LORD ABBETT SECURITIES TRUST, 485BPOS, 1998-03-19

LORD ABBETT SECURITIES TRUST
485BPOS, 1998-03-19

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

SECURITIES & EXCHANGE COMMISSION

Washington, D. C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 20 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]

OF 1940

AMENDMENT NO. 20 [X]

LORD ABBETT SECURITIES TRUST

Exact Name of Registrant as Specified in Charter

767 Fifth Avenue, New York, N.Y. 10153

Address of Principal Executive Office

Registrant's Telephone Number (212) 848-1800

Thomas F. Konop, Vice President

767 Fifth Avenue, New York, N.Y. 10153

(Name and Address of Agent for Service)

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

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

X on March 19, 1998 pursuant to paragraph (b) of Rule 485
- ----

- ---- 60 days after filing pursuant to paragraph (a) of Rule 485

- ---- on (date) pursuant to paragraph (a) (i) of Rule 485

- ---- 75 days after filing pursuant to paragraph (a) (ii) of Rule 485

- ---- on (date) pursuant to paragraph (a) (ii) of Rule 485

If appropriate, check the following box:

- ---- this post-effective amendment designates a new effective date for a
previously filed post-effective amendment

1
<PAGE>

LORD ABBETT SECURITIES TRUST
N-1A
Cross Reference Sheet
Post-Effective Amendment No.20

This Post-Effective Amendment No. 20 (the "Amendment") to the Registrant's
Registration Statement relates to the Lord Abbett Securities Trust incorporating
World Bond-Debenture Series' Disclosure into a Prospectus with Growth & Income
Series and International Series. The Statement of Additional Information for
World Bond-Debenture Series will be bound together with that of Growth & Income
Series and International Series.

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

POST-EFFECTIVE
AMENDMENT NO.

Alpha Series - Class A, B, C 17
International Series - Class Y 16

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

1 Cover Page
2 Fee Table
3 Financial Highlights
4 (a) (i) Cover Page
4 (a) (ii)I Investment Objectives
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Last Page
5 (d) N/A
5 (e) Our Management
5 (f) Our Management
5 (g) Purchases
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page; Purchases
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
6 (h) Purchases
7 (a) Back Cover Page
7 (b) (c) (d) Purchases
8 (a) (b) (c) (d) Redemptions
Purchases, Redemptions and Shareholder Services
9 N/A
10 Cover Page
11 Cover Page -- Table of Contents
12 N/A
13 (a) (b) (c) (d) Investment Objectives and Policies

2
<PAGE>

14 Trustees and Officers
15 (a) (b) (c) Trustees and Officers
16 (a) (i) Investment Advisory and Other
Services
16 (a) (ii) Trustees and Officers
16 (a) (iii) Investment Advisory and Other
Services
16 (b) Investment Advisory and Other Services
16 (c) (d) (e) (g) N/A
16 (f) Purchases, Redemptions and Shareholder Services
16 (h) Investment Advisory and Other Services
16 (i) N/A
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases; Redemptions and Shareholder Services;
Notes to Financial Statements

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

19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions and Shareholder Services
21 (b) (c) N/A
22 N/A
22 (b) Past Performance
23 Financial Statements; Supplementary

3
<PAGE>

Lord Abbett
- --------------------------
Prospectus
- --------------------------
- --------------------------
March 19, 1998
- --------------------------
Application Inside

LORD ABBETT

SECURITIES

TRUST

GROWTH & INCOME SERIES

INTERNATIONAL SERIES

WORLD BOND-DEBENTURE
SERIES

<PAGE>

LORD ABBETT SECURITIES TRUST
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
================================================================================
Lord Abbett Securities Trust ("we" or the "Fund") is a mutual fund currently
consisting of four series. Only shares of the Growth & Income Series, the
International Series and the World Bond-Debenture Series are offered by this
Prospectus. These Series offer three classes of shares: Class A, Class B and
Class C. These classes provide different options in purchasing shares of the
Fund. See "Purchases" for a description of these choices.

The Growth & Income Series seeks long-term growth of capital and income
without excessive fluctuations in market value. The International Series seeks
long-term capital appreciation.

