<PAGE>
Lord Abbett Securities Trust
o Alpha Series
o Growth & Income Series
o International Series
o World Bond-Debenture Series
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 1998
[GRAPHIC OMITTED]
Investment portfolios designed to help you
capture capital growth over the long term
[LOGO]
<PAGE>
Report to Shareholders
For the Six Months Ended April 30, 1998
[PHOTO OMITTED]
/s/ Robert S. Dow
- -----------------
Robert S. Dow
Chairman
May 15, 1997
Table of Contents
Growth & Income Series
- --------------------------------------------------------------------------------
Fund Facts 3
Statement of Net Assets 5
International Series
- --------------------------------------------------------------------------------
When Searching the Globe 4
Statement of Net Assets 8
World Bond-Debenture Series
- --------------------------------------------------------------------------------
Statement of Net Assets 10
Alpha Series
- --------------------------------------------------------------------------------
Statement of Net Assets 12
Data on All Series
- --------------------------------------------------------------------------------
Statements of Operations 13
Statements of Changes
in Net Assets 14
Financial Highlights 15
Notes to Financial Statements 18
Lord Abbett Securities Trust - Growth & Income Series and International Series
completed the first half of their fiscal year on April 30, 1998. We are pleased
to report that this six-month period also saw the introduction of two new funds
to the Securities Trust:
o World Bond-Debenture Series, which commenced operations on 12/18/97,
pursues a flexible approach to fixed-income investing; and
o Alpha Series, a "fund of funds" that invests primarily in small-cap
equities worldwide and commenced operations on 12/29/97.
The following is an overview of class-specific data for the period under review.
Growth & Income Series - 6 Months Ended 4/30/98
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $9.62 $9.61 $9.59
Capital gains $0.59 $0.59 $0.59
Total return* +10.50% +11.16% +15.62%
International Series - 6 Months Ended 4/30/98
Class A Class B Class C Class Y+ (partial
period)
- --------------------------------------------------------------------------------
Net asset value $14.59 $14.52 $14.52 $14.60
Dividends $ 0.03 -- -- --
Total return* +27.00% +27.37% +32.73% +28.90%
World Bond-Debenture Series - 12/18/97** - 4/30/98
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $10.69 $10.68 $10.67
Total return* + 1.80% + 1.46% + 5.63%
Alpha Series - 12/29/97** - 4/30/98
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $16.07 $16.05 $16.05
Total return* +12.10% +12.78% +17.53%
About the Growth & Income Series
U.S. stocks recovered from their October dip on Asian concerns and catapulted
the Dow Jones Industrial Average past the 9000 mark during the six months ended
April 30, 1998. As we had expected, highlights of the period's investment
environment included low inflation, well-behaved interest rates and slowing
corporate earnings. Growth, however, far exceeded most expectations with the
U.S. economy, as measured by gross national product, expanding at more than a
4.0% annualized rate.
Your portfolio provided attractive returns in this environment, with holdings in
financial stocks (such as banks and brokerage firms) adding particular value.
Several highly publicized mergers among banks and brokerage firms worked to our
advantage, as did above-average earnings for the sector as a whole. Stock
selection in the energy sector also helped performance.
* Total return performance, which is not annualized, is the percent change in
value with all dividends and distributions reinvested for the periods shown,
using the SEC-required uniform method to compute such returns.
** Commencement of operations.
+ International Series Class Y shares commenced operations on 12/29/97.
<PAGE>
Report to Shareholders
We view the current rate of economic expansion as atypical and unsustainable
given the lateness of the economic cycle. Housing, retail, consumer durable,
technology and automotive stocks have all risen sharply on the back of a
consumer spending spree fueled by high confidence levels, continued income
expansion, good job availability and, perhaps most importantly, the phenomenal
bull market in financial assets that has quickly refilled depleted checkbooks.
We believe that falling exports, stemming from the drag of the high dollar and
continued troubles in Asia, as well as an ever-vigilant Federal Reserve, make a
slowing U.S. economy a virtual certainty during the second half of 1998.
Given that projection, your portfolio has become more heavily weighted in
financial and consumer noncyclical stocks, which should show better overall
earnings patterns than the rest of the market in a slowdown. We expect slower
growth to be accompanied by continued benign inflation and a stable-to-lower
interest rate environment.
About the International Series
Portfolio Manager Chris J. Taylor continues to perform well through his
"best-of-breed" approach to stock selection. We are particularly pleased to
report that the New York Times, utilizing data from Morningstar (an independent
mutual fund rating organization), recently ranked International Series 1 out of
305 Diversified Foreign Stock Funds for the year ended May 5, 1998. Since
inception (December 13, 1996), Morningstar ranked International Series 2 out of
488 Diversified Foreign Stock Funds for the period ending April 30, 1998. Past
performance does not guarantee future results.
The elimination of country, currency and market-capitalization decisions enables
Chris and his team to focus exclusively on companies that set a worldwide pace
for innovation within their respective industries. Two examples of stock
selections they've made for International Series are highlighted below.
o A Canadian manufacturer of "zero-emission" fuel cells, which have a
variety of innovative applications, including power sources for buses,
trucks, housing developments and PCs. One of this company's key
collaborative deals has been with a German concern (another portfolio
holding), which patented the internal combustion engine in the 1890s, and
now seeks environmentally friendly replacement technologies. We believe
that the recent merger of this German firm with a major American
automobile manufacturer can be expected to speed global acceptance and
sales of "zero-emission" fuel cells.
o A U.K.-based producer of flat panel loudspeakers, which has licensed its
breakthrough technology to NEC, Fujitsu, Lucky Goldstar and Samsung.
Widely seen as superior to traditional cone-design speakers, we believe
the company's product will soon dominate an industry that already produces
more than one billion units a year. Equally important, we feel confident
that the versatility of the company's design will spur new applications
and new markets for speaker technology.
International Series' investment strategy does not force the sale of companies
that experience rapid market capitalization growth. While the Series will invest
in outstanding companies, wherever they are based, we expect the majority of
your portfolio's holdings to be based in Europe at this time. In our view, this
region's combination of inexpensive currencies, corporate restructuring and
sustainable economic growth offer a nearly ideal environment in which
"best-of-breed" companies may flourish.
About the World Bond-Debenture Series
The December launch of World Bond-Debenture Series has allowed Lord Abbett to
realize a long-held ambition- a global supplement to Lord Abbett's
Bond-Debenture Fund's investment strategy. We believe the key to that strategy's
sustained 25-year effectiveness is its flexible approach to investing in the
fixed-income markets.
As dividend yields from U.S. stocks approach historic lows, and yields on
high-quality U.S. bonds remain around 6%, our new World Bond-Debenture Series
seeks to provide high levels of current income and attractive total return
through investments in U.S. and international high-yield bonds, U.S. and
international convertible bonds, as well as emerging markets debt. The Series is
positioned to offer shareholders intriguing income-generating investment
alternatives from financial markets around the globe. Since the historical
performance and risks of world markets have been largely uncorrelated, choosing
this highly diversified global investment may be an attractive way to help
dampen overall risk in your portfolio.
1
<PAGE>
Report to Shareholders
(Continued from previous page)
The asset classes in which World Bond-Debenture Series invests have long been
covered by Lord Abbett analysts. The expertise of industry analysts is combined
with economic and political risk analysis to identify undervalued securities in
appropriate economic environments. For example, with much of Southeast Asia in
disarray, the Fund has added value for shareholders by avoiding significant
participation in this troubled region. Within emerging markets, however, the
Fund will look for opportunities in undervalued corporate bonds as well as
sovereign issues.
In our view, global investments chosen wisely on the basis of country and
corporate analysis will ideally provide Series' assets with protection against
U.S. market and industry cycles. At the same time, the broad range of asset
classes in which the Series may invest will allow it to pursue aggressive
income-generating and total return strategies in local markets worldwide at
different times in their economic cycles.
The management team of World Bond-Debenture Series is led by Zane Brown, Partner
and Director of Fixed Income Management, who has more than 20 years of
experience in the financial services industry, and Tim Horan, Vice President and
Director of International FIxed Income, who has more than 15 years of experience
in the financial services industry.
About the Alpha Series
We are pleased with the strong since-inception performance of our new Alpha
Series, and believe that the multi-manager strategy of this "fund of funds" is
extremely well-suited to the small-cap stock environment. We regard small-cap
companies as the virtual embodiment of entrepreneurial energy and vitality. We
expect that these companies will thrive, thus rewarding long-term investors.
In the U.S., small-cap stocks have continued to lag their large-cap
counterparts--a trend of some long standing that, in our view, now points to
significantly better relative value for the small-cap arena. Alpha Series
participates in the U.S. small-cap growth market through investment in Lord
Abbett Developing Growth Fund. The Fund's Senior Portfolio Manager, Stephen J.
McGruder, has almost 30 years of investment experience in the small-cap arena.
Prior to joining Lord Abbett in 1995, he was Portfolio Manager at Wafra
Investment Advisory Group. Alpha Series participates in the U.S. small-cap value
market through investment in Lord Abbett Research Fund -- Small-Cap Series.
Robert P. Fetch, Small-Cap Series' Senior Portfolio Manager, has over 20 years
of investment experience, 15 in selecting small-cap stocks on a value-driven
basis. Prior to joining Lord Abbett, he was a Managing Director at Prudential
Investments and oversaw the Prudential Small Company Fund.
We believe now is also a particularly opportune time to invest in small-cap
companies outside the United States. A key support for this view is the current
liberalization of Europe's business environment, which seems likely to benefit
the region's smaller firms. Alpha Series participates in the international
small-cap market through investment in Lord Abbett Securities Trust --
International Series. Chris J. Taylor, International Series' Senior Portfolio
Manager, has over 15 years of equity investment experience. Chris is also
Managing Director of Fuji Investment Management Company (Europe) Ltd., of which
Lord Abbett is a minority owner.
We are pleased that you have chosen one or more of the Series in Lord Abbett
Securities Trust to play a role in your diversified investment portfolio. We
appreciate the confidence you have placed in Lord Abbett and aim to reward your
confidence in us going forward with continued strong performance by the Trust.
2
<PAGE>
Fund Facts
The Sophisticated Shopper
When it comes to stock selection, the portfolio manager of the Growth & Income
Series tries to be a savvy buyer. We have an experienced team of financial
professionals whose approach includes elements similar to those taken by smart
shoppers.
