. If the Small-Cap Fund writes a put option, it is obligated to
purchase a given security at a specified price at any time during the term of
the option.

Writing listed put options is a useful portfolio investment strategy when the
Small-Cap Fund has cash or other reserves available for investment as a result
of sales of Small-Cap Fund shares or, more importantly, because Fund Management
believes a more defensive and less fully invested position is desirable in light
of market conditions. If the Fund Management wishes to invest its cash or
reserves in a particular security at a price lower than current market value, it
may write a put option on that security at an exercise price which reflects the
lower price it is willing to pay. The buyer of the put option generally will not
exercise the option unless the market price of the underlying security declines
to a price near or below the exercise price. If the Small-Cap Fund writes a
listed put, the price of the underlying stock declines and the option is
exercised, the premium, net of transaction charges, will reduce the purchase
price paid by the Small-Cap Fund for the stock. The price of the stock may
decline by an amount in excess of the premium, in which event the Small-Cap Fund
would have foregone an opportunity to purchase the stock at a lower price.

If, prior to the exercise of a put option, the Small-Cap Fund determines that it
no longer wishes to invest in the stock on which the put option had been
written, the Fund may be able to effect a closing purchase transaction on an
exchange by

5
<PAGE>

purchasing a put option of the same Fund as the one which it has previously
written. The cost of effecting a closing purchase transaction may be greater
than the premium received on writing the put option and there is no guarantee
that a closing purchase transaction can be effected.

Stock Index Options (Small-Cap Fund). Except as describe below, the Small-Cap
Fund will write call options on indices only if on such date it holds a
portfolio of stocks at least equal to the value of the index times the
multiplier times the number of contracts. When the Small-Cap Fund writes a call
option on a broadly-based stock market index, the Small-Cap Fund will segregate
or put into escrow with its custodian, or pledge to a broker as collateral for
the option, one or more "qualified securities" with a market value at the time
the option is written of not less than 100% of the current index value times the
multiplier times the number of contracts.

Segregated Accounts (Small-Cap Fund). If the Small-Cap Fund has written an
option on an industry or market segment index, it will segregate or put into
escrow with its custodian, or pledge to a broker as collateral for the option,
at least ten "qualified securities," which are securities of an issuer in such
industry or market segment, with a market value at the time the option is
written of not less than 100% of the current index value times the multiplier
times the number of contracts. A "qualified security" is an equity security
which is listed on a national securities exchange or listed on the National
Association of Securities Dealers Automated Quotation System against which the
Small-Cap Fund has not written a stock call option and which has not been hedged
by the Small-Cap Fund by the sale of stock index futures. Such securities will
include stocks which represent at least 50% of the weighing of the industry or
market segment index and will represent at least 50% of the Small-Cap Fund's
holdings in that industry or market segment. No individual security will
represent more than 25% of the amount so segregated, pledged or escrowed. If at
the close of business on any day the market value of such qualified securities
so segregated, escrowed or pledged falls below 100% of the current index value
times the multiplier times the number of contracts, the Small-Cap Fund will so
segregate, escrow or pledge an amount in cash, Treasury bills or other
high-grade short-term obligations equal in value to the difference. In addition,
when the Small-Cap Fund writes a call on an index which is in-the-money at the
time the call is written, the Small-Cap Fund will segregate with its custodian
or pledge to the broker as collateral cash, equity securities, non-investment
grade debt, short term U.S. Government securities or other high-grade short-term
debt obligations equal in value to the amount by which the call is in-the-money
times the multiplier times the number of contracts. Any amount segregated
pursuant to the foregoing sentence may be applied to the Small-Cap Fund's
obligation to segregate additional amounts in the event that the market value of
the qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts. However, if the Small-Cap Fund holds a
call on the same index as the call written where the exercise price of the call
held is equal to or less than the exercise price of the call written or greater
than the exercise price of the call written if the difference is maintained by
the Small-Cap Fund in cash, equity securities, non-investment grade debt,
treasury bills or other high-grade short-term obligations in a segregated
account with its custodian, it will not be subject to the requirements describe
in this paragraph. In instances involving the purchase of stock index futures
contracts by the Small-Cap Fund, an amount of cash or permitted securities equal
to the market value of the futures contracts will be deposited in a segregated
account with the its custodian and/or in a margin account with a broker to
collateralize the position and thereby insure that the use of such futures are
unleveraged.

Under regulations of the Commodity Exchange Act, investment companies registered
under the Act are exempt from the definition of "commodity pool operator,"
provided all of the Small-Cap Fund's commodity futures or commodity options
transactions constitute bona fide hedging transactions within the meaning of the
CFTC's regulations. The Small-Cap Fund will use stock index futures and options
on futures as described herein in a manner consistent with this requirement.

Stock Index Futures (Small-Cap Fund). The Small-Cap Fund will engage in
transactions in stock index futures contracts as a hedge against changes
resulting from market conditions in the values of securities which are held in
the Small-Cap Fund's portfolio or which it intends to purchase. The Small-Cap
Fund will engage in such transactions when they are economically appropriate for
the reduction of risks inherent in the ongoing management of the Small-Cap Fund.
The Small-Cap Fund may not purchase or sell stock index futures if, immediately
thereafter, more than one-third of its net assets would be hedged and, in
addition, except as described above in the case of a call written and held on
the same index, will write call options on indices or sell stock index futures
only if the amount resulting from the multiplication of the then current level
of the index (or indices) upon which the option or future contract(s) is based,
the applicable multiplier(s), and the number

6
<PAGE>

of futures or options contracts which would be outstanding, would not exceed
one-third of the value of the Small-Cap Fund's net assets.