The World Bond-Debenture Series seeks high current income and the
opportunity for capital appreciation to produce a high total return. It invests
substantially in lower-rated debt securities which entail greater risks than
investments in higher-rated debt securities. The former are referred to
colloquially as "junk bonds." Before investing in the World Bond-Debenture
Series, investors should carefully consider the risks set forth under "How We
Invest" and also that at least 20% of the World Bond-Debenture Series' assets
must be invested in any combination of investment grade debt securities, U.S.
Government or other soverign state securities and cash equivalents.

There can be no assurance that each Series will achieve its objective.

This Prospectus sets forth concisely the information about the Fund and
each Series that a prospective investor should know before investing. Additional
information about the Fund and each Series has been filed with the Securities
and Exchange Commission. The Statements of Additional Information are
incorporated by reference into this Prospectus and may be obtained, without
charge, by writing to the Fund or by calling 800-874-3733 and asking for "Part B
of the Prospectus -- the Statements of Additional Information." The date of this
Prospectus, and the date of the Statements of Additional Information, is March
19, 1998.

PROSPECTUS

Investors should read and retain this Prospectus. Shareholder inquiries should
be made in writing to the Fund or by calling 800-821-5129. You can also make
inquiries through your broker-dealer.

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

====================================
CONTENTS PAGE

1 Investment Objectives 2

2 Fee Table 2

3 Financial Highlights 4

4 How We Invest 5

5 Purchases 13

6 Shareholder Services 20

7 Our Management 21

8 Dividends, Capital Gains
Distributions and Taxes 22

9 Redemptions 23

10 Performance 24
===================================

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

<PAGE>

INVESTMENT OBJECTIVES
================================================================================
The investment objective of the Growth & Income Series is long-term growth of
capital and income without excessive fluctuations in market value. Normally, it
invests in common stocks of large, seasoned companies in sound financial
condition which are expected to show above-average price appreciation. The
investment objective of the International Series is long-term capital
appreciation. The production of any current income is incidental to this
objective and the International Series also may invest in securities which do
not produce any income. The International Series normally invests primarily in
equity securities of non-U.S. issuers. The investment objective of the World
Bond-Debenture Series is high current income. Unusual values are sought,
particularly in lower-rated debt securities, some of which are convertible into
common stocks or have warrants to purchase common stocks.

FEE TABLE
================================================================================
A summary of the expenses of each Series is set forth in the table below. The
example is not a representation of past or future expenses. Actual expenses may
be more or less than those shown.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
GROWTH & INCOME SERIES Class A Class B Class C
Shares Shares Shares
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Transaction Expenses(1)
(as a percentage of offering price)
Maximum Sales Load(2) on Purchases
(See "Purchases") 5.75% None None

Deferred Sales Load(2)
(See "Purchases") None 5% if shares are redeemed 1% if shares
before 1st anniversary are redeemed
of purchase, declining before 1st anniversary
to 1% before 6th of purchase
anniversary and
eliminated on and
after 6th anniversary(3)
- -----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses(4)
(as a percentage of average net assets)
Management Fees (See "Our Management") 0.75% 0.75% 0.75%
12b-1 Fees (See "Purchases")(1)(2) 0.24% 1.00% 1.00%
Other Expenses (See "Our Management") 0.30% 0.30% 0.30%
- -----------------------------------------------------------------------------------------------------------------
Total Operating Expenses 1.29% 2.05% 2.05%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
INTERNATIONAL SERIES Class A Class B Class C
Shares Shares Shares
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Transaction Expenses(1)
(as a percentage of offering price)
Maximum Sales Load(2) on Purchases
(See "Purchases") 5.75% None None

2
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
WORLD BOND-DEBENTURE SERIES Class A Class B Class C
Shares Shares Shares
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Transaction Expenses(1)
(as a percentage of offering price)
Maximum Sales Load(2) on Purchases
(See "Purchases") 4.75% None None

<CAPTION>
Example: Assume each Series' annual return is 5% and there is no change in the
level of expenses described above. For a $1,000 investment in each Series, with
reinvestment of all distributions, you would pay the following total expenses
assuming redemption on the last day of each time period indicated.