When you think about how you shop, you realize that you like to find bargains.
Savvy shoppers often check out the sales racks to find items with a low price
tag. Of course, just because "the price is right" does not mean that a product
is worth buying. A smart shopper will carefully inspect the item, checking it
for defects and overall quality. Another important test required by the smart
shopper: usability and function. If the item is not in style, or is something
that would not likely be used, there is probably no point in buying it.
Quantitative Research:
Performed on a universe of the 1,000 largest U.S. and multinational companies to
identify those stocks that represent the best bargains: a "low price tag."
Fundamental Research:
Conducted to assess a company's operating environment, resources and strategic
plans, and to determine its prospects for exceeding the earnings expectations
reflected in its stock price: "overall quality."
Business Cycle Analysis:
Used to assess the economic and interest-rate sensitivity of the Fund's
portfolio. This analysis helps the portfolio manager assess how adding or
eliminating stocks changes a portfolio's overall sensitivity to economic
activity and interest rates: "is it in style?"
Lord Abbett Securities Trust - Growth & Income Series -- A Strong Performer
Average Annual Class C Share Total Return(1) as of 4/30/98
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
1 Year 31.6%
3 Years 25.2%
Life of Series(2) 20.1%
(1) Reflects the percent change at net asset value (for Class C shares) which
includes the reinvestment of all distributions. The Series issues
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord
Abbett Distributor LLC at 800-874-3733 and ask for the current prospectus.
(2) The Series commenced operations on 1/3/94. Formerly Lord Abbett Securities
Trust - Growth & Income Trust.
Growth & Income Series
SEC-required average annual total returns (for Class C shares) for the periods
ended 3/31/98, with all distributions reinvested:
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
1 Year 37.43%
Life of Series 20.63%
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
3
<PAGE>
When Searching the Globe for the Best Investment Opportunities
Rely On An Experienced Global Manager
Lord, Abbett & Co. is a minority owner of the International Series'
sub-adviser's parent company, Fuji Investment Management Co., Ltd. (FIMCO).
FIMCO is:
o An investment management affiliate of Fuji Bank, one of the world's
largest banks
o A money manager whose services, until now, had been available only to
large, institutional accounts
o An asset manager with offices in Tokyo and London serving the pension
investment needs of many premier international companies, including:
Bridgestone NISSAN
Hitachi SONY
MCI Canon Inc.
And a Solid Investment Strategy
FIMCO's strategy is based on the timely purchase of undervalued foreign
companies which have focused on benefiting from the future changes within their
industries. Their disciplined research process involves:
o examining global trends to identify developments on an
industry-by-industry basis;
o using this information, along with our research and experience, to try to
define the ideal company within each industry; and
o assessing the companies in each industry to determine which are
"best-of-breed." In other words, determining which ones best match the
"ideal" company, based on a blend of both quantitative and fundamental
analysis.
The International Series' portfolio consists of 40-50 such companies, which meet
our goal of creating a portfolio where the performance of individual holdings is
not diluted across too many securities.
Lord Abbett Securities Trust - International Series
Total Returns Through 4/30/98:(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
1 Year(1) 45.5%
Life of Series(2) 37.3%
(1) Performance is at net asset value for Class A shares. The Series offers
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord
Abbett Distributor llc at 800-874-3733 and ask for the current prospectus.
(2) The Series commenced operations on 12/13/96.
International Series
SEC-required average annual total return for Class A shares at the maximum sales
charge of 5.75% for the period 12/13/96 (commencement of operations) through
3/31/98, with all distributions reinvested:
[THE FOLLOWING TABLE WAS REPRESENTED IN A BAR CHART IN THE PRINTED MATERIAL]
1 Year 31.40%
Life of Series 29.66%
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
4
<PAGE>
Important Information
Results quoted herein reflect appropriate Rule 12b-1 Plan expenses from
commencement of the Plan. Tax consequences are not reflected. If used as sales
material after 6/30/98, this report must be accompanied by Lord Abbett's
Performance Quarterly for the most recently completed calendar quarter.
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.
Statement of Net Assets
GROWTH AND INCOME SERIES April 30, 1998
<TABLE>
<CAPTION>
Investments Shares Market Value
==========================================================================================
<S> <C> <C> <C>
Common Stocks 97.57%
==========================================================================================
Aerospace .38% Raytheon (New)- 1,313 $ 72,461
Raytheon Company-A leading factor in
air-defense missiles and
military electronic products 10,000 566,875
Total 639,336
- --------------------------------------------------------------------------------==========
Agricultural Archer-Daniels-Midland Co.-Leading processor
Products 1.47% and seller of agricultural commodities 77,000 1,655,500
Pioneer Hi-Bred International, Inc.-Leading
U.S. supplier of hybrid seed 22,500 849,375
Total 2,504,875
- --------------------------------------------------------------------------------==========
Apparel 1.35% VF Corp.-Leading producer of blue jeans
and other apparel 44,200 2,298,400
- --------------------------------------------------------------------------------==========
Auto Parts: Genuine Parts Company-National distributor
After Market .48% of automotive replacement parts 22,800 820,800
- --------------------------------------------------------------------------------==========
Automobiles .82% General Motors Corp.-Worldwide auto producer 20,600 1,387,925
- --------------------------------------------------------------------------------==========
Banks: Money BankAmerica Corp.-Major money-center bank 36,800 3,128,000
Center 4.94%
Chase Manhattan Corp.-Major money-center
bank-holding company 23,400 3,242,362
First Chicago NBD-Major Midwest bank 22,000 2,043,250
Total 8,413,612
- --------------------------------------------------------------------------------==========
Banks: Banc One Corp-Leading bank-holding company 30,000 1,764,375
Regional 7.87%
BankBoston, N.A.-Leading
New England regional bank 22,400 2,417,800
Comerica Inc.-Midwestern
regional bank-holding company 42,150 2,821,416
First Union Corp.-Major East Coast bank 24,000 1,449,000
KeyCorp-Multi-regional bank-holding
company serving the Northwest U.S. 34,000 1,349,375
Mellon Bank Corp.-Commercial bank
located in Pittsburgh, PA 50,000 3,600,000
Total 13,401,966
- --------------------------------------------------------------------------------==========
Brokers 1.48% Morgan Stanley, Dean Witter,
Discover & Co.-Major brokerage and
credit card company 32,000 2,524,000
- --------------------------------------------------------------------------------==========
Chemicals: Morton International Inc.-
Specialty .85% Producer of specialty chemicals,
salt and airbags 45,000 1,440,000
- --------------------------------------------------------------------------------==========
Chemicals 2.75% +Air Products & Chemicals Inc.
-Industrial gas producer 20,000 1,738,750
DuPont DeNemours, E.I & Co.-Major U.S.
-based producer of plastics and chemicals 30,000 2,184,375
Union Carbide Corp.-Major U.S.
-based producer of plastics and chemicals 15,700 761,450
Total 4,684,575
- --------------------------------------------------------------------------------==========
Communications Harris Corp.-Manufacturer of advanced
Equipment 1.40% electronic systems and communications
equipment 49,200 2,380,050
- --------------------------------------------------------------------------------==========
Communications *Worldcom Inc.-Diversified
Services .53% telecommunications company 21,000 898,406
- --------------------------------------------------------------------------------==========
Computer: *Digital Equipment Corp.
Hardware 5.42% -Manufacturer of data-processing
equipment 36,000 2,002,500
Hewlett-Packard Co.-Leading manufacturer
of computer products, including
printers, servers, workstations and PCs 20,400 1,536,375
International Business Machines Corp.
-World's largest computer manufacturer 27,800 3,221,325
*Sun Microsystems Inc. Supplier of
network computer products including
workstations, servers, software,
microprocessors, and a full range of
services and support 60,000 2,471,250
Total 9,231,450
-----------------------------------------------------------==========
</TABLE>
5
<PAGE>
Statement of Net Assets
GROWTH & INCOME SERIES April 30, 1998
<TABLE>
<CAPTION>
Investments Shares Market Value
==========================================================================================
<S> <C> <C> <C>
Containers 2.59% Crown Cork & Seal Inc.-Major producer
of a wide variety of steel and
aluminum containers for the food
industry 40,000 $ 2,082,500
Sonoco Products Co.-A leading
U.S. producer of specialty paper and
plastic packaging components 58,000 2,330,875
Total 4,413,375
- --------------------------------------------------------------------------------==========
Cosmetics .86% International Flavor & Fragrance-World's
largest flavors and fragrances
manufacturer 30,000 1,468,125
- --------------------------------------------------------------------------------==========
Drugs/Health-Care American Home Products Corp.-Producer
Products 5.75% of drugs, food housewares and packaged
medicine and medical products 12,000 1,117,500
Bristol-Myers-Squibb Company-Major
worldwide pharmaceutical concern with
interests in infant nutrition,
non-prescription medications, medical
devices and toiletries 32,000 3,388,000
SmithKline Beecham plc ADR-U.K.-based
health-care company providing prescription
and over-the-counter drugs
and clinical laboratory services 57,000 3,395,063
Warner-Lambert Co.-Drug and consumer
products manufacturer 10,000 1,891,875
Total 9,792,438
- --------------------------------------------------------------------------------==========
Electric Baltimore Gas & Electric Co.
Power 5.17% -Regional electric utility company 32,500 1,023,750
Carolina Power & Light Co.