RISK FACTORS - SMALL-CAP FUND

Risks of Transactions in Stock Options. Writing options involves the risk that
there will be no market in which to effect a closing transaction. An option
position may be closed out only on an exchange which provides a secondary market
for an option of the same Fund. Although the Small-Cap Fund will generally write
only those options for which there appears to be an active secondary market,
there is no assurance that a liquid secondary market on an exchange will exist
for any particular option, or at any particular time, and for some options no
secondary market on an exchange may exist. If the Small-Cap Fund, as a covered
call option writer, is unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.

Risks of Options on Indices. The Small-Cap Fund's purchase and sale of options
on indices will be subject to risks described above under "Risk of Transactions
in Stock Options." In addition, the distinctive characteristics of options on
indices create certain risks that are not present with stock options.

Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular stock, whether the Small-Cap Fund
will realize a gain or loss on the purchase or sale of an option on an index
depends upon movements in the level of stock prices in the stock market
generally or in an industry or market segment rather than movements in the price
of a particular stock. Accordingly, successful use by the Small-Cap Fund of
options on indices would be subject to the investment adviser's ability to
predict correctly movements in the direction of the stock market generally or of
a particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.

Index prices may be distorted if trading of certain stocks included in the index
is interrupted. Trading in the index option also may be interrupted in certain
circumstances, such as if trading were halted in a substantial number of stocks
included in the index. If this occurred, the Small-Cap Fund would not be able to
close out options which it had purchased or written and, if restrictions on
exercise were imposed, may be unable to exercise an option it holds, which could
result in substantial losses to the Small-Cap Fund. It is the Small-Cap Fund's
policy to purchase or write options only on indices which include a number of
stocks sufficient to minimize the likelihood of a trading halt in the index.

Trading in index options commenced in April 1983 with the S&P 100 option
(formerly called the CBOE 100). Since that time a number of additional index
option contracts have been introduced including options on industry indices.
Although the markets for certain index option contracts have developed rapidly,
the markets for other index options are still relatively illiquid. The ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop in all index option contracts. The Small-Cap Fund will
not purchase or sell any index option contract unless and until, in Fund
management's opinion, the market for such options has developed sufficiently
that such risk in connection with such transactions in no greater than such risk
in connection with options on stocks.

Special Risks of Writing Calls on Indices. Because exercises of index options
are settled in cash, a call writer cannot determine the amount of its settlement
obligations in advance and, unlike call writing on specific stocks, cannot
provide in advance for, or cover, its potential settlement obligations by
acquiring and holding the underlying securities. However, the Small-Cap Fund
will write call options on indices only under the circumstances described above
under "Limitations on the Purchases and Sales of Stock Options, Options on Stock
Indices and Stock Index Futures."

Price movements in the Small-Cap Fund's portfolio probably will not correlate
precisely with movements in the level of the index and, therefore, the Fund
bears the risk that the price of the securities held may not increase as much as
the index. In such event the Small-Cap Fund would bear a loss on the call which
is not completely offset by movements in the price of the Small-Cap Fund's
portfolio. It is also possible that the index may rise when the Small-Cap Fund's
portfolio of stocks does not rise. If this occurred, the Small-Cap Fund would
experience a loss on the call which is not offset by an increase in the

7
<PAGE>

value of its portfolio and might also experience a loss in its portfolio.
However, because the value of a diversified portfolio will, over time, tend to
move in the same direction as the market, movements in the value of the
Small-Cap Fund in the opposite direction to the market would be likely to occur
for only a short period or to a small degree.

Unless the Small-Cap Fund has other liquid assets that are sufficient to satisfy
the exercise of a call, the Small-Cap Fund would be required to liquidate
portfolio securities in order to satisfy the exercise. Because an exercise must
be settled within hours after receiving the notice of exercise, if the Small-Cap
Fund fails to anticipate an exercise, it may have to borrow (in amounts not
exceeding 20% of the Fund's total assets) pending settlement of the sale of
securities in its portfolio and would incur interest charges thereon.

When the Small-Cap Fund has written a call, there is also a risk that the market
may decline between the time the call is written and the time the Small-Cap Fund
is able to sell stocks in its portfolio. As with stock options, the Small-Cap
Fund will not learn that an index option has been exercised until the day
following the exercise date but, unlike a call on stock where the Small-Cap Fund
would be able to deliver the underlying securities in settlement, the Fund may
have to sell part of its stock portfolio in order to make settlement in cash,
and the price of such stocks might decline before they can be sold. This timing
risk makes certain strategies involving more than one option substantially more
risky with index options than with stock options. For example, even if an index
call which the Small-Cap Fund has written is "covered" by an index call held by
the Small-Cap Fund with the same strike price, the Small-Cap Fund will bear the
risk that the level of the index may decline between the close of trading on the
date the exercise notice is filed with the clearing corporation and the close of
trading on the date the Small-Cap Fund exercises the call it holds or the time
the Small-Cap Fund sells the call which in either case would occur no earlier
than the day following the day the exercise notice was filed.

Special Risks of Purchasing Puts and Calls on Indices. If the Small-Cap Fund
holds an index option and exercises it before final determination of the closing
index value for that day, it runs the risk that the level of the underlying
index may change before closing. If such a change causes the exercised option to
fall out-of-the-money, the Fund will be required to pay the difference between
the closing index value and the exercise price of the option (times the
applicable multiple) to the assigned writer. Although the Small-Cap Fund may be
able to minimize this risk by withholding exercise instructions until just
before the daily cut off time or by selling rather than exercising an option
when the index level is close to the exercise price it may not be possible to
eliminate this risk entirely because the cut off times for index options may be
earlier than those fixed for other types of options and may occur before
definitive closing index values are announced.