1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth & Income Series
Class A shares $70 $96 $124 $204
Class B shares(3) $71 $94 $130 $219
Class C shares $31 $64 $110 $238

International Series
Class A shares $71 $98 $128 $213
Class B shares(3) $71 $96 $134 $226
Class C shares $32 $66 $114 $245

World Bond Debenture Series
Class A shares $58 $79 $103 $170
Class B shares(3) $68 $87 $117 $192
Class C shares $28 $57 $97 $212

You would pay the following expenses on the same investment, assuming no
redemption.

Growth & Income Series
Class A shares $70 $96 $124 $204
Class B shares(3) $21 $64 $110 $219
Class C shares $21 $64 $110 $238

International Series
Class A shares $71 $98 $128 $213
Class B shares(3) $21 $66 $114 $226
Class C shares $21 $66 $114 $245

World Bond Debenture Series
Class A shares $58 $79 $103 $170
Class B shares(3) $18 $57 $97 $192
Class C shares $18 $57 $97 $212
</TABLE>
(1) Although the Series' does not, with respect to Class B and Class C shares,
charges a front-end sales charge, investors should be aware that long-term
shareholders may pay, under the Rule 12b-1 Plan applicable to Class B and
Class C shares, more than the economic equivalent of the maximum front-end
sales charge as permitted by certain rules of the National Association of
Securities Dealers, Inc. Likewise, with respect to Class A shares,
investors should be aware that, over the long term, such maximum may be
exceeded due to the Rule 12b-1 Plan applicable to Class A shares which
permits each Series to pay up to 0.50% in total annual fees, half for
service and the other half for distribution.
(2) Sales "load" is referred to as sales "charge" and "deferred sales load" is
referred to as "contingent deferred sales charge" (or "CDSC") and "12b-1
fees" which consist of a "service fee" and a "distribution fee" are
referred to by either or both of these terms where appropriate throughout
this Prospectus.
(3) Class B shares will automatically convert to Class A shares on the eighth
anniversary of the purchase of Class B shares.
(4) The annual operating expenses for each of the Series are based on
estimated expenses for the current fiscal year. The foregoing is provided
to give investors a better understanding of the expenses that are incurred
by an investment in each Series.

3
<PAGE>

3 FINANCIAL HIGHLIGHTS
================================================================================

The following financial highlights have been audited by Deloitte & Touche llp,
independent auditors, whose report thereon is incorporated by reference into the
Statement of Additional Information and may be obtained on request by calling
1-800-874-3733.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
GROWTH & INCOME SERIES Class A Shares Class B Shares
------------------------------- --------------------
For the Period For the Period
Year Ended July 15, 1996** June 5, 1997**
Per Share+ Operating October 31, to to
Performance: 1997 October 31, 1996 October 31, 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $7.09 $6.50 $8.20
Income from investment operations
Net investment income .093 .028 --
Net realized and unrealized
gain on securities 1.781 .589 .60
Total from investment operations 1.874 .617 .60
- -----------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.099) (.027) --
Distributions from net realized gain (.075) -- --
Net asset value, end of period $8.79 $7.09 $8.80
- ----------------------------------------------------------------------------------------------
Total Return* 26.78% 12.10%++ 7.19%++
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Ratios to Average Net Assets:
Expenses, including waiver 1.29% .39%++ .86%++
Expenses, excluding waiver 1.29% .39%++ .86%++
Net investment income 1.15% .40%++ .01%++
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------
GROWTH & INCOME SERIES Class C Shares
--------------------------------------------------
For the Period
Year Ended October 31, January 3, 1994**
Per Share+ Operating ---------------------------- to
Performance: 1997 1996 1995 October 31, 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $7.09 $6.04 $5.07 $5.00
Income from investment operations
Net investment income .032 .0949 .12 .089
Net realized and unrealized
gain on securities 1.790 1.0986 .97 .041
Total from investment operations 1.822 1.1935 1.09 .13
- -----------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.037) (.1035) (.12) (.06)
Distributions from net realized gain (.075) (.04) -- --
Net asset value, end of period $8.80 $7.09 $6.04 $5.07
- -----------------------------------------------------------------------------------------------
Total Return* 26.24% 20.02% 21.83% 2.62%++
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Ratios to Average Net Assets:
Expenses, including waiver 2.05% 1.55% 1.16% 0.61%++
Expenses, excluding waiver 2.05% 2.01% 1.91% 1.94%++
Net investment income 0.39% 1.36% 2.06% 2.03%++
- -----------------------------------------------------------------------------------------------
<CAPTION>
Growth & Income Series