-Electric utility company serving North
and South Carolina 25,000 1,076,563
CINergy Corp.-Supplier of electricity
and natural gas in Southwestern Ohio
and adjacent Kentucky and
Indiana territories 52,900 1,844,888
Firstenergy Corp.-Major Midwestern
electric utility holding company 50,000 1,512,500
FPL Group-One of the nation's premier
electric utilities, serving about 7 million
people in Florida's East, Southeast
and Southwest coasts 35,000 2,172,188
Pacificorp-Electrical-services provider
and coal and gas producer 50,000 1,162,500
Total 8,792,389
- --------------------------------------------------------------------------------==========
Electrical Emerson Electric Co.-Diversified manufacturer
Equipment 1.03% of consumer and industrial electrical
components 27,600 1,756,050
- --------------------------------------------------------------------------------==========
Financial: Fed National Mortgage-America's largest
Miscellaneous .88% supplier of conventional home mortgages 25,000 1,496,875
- --------------------------------------------------------------------------------==========
Food 5.02% Best Foods-Producer of diversified
packaged foods 40,000 2,195,000
ConAgra Inc.-Major producer of
agricultural and consumer products 53,940 1,574,373
Heinz H.J. Co.-Domestic packaged
foods producer 61,400 3,346,300
Sara Lee Corp.-A diversified maker
of branded-food products, apparel
and household consumer products 24,000 1,429,500
Total 8,545,173
- --------------------------------------------------------------------------------==========
Health-Care Baxter International Inc.-World's
Products .57% leading distributor and major
manufacturer of hospital supplies and
related medical equipment 17,500 970,155
- --------------------------------------------------------------------------------==========
Health-Care Aetna Inc.-Major multi-line insurer 25,650 2,072,841
Products .57%
*Humana Inc.-Major U.S. provider of
managed-health plans 65,000 1,755,000
United Healthcare Corp.-Offers health-care
coverage and related services in
all 50 states 35,000 2,458,750
Total 6,286,591
- --------------------------------------------------------------------------------==========
Household Kimberly Clark Corp.-Major producer of
Products 1.97% consumer and personal-care products 49,180 2,495,885
Rubbermaid Inc-Housewares manufacturer 30,000 858,750
Total 3,354,635
- --------------------------------------------------------------------------------==========
Housewares .80% Fortune Brands Inc.-Consumer products
conglomerate 36,900 1,360,688
- --------------------------------------------------------------------------------==========
Insurance: American General Corporation-A leading
Life 1.31% provider of financial services, including
life/health insurance, annuities,
consumer credit and mortgage financing 33,600 2,238,600
- --------------------------------------------------------------------------------==========
Insurance: Allstate Corp.-Second-largest provider
Property and of personal lines of insurance in the U.S. 15,000 1,443,750
Casualty 4.34%
Chubb Corp.-Broad-based property and
casualty insurance organization 22,000 1,736,625
CIGNA Corp.-Multi-line insurance and
medical services 7,600 1,572,725
CMAC Investment Corp.-Major private
mortgage insurance provider 15,200 981,350
The Progressive Corporation-Insurance
holding company specializing in
non-standard auto insurance 12,200 1,652,338
Total 7,386,788
-----------------------------------------------------------==========
</TABLE>
6
<PAGE>
Statement of Net Assets
GROWTH & INCOME SERIES April 30, 1998
<TABLE>
<CAPTION>
Investments Shares Market Value
==========================================================================================
<S> <C> <C> <C>
Machinery: Deere & Co.-World's largest manufacturer
Diversified 1.16% of farm equipment 33,800 $ 1,975,187
- --------------------------------------------------------------------------------==========
Miscellaneous 2.25% First Data Corp.-Information supplier for
credit-card processing and related services 50,000 1,693,750
National Service Industries, Inc.-Diversified
manufacturer of lighting equipment, rental
uniforms and specialty chemicals 39,400 2,132,525
Total 3,826,275
- --------------------------------------------------------------------------------==========
Natural Gas: Columbia Energy Group-Utility holding
Distribution 3.11% company and natural gas distribution 30,000 2,437,500
Nicor Inc.-Natural gas distributor
in Illinois 70,000 2,865,625
Total 5,303,125
- --------------------------------------------------------------------------------==========
Natural Gas: The Coastal Corporation-A diversified
Diversified .91% gas pipeline company 21,800 1,557,337
- --------------------------------------------------------------------------------==========
Office Equipment/ Xerox Corp.-World's leading duplication
Supplies 1.33% technology supplier 20,000 2,270,000
- --------------------------------------------------------------------------------==========
Oil: International Amoco Corp.-Major integrated petroleum
Integrated 7.02% and natural gas company with sizable
interests in chemicals 39,800 1,761,150
Chevron Corp.-Worldwide petroleum
company with important interests in
chemicals and minerals 23,600 1,951,425
Exxon Corp.-World's largest integrated
oil company 40,000 2,917,500
Mobil Corp.-Large international oil company 45,000 3,555,000
Total S.A. Sponsored ADR-Leading French
international oil and gas company 30,000 1,762,500
Total 11,947,575
- --------------------------------------------------------------------------------==========
Paper and Forest Bowater Inc.-Manufacturer of newsprint,
Products 3.82% groundwood, kraft pulp and lumber products 31,100 1,739,655
Fort James Corp.-Producer of paper-based
consumer products, packaging and
communication papers 64,100 3,180,962
International Paper Co.-Producer of paper
and forest products 11,750 613,202
Temple-Inland, Inc.-Leading manufacturer
of corrugated boxes, bleached paperboard,
pulp and building materials 15,000 968,437
Total 6,502,256
- --------------------------------------------------------------------------------==========
Photographic .85% Eastman Kodak Co.-Leading manufacturer
of photographic film and equipment 20,000 1,443,750
- --------------------------------------------------------------------------------==========
Printing: Donnelley, R.R. & Sons Co.-Largest
Specialty 1.70% commercial printer in the U.S. 42,000 1,850,625
Gannett Inc.-U.S. newspaper publisher 15,200 1,032,650
Total 2,883,275
- --------------------------------------------------------------------------------==========
Railroads .24% Canadian National Railway-Major
Canadian-based railroad operator 6,300 409,894
- --------------------------------------------------------------------------------==========
Retail: Dept & May Department Stores Company-Leading
Merchandise 2.84% department store retailer 25,000 1,542,188
Wal-Mart Stores Inc.-Largest U.S.
discount retailer 65,000 3,286,563
Total 4,828,751
- --------------------------------------------------------------------------------==========
Retail: *Toys R Us Inc.-Discount toy supermarts;
Specialty .68% department stores 42,200 1,163,138
- --------------------------------------------------------------------------------==========
Telephone: AT&T Corp.-Global telecommunications giant 47,000 2,822,938
Long Distance 3.43%
MCI Communications Corp.-Long distance
telecommunications provider 32,700 1,645,219
Sprint Corp.-Third largest long
distance telephone system 20,000 1,366,250
Total 5,834,407
- --------------------------------------------------------------------------------==========
Telephone: Ameritech Corp.-Regional telephone company
Local 3.46% serving customers in the Midwest 40,000 1,702,500
Bell Atlantic Corp.-Regional
telephone company 16,800 1,571,850
BellSouth Corp.-Regional telephone
company 14,400 924,300
SBC Communication Inc.-Mexican
telephone monopoly 41,000 1,698,938
Total 5,897,588
-----------------------------------------------------------==========
Tobacco 1.05% Philip Morris Inc.-Leading tobacco
company 48,000 1,791,000
-----------------------------------------------------------==========
Total Investments in
Common Stocks (Cost $111,431,038) 166,120,835
==========================================================================================
Other Assets, Less Liabilities 2.43%
==========================================================================================
Short-term
Investment American Express Credit Co.
5.51% due 5/1/1998 3,275M 3,275,000
-----------------------------------------------------------==========
</TABLE>
7
<PAGE>
Statement of Net Assets
GROWTH & INCOME SERIES April 30, 1998
<TABLE>
<CAPTION>
Investments
==========================================================================================
<S> <C>
Cash and Receivables, Net of Liabilities $ 862,210
- ------------------------------------------------------------------------------============
Total Other Assets, Less Liabilities 4,137,210
==========================================================================================
Net Assets 100.00% $170,258,045
==========================================================================================
Class A Shares-Net asset value
($71,777,760 / 7,461,257 shares outstanding) $9.62
Class B Shares-Net asset value
($1,948,460 / 202,809 shares outstanding) $9.61
Class C Shares-Net asset value
($96,531,825 / 10,071,133 shares outstanding) $9.59
* Non-income producing.
+ Security is held in connection with an open option written.
See Notes to Financial Statements.