2.
Directors (Trustees) and Officers

The following director is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. He has
been associated with Lord Abbett for over five years and is also an officer,
director, or trustees of twelve other Lord Abbett-sponsored funds. He is an
"interested person" as defined in the Act, and as such, may be considered to
have an indirect financial interest in the Rule 12b-1 Plan described in the
Prospectus.

Robert S. Dow, age 53, Chairman and President

The following outside directors are also directors or trustees of some or all of
the twelve other Lord Abbett-sponsored funds referred to above.

E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York

8
<PAGE>

Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer of
Courtroom Television Network (1997 - 1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991 - 1997). Prior to
that, President and Chief Operating Officer of Home Box Office. Age 57.

William H. T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri

Co-founder and Chairman of the Board of financial advisory firm of
Bush-0'Donnell & Company. Age 60.

Robert B. Calhoun
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York

Managing Director of Monitor Clipper Partners and President of The Clipper
Group, both private equity investment funds. Age 56.

Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois

Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 68.

John C. Jansing
162 S. Beach Road
Hobe Sound, Florida

Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.

C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut

Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994 - 1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992 - 1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J.B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 65.

Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia

President and Chief Executive Officer of Rochester Button Company. Age 70.

Thomas J. Neff
Spencer Stuart

9
<PAGE>

277 Park Avenue
New York, New York

Chairman of Spencer Stuart, an executive search consulting firm. Currently
serves as a Director of Ace, Ltd. (NYSE). Age 61.

The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The Growth Opportunities Fund has not commenced
paying fees. When the Fund starts to pay such fees, a portion of the fees
payable by the Fund to its outside directors/trustees will be deferred under a
plan that deems the deferred amounts to be invested in shares of the Fund for
later distribution to the directors/trustees. The third column sets forth
information with respect to the equity-based benefits accrued for outside
directors by the Lord Abbett-sponsored funds. The fourth column sets forth the
total compensation payable by such funds to the outside directors. No director
of the Fund associated with Lord Abbett and no officer of the Fund received any
compensation from the Fund for acting as a director or officer.

<TABLE>
<CAPTION>
Year Ended October 31, 1997 (Affiliated Fund)
--------------------------------------------
Year Ended November 30, 1997 (Small-Cap Fund) (Growth Opportunities Fund) (High Yield Fund)
-------------------------------------------------------------------------------------------
Year Ended October 31, 1997 (International Fund)
------------------------------------------------
<S> <C> <C> <C>
(1) (2) (3) (4)

For Year Ended
December 31, 1997
Benefits Accrued by Total Compensation
each Fund Accrued by each Fund
and all other Lord and all other Lord
Aggregate Abbett-sponsored Abbett-sponsored
Name of Director Compensation Accrued by each Fund(1) Funds(2) Funds(3)
- ---------------- -------------------------------------- ------------------- --------------------
Affiliated Small-Cap International
Fund Fund Fund
------- --------- -------------
E. Thayer Bigelow $22,939 $223 $20 $17,068 $56,000
William H. T. Bush* None None None None None
Robert B. Calhoun** None None None None None
Stewart S. Dixon $22,527 $229 $21 $32,190 $55,000
John C. Jansing(4) $22,527 $219 $20 $45,085 $55,000
C. Alan MacDonald $23,418 $229 $20 $30,703 $54,000
Hansel B. Millican, Jr. $22,719 $219 $20 $37,747 $55,000
Thomas J. Neff $22,839 $223 $20 $19,853 $56,000
</TABLE>

* Elected as a director, June 17, 1998 effective as of August 13, 1998
** Elected as a director, May 5, 1998 effective as of June 17, 1998

1. Outside directors' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by each Fund to its
outside directors is being deferred under a plan that deems the deferred
amounts to be invested in shares of the Fund for later distribution to the
directors. The amount of aggregate compensation payable by each Fund as of
its 1997 fiscal year end deemed invested in Fund shares, including
dividends reinvested and changes in net asset value applicable to such
deemed investments, were as follows:

Affiliated Small-Cap International High Yield
Fund Fund Fund Fund
---- ---- ---- ----

10
<PAGE>

E. Thayer Bigelow $72,452 $216 $20 None
William H. T. Bush None None None None
Robert B. Calhoun None None None None
Stewart S. Dixon $323,416 $0 $0 None
John C. Jansing $390,389 $212 $20 None
C. Alan MacDonald $234,210 $0 $0 None
Hansel B. Millican, Jr. $394,521 $212 $20 None
Thomas J. Neff $390,787 $216 $20 None

If the amounts deemed invested in each Fund's shares were added to each
director's actual holdings of each Fund's shares as of its 1997 fiscal
year end each would own, the following:

Affiliated Small-Cap International High Yield
Fund Fund Fund Fund
---- ---- ---- ----
E. Thayer Bigelow $2,870 $0 $0 None
William H. T. Bush None None None None
Robert B. Calhoun None None None None
Stewart S. Dixon $20,366 $0 $0 None
John C. Jansing $40,803 $0 $0 None
C. Alan McDonald $54,192 $18,389 $0 None
Hansel B. Millican, Jr. $43,985 $1,467 $0 None
Thomas J. Neff $26,158 $0 $0 None

2. The amounts in Column 3 were accrued by the Lord Abbett-Sponsored Funds
for the 12 months ended October 31, 1997 with respect to the equity based
plans established for independent directors in 1996. This plan supercedes
a previously approved retirement plan for all future directors. Current
directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election.

3. This column shows aggregate compensation, including directors fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1997.

4. Mr. Jansing chose to continue to receive benefits under the retirement
plan, which provides that outside directors (trustees) may receive annual
retirement benefits for life equal to their final annual retainer
following retirement at or after age 72 with at least ten years of
service. Thus, if Mr. Jansing were to retire and the annual retainer
payable by the funds were the same as it is today, he would receive annual
retirement benefits of $50,000.