Year Ended October 31, For the Period
-------------------------------------- January 3, 1994**
Supplemental Data for All Classes: 1997 1996 1995 to October 31, 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net assets, end of period (000) $142,992 $113,962 $32,770 $9,160
Portfolio turnover rate 36.37% 23.84% 23.17% 31.95%
Average Commissions per share
paid on equity transactions $.065 $.064 $.059 --
- -----------------------------------------------------------------------------------------------
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
INTERNATIONAL SERIES
- ---------------------------------------------------------------------------------------------
Class A Shares Class B Shares Class C Shares
For the Period For the Period For the Period
December 13, 1996** June 2, 1997** June 2, 1997**
Per Share+ Operating to to to
Performance: October 31, 1997 October 31, 1997 October 31, 1997
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.42 $10.26 $10.26
Income from investment operations
Net investment income .07 (.03) (.03)
Net realized and unrealized
gain on securities 1.37 .60 .60
Total from investment operations 1.44 .57 .57
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $10.86 $10.83 $10.83
- ---------------------------------------------------------------------------------------------
Total Return* 15.21%++ 5.56%++ 5.56%++
- ---------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Ratios to Average Net Assets:
Expenses, including waiver 1.23%++ .87%++ .87%++
Expenses, excluding waiver 1.23%++ .87%++ .87%++
Net investment income 0.41%++ (0.46)%++ (0.46)%++
- ---------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------
Supplemental Data for All Classes: December 13, 1996**
to October 31, 1997
- ---------------------------------------------------------------------------------------------
<S> <C>
Net assets, end of period (000) $37,334
Portfolio turnover rate 29.72%
Average commission rate per share
paid on equity transactions $ .024
- ---------------------------------------------------------------------------------------------
</TABLE>
* Total return does not consider the effects of front-end sales or contingent
deferred sales charges.
** Commencement of Operations.
+ Prior to July 12, 1996 and June 2, 1997, both the Growth & Income Series and
the International Series had only one class of shares. That class is now
designated "Class A shares."
++ Not annualized.
See Notes to Financial Statements.

HOW WE INVEST
================================================================================

The Growth & Income Series. The Series is intended for long-term investors who
purchase and redeem shares to meet their own financial requirements rather than
to take advantage of price fluctuations. The needs of such investors will be
best served by an investment whose growth is characterized by low fluctuations
in market value. For this reason, the Series tries to keep its assets invested
in securities which are selling at reasonable prices in relation to value and,
thus, is willing to forgo some opportunities for gains when, in the judgment of
Fund management, they carry excessive risk. Fund management tries to anticipate
major changes in the economy and select stocks which it believes will benefit
most from these changes.

The Growth & Income Series normally invests in common stocks (including
securities convertible into common stocks) of large, seasoned companies which
are expected to show above-average growth in value and which are in sound
financial condition. Although the prices of common stocks fluctuate and their
dividends vary, historically, common stocks have appreciated in value and their
dividends have increased when the companies they represent have prospered and
grown.

The Growth & Income Series is constantly balancing the opportunity for
profit against the risk of loss. In the past, very few industries have
continuously provided the best investment opportunities. Fund management
believes it is important to take a flexible approach and adjust the portfolio to
reflect changes in the opportunities for sound investments relative to the risks
assumed; therefore, it sells securities that it judges to be overpriced and
reinvests the proceeds in other securities which it believes offer better
values.