</TABLE>
Statement of Net Assets
INTERNATIONAL SERIES April 30, 1998
<TABLE>
<CAPTION>
Investments Shares Market Value
==========================================================================================
<S> <C> <C> <C>
Investments in Securities 92.97%
==========================================================================================
Foreign 91.07%
==========================================================================================
Canada 11.84% *Ballard Power Systems-Designs,
manufactures and developes
hydrogen-based fuel cells that are the
only true zero-emission power source for
vehicles 76,400 $ 8,783,754
*Descartes System Company-Software
manufacturer whose products automate
and integrate corporate supply chains 200,000 1,279,000
Timber West Timber Trust-Unitized fund
created to invest in forestry, land and
timber assets 200,000 615,040
Total 10,677,794
- --------------------------------------------------------------------------------==========
Denmark 7.79% BG Bank Dkk-Domestic retail bank focused
on low-cost delivery of standard products 35,000 2,044,483
Jyske Bank-Bank specialising in international
private and commercial banking 20,000 2,321,946
Syd-Sonderhill-Regional, mortgage and
personal banking firm 25,000 1,394,628
Unidanmark 'A'-One of Denmark's largest
full-service banking groups 15,000 1,259,547
Total 7,020,604
- --------------------------------------------------------------------------------==========
Finland 4.49% Pohjola-Findland's largest general insurance
company covering both life and
non-life sectors 40,000 2,216,188
Raisio Yhtyma Oyj-Producer of paper processing
chemicals and foodstuffs, including a
cholesterol-lowering margarine 10,000 1,834,593
Total 4,050,781
- --------------------------------------------------------------------------------==========
France 10.06% Alcatel Alsthom-One of the world's largest
full-line heavy electrical
engineering firms 20,000 3,703,088
AXA-UAP-One of Europe's largest
financial organizations 20,000 2,344,736
Thomson-CSF-A major aerospace company 35,000 1,383,263
*Ubi Soft Entertain-One of Europe's
largest producers, translators and
distributors of games software 12,500 1,635,669
Total 9,066,756
- --------------------------------------------------------------------------------==========
Germany 29.67% Daimler-Benz-World's largest manufacturer
of luxury cars, buses and class-eight
trucks 15,000 1,463,660
*DLW-Major producer of linelolum and carpet
floor coverings, as well as
office furniture 15,000 2,197,160
Eigne & Partner-A major software developer 3,394 950,320
Felten & Guilleaume-Manufacturer of
electric power distribution network
and grid components 13,000 1,592,871
GEA Ag Dem-One of the world's top
suppliers of food-and pharmaceutical
-processing equipment 3,000 1,337,009
Gehe-Europe's largest pharmacy chain 40,000 2,071,848
His Sport Wear-Designs and retails
sports and leisure wear 45,000 864,662
Iwka-Multi-line engineering company
making packaging, robot welding and
defense equipment 5,000 1,177,945
Marschollek Lauten & Partners-Largest
independent personal life insurance
and investment consultancy services 7,500 2,921,888
Preussag-Diversified firm with activities
from oil extraction to metals 4,000 1,421,331
</TABLE>
8
<PAGE>
Statement of Net Assets
INTERNATIONAL SERIES April 30, 1998
<TABLE>
<CAPTION>
Shares or
Investments Principal Amount Market Value
==========================================================================================
<S> <C> <C> <C>
Sai Automotive-Major producer of auto
dashboards and door panels 75,000 $ 1,336,673
Sap Ag-World's fourth-largest software
firm, dominating the global market for
relational databases 7,500 3,550,543
SKW Trostberg-Specialist niche chemical
firm producing additives,covering,
adhesives, anti-corrosive paints and
oil-well drilling products 45,000 1,552,631
Viag Ag-Diversified group with utility,
aluminum, chemical, glass and packaging
operations 4,000 2,025,062
Vossloh-Manufacturer of elecrical lightling
equipment as well as railway truck fasteners
and related installation equipment 35,000 2,280,702
Total 26,744,305
- --------------------------------------------------------------------------------==========
Netherlands 5.27% *Baan Aano-A major software developer 30,000 1,313,121
Hunter Douglas-Major global supplier of
decorative building fittings, especially
window blinds 14,000 682,032
Kon Pakhoed-Largest chemical distributor
worldwide 30,000 1,097,975
Vmf Stork-Engineering amd service company
foused on aircraft parts, processing
machinery and food-manufacturing equipment 45,857 1,657,919
Total 4,751,047
- --------------------------------------------------------------------------------==========
Switzerland 6.06% Baloise Holdings-Insurance group 750 1,735,265
Christ Aesch-Major global provider of
water-treatment chemicals and
purification equipment 700 433,566
Saurer Ag Arbon Chf-Textile-machinery
and auto-component manufacturing firm 1,100 1,109,890
Stratec Holding-Health-care company
concentrating on osteosynthesis and
prothetics 600 915,485
Swiss Life-Major life insurance company
with operations throughout Europe 1,500 1,267,732
Total 5,461,938
- --------------------------------------------------------------------------------==========
United Kingdom Ashtead Group-Major construction plant
15.89% and machinery hire firm 300,000 1,343,640
Delphi Group-Producer of temporary,
contract and permanent IT staff to
corporations in the U.S. and the U.K. 50,180 625,604
DBS Management-Supplies independent
financial advisors with financial product
evaluation and administration software
and services 300,000 1,210,770
First Technology-Designs and manufactures
equipment and systems for auto safety 289,750 1,929,647
Jarvis Ord-Specialist engineering and
service company focused on the
installation of related track and signals 166,700 1,848,435
Johnson Matthey-Precision metal-based
refinery, alloy manufacturing and
trading company 120,000 1,215,300
Precoat International Ord-Processes and
distributes precoated steel in Europe and
North America 510,000 1,981,605
Regal Hotel-Owns and operates more than
100 medium-quality, midium-sized hotels
and inns 1,000,000 710,300
Trifast-Distributes and manufactures
industrial fasteners, particularly for
electronics and electrical concerns 60,000 661,794
UTD Assurance Group-A major
insurance provider 3,500,000 467,950
Verity Group-Makes high-quality
loud speakers and has developed the
first commercial flat panel speaker 1,500,000 2,331,300
Total 14,326,345
-----------------------------------------------------------==========
Total Investments in Foreign Securities
(Cost $63,892,463) 82,099,570
==========================================================================================
United States 1.90%
==========================================================================================
*Net Bank, Inc.-Provider of banking
services over the internet
(Cost $917,207) 63,800 1,714,625
- --------------------------------------------------------------------------------==========
Total Investments in Common Stocks
(Cost $64,809,670) 83,814,195
==========================================================================================
Other Assets, Less Liabilities 7.03%
==========================================================================================
Short-term
Investment Federal Home Loan Mortgage Corp. 5.45%
due 5/1/1998 3,500,000 3,499,470
- --------------------------------------------------------------------------------==========
Cash and Receivables, Net of Liabilities 2,839,820
- --------------------------------------------------------------------------------==========
Total Other Assets, Less Liabilities 6,339,290
==========================================================================================
Net Assets 100.00% $90,153,485
==========================================================================================
</TABLE>
9
<PAGE>
Statement of Net Assets
INTERNATIONAL SERIES April 30, 1998
<TABLE>
<CAPTION>
================================================================================
<S> <C> <C>
Class A Shares-Net asset value
($63,635,578 / 4,362,613 shares outstanding) $14.59
Class B Shares-Net asset value
($7,112,242 / 489,889 shares outstanding) $14.52
Class C Shares-Net asset value
($8,212,336 / 565,542 shares outstanding) $14.52
Class Y Shares-Net asset value
($11,193,329 / 766,798 shares outstanding) $14.60
* Non-income producing.
See Notes to Financial Statements.
</TABLE>
Statement of Net Assets
WORLD BOND-DEBENTURE FUND April 30, 1998
<TABLE>
<CAPTION>
Principal
Investments Amount Market Value
==========================================================================================
<S> <C> <C> <C>
Investments in Securities 81.22%(a)(b)
==========================================================================================
Foreign 54.45%
==========================================================================================
Argentina 7.55% Republic of Argentina 6.625/2005(a) $143M $ 130,566
Telefonica De Argentina SA 9.125/2008(a) 150M 150,000
Total 280,566
- --------------------------------------------------------------------------------==========
Brazil 5.28% Republic of Brazil 10.125/2027(a) 150M 145,523
Globo Comunicacoes E Participacoes
Ltda 10.625/2008(a) 50M 50,625
Total 196,148
- --------------------------------------------------------------------------------==========
Bulgaria 1.09% Republic of Bulgaria, Floating Rate/2024(a) 50M 40,625
- --------------------------------------------------------------------------------==========
Canada 2.05% Canadian Airlines Corp. Sr. Secured
Note 10/2005(a) 75M 76,125
- --------------------------------------------------------------------------------==========
China 2.70% Cathay International Ltd. 13/2008+(a) 100M 100,500
- ------------------------------------------------------------------------------------------
Croatia 1.32% Republic of Croatia 7/2002+(a) 50M 49,173
- ------------------------------------------------------------------------------------------
Germany 5.87% Fresenius Medical Care 7.375/2008+(b) 125M 71,359
Geberit International SA 10.125/2007(b) 150M 95,864
RSL Communications plc 10/2008+(b) 150M 50,962
Total 218,185
- --------------------------------------------------------------------------------==========
Mexico 11.73% Coca-Cola Femsa SA 8.95/2006(a) 100M 104,750
Grupo Televisa SA Zero Coupon Sr.
Discount Note due 2008**(a) 150M 119,625
United Mexican States 9.875/2007(a) 100M 107,375
Pepsi-GemexSA Gtd. Sr. Note
Series B 9.75/2004(a) 100M 104,250
Total 436,000
- --------------------------------------------------------------------------------==========
Panama 2.64% Republic of Panama 8.875/2027(a) 100M 98,250
- --------------------------------------------------------------------------------==========
South Africa 2.53% Republic of South Africa 12/2005(b) 250M 47,893
Walt Disney Co. 14/2002(b) 230M 46,345
Total 94,238
- --------------------------------------------------------------------------------==========
Switzerland 4.42% Nestle Holding Inc. 3/2002(a) 50M 64,063
Roche Holdings Inc. Zero Coupon Conv.
Notes due 2010+(a) 175M 100,407
Total 164,470
- --------------------------------------------------------------------------------==========
United Kingdom 7.27% British Airways 10.875/2008(b) 50M 108,001
IPC Magazines Group 9.625/2008+(b) 50M 81,471
Telewest plc Zero Coupon Sr.
Discount Deb. due 2007**(a) 100M 80,750
Total 270,222
-----------------------------------------------------------==========
Total Investments in Foreign Securities
(Cost $1,993,569) 2,024,502
-----------------------------------------------------------==========
</TABLE>
10
<PAGE>
Statement of Net Assets
WORLD BOND-DEBENTURE FUND April 30, 1998
<TABLE>
<CAPTION>
Principal Amount
Investments or Number of Shares Market Value
==========================================================================================
<S> <C> <C> <C>
Domestic 26.77%
==========================================================================================
United States Arbor Software Corp
Conv. Sub. Notes 4.50/2005+(a) $ 75M $ 81,398
Baker Hughes Inc.
Zero Coupon Conv.Notes Due 2008(a) 50M 41,728
Bell Atlantic Financial Service (Nlztel)
Conv. Sub. Deb.5.75/2003+(a) 50M 52,250
BE Aerospace Sr.
Sub. Notes 8/2008+(a) 50M 49,625
Chancellor Media Corp
Sr. Notes 10.50/2007(a) 100M 111,500
Comcast Cellular
Sr. Sub. Notes 9.50/2007+(a) 75M 78,189
GST Telecommunications Inc.*(a) 1,500 23,250
Mastec Inc. Sr. Sub. Notes 7.75/2008+(a) 50M 49,750
Navistar International
Sr. Sub. Notes 8/2008(a) 50M 49,875
Orbital Imaging Corp.
Sr. Notes 11.625/2005 w/Warrants+(a) 55M 59,675
Polysindo International Finance Co.
Gtd. Secured Notes 9.375/2007(a) 40M 22,800
Rogers Comm Inc. 8.75/2007(b) 100M 70,240
Sinclair Broadcasting Group, Inc.
Sr. Sub. Notes 10/2005(a) 100M 107,250
Swiss Life (GLXO) Conv. Deb. 2/2003(a) 50M 52,063
Teleport Communications
Zero Coupon Sr. Discount Notes due 2007(a) 100M 86,250
Viatel Inc.
Sr. Note 11.15/2008 w/Warrants(b) 100M 59,594
Total Investment in United States Securities
(Cost $986,034) 995,437
-----------------------------------------------------------==========
Total Investment in Securities (Cost $2,979,603) 3,019,939
==========================================================================================
Other Assets, Less Liabilities 18.78%
==========================================================================================
Other Assets
Short-term
Investments American Express Credit Corp.