Except where indicated, the following executive officers of each Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Carper, Hilstad, Hudson, Morris, and Walsh are partners of Lord Abbett;
the others are employees:

Executive Vice Presidents:

Zane E. Brown, age 46 (International Fund )

Robert P. Fetch, age 45 (Small-Cap Fund, Growth Opportunities Fund) (with Lord
Abbett since 1995 - formerly Managing Director at Prudential Investment Advisors
from 1983 to 1995)

W. Thomas Hudson, age 56 (Affiliated Fund )

11
<PAGE>

Robert G. Morris, age 54 (Small-Cap Fund, Growth Opportunities Fund,
International Fund)

Vice Presidents:

Paul A. Hilstad, age 55, Vice President and Secretary (all Funds) (with Lord
Abbett since 1995 - formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.)

Zane E. Brown, age 46 (Small-Cap Fund)

Daniel E. Carper, age 46 (all Funds)

Timothy Horan, age 44 (International Fund) (with Lord Abbett since 1996-
formerly Senior Manager at Credit Suisse from 1994 to 1995; prior thereto Vice
President at Aubrey G. Lanston & Co. from 1992 to 1994)

Lawrence H. Kaplan, age 41, Vice President and Assistant Secretary (all Funds)
(with Lord Abbett since 1997 - formerly Vice President and Chief Counsel of
Salomon Brothers Asset Management Inc from 1995 to 1997; prior thereto Senior
Vice President, Director and General Counsel of Kidder Peabody Asset Management,
Inc.)

Thomas F. Konop, age 56, Vice President and Assistant Secretary (all Funds)

Jerald Lanzotti, age 31 (International Fund)

Gregory M. Macosko, age 51 (Small-Cap Fund) (with Lord Abbett since 1997 -
formerly Analyst with Royce Associates from 1991 to 1997)

Stephen I. McGruder, age 55 (International Fund) (with Lord Abbett since 1995 -
formerly Vice President of Wafra Securities from 1988 to 1995)

Robert Morris, age 54 (Affiliated Fund)

A. Edward Oberhaus III, age 38 (all Funds)

Keith F. O'Connor, age 43 (all Funds)

Fernando Saldanha, age 45 (International Fund) (with Lord Abbett since 1998 -
formerly Economist and Senior Financial Officer of World Bank (IBRO) from 1988
to 1998)

Eli Salzman, age 34 (Affiliated Fund) (with Lord Abbett since 1997 - formerly
Vice President of Mutual of America Capital Corp.; prior thereto Vice President
of Mitchell Hutchins Asset Mgt. from 1986 to 1996)

Christopher J. Towle, age 41 (International Fund)

John J. Walsh, age 62 (all Funds); and

Treasurer:

Donna M. McManus, age 37, Treasurer (all Funds) (with Lord Abbett since 1996 -
formerly a Senior Manager at Deloitte & Touche LLP).

12
<PAGE>

The Funds' By-Laws provide that each Fund shall not hold an annual meeting of
its stockholders in any year unless one or more matters are required to be acted
on by stockholders under the Investment Company Act of 1940, as amended (the
"Act"), or unless called by a majority of the Board of Directors (Trustees) or
by shareholders holding at least one quarter of the stock of each Fund
outstanding and entitled to vote at the meeting. When any such annual meeting is
held, the shareholders will elect directors (trustees) and vote on the approval
of the independent auditors of each Fund, except for International Fund.

As of March 1, 1998 our officers and directors as a group owned less than 1% of
each Fund's outstanding shares, except for Growth Opportunities Fund for which
as of November 30, 1997, our officers and directors, as a group, owned less than
12% of the Fund's outstanding shares.

3.
Investment Advisory and Other Services

As described under "Our Management" in the Prospectus, Lord Abbett is the
investment manager of the Funds. Ten of the general partners of Lord Abbett are
officers and/or directors (trustees) of the Funds, as follows: Zane E. Brown
(High Yield Fund, Small-Cap Fund, and Growth Opportunities Fund, ); Daniel E.
Carper (all Funds); Robert S. Dow (all Funds); Robert P. Fetch (Small-Cap Fund,
Growth Opportunities Fund, International Fund); Robert I. Gerber (High Yield
Fund); Paul A. Hilstad (all Funds); W. Thomas Hudson (Affiliated Fund, High
Yield Fund; Stephen J. McGruder (International Fund); Robert G. Morris (all
Funds); Christopher J. Towle (International Fund); and John J. Walsh (all
Funds).

The other general partners who are neither officers nor directors of the Funds
are Stephen Allen, John E. Erard, Daria L. Foster, Michael B. McLaughlin, R.
Mark Pennington, and Robert J. Noelke. The address of each partner is The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203.

The services performed by Lord Abbett are described in the Prospectus under "Our
Management." Under its Management Agreement, Affiliated Fund pays Lord Abbett a
monthly fee, based on average daily net assets for each month, at the annual
rate of .5 of 1% of the portion of its net assets not in excess of $200,000,000;
.4 of 1% of the portion in excess of $200,000,000, but not in excess of
$500,000,000; .375 of 1% of the portion in excess of $500,000,000, but not in
excess of $700,000,000; .35 of 1% of the portion in excess of $700,000,000, but
not in excess of $900,000,000; and .3 of 1% of the portion in excess of
$900,000,000.

For the fiscal years ended October 31, 1997, 1996 and 1995, the management fees
paid to Lord Abbett by the Affiliated Fund amounted to $22,192,209, $17,683,694
and $14,431,000, respectively.