The Series may invest up to 10% of its net assets (at the time of
investment) in foreign securities. These foreign securities will be the kind
described in this Prospectus for the Series' domestic investment. It is the
present intention of Fund management that these securities be primarily traded
in the United Kingdom, Western Europe, Australia, Canada, the Far East, Latin
America, and other developed countries as may be determined from time to time.
The Series also may invest in straight bonds and other debt securities,
including lower rated, high-yield bonds, sometimes referred to as "junk bonds"
with a limit of 5% of its net

5
<PAGE>

assets (at the time of investment) in such lower rated (BB/Ba or lower),
high-yield bonds.

The Series does not purchase securities for trading purposes. To create
reserve purchasing power and also for temporary defensive purposes, it may
invest in short-term debt and other high-quality, fixed-income securities.

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

Although the International Series intends to invest primarily in equity
securities of companies with market capitalization of less than $1 billion
listed on stock exchanges, it may also invest in equity securities of such
companies traded in over-the-counter markets, as well as large and middle
capitalization securities. Small capitalization securities involve greater risk
and the markets for such securities may be more volatile and less liquid than
those of larger securities. Securities of companies in developing countries may
pose liquidity risks. For a description of special considerations and certain
risks associated with investments in foreign issuers, see section headed "Risk
Factors -- Each Series." The Series may temporarily reduce its equity holdings
for defensive purposes in response to adverse market conditions and invest in
domestic, Eurodollar and foreign short-term money market instruments. See
"Investment Objectives and Policies" in the Statement of Additional Information.

Although the International Series will not invest for short-term trading
purposes, investment securities may be sold from time to time without regard to
the length of time they have been held.

Any remaining assets of the Series not invested as described above may be
invested in certain securities or obligations as set forth under the heading
"Other Common Policies."

Financial Futures and Options Thereon. The International Series may deal
in financial futures transactions with respect to the type of securities
described in this Prospectus, including indices of such securities and options
on such financial futures and indices. The Series will not enter into any
futures contracts, or options thereon, if the aggregate market value of the
securities covered by futures contracts plus options on such financial futures
exceeds 50% of the Series' total assets.

Investment Funds. Some emerging countries have laws and regulations that
currently preclude direct foreign investment in the securities of their
companies. However, indirect foreign investment in the securities of such
countries is permitted through investment funds which have been specifically
authorized. The International Series may invest (normally not more than 5% of
the Series' total assets) in these investment funds subject to the provisions of
the Investment Company Act of 1940, as amended, and other applicable
restrictions as discussed herein or in the Statement of Additional Information.
If the Series invests in such investment funds, the Series' shareholders will
bear not only their proportionate share of the expenses of the Series (including
operating expenses and the fees of Lord Abbett), but also will indirectly bear
similar expenses of the underlying investment funds.

Depository Receipts. The International Series may invest in American
Depository Receipts ("ADRs"), Global Depository Receipts ("GDRs"), European
Depository Receipts ("EDRs") and other Depository Receipts (which, together with
ADRs, GDRs and EDRs, are hereinafter collectively referred to as "Depository
Receipts"), to the extent that such Depository Receipts become available. ADRs
are securities, typically issued by a U.S. financial institution (a
"depository"), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer (the "underlying issuer") and deposited
with the depository. ADRs may be established by a depository without
participation by the underlying issuer. GDRs, EDRs and other types of Depository
Receipts are typically issued by foreign depositories, although they may also be
issued by U.S. depositories, and evidence ownership interests in a security or
pool of

6
<PAGE>

securities issued by either a foreign or a U.S. corporation. Generally,
Depository Receipts in registered form are designed for use in the U.S.
securities market and Depository Receipts in bearer form are designed for use in
securities markets outside the United States. The Series may invest in sponsored
and unsponsored Depository Receipts. For purposes of the International Series'
investment policies, the Series' investments in Depository Receipts will be
deemed to be investments in the underlying securities.

THE WORLD BOND-DEBENTURE SERIES. Fund management believes that with respect to
the Series, a high total return (current income and capital appreciation) may be
derived from an actively-managed, diversified debt-security portfolio. The
Series seeks unusual values, particularly in lower-rated debt securities, some
of which are convertible into common stocks or have warrants to purchase common
stocks.