(U.S. dollar- 5.51% due 5/1/1998 170M 170,000
denominated)
American General Finance
5.40% due 5/1/1998 170M 170,000
Ford Motor Credit
5.41% due 5/1/1998 170M 170,000
General Electric Capital Corp.
5.40% due 5/1/1998 165M 165,000
Merrill Lynch & Co.
5.50% due 5/1/1998 170M 170,000
Total 845,000
- --------------------------------------------------------------------------------==========
Receivable for: Securities sold 329,690
Capital stock sold 227,171
Other 55,225
Total 1,457,086
- --------------------------------------------------------------------------------==========
Payable for: Securities purchased 758,853
- --------------------------------------------------------------------------------==========
Total Other Assets, Less Liabilities 698,233
==========================================================================================
Net Assets 100.00% $3,718,172
==========================================================================================
Class A Shares-Net asset value
($3,309,868 / 309,750 shares outstanding) $10.69
Class B Shares-Net asset value
($98,607 / 9,237 shares outstanding) $10.68
Class C Shares-Net asset value
($309,697 / 29,015 shares outstanding) $10.67
(a) Investments in U.S. dollar-denominated securities (64.23%).
(b) Investments in non-U.S. dollar-denominated securities (16.99%).
* Non-income producing.
** Deferred-interest debentures pay no interest for a stipulated
number of years, after which they pay astipulated coupon rate.
+ Restricted security under Rule 144A.
See Notes to Financial Statements.
</TABLE>
11
<PAGE>
Statement of Net Assets
ALPHA SERIES April 30, 1998
<TABLE>
<CAPTION>
Shares or
Investments Principal Amount Market Value
==========================================================================================
Investments in Securities 96.82%
==========================================================================================
<S> <C> <C> <C>
*Lord Abbett Developing Growth Fund,
Inc.-Class Y 511,464 $ 8,398,245
Lord Abbett Research Fund,
Inc.-Small Cap Series-Class Y 455,960 8,248,320
Lord Abbett Securities
Trust-International Series-Class Y 766,787 11,195,096
Total Investment in Securities
(Cost $27,570,896) 27,841,661
==========================================================================================
Other Assets, Less Liabilities 3.18%
==========================================================================================
Other Assets
Short-term
Investments American Express Credit Co.
5.51% due 5/1/1998 196M 196,000
- --------------------------------------------------------------------------------==========
Receivable for: Capital stock sold 4,250,355
Other 34,203
Total Other Assets 4,480,558
- --------------------------------------------------------------------------------==========
Payable for: Capital stock reacquired 3,535,049
Other 32,465
Total Other Assets, Less Liabilities 913,044
==========================================================================================
Net Assets 100.00% $28,754,705
==========================================================================================
Class A Shares-Net asset value
($13,640,463 / 849,008 shares outstanding) $16.07
Class B Shares-Net asset value
($10,533,085 / 656,270 shares outstanding) $16.05
Class C Shares-Net asset value
($4,581,157 / 285,401 shares outstanding) $16.05
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
12
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
12/18/97 12/29/97
(Commencement (Commencement
of Operations) of Operations)
Six Months Ended 4/30/98 to 4/30/98 to 4/30/98
------------------------------ --------------- --------------
Growth & World Bond
Income International Debenture Alpha
Investment Income Series Series Series Series
===================================================================================== ============== ==============
<S> <C> <C> <C> <C>
Income Dividends $ 1,567,914 $ 351,516 $ -- $ 11
Interest 116,320 64,653 65,104 1,936
Foreign taxes withheld -- (4,070) (340) --
Total income 1,684,234 412,099 64,764 1,947
----------------------------------------------------------------- -------------- --------------
Expenses Management fee 583,989 190,842 6,363 8,201
Management fee waived -- -- (6,363) (8,201)
12b-1 distribution plan-Class A 76,065 49,230 -- 1,951
12b-1 distribution plan-Class B 5,696 16,698 20 5,422
12b-1 distribution plan-Class C 451,251 22,334 60 2,099
Shareholder servicing 91,722 50,224 200 --
Report to shareholders 28,792 7,230 200 --
Audit and tax 16,531 7,446 619 --
Registration 18,000 33,000 100 --
Legal 3,000 600 100 --
Organization 3,666 3,390 684 --
Other 18,080 13,022 100 --
Net expenses 1,296,792 394,016 2,083 9,472
---------------------------------------------------------------- --------------- --------------
Net investment income (loss) 387,442 18,083 62,681 (7,525)
---------------------------------------------------------------- --------------- --------------
Realized and Unrealized Gain on Investments and
Foreign Currency Transactions
===================================================================================== =============== ==============
Net realized gain (loss) from investment and foreign
currency transactions
Proceeds from sales 36,888,182 5,617,826 2,441,300 --
Cost of investments sold 27,468,230 6,282,332 2,403,560 --
Net realized gain (loss) 9,419,952 (664,506) 37,740 --
---------------------------------------------------------------- --------------- --------------
Unrealized appreciation of investments and
foreign currency holdings 14,522,585 16,319,247 41,078 --
- ------------------------------------------------------------------------------------- --------------- --------------
Net realized and unrealized gain on investments
and foreign currency transactions 23,942,537 15,654,741 78,818 270,764
- ------------------------------------------------------------------------------------- --------------- --------------
Net Increase in Net Assets Resulting from Operations $ 24,329,979 $ 15,672,824 $ 141,499 $ 263,239
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
12/18/97
(Commencement
of Operations)
Six Months Ended 4/30/98 to 4/30/98
------------------------------- ---------------
Growth & World Bond
Income International Debenture
Increase (Decrease) in Net Assets Series Series Series
============================================================================== ===============
<S> <C> <C> <C>
Operations Net investment income (loss) $ 387,442 $ 18,083 $ 62,681
Net realized gain (loss)
from investment
and foreign
currency transactions 9,419,952 (664,506) 37,740
Net unrealized appreciation of
investments and foreign
currency holdings 14,522,585 16,319,247 41,078
Net increase in net assets
resulting from operations 24,329,979 15,672,824 141,499
- ------------------------------------------------------------------------------ ---------------
Undistributed net investment income
included in price of share transactions -- -- --
- ------------------------------------------------------------------------------ ---------------
Distributions to shareholders from
net investment income:
Class A -- (75,253) --
Class B -- -- --
Class C -- -- --
Total -- (75,253) --
------------------------------------------------------------------ ---------------
Distributions to shareholders from
net realized gain from investment and
foreign currency transactions:
Class A (3,955,820) -- --
Class B (22,529) -- --
Class C (5,643,671) -- --
Total (9,622,020) -- --
------------------------------------------------------------------ ---------------
Total distributions (9,622,020) (75,253) --
- ------------------------------------------------------------------------------ ---------------
Share transactions:
Net proceeds from
sales of shares 16,036,266 41,444,413 2,576,173
Net asset value of shares issued
to shareholders in reinvestment
of net investment income
and realized gain
from investment transactions 9,032,142 71,969 --
Total 25,068,408 41,516,382 2,576,173
------------------------------------------------------------------ ---------------
Cost of shares reacquired (12,509,997) (4,294,967) --
------------------------------------------------------------------ ---------------
Increase in net assets
derived from
share transactions 12,558,411 37,221,415 2,576,173
------------------------------------------------------------------ ---------------
Increase in net assets 27,266,370 52,818,986 2,717,672
- ------------------------------------------------------------------------------ ---------------
Net Assets
Beginning of period 42,991,675 37,334,499 1,000,500
------------------------------------------------------------------ ---------------
End of period+ $ 170,258,045 $ 90,153,485 $ 3,718,172
===================================================================================
12/29/97 12/13/97
(Commencement Year (Commencement
of Operations) Ended of Operations)
to 4/30/98 10/31/97 to 10/31/97
------------- ---------------- ---------------
Growth &
Alpha Income International
Increase (Decrease) in Net Assets Series Series Series
============================================================ ================ ===============
Operations Net investment income (loss) $ (7,525) $ 939,517 $ 62,336
Net realized gain (loss)
from investment
and foreign
currency transactions -- 9,523,336 (498,854)
Net unrealized appreciation of
investments and foreign
currency holdings 270,764 19,515,134 2,685,278
Net increase in net assets
resulting from operations 263,239 29,977,987 2,248,760
- ------------------------------------------------------------ ---------------- ---------------
Undistributed net investment income
included in price of share transactions -- (7,673) 143,734
- ------------------------------------------------------------ ---------------- ---------------
Distributions to shareholders from
net investment income:
Class A -- (660,996) --
Class B -- -- --
Class C -- (351,430) --
Total -- (1,012,426) --
------------------------------------------------ ---------------- ---------------
Distributions to shareholders from
net realized gain from investment and
foreign currency transactions:
Class A -- (501,039) --
Class B -- -- --
Class C -- (701,709) --
Total -- (1,202,748) --
------------------------------------------------ ---------------- ---------------
Total distributions -- (2,215,174) --
- ------------------------------------------------------------ ---------------- ---------------
Share transactions:
Net proceeds from
sales of shares 28,803,015 21,789,630 36,170,176
Net asset value of shares issued
to shareholders in reinvestment
of net investment income
and realized gain
from investment transactions -- 2,029,420 --
Total 28,803,015 23,819,050 36,170,176
------------------------------------------------ ---------------- ---------------
Cost of shares reacquired (321,549) (22,544,262) (3,228,171)
------------------------------------------------ ---------------- ---------------
Increase in net assets
derived from
share transactions 28,481,466 1,274,788 32,942,005
------------------------------------------------ ---------------- ---------------
Increase in net assets 28,744,705 29,029,928 35,334,499
- ------------------------------------------------------------ ---------------- ---------------
Net Assets
Beginning of period 10,000 113,961,747 2,000,000
------------------------------------------------ ---------------- ---------------
End of period+ $ 28,754,705 $ 142,991,675 $ 37,334,499
===================================================================================
</TABLE>
+ Including undistributed net investment income of $360,037, $5,177,
$62,681 and $(7,525), respectively, as of April 30, 1998 and
undistributed net investment income of $153,968 and $206,070 as of
October 31, 1997.
See Notes to Financial Statements.