Under its Management Agreement, Small-Cap Fund is obligated to pay Lord Abbett a
monthly fee, based on average daily net assets for each month, at the annual
rate of .75 of 1% of the Small-Cap Fund's average daily net assets. For the
period December 13, 1995 (commencement of operations) to November 30, 1996, Lord
Abbett waived $24,461 in management fees with respect to the Small-Cap Fund. For
the same time period, Lord Abbett did not receive management fees with respect
to the Small-Cap Fund. For the year end November 30, 1997 and the period
December 13, 1995 (commencement of operations) to November 30, 1996, the
management fees paid to Lord Abbett by the Small-Cap Fund amounted to $1,075,019
and $0 , respectively.

Under the Management Agreement, Growth Opportunities Fund is obligated to pay
Lord Abbett a monthly fee, based on average daily net assets for each month, at
the annual rate of .90 of 1% of the Fund's average daily net assets. For the
period from August 1, 1995 (commencement of operations) through November 30,
1995, the fiscal year ended November 30, 1997 and the fiscal half year ended May
31, 1998, the management fee was .75 of 1% and was waived by Lord Abbett with
respect to the Fund and, except for this waiver, would have amounted to $2,125,
$8,249; $10,844, and $7,077, respectively. On September 15, 1998, the Fund's
shareholders voted to raise the management fee to .90 of 1%.

13
<PAGE>

Under its Management Agreement, International Fund is obligated to pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .75 of 1%. For the period December 13, 1996 (commencement of
operations) to October 31, 1997, the management fees paid to Lord Abbett by the
International Fund amounted to $ 127,715.

Each Fund's fee is allocated among all of its classes based on each's
proportionate share of such daily net assets.

In addition we are obligated to pay all expenses not expressly assumed by Lord
Abbett, including, without limitation, outside directors' fees and expenses,
association membership dues, legal and auditing fees, taxes, transfer and
dividend disbursing agent fees, shareholder servicing costs, expenses relating
to shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.

Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent accountants for each Fund and must be approved at least annually
by each Fund's Board of Directors (Trustees) to continue in such capacity. They
perform audit services for each Fund including the examination of financial
statements included in each's annual report to shareholders.

The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10268, is each
Fund's custodian. In accordance with the requirements of Rule 17f-5, each Fund's
directors (trustees) have approved arrangements permitting each Fund's foreign
assets not held by BNY or its foreign branches to be held by certain qualified
foreign banks and depositories.

The Sub-Custodians of BNY are:

Euro-Clear (a transnational securities depository); Australia: ANZ Banking
Group; Austria: Creditanstalt-Bankverein; Canada: Canadian Imperial Bank of
Commerce; Chile: Citibank, N.A.; Czech Republic: Ceskoslovenska Obchodni Banka;
Denmark: Den Danske Bank; Finland: Union Bank of Finland; Germany: J.P. Morgan
GmbH; Greece: National Bank of Greece S.A.; Hong Kong, Indonesia, Philippines,
Taiwan and Thailand: Hong Kong & Shanghai Banking Corp.; Hungary: Citibank
Budapest Rt; India: Hong Kong and Shanghai Banking Corporation; Ireland: Allied
Irish Banks, PLC; Israel: Bank Leumi LE-Israel B.M.; Japan: The Fuji Bank, Ltd.;
Jordan: Citibank, N.A.; Korea: Bank of Seoul; Luxembourg: Banque Internationale
A Luxembourg, S.A.; Mexico: Citibank, N.A.; Morocco: Banque Commerciale du
Maroc; Netherlands: Bank van Haften Labouchere; New Zealand: Anz Banking Group
Ltd.; Norway: Den Norske Bank; Pakistan: Citibank, N.A.; Peru: Citibank, N.A.;
Poland: Bank Handlowy w Warszawie S.A.; Portugal: Banco Espirito Santo E
Comercial de Lisboa; Malaysia, Singapore: Development Bank of Singapore; South
Africa: The First National Bank of Southern Africa; Sri Lanka: Hong Kong and
Shanghai Banking Corporation; Sweden: Skandinaviska Enskilda Banken;
Switzerland: Bank Leu; Turkey: Citibank, N.A.; Venezuela: Citibank, N.A.

4.
Portfolio Transactions

Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns and taking into account
the full range and quality of the brokers' services. Consistent with obtaining
best execution, we generally pay, as described below, a higher commission than
some brokers might charge on the same transactions. Our policy with respect to
best execution governs the selection of brokers or dealers and the market in
which the transaction is executed. To the extent permitted by law, we may, if
considered advantageous, make a purchase from or sale to another Lord
Abbett-sponsored fund without the intervention of any broker-dealer.

Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts --
investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. They are responsible for obtaining best
execution.

14
<PAGE>

We pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities including blocks, a willingness and ability to take
positions in securities, knowledge of a particular security or market proven
ability to handle a particular type of trade, confidential treatment, promptness
and reliability.

Some of these brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received form brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, and are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.

No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.

If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.

If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate with us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.

We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to them of portfolio business.

For the fiscal years ended October 31, 1997, 1996 and 1995, Affiliated Fund paid
total commissions to independent dealers of $7,681,037, $5,897,259 and
$6,542,354, respectively.

For the period December 13, 1995 (commencement of operations) to November 30,
1996 and the year ended November 30, 1997, the Small-Cap Fund paid total
commissions to independent broker-dealers of $45,266 and 1,812,425,
respectively.

For the period December 13, 1996 (commencement of operations) through October
31, 1997, the International Fund paid total commissions to independent
broker-dealers of $108,270.

15
<PAGE>

5.
Purchases, Redemptions
and Shareholder Services

Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions," respectively.