Higher yield on debt securities can occur during periods of inflation when
the demand for borrowed funds is high. Also, buying lower-rated bonds when the
credit risk is above average but, the Series thinks, likely to offer good value,
can generate higher yields. Such debt securities normally will consist of
secured debt obligations of the issuer (i.e., bonds), general unsecured debt
obligations of the issuer (i.e., debentures) and debt securities which are
subordinate in right of payment to other debt of the issuer.

Capital appreciation potential is an important consideration in the
selection of portfolio securities. Capital appreciation is sought by (1)
investing in debt securities when the trend of interest rates is expected to be
down; (2) investing in convertible debt securities or debt securities with
warrants attached entitling the holder to purchase common stock; and (3)
investing in debt securities of issuers in financial difficulties when, in our
opinion, the problems giving rise to such difficulties can be successfully
resolved, with a consequent improvement in the credit standing of the issuers.
Such investments involve corresponding risks that interest and principal
payments may not be made if such difficulties are not resolved. In no event will
we invest more than 10% of our gross assets at the time of investment in debt
securities which are in default as to interest or principal.

Under normal circumstances, the Series invests at least 65% of its total
assets in bonds and/or debentures. Also, under normal circumstances its total
assets will be invested in securities, primarily traded in at least three
different countries, including the United States (the "guideline"). Except for
this guideline, there are neither limitations on how much of the Series' assets
can be invested in securities primarily traded in any one country, nor is there
a requirement that the securities of each issuer held by the Series be primarily
traded in the same three countries. However, this guideline may not be followed
for temporary defensive periods when Fund management (hereinafter meaning the
officers of the Fund subject to the direction of the Fund's Board of Trustees
with the advice of Lord, Abbett &Co., hereinafter "Lord Abbett") believes that
it should invest entirely in domestic securities or in securities primarily
traded in fewer than three such countries or in equity or short-term debt
securities.

Subject to the guideline described above with respect to investing in at
least three different countries, including the United States, the Series may
invest its assets in securities which are primarily traded in the countries
throughout the world.

If the Board of Trustees determines that the change will benefit
shareholders, the following investment policies are subject to change by the
Board without shareholder approval: (a) the Series must keep at least 20% of the
value of its total assets in (1) debt securities which, at the time of purchase,
are "investment grade," i.e., rated within one of the four highest grades
determined either by Moody's Investors Service, Inc. or Standard & Poor's
Ratings Services, (2) debt securities issued or guaranteed by the U.S.
Government or another sovereign state or its agencies or instrumentalities, (3)
cash or cash equivalents (short-term obligations of banks, corporations, the
U.S. Government or another sovereign state), or (4) a combination of any of the
foregoing; (b) while the Series may invest its gross assets, at market value, in
debt securities primarily traded in foreign countries -- such foreign debt
securities normally will be limited to issues where there does not appear to be
substantial risk of nationalization, exchange controls, confiscation or other
government restrictions; (c)

7
<PAGE>

subject to the percentage limitations for purchases of other than debt
securities described below, the Series may purchase common and preferred stocks;
(d) it may hold or sell any property or securities which it may obtain through
the exercise of conversion rights or warrants or as a result of any
reorganization, recapitalization or liquidation proceedings for any issuer of
securities owned by it. In no event will the Series voluntarily purchase any
securities other than debt securities, if, at the time of such purchase or
acquisition, the value of the property and securities, other than debt
securities, in its portfolio is greater than 35% of the value of its gross
assets. A purchase or acquisition will not be considered "voluntary" if made in
order to avoid loss in value of a conversion or other premium; and (e) the
Series neither purchases securities for short-term trading, nor for the purpose
of exercising control of management.

The other debt securities in which the Series may invest include, but are
not limited to, domestic and foreign fixed- and floating-rate notes, bonds,
debentures, convertibles, certificates, warrants, commercial paper and principal
and interest pass-through instruments issued by governments, authorities,
partnerships, corporations, trust companies, banks and bank holding companies,
and banker's acceptances, certificates of deposit, time deposits and deposit
notes issued by domestic and foreign banks. Apart from hedging purposes, the
Series also may enter into forward foreign currency contracts and forward
foreign currency contracts which are non-deliverable, to give the Series
indirect interest rate exposure in a country where direct exposure is not
available to the Series on a level as advantageous.