14
<PAGE>
Financial Highlights
GROWTH & INCOME SERIES
<TABLE>
<CAPTION>
Class A Shares Class B Shares
--------------------------------------------- -------------------------------
Six Months Year Ended Six Months
Ended 4/30, 10/31, 7/15/96(a) Ended 4/30, 6/5/97(a)
Per Share Operating Performance: 1998 1997 to 10/31/96 1998 to 10/31/97
============================================================================================ ===============================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.79 $ 7.09 $ 6.50 $ 8.80 $ 8.20
- -------------------------------------------------------------------------------------------- -------------------------------
Income from investment operations
Net investment income .04 .093 .028 .01 -(e)
Net realized and
unrealized gain on investments 1.38 1.781 .589 1.39 .60
Total from investment operations 1.42 1.874 .617 1.40 .60
----------------------------------------------------------------------------------------- ------------------------------
Distributions
Dividends from net investment income -- (.099) (.027) -- --
Distributions from net realized gain (.59) (.075) -- (.59) --
------------------------------------------------------------------------------------------ -----------------------------
Net asset value, end of period $ 9.62 $ 8.79 $ 7.09 $ 9.61 $ 8.80
- ---------------------------------------------------------------------------------------------- -----------------------------
Total Return(c) 10.50%(d) 26.78% 12.10%(d) 11.16%(d) 7.19%(d)
=============================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .60%(d) 1.29% .39%(d) .97%(d) .86%(d)
Expenses, excluding waiver .60%(d) 1.29% .39%(d) .97%(d) .86%(d)
Net investment income .47%(d) 1.15% .40%(d) .07%(d) .01%(d)
=========================================================================================================================
</TABLE>
(a) Commencement of offering respective Class shares.
(b) Commencement of operations.
(c) Total return does not consider the effects of sales loads.
(d) Not annualized.
(e) Amount less than $.01.
See Notes to Financial Statements.
Financial Highlights
GROWTH & INCOME SERIES
<TABLE>
<CAPTION>
Class C Shares
---------------------------------------------------------------------------------
Six Months
Ended 4/30, Year Ended 10/31, 1/3/94(b)
Per Share Operating Performance: 1998 1997 1996 1995 to 10/31/94
==========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.80 $ 7.09 $ 6.04 $ 5.07 $ 5.00
- --------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .01 .032 .0949 .12 .089
Net realized and unrealized
gain on investments 1.37 1.790 1.0986 .97 .041
Total from investment operations 1.38 1.822 1.1935 1.09 .130
----------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income -- (.037) (.1035) (.12) (.06)
Distributions from net realized gain (.59) (.075) (.04) -- --
Net asset value, end of period $ 9.59 $ 8.80 $ 7.09 $ 6.04 $ 5.07
- --------------------------------------------------------------------------------------------------------------------------
Total Return(c) 15.62%(d) 26.24% 20.02% 21.83% 2.62%(d)
==========================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .98%(d) 2.05% 1.55% 1.16% .61%(d)
Expenses, excluding waiver .98%(d) 2.05% 2.01% 1.91% 1.94%(d)
Net investment income .09%(d) 0.39% 1.36% 2.06% 2.03%(d)
==========================================================================================================================
<CAPTION>
Six Months
Ended 4/30 Year Ended 10/31, 1/3/94(b)
Supplemental Data for All Classes: 1998 1997 1996 1995 to 10/31/94
===================================================================================================================
<S> <C> <C> <C> <C> <C>
Net assets,
end of period (000) $170,258 $142,992 $113,962 $32,770 $ 9,160
Portfolio turnover rate 23.90% 36.37% 23.84% 23.17% 31.95%
Average commission rate per
share paid on
equity transactions $ .065 $ .065 $ .064 $ .059 n/a
===================================================================================================================
</TABLE>
(a) Commencement of offering respective Class shares.
(b) Commencement of operations.
(c) Total return does not consider the effects of sales loads.
(d) Not annualized.
(e) Amount less than $.01.
See Notes to Financial Statements.
15
<PAGE>
Financial Highlights
INTERNATIONAL SERIES
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Class Y Shares
- ------------------------------------------------------------------ ----------------------- ----------------------- --------------
Six Months Six Months Six Months
Ended 4/30, 12/13/96(a) Ended 4/30, 6/2/97(b) Ended 4/30 6/2/97(b) 12/30/97(b)
Per Share Operating Performance: 1998 to 10/31/97 1998 to 10/31/97 1998 to 10/31/97 to 4/30/98
================================================================== ======================= ======================= ==============
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 10.86 $ 9.42 $ 10.83 $ 10.26 $ 10.83 $ 10.26 $ 11.28
- ------------------------------------------------------------------ ----------------------- ----------------------- --------------
Income from investment operations
Net investment income (loss) .01(e) .07 (.03)(e) (.03) (.03)(e) (.03) .09(e)
Net realized and unrealized gain
on investments and foreign
currency holdings 3.75 1.37 3.72 .60 3.72 .60 3.23
Total from investment operations 3.76 1.44 3.69 .57 3.69 .57 3.32
-------------------------------------------------------------- ----------------------- ----------------------- --------------
Distributions
Dividends from net investment income .03 -- -- -- -- -- --
============================================================== ======================= ====================== ==============
Net asset value, end of period $ 14.59 $ 10.86 $ 14.52 $ 10.83 $ 14.52 $ 10.83 $ 14.60
- ------------------------------------------------------------------ ----------------------- ---------------------- --------------
Total Return(c) (d) 27.00%(d) 15.21% 27.37%(d) 5.56% 32.73%(d) 5.56% 28.90%(d)
====================================================================================================================================
Ratios to Average Net Assets:(d)
Expenses .71% 1.23% 1.08% .87% 1.08% 87% .33%
Net investment income (loss) .07% .41% (.20)% (0.46)% (0.26)% (0.46)% .60%
================================================================================================================================
<CAPTION>
Six Months
Ended 4/30, 12/13/96(a)
Supplemental Data for All Classes: 1998 to 10/31/97
====================================================================================================================================
Net assets, end of period (000) $90,153 $37,334
Portfolio turnover rate 11.14% 29.72%
Average commission rate per share
paid on equity transactions $ .015 $ .024
================================================================================================================================
</TABLE>
(a) Commencement of operations.
(b) Commencement of offering respective Class shares.
(c) Total return does not consider the effects of sales loads.
(d) Not annualized.
(e) Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
16
<PAGE>
Financial Highlights
WORLD BOND-DEBENTURE SERIES
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
-------------------- --------------------- ---------------------
12/18/97(a) 12/19/97(b) 12/19/97(b)
Per Share Operating Performance: to 4/30/98 to 4/30/98 to 4/30/98
============================================================================== ===================== =====================
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
- ------------------------------------------------------------------------------ --------------------- ---------------------
Income from investment operations
Net investment income .20 .04 .02
Net realized and unrealized gain on
investments and foreign currency holdings .49 .64 .65
Total from investment operations .69 .68 .67
-------------------------------------------------------------------------- -------------------- ---------------------
Net asset value, end of period $ 10.69 $ 10.68 $ 10.67
- ------------------------------------------------------------------------------ -------------------- ---------------------
Total Return(c)(d) 1.80%(d) 1.46%(d) 5.63%(d)
============================================================================== ==================== =====================
Ratios to Average Net Assets:(d)
Expenses, including waiver .09% .26% .39%
Expenses, excluding waiver .36% .54% .67%
Net investment income 2.72% 2.35% 2.05%
========================================================================== ==================== =====================
<CAPTION>
12/18/97
Supplemental Data for AllClasses: to 4/30/98
==============================================================================================================================
Net assets, end of period (000) $ 3,718
Portfolio turnover rate 104.32%
Average commission rate per share
paid on equity transactions $ .07
==========================================================================================================================
(a) Commencement of operations.
(b) Commencement of offering respective Class shares.
(c) Total return does not consider the effects of sales loads.
(d) Not annualized.
See Notes to Financial Statements.
</TABLE>
Financial Highlights
ALPHA SERIES
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
-------------------- --------------------- ---------------------
12/29/97(a) 12/29/97(b) 12/29/97(b)
Per Share Operating Performance: to 4/30/98 to 4/30/98 to 4/30/98
============================================================================== ===================== =====================
<S> <C> <C> <C>
Net asset value, beginning of period $ 13.52 $ 13.52 $ 13.52
- ------------------------------------------------------------------------------ --------------------- ---------------------
Income from investment operations
Net investment income (loss) (.01)(e) (.05)(e) (.05)(e)
Net realized and
unrealized gain on investments 2.56 2.58 2.58
Total from investment operations 2.55 2.53 2.53
-------------------------------------------------------------------------- --------------------- ---------------------
Net asset value, end of period $ 16.07 $ 16.05 $ 16.05
- ------------------------------------------------------------------------------ --------------------- ---------------------
Total Return(c)(d) 12.10%(d) 12.78%(d) 17.53%(d)
==============================================================================================================================
Ratios to Average Net Assets:(d)
Expenses, including waiver .08% .32% .32%
Expenses, excluding waiver .25% .49% .49%
Net investment (loss) (.04)% (.28)% (.29)%
==========================================================================================================================
<CAPTION>
Six Months
Ended 4/30
Supplemental Data for All Classes: 1998
==============================================================================================================================
Net assets, end of period (000) $28,755
Portfolio turnover rate 0.00%
==========================================================================================================================
(a) Commencement of operations.
(b) Commencement of offering respective Class shares.
(c) Total return does not consider the effects of sales loads.
(d) Not annualized.