As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day that the NYSE is open for
trading by dividing our total net assets by the number of shares outstanding at
the time of calculation. The NYSE is closed on Saturdays and Sundays and the
following holidays -- New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

Each Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the New York or American Stock Exchange or on the
NASDAQ National Market System are valued at the last sales price, or, if there
is no sale on that day, at the mean between the last bid and asked prices, or,
in the case of bonds, in the over-the-counter market if, in the judgment of the
Fund's officers, that market more accurately reflects the market value of the
bonds. Over-the-counter securities not traded on the NASDAQ National Market
System are valued at the mean between the last bid and asked prices. Securities
for which market quotations are not available are valued at fair market value
under procedures approved by the Board of Directors (Trustees).

The net asset value per share for the Class Y shares will be determined by
taking Class Y shares net assets and dividing by shares outstanding. Our Class Y
shares will be offered at net asset value.

Each Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("Lord Abbett Distributor") and
subsidiary of Lord Abbett under which Lord Abbett Distributor is obligated to
use its best efforts to find purchasers for the shares of each Fund, and to make
reasonable efforts to sell Fund shares so long as, in Lord Abbett Distributor's
judgment, a substantial distribution can be obtained by reasonable efforts.

Class Y Share Exchanges. The Prospectus briefly describes the Telephone Exchange
Privilege. You may exchange some or all of your Y shares for Y shares of any
Lord Abbett-sponsored funds currently offering Class Y shares to the public.
Currently those funds are Affiliated Fund, Small-Cap Fund, Growth Opportunities
Fund, International Fund, Bond-Debenture Fund, Developing Growth Fund, and
Mid-Cap Value Fund.

Redemptions. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See each Prospectus for expedited redemption procedures.

The right to redeem and receive payment, as described in each Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.

Our Board of Directors (Trustees) may authorize redemption of all of the shares
in any account in which there are fewer than 25 shares (Affiliated Fund,
Small-Cap Fund, and Growth Opportunities Fund), and 60 shares (International
Fund). Before authorizing such redemption, the Board must determine that it is
in our economic best interest or necessary to reduce disproportionately
burdensome expenses in servicing shareholder accounts. At least 6 month's prior
written notice will be given before any such redemption, during which time
shareholders may avoid redemption by bringing their accounts up to the minimum
set by the Board.

6.
Past Performance

16
<PAGE>

Each Fund computes the annual compounded rate of total return for Class Y shares
during specified periods that would equate the initial amount invested to the
ending redeemable value of such investment by adding one to the computed average
annual total return, raising the sum to a power equal to 1 over the number of
years covered by the computation and multiplying the result by one thousand
dollars, which represents a hypothetical initial investment. The calculation
assumes deduction of no sales charge from the initial amount invested and
reinvestment of all income dividends and capital gains distributions on the
reinvestment dates at prices calculated as stated in each Prospectus. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the annual total return computation.

In calculating total returns for Class Y shares no sales charge is deducted from
the initial investment and the return is shown at net asset value. Total returns
also assume that all dividends and capital gains distributions during the period
are reinvested at net asset value per share, and that the investment is redeemed
at the end of the period.

Class Y share performance. Using the computation method described above,
Affiliated Fund's total return for Class Y shares for the period from inception
(March 27, 1998) to April 30, 1998 was .20%. For the period from inception
(December 30, 1997) to May 31, 1998, the total return for the Small-Cap Fund was
6.50%. For the period from inception (December 30, 1997) to April 30, 1998, the
total return for the International Fund was 29.40% (not annualized).

Our yield quotation for Class Y shares is based on a 30-day period ended on a
specified date, computed by dividing the net investment income per share earned
during the period by the net asset value per share of such class on the last day
of the period. This is determined by finding the following quotient: take the
dividends and interest earned during the period for the class minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of Class shares outstanding during the period that were entitled to receive
dividends and (ii) the net asset value per share of such class on the last day
of the period. To this quotient add one. This sum is multiplied by itself five
times. Then one is subtracted from the product of this multiplication and the
remainder is multiplied by two. Yields for Class Y shares do not reflect the
deduction of any sales charge.

These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund' investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. Therefore, there is no assurance that this performance will
be repeated in the future.

7.
Taxes

The value of any shares redeemed by each Fund or repurchased or otherwise sold
may be more or less than your tax basis in the shares at the time the
redemption, repurchase or sale is made. Any gain or loss will generally be
taxable for federal income tax purposes. Any loss realized on the sale,
redemption or repurchase of a Fund's shares which you have held for six months
or less will be treated for tax purposes as a long-term capital loss to the
extent of any capital gains distributions which you received with respect to
such shares. Losses on the sale of stock or securities are not deductible if,
within a period beginning 30 days before the date of the sale and ending 30 days
after the date of the sale, the taxpayer acquires stock or securities that are
substantially identical.

Each Fund will be subject to a four-percent nondeductible excise tax on certain
amounts not distributed (and not treated as having been distributed) on a timely
basis in accordance with a calendar-year distribution requirement. Each Fund
intends to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax.

The writing of call options and other investment techniques and practices which
each Fund may utilize, as described above under "Investment Objectives and
Policies," may create "straddles" for United States federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by a Fund. Such transactions may increase the amount of short-term capital gain
realized by each Fund, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict each Fund's ability to engage in transactions
in options.

17
<PAGE>

Certain futures contracts and certain listed options held by a Fund will be
required to be "marked to market" for federal income tax purpose, i.e., treated
as having been sold at their fair market value on the last day of the Fund's
taxable year (referred to as Section 1256 Contracts). Sixty percent of any gain
or loss recognized on actual or deemed sales of such Section 1256 Contracts will
be treated as long-term capital gain or loss, and 40% of such gain or loss will
be treated as short-term capital gain or loss. Each Fund may be required to
defer the recognition of losses on securities and options and futures contracts
to the extent of any recognized gain on offsetting positions held by the Fund.