Other Investment Policies and Techniques

Country Diversification. Subject to the guideline described above with
respect to investing in at least three different countries, including the United
States, the Series may invest its assets in securities which are primarily
traded in the countries throughout the world.

Risk and Volatility Reduction. The Series intends to utilize, from time to time,
one or more of the investment techniques identified below. While some of these
techniques involve risk when utilitzed independently, Fund management intends to
use them to reduce risk and volatility in the Series' portfolio, although this
result cannot be assured.

Covered Call Options. The Series may sell call options on securities it
owns. A call option on securities gives the purchaser of the option, upon
payment of a premium to the seller of the option, the right to call upon the
seller to deliver a specified security on or before a fixed date at a
predetermined price.

Rights and Warrants. The Series may invest in rights and warrants to
purchase securities.

Rights represent a privilege offered to holders of record of issued
securities (usually on a pro-rata basis) for additional securities of the same
class, of a different class, or of a different issuer, as the case may be.
Warrants represent the privelege to purchase securities at a stipulated price
and are usually valid for several years. Rights and warrants generally do not
entitle a holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuing
company.

The value of a right or warrant may not necessarily change with the value
of the underlying securities and rights and warrants cease to have value if they
are not exercised prior to their expiration date.

Interest Rates And Market Prices. The market prices for debt securities will
fluctuate as interest rates change. When interest rates go up, market prices of
debt securities tend to go down and when such interest rates go down, such debt
securities' market price tends to go up. Longer maturity debt securities may
exhibit greater price volatility in response to changes in interest rates than
shorter maturity securities.

Risk Factors -- Each Series

High Yield Debt Securities. Except for the International Series, the World
Bond-Debenture Series may invest substantially and the Growth & Income

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Series may invest up to 5% of its net assets (at the time of investment) in
lower-rated bonds because they tend to have higher yields. In general, the
market for lower-rated bonds is more limited than that for higher-rated bonds
and, therefore, may be less liquid. Market prices of lower-rated bonds may
fluctuate more than those of higher-rated bonds, particularly in times of
economic change and stress. In addition, because the market for lower-rated
corporate debt securities has in past years experienced wide fluctuations in the
values of certain of these securities, past experience may not provide an
accurate indication of the future performance of that market or of the frequency
of default, especially during periods of recession. Objective pricing data for
lower-rated bonds may be more limited than for higher-rated bonds and valuation
of such securities may be more difficult and require greater reliance upon
judgment.

While the market for lower-rated bonds may be relatively insensitive to
interest rate changes, the market prices of these bonds structured as zero
coupon or pay-in-kind securities may be affected to a greater extent by such
changes and thus may be more volatile than prices of lower-rated securities
paying interest periodically in cash. Lower-rated bonds that are callable prior
to maturity may be more susceptible to refunding during periods of falling
interest rates, requiring replacement with lower-yielding securities.

Since the risk of default generally is higher among lower-rated bonds, the
research and analysis performed by Lord Abbett are especially important in the
selection of such bonds. If bonds are rated BB/Ba or lower, they are described
as "high-yield bonds" because of their generally higher yields and are referred
to colloquially as "junk bonds" because of their greater risks. In selecting
lower-rated bonds for investment, Lord Abbett does not rely upon ratings, which
evaluate only the safety of principal and interest, not market value risk, and
which, furthermore, may not accurately reflect an issuer's current financial
condition. Neither the World Bond-Debenture Series nor the Growth & Income
Series has any minimum rating criteria for its investments in bonds. Some
issuers may default as to principal and/or interest payments subsequent to its
purchase of their securities. Through portfolio diversification, good credit
analysis and attention to current developments and trends in interest rates and
economic conditions, investment risk can be reduced, although there is no
assurance that losses will not occur.

Laws enacted from time to time could limit the tax or other advantages of,
and the issuance of, lower-rated securities and could adversely affect their
secondary market and the financial condition of their issuers. On the other
hand, such legislation (curtailing the supply of new issues) could improve the
liquidity, market values and demand for outstanding issues.

Size. If each Series remains small, there is risk that redemptions of a
Series' shares may (a) cause portfolio securities