SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATON DATED JUNE 1, 1998
FOR THE LORD ABBETT DEVELOPING GROWTH FUND, INC.
SUPPLEMENT EFFECTIVE DATE: JUNE 10, 1998
Lord Abbett
Securities Trust - World Bond-Debenture Series
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Objective: High current income and the opportunity for capital appreciation from
a portfolio of U.S. and foreign fixed-income securities.
[LOGO] (R) A Tradition of Performance Through Disciplined Investing
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Strategic Flexibility
For more than 25 years, Lord Abbett Bond-Debenture Fund has sought high current
income and capital growth through its flexible investment approach. By investing
primarily across domestic fixed-income asset classes, the Bond-Debenture Fund
has offered investors a unique level of strategic diversification. Today, at
over $3 billion in assets, the Bond-Debenture Fund is one of the largest
fixed-income funds in the mutual fund industry.
Lord Abbett Securities Trust - World Bond-Debenture Series applies the proven
Bond-Debenture Fund strategy to the global fixed-income environment and seeks to
profit from opportunities in foreign markets, where economic cycles are not
necessarily synchronized to the U.S. economy. The portfolio management team
utilizes extensive research across all global economic regions to uncover what
they believe are the best values from around the world in the fixed-income
markets.
4-Way Portfolio Focus
1> High-yield Corporate Debt
The Series' lower-rated debt holdings pay high income and help minimize
the effects of interest-rate fluctuations. Price appreciation may result
if the credit rating of debt issuers is upgraded.
2> High-grade Debt
High-quality corporate issues, U.S. Government and other sovereign-backed
securities provide a dependable stream of current income.
3> Equity-related Securities
Capital appreciation is sought by investing in convertible bonds that may
be exchanged for common stock. When the stock of the underlying company
rises, these equity-related issues generally increase in value.
4> Emerging-market Debt
Emerging-market debt securities provide attractive high-income
opportunities. Price appreciation may result from rating upgrades of
country debt.
Foreign investment risk factors include the potential for less regulation
and liquidity and more volatility than U.S. markets; currency fluctuation;
potentially less publicly available information about companies, banks and
governments than for U.S. counterparts; lack of uniform accounting
standards among countries, impairing comparisons; potentially higher
transaction costs and different securities settlement practices. Series
shares are neither insured nor guaranteed by any government agency. Lower
rated bonds held by the Series may experience greater fluctuations in
value and increased periods of reduced liquidity due to changes in
economic or market conditions than higher rated bonds. Lower rated bonds
generally provide a higher yield than higher rated bonds of similar
average maturity, but have greater credit risk. Non-investment-grade,
fixed-income securities generally involve greater volatility of price to
principal and income than securities in higher rating categories.
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Four Investment Categories
By investing a significant portion of its assets in the four fixed-income
sectors represented by the indices below, the World Bond-Debenture Series seeks
to provide investors with the opportunity for current income and capital
appreciation.
Average Historical Index Returns for the five years ending 12/31/97.*
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[The following table was depicted as a bar graph in the printed material.]
U.S. High-yield Bonds 12.0%
Global Bonds 7.7%
U.S. Convertible Bonds 14.0%
Emerging-market Debt 20.7%
*Sources:
Merrill Lynch High-Yield Index, J.P. Morgan Global Broad Index, Merrill Lynch
All Quality Convertibles Index and J.P. Morgan Emerging Markets Bond Index Plus,
respectively.
Past performance is no indication of future results. Investors cannot invest
directly in an index such as the ones illustrated.
Since the Series is actively managed, the exact blend of the asset categories,
as well as the portion allocated to domestic and foreign issues, will change
over time. As there is no one index combining all four categories in the same
blend as the portfolio, these four separate indices may not be a valid
comparison for the Series.
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(seated)
Zane E. Brown
(standing, from left to right)
Fernando Saldanha
Timothy W. Horan
Christopher J. Towle
Experienced Management
Zane E. Brown - Partner and Director of Fixed Income
With more than 22 years of experience managing bonds, Mr. Brown will lead the
World Bond-Debenture Series management team assisted by:
Timothy W. Horan - Director of International Fixed Income
Mr. Horan currently directs the Global Fund - Income Series management team. He
has more than 15 years of industry experience, including time at Credit Suisse
as Co-Manager of Bank Proprietary Portfolio and at the Federal Reserve Bank of
New York as both Economist and Foreign Exchange Trader.
Christopher J. Towle - Director of High-yield Fixed Income
Mr. Towle, Portfolio Manager of the Bond-Debenture Fund, has over 17 years of
industry experience, including more than 10 years at Lord Abbett.
Fernando Saldanha - Emerging Markets Specialist
Mr. Saldanha has a Ph.D. in Economics from the Massachusetts Institute of
Technology and was Senior Financial Officer and Economist at the World Bank.
<PAGE>
Portfolio Allocation as of 3/31/98:
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[The following table was depicted as a bar graph in the printed material.]
Sector Diversification
High-Yield Straight Debt 37.1%
High-grade Debt (U.S. and Foreign Gov't and Agency Obligations, 19.3%
Higher-rated Straight Debt)
Equity-related Securities (Convertible Debt, Convertible-preferred 14.4%
Stocks, Common Sticks, Warrants)
Emerging market Debt 29.2%
Geographic Distribution
U.S. and Canada 36.4%
Europe 27.9%
Latin America 29.7%
Pacific Rim 2.2%
Africa 3.8%
About Lord, Abbett & Co.
Founded in 1929, Lord, Abbett & Co. was one of the nation's first mutual fund
managers. Lord Abbett manages approximately $27 billion in a family of mutual
funds and separately managed accounts. The Lord Abbett Family of Funds consists
of 30 mutual funds.
Numbers to Keep Handy
For Shareholder Account
or Statement Inquiries: 800-821-5129
For Literature: 800-874-3733
For More Information: 800-426-1130
Visit Our Web Site: http://www.lordabbett.com
For more complete information about any Lord Abbett mutual fund, such as Lord
Abbett Securities Trust - World Bond-Debenture Series, including charges and
expenses, call your investment professional or Lord Abbett Distributor llc at
800-874-3733 for a prospectus. An investor should read the prospectus carefully
before investing.
[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD, ABBETT DISTRIBUTOR LLC
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The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 o 800-426-1130
LAWBD-6-398
(4/98)