As described in the Prospectus under "How We Invest - Risk Factors," each Fund
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that shareholders of each Fund
who are subject to United States federal income tax will not be entitled to
claim a federal income tax credit or deduction for foreign income taxes paid by
each Fund.

Gains and losses realized by each Fund on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.

If either Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies," it may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on either the Fund or its shareholders in respect to
deferred taxes arising from such distributions or gains.

If a Fund were to invest in a passive foreign investment company with respect to
which a Fund elected to make a "qualified electing fund" election, in lieu of
the foregoing requirements, the Fund might be required to include in income each
year a portion of the ordinary earnings and net capital gains of the qualified
electing fund, even if such amount were not distributed to a Fund.

Dividends paid by a Fund will qualify for the dividends-received deduction for
corporations to the extent they are derived from dividends paid by domestic
corporations.

18
<PAGE>

The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax advisor
regarding U.S. and foreign tax consequences of the ownership of shares of a
Fund, including a 30% (or lower treaty rate) United States withholding tax on
dividends representing ordinary income and net short-term capital gains, and the
applicability of United States gift and estate taxes to non-United States gift
and estate taxes to non-United States persons who own Fund shares.

8.
Information About the Funds

The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such security, prohibiting profiting on trades of
the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of such Advisory Group.

9.
Financial Statements

The financial statements for the fiscal year ended November 30, 1997, the fiscal
half-year ended May 31, 1998, and the report thereon of Deloitte & Touche LLP,
independent auditors, included in the 1997 Annual Report to Shareholders of the
Lord Abbett Research Fund, Inc. (which includes Small-Cap Fund and Growth
Opportunities Fund), are incorporated herein by reference in reliance upon the
authority of Deloitte & Touche LLP as experts in auditing and accounting.

The financial statements for the fiscal year ended October 31, 1997, the fiscal
half-year ended April 30, 1998, and the report of Deloitte & Touche LLP,
independent auditors, on such financial statements contained in the 1997 Annual
Report to Shareholders of Lord Abbett Affiliated Fund, Inc. are incorporated
herein by reference to such financial statements and report in reliance upon the
authority of Deloitte & Touche LLP as experts in auditing and accounting.

The financial statements for the fiscal year ended December 31, 1997, the fiscal
half-year June 30, 1998, and the report of Deloitte & Touche LLP, independent
public auditors, on such financial statements contained in the 1997 Annual
Report to Shareholders of Lord Abbett Bond-Debenture Fund, Inc. are incorporated
herein by reference to such financial statements and report, in reliance upon
the authority of Deloitte & Touche LLP as experts in auditing and accounting.

The financial statements for the period from December 13, 1996 (commencement of
operations) to October 31, 1997, the fiscal half-year ended April 30, 1998, and
the report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1997 Annual Report to Shareholders of Lord Abbett
Securities Trust (which includes International Fund) are incorporated herein by
reference to such financial statements.

<PAGE>
19

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

Financial Statements

(a) Financial Highlights for the period December 30, 1997 to April 30,
1998.

(b) Exhibits -

99.B11 Consent of Deloitte & Touche LLP*

* To be filed.

Exhibit items not listed above have either already been filed or are
not applicable.

Item 25. Persons Controlled by or Under Common Control with Registrant

None.

Item 26. Number of Record Holders of Securities

(as of November 16, 1998)

Growth & Income Fund
Class A - 2,785
Class B - 380
Class C - 3,867

International Fund
Class A - 5,884
Class B - 2,451
Class C - 1,500
Class Y - 7

World Bond-Debenture Fund
Class A - 144
Class B - 40
Class C - 34

Alpha Series
Class A - 3,649
Class B - 3,456
Class C - 1,225

Item 27. Indemnification

The Registrant is a Delaware Business Trust established under
Chapter 38 of Title 12 of the Delaware Code. The Registrant's
Declaration and Instrument of Trust at Section 4.3 relating to
indemnification of Trustees, officers, etc. states the following.

The Trust shall indemnify each of its Trustees, officers, employees
and agents (including any individual who serves at its request as
director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor
or otherwise) against all liabilities and expenses, including but
not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees reasonably
incurred by him or her in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body in which he
or she may be or may have been involved as a party or otherwise or
with which he or she may be or may have been threatened, while
acting as Trustee or as an officer, employee or agent of the Trust
or the Trustees, as the case may be, or thereafter, by reason of his
or her being or having been such a Trustee, officer, employee or
agent, except with respect to any matter as to which he or she shall
have been adjudicated not to have acted in good faith in the
reasonable belief that his or her action was in the best interests
of the Trust or any Series thereof. Notwithstanding anything herein
to the contrary, if any matter which is the subject of
indemnification hereunder relates only to one Series (or to more
than one but not all of the Series of the Trust), then the indemnity
shall be paid only out of the assets of the affected Series. No
individual shall be indemnified hereunder against any liability to
the Trust or any Series

4
<PAGE>

thereof or the Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his or her office. In addition, no such indemnity
shall be provided with respect to any matter disposed of by
settlement or a compromise payment by such Trustee, officer,
employee or agent, pursuant to a consent decree or otherwise, either
for said payment or for any other expenses unless there has been a
determination that such compromise is in the best interests of the
Trust or, if appropriate, of any affected Series thereof and that
such Person appears to have acted in good faith in the reasonable
belief that his or her action was in the best interests of the Trust
or, if appropriate, of any affected Series thereof, and did not
engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or
her office. All determinations that the applicable standards of
conduct have been met for indemnification hereunder shall be made by
(a) a majority vote of a quorum consisting of disinterested Trustees
who are not parties to the proceeding relating to indemnification,
or (b) if such a quorum is not obtainable or, even if obtainable, if
a majority vote of such quorum so directs, by independent legal
counsel in a written opinion, or (c) a vote of Shareholders
(excluding Shares owned of record or beneficially by such
individual). In addition, unless a matter is disposed of with a
court determination (i) on the merits that such Trustee, officer,
employee or agent was not liable or (ii) that such Person was not
guilty of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or
her office, no indemnification shall be provided hereunder unless
there has been a determination by independent legal counsel in a
written opinion that such Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.