(e) Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
17
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Securities Trust (the "Trust") is an open-end management investment
company, organized as a Delaware business trust. The Trust currently consists of
four separate portfolios ("Series")-Lord Abbett Growth & Income Series ("Growth
& Income") and Lord Abbett International Series ("International"), Lord Abbett
World Bond Debenture Series ("World Bond Debenture") and Lord Abbett Alpha
Series ("Alpha"). Effective December 18, 1997, the World Bond Debenture Series
was added, and the Trust received a capital contribution of $1,000,500 and
issued 100,050 shares to the partners of Lord Abbett & Co. ("Lord Abbett"). The
Alpha Series was added on December 29, 1997 at which time the Trust received a
capital contribution of $10,000 and issued 740 shares of the Alpha Series to the
partners of Lord Abbett. The Alpha Series invests in other funds managed by Lord
Abbett ("Underlying Funds"). Each Series is diversified as defined under the
Investment Company Act of 1940. The financial statements have been prepared in
conformity with generally accepted accounting principles which permit management
to make certain estimates and assumptions at the date of the financial
statements:
The following summarizes the significant accounting policies of the Trust: (a)
Market value is determined as follows: Securities listed or admitted to trading
privileges on any national securities exchange are valued at the last sales
price on the principal securities exchange on which such securities are traded,
or, if there is no sale, at the mean between the last bid and asked prices on
such exchange. Securities traded in the over-the-counter market are valued at
the mean between the last bid and asked prices in such market, except that
securities admitted to trading on the NASDAQ National Market System are valued
at the last sales price if it is determined that such price more accurately
reflects the value of such securities. Investments in the Underlying Funds are
valued at the closing net asset value per share of each Underlying Fund on the
day of valuation. Short-term securities are valued at amortized cost which
approximates market value. Securities for which market quotations are not
available are valued at fair value under procedures approved by the Board of
Trustees. (b) Transactions denominated in foreign currencies are recorded in the
Company's records at the rate prevailing when earned or incurred. Asset and
liability accounts that are denominated in foreign currencies are adjusted to
reflect current exchange rates. (c) The Trust may write call options on
securities it owns. Premiums received by the Trust upon writing covered call
options are included in the Trust's statement of net assets as an asset and an
equivalent liability. The liability is adjusted daily to the market value of the
options written. If an option expires, or if the Trust enters into a closing
purchase transaction, the Trust realizes a gain or, if the cost of a closing
purchase transaction exceeds the premium originally received, a loss, and the
liability related to the option is extinguished. If an option is exercised, the
proceeds of the sale of the underlying security are increased by the premium
originally received when the option was written. (d) It is the policy of the
Trust to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its taxable income in
taxable distributions. Therefore, no federal income tax provision is required.
(e) Security transactions are recorded on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are calculated on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Net investment income (other than
distribution and service fees) and realized and unrealized gains or losses are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day. (f) Organization expenses are amortized
evenly over a period of five years. (g) Effective November 1, 1997, the Trust
discontinued the accounting practice of equalization. Undistributed net
investment income of $181,432 and $143,734, representing accumulated
equalization at October 31, 1997 for the Growth & Income and International
Series, respectively, was transferred to paid-in-capital. Such reclassification
had no effect on net assets, results of operations, or net asset value per
share.
2. Management Fee and Other Transactions with Affiliates
The Trust has a management agreement with Lord Abbett pursuant to which Lord
Abbett supplies the Trust with investment management services and executive and
other personnel, pays the remuneration of officers, provides office space and
pays for ordinary and necessary office and clerical expenses relating to
research and statistical work and supervision of the Trust's investment
portfolios. The management fee is based on average daily net assets at the rate
of 0.75% per annum for the Growth and Income, International and World Bond
Debenture Series and 0.50% per annum for the Alpha Series. Lord Abbett waived
its fee for the World Bond Debenture and Alpha Series for the period ended April
30, 1998. Lord Abbett has entered into a sub-advisory agreement with Fuji
Investment Management Co. (Europe), Ltd. ("sub-adviser"). The sub-adviser
furnishes investment advisory services in connection with the management of the
International Series. Lord Abbett pays for the cost of the sub-adviser's
services.
Each Series of the Trust has Rule 12b-1 plans and agreements with respect to one
or more classes of shares as described below (the "Class A, Class B and Class C
Plans") with Lord Abbett Distributor llc ("Distributor"), an affiliate of Lord
Abbett. Each Series makes payments to Distributor which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, each Series
pays Distributor (1) an annual service fee of 0.25% of the average daily net
assets of Class A shares, (2) a one-time distribution fee of up to 1% on certain
qualifying purchases and (3) a supplemental annual distribution fee of 0.10% of
the average daily net assets of Class A shares serviced by certain qualifying
institutions. Pursuant to the Class B Plan, each Series pays Distributor an
annual service and distribution fee of 0.25% and 0.75%, respectively, of the
average daily net asset value of the Class B shares. Pursuant to the Class C
Plan, each Series pays Distributor (1) a service fee and a distribution fee, at
the time such shares are sold, not to exceed 0.25% and 0.75%, respectively, of
the net asset value of such shares sold and (2) at each quarter-end after the
first anniversary of the sale of such shares, a service fee and a distribution
fee at an annual rate not to exceed 0.25% and 0.75%, respectively, of the
average annual net asset value of such shares outstanding. Class Y does not have
a Rule 12b-1 plan. The Class A Plan for the World Bond Debenture Series will not
become operative until May 1, 1998.
The Alpha Series has entered into a Servicing Arrangement with the Underlying
Funds pursuant to which each Underlying Fund will pay a portion of the expenses
of the Alpha Series in proportion to the average daily value of shares owned by
the Alpha Series.
Lord Abbett received the following commissions for the period ended April 30,
1998 on sales of shares of the Trust after concessions were paid to authorized
distributors:
Lord Abbett Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
Growth & Income $26,980 $162,001
- --------------------------------------------------------------------------------
International $76,879 $472,307
- --------------------------------------------------------------------------------
World Bond Debenture $ 2,782 $ 17,901
- --------------------------------------------------------------------------------
Alpha $63,189 $398,138
- --------------------------------------------------------------------------------
3. Distributions
Dividends from net investment income, if any, are declared and paid
semi-annually for the Growth &Income Series, annually for the International and
Alpha Series, and monthly for the World Bond Debenture Series. Net realized
gains from investment transactions, if any, are distributed to share-
18
<PAGE>
Notes to Financial Statements
holders at least annually. At April 30, 1998, the accumulated undistributed net
realized gain (loss) for financial reporting purposes, aggregated $9,348,254 for
the Growth & Income Series, $(1,163,360) for the International Series, $37,740
for the World Bond Debenture Series and $0 for the Alpha Series. Distributions
declared from net investment income on May 5, 1998 were as follows:
Rate Aggregate
Per Share Amount
- --------------------------------------------------------------------------------
Growth & Income Series-Class A $ .035 $260,386
- --------------------------------------------------------------------------------
World Bond Debenture Series-Class A $ .071 $ 25,684
- --------------------------------------------------------------------------------
World Bond Debenture Series-Class B $ .062 $ 670
- --------------------------------------------------------------------------------
World Bond Debenture Series-Class C $ .062 $ 2,202
- --------------------------------------------------------------------------------
Income and capital gains distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gains amounts in accordance with generally
accepted accounting principles.
4. Capital
Transactions in shares of beneficial interest for the Growth & Income Series
were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
----------------------- -----------------------------
Class A Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Sales of shares 944,791 $ 8,509,758 962,023 $ 7,725,077
Shares issued to
shareholders in
reinvestment of net
investment income
and realized gain
from investment
transactions 446,263 3,672,745 134,345 1,035,066
Total 1,391,054 12,182,503 1,096,368 8,760,143
- -------------------------------------------------- -----------------------------
Shares reacquired (628,600) (5,556,806) (1,067,517) (8,524,014)
Increase in shares 762,454 $ 6,625,697 28,851 $ 236,129
- -------------------------------------------------------------------------------------
Six Months Ended 6/5/97 to
April 30, 1998 October 31, 1997
----------------------- -----------------------------
Class B Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
Sales of shares 169,090 1,522,152 38,206 $ 339,259
Shares issued to
shareholders in
reinvestment of net
investment income
and realized gain
from investment
transactions 2,736 22,576 -- --
Total 171,826 1,544,728 38,206 339,259
- -------------------------------------------------- -----------------------------
Shares reacquired (6,737) (61,517) (486) (4,369)
Increase in shares 165,089 $ 1,483,211 37,720 $ 334,890
- -------------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
----------------------- -----------------------------
Class C Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Sales of shares 661,463 $ 6,004,356 1,695,886 $ 13,725,294
Shares issued to
shareholders in
reinvestment of net
investment income
and realized gain
from investment
transactions 648,459 5,336,821 130,943 994,354
Total 1,309,922 11,341,177 1,826,829 14,719,648
- -------------------------------------------------- -----------------------------
Shares reacquired (760,670) (6,891,674) (1,713,554) (14,015,879)
Increase in shares 549,252 $ 4,449,503 113,275 $ 703,769
- -------------------------------------------------------------------------------------
</TABLE>
Transactions in shares of beneficial interest for the International Series were
as follows:
<TABLE>
<CAPTION>
Six Months Ended 12/13/96 to
April 30, 1998 October 31, 1997
----------------------- -----------------------------
Class A Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Sales of shares 1,690,567 $ 21,829,651 3,074,958 $ 31,360,535
Shares issued to
shareholders in
reinvestment of net
investment income 6,701 71,968 -- --
Total 1,697,268 21,901,619 3,074,958 31,360,535
- -------------------------------------------------- -----------------------------
Shares reacquired (349,662) (4,052,372) (272,153) (2,887,954)
Increase in shares 1,347,606 $ 17,849,247 2,802,805 $ 28,472,581
- -------------------------------------------------------------------------------------
Six Months Ended 6/2/97 to
April 30, 1998 October 31, 1997
----------------------- -----------------------------
Class B Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
Sales of shares 350,317 $ 4,571,319 159,588 $ 1,691,357
- -------------------------------------------------- -----------------------------
Shares reacquired (12,874) (154,397) (7,142) (77,972)
- -------------------------------------------------- -----------------------------
Increase in shares 337,443 $ 4,416,922 152,446 $ 1,613,385
- -------------------------------------------------------------------------------------
Six Months Ended 6/2/97 to
April 30, 1998 October 31, 1997
----------------------- -----------------------------
Class C Shares Amount Shares Amount
- -------------------------------------------------- -----------------------------
Sales of shares 301,907 $ 4,014,924 295,740 $ 3,118,284
- -------------------------------------------------- -----------------------------
Shares reacquired (6,820) (88,197) (25,285) (262,245)
- -------------------------------------------------- -----------------------------
Increase in shares 295,087 $ 3,926,727 270,455 $ 2,856,039
- -------------------------------------------------------------------------------------
12/30/97 to
April 30, 1998
-----------------------------
Class Y Shares Amount
- -------------------------------------------------------------------------------------