The Trustees may make advance payments out of the assets of the
Trust or, if appropriate, of the affected Series in connection with
the expense of defending any action with respect to which
indemnification might be sought under this Section 4.3. The
indemnified Trustee, officer, employee or agent shall give a written
undertaking to reimburse the Trust or the Series in the event it is
subsequently determined that he or she is not entitled to such
indemnification and (a) the indemnified Trustee, officer, employee
or agent shall provide security for his or her undertaking, (b) the
Trust shall be insured against losses arising by reason of lawful
advances, or (c) a majority of a quorum of disinterested Trustees or
an independent legal counsel in a written opinion shall determine,
based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the
indemnitee ultimately will be found entitled to indemnification. The
rights accruing to any Trustee, officer, employee or agent under
these provisions shall not exclude any other right to which he or
she may be lawfully entitled and shall inure to the benefit of his
or her heirs, executors, administrators or other legal
representatives.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expense incurred or paid by a Trustee, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser

Lord, Abbett & Co. acts as investment manager and/or principal
underwriter for twelve other Lord Abbett open-end investment
companies (of which it is principal underwriter for thirteen), and
as investment adviser to approximately 8,330 private accounts as of
September 30, 1998. Other than acting as Trustees (directors) and/or
officers of open-end investment companies managed by Lord, Abbett &
Co., none of Lord, Abbett & Co.'s partners has, in the past two
fiscal years, engaged in any other business, profession,

5
<PAGE>

vocation or employment of a substantial nature for his own account
or in the capacity of director, officer, employee, partner or
trustee of any entity.

Item 29. Principal Underwriter

(a) Lord Abbett Affiliated Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Government Securities Money Market Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett Global Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Series Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Investment Trust

Investment Adviser

American Skandia Trust (Lord Abbett Growth and Income
Portfolio)

(b) The partners of Lord, Abbett & Co. are:

Name and Principal Positions and Offices
Business Address (1) with Registrant
-------------------- ---------------

Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Zane E. Brown Executive Vice President
Robert G. Morris Executive Vice President
Daniel E. Carper Vice President
Robert P. Fetch Vice President
Stephen I. McGruder Vice President
Robert G. Morris Vice President
Christopher J. Towle Vice President
John J. Walsh Vice President

The other general partners of Lord, Abbett & Co. who are neither
officers nor directors of the Registrant are Stephen Allen, John E. Erard, Daria
L. Foster, Robert I. Gerber, W. Thomas Hudson, Michael McLaughlin and Robert J.
Noelke, and Mark R. Pennington.

(1) Each of the above has a principal business address at 767
Fifth Avenue, New York, NY 10153

Item 30. Location of Accounts and Records

Registrant maintains the records, required by Rules 31a - 1(a) and
(b), and 31a - 2(a) at its main office.

Lord, Abbett & Co. maintains the records required by Rules 31a -
1(f) and 31a - 2(e) at its main office.

Certain records such as correspondence may be physically maintained
at the main office of the

6
<PAGE>

Registrant's Transfer Agent, Custodian, or Shareholder Servicing
Agent within the requirements of Rule 31a-3.

Item 31. Management Services

None.

Item 32. Undertakings

The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

The Registrant undertakes, if requested to do so by the holders of
at least 10% of the Registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the question
of removal of a director or directors and to assist in
communications with other shareholders as required by Section 16(c).

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
30th day of November, 1998.

LORD ABBETT SECURITIES TRUST, INC.

By /s/ Robert S. Dow
-------------------------------
Robert S. Dow,
Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

Chairman, President
/s/ Robert S. Dow and Director November 30, 1998
- ------------------------- -------------------------- -------------------
Robert S. Dow (Title) (Date)

/s/ E. Thayer Bigelow Director November 30, 1998
- ------------------------- -------------------------- -------------------
E. Thayer Bigelow (Title) (Date)

/s/ William H.T. Bush Director November 30, 1998
- ------------------------- -------------------------- -------------------
William H.T. Bush (Title) (Date)

/s/ Robert B. Calhoun Jr. Director November 30, 1998
- ------------------------- -------------------------- -------------------
Robert B. Calhoun Jr. (Title) (Date)

/s/ Stewart S. Dixon Director November 30, 1998
- ------------------------- -------------------------- -------------------
Stewart S. Dixon (Title) (Date)

/s/ John C. Jansing Director November 30, 1998
- ------------------------- -------------------------- -------------------
John C. Jansing (Title) (Date)

/s/ C. Alan MacDonald Director November 30, 1998
- ------------------------- -------------------------- -------------------
C. Alan MacDonald (Title) (Date)

/s/ Hansel B. Millican Director November 30, 1998
- ------------------------- -------------------------- -------------------
Hansel B. Millican, Jr. (Title) (Date)

/s/ Thomas J. Neff Director November 30, 1998
- ------------------------- -------------------------- -------------------
Thomas J. Neff (Title) (Date)

Vice President and
/s/ Keith F. O'Connor Chief Financial Officer November 30, 1998
- ------------------------- -------------------------- -------------------
Keith F. O'Connor (Title) (Date)
7
<PAGE>