Sales of shares 766,798 $11,028,519
- -------------------------------------------------------------------------------------
Increase in shares 766,798 $11,028,519
- -------------------------------------------------------------------------------------
Transactions in shares of beneficial interest for the World Bond Debenture
Series were as follows:
12/18/97 to
April 30, 1998
-----------------------------
Class A Shares Amount
- -------------------------------------------------------------------------------------
Sales of shares 309,750 $3,168,674
- -------------------------------------------------------------------------------------
Increase in shares 309,750 $3,168,674
- -------------------------------------------------------------------------------------
12/19/97 to
April 30, 1998
-----------------------------
Class B Shares Amount
- -------------------------------------------------------------------------------------
Sales of shares 9,237 $98,112
- -------------------------------------------------------------------------------------
Increase in shares 9,237 $98,112
- -------------------------------------------------------------------------------------
12/19/97 to
April 30, 1998
-----------------------------
Class C Shares Amount
- -------------------------------------------------------------------------------------
Sales of shares 29,015 $309,887
- -------------------------------------------------------------------------------------
Increase in shares 29,015 $309,887
- -------------------------------------------------------------------------------------
Transactions in shares of beneficial interest for the Alpha Series were as
follows:
12/29/97 to
April 30, 1998
-----------------------------
Class A Shares Amount
- -------------------------------------------------------------------------------------
Sales of shares 854,399 $13,565,497
- -------------------------------------------------------------------------------------
Shares reacquired (5,391) (85,453)
- -------------------------------------------------------------------------------------
Increase in shares 849,008 $13,480,044
- -------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
Notes to Financial Statements
<TABLE>
<CAPTION>
12/29/97 to
April 30, 1998
-----------------------------
Class B Shares Amount
- -------------------------------------------------------------------------------------
<S> <C> <C>
Sales of shares 668,746 $10,658,922
- -------------------------------------------------------------------------------------
Shares reacquired (12,476) (199,168)
- -------------------------------------------------------------------------------------
Increase in shares 656,270 $10,459,754
- -------------------------------------------------------------------------------------
12/29/97 to
April 30, 1998
-----------------------------
Class C Shares Amount
- -------------------------------------------------------------------------------------
Sales of shares 287,687 $4,588,596
- -------------------------------------------------------------------------------------
Shares reacquired (2,286) (36,928)
- -------------------------------------------------------------------------------------
Increase in shares 285,401 $4,551,668
- -------------------------------------------------------------------------------------
As of April 30, 1998, paid in capital for each Series was as follows:
Series
- -------------------------------------------------------------------------------------
Growth & Income $105,869,362
- -------------------------------------------------------------------------------------
International $ 72,307,143
- -------------------------------------------------------------------------------------
World Bond Debenture $ 3,576,683
- -------------------------------------------------------------------------------------
Alpha $ 28,491,466
- -------------------------------------------------------------------------------------
5. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments)
were as follows:
Series Purchases Sales
- -------------------------------------------------------------------------------------
Growth & Income $39,810,923 $36,794,779
- -------------------------------------------------------------------------------------
International $39,036,447 $ 5,617,826
- -------------------------------------------------------------------------------------
World Bond Debenture $ 5,192,416 $ 2,249,416
- -------------------------------------------------------------------------------------
Alpha $27,570,896 $ --
- -------------------------------------------------------------------------------------
As of April 30, 1998, net unrealized appreciation, unrealized appreciation and
unrealized depreciation of investments based on cost for federal income tax
purposes were as follows:
Net Unrealized Unrealized Unrealized
Series Appreciation Appreciation (Depreciation)
- -------------------------------------------------------------------------------------
Growth & Income $54,689,797 $55,360,351 $ (670,554)
- -------------------------------------------------------------------------------------
International $19,004,525 $20,394,473 $(1,389,948)
- -------------------------------------------------------------------------------------
World Bond Debenture $ 40,336 $ 50,454 $ (10,118)
- -------------------------------------------------------------------------------------
Alpha $ 270,764 $ 270,764 $ --
- -------------------------------------------------------------------------------------
The cost of investments for federal income tax purposes is the same as that used
for financial reporting purposes.
At April 30, 1998, the Growth & Income Series had outstanding covered written
call option contracts as follows:
Contract
Underlying Expiration Premium
Investment Shares Date Received Value (Depreciation)
- -------------------------------------------------------------------------------------
Air Products &
Chemical, Inc. 5,000 6/20/98 $8,095 $17,500 $(9,405)
- -------------------------------------------------------------------------------------
Transactions in call options written during the six months ended April 30, 1998
for the Growth & Income Series were as follows:
Number Premiums
of Contracts Received
- -------------------------------------------------------------------------------------
Options written 415 $53,962
- -------------------------------------------------------------------------------------
Options expired 365 $45,867
- -------------------------------------------------------------------------------------
Options outstanding at
April 30, 1998 50 $ 8,095
- -------------------------------------------------------------------------------------
At April 30, 1998, the World Bond Debenture Series had outstanding forward
currency contracts to sell and buy foreign currencies as follows:
Value at Unrealized
Foreign Currency Settlement Date Current Appreciation
Sell Contracts Receivable Value (Depreciation)
- -------------------------------------------------------------------------------------
Deutsche Marks,
expiring 6/18/98 $49,776 50,590 $(814)
- -------------------------------------------------------------------------------------
South African Rands,
expiring 5/20/98 $47,745 $47,841 $ (96)
- -------------------------------------------------------------------------------------
Total $97,521 $98,431 $(910)
- -------------------------------------------------------------------------------------
Value at Unrealized
Foreign Currency Settlement Date Current Appreciation
Buy Contracts Payable Value (Depreciation)
- -------------------------------------------------------------------------------------
Indonesian Ruplan,
expiring 5/14/98 $25,000 $24,789 $ (211)
- -------------------------------------------------------------------------------------
Turkish Lira,
expiring 6/26/98 $50,000 $51,853 $1,853
- -------------------------------------------------------------------------------------
Total $75,000 $76,642 $1,642
- -------------------------------------------------------------------------------------
</TABLE>
6. Trustees' Remuneration
The Trustees of the Trust associated with Lord Abbett and all officers of the
Trust receive no compensation from the Trust for acting as such. Outside
Trustees' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on net assets of each fund. Trustees' fees payable at April
30, 1998, under a deferred compensation plan were $123,858.
Copyright (C) 1998 by Lord Abbett Securities Trust, 767 Fifth Avenue, New York,
NY 10153-0203
This publication, when not used for the general information of
shareholders of Lord Abbett Securities Trust, is to be distributed only if
preceded or accompanied by a current prospectus which includes information
concerning each Series' investment objective and policies, sales charges and
other matters. There is no guarantee that the forecasts contained within this
publication will come to pass.
All rights reserved. Printed in the U.S.A.
20
<PAGE>
Lord, Abbett & Co.
A Tradition of Performance Through
Disciplined
Investing
[PHOTO OMITTED]
(seated)
Zane E. Brown
Partner and Director of Fixed Income
(standing, from left to right)
Fernando Saldanha
Emerging Market Specialist
Timothy W. Horan
Director of International Fixed Income
Christopher J. Towle
Director of High-Yield Fixed Income7
A successful long-term track record is evidence of a successful investment
strategy. For decades, we at Lord, Abbett & Co., have believed that investing
with a disciplined, value approach is the best way to achieve competitive
returns and reduce portfolio risk. This commitment, and the dedication of our
team of 59 investment professionals, have helped us earn the trust of financial
professionals and investors for over 65 years.*
About Your Fund's Board of Directors
The Securities and Exchange Commission (SEC) views the role of the independent
Board of Directors as one of the most important components in overseeing a
mutual fund. The Board of Directors watches over your Fund's general operations
and represents your interests. Board members review and approve every contract
between your Fund and Lord, Abbett & Co. (the Fund's investment manager) and
Lord Abbett Distributor llc (the Fund's underwriter). They meet regularly to
review a wide variety of information and issues regarding your Fund. Every
member of the Board possesses extensive business experience. Lord Abbett
Securities Trust shareholders are indeed fortunate to have a group of
independent directors with diverse backgrounds to provide a variety of
viewpoints in the oversight of their Fund. Below, we feature one of our
independent directors, E. Thayer Bigelow, Jr.
E. Thayer Bigelow, Jr.
Director--Lord Abbett
Securities Trust
[PHOTO OMITTED]
Mr. Bigelow is a graduate of Trinity College and earned his MBA at the
University of Colgate Darden Business School. He is currently the CEO of Court
Room Television Network, and previously served for five years as President and
CEO of Time/Warner Cable Programming, Inc.
Mr. Bigelow serves as a member of the Board of Trustees for the Cate School. He
is also a member of the Board of Directors for the Visiting Nurse Service of New
York, Crane Co., Medusa Inc. and The Boy's Club of New York. He has been an
independent director for all of Lord Abbett's funds since 1994.
<PAGE>
Investing in the Lord Abbett Family of Funds
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
GROWTH
- -------------------------------------------------------------------------------------------------------------------------
INCOME
- -------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market Fund
<S> <C> <C> <C> <C> <C> <C>
Developing Alpha Series Affiliated Fund Balanced Series Bond-Debenture o National U.S. Government
Growth Fund Fund o California Securities
Global Fund- Growth & o Connecticut Money Market
Equity Series Income Series Global Fund- o Florida Fund**+
Income Series o Georgia
International Research Fund- o Hawaii
Series Large-Cap Series Limited Duration o Michigan
U.S. Government o Minnesota
Mid-Cap Securities Series** o Missouri
Value Fund o New Jersey
U.S. Government o New York
Research Fund- Securities Series** o Pennsylvania
Small-Cap o Texas
Series World Bond- o Washington
Debenture
Series
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your investment professional provides value in helping you identify and
understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Securities
Trust.
For more complete information about any other Lord Abbett fund, including
charges and expenses, call your investment professional or Lord Abbett
Distributor llc at 800-874-3733 for a prospectus. Read it carefully before
investing.
When you invest in a family of funds, you benefit from:
Diversification. You and your investment professional can diversify your
investments between equity and income funds.
Flexibility. As your investment goals change, your investment professional can
help you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 30
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your invest-ment professional to help you customize your investment plan.
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
* The Lord Abbett Research Fund-Small-Cap Series is closed to new investors.
For more information, call Lord Abbett Distributor llc at 800-426-1130.
** An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ Although the Fund is managed to maintain, and has maintained, its stable
net asset value of $1.00 per share price, there can be no assurance that a
stable net asset value of $1.00 per share will be maintained.
[LOGO] 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 (6/98)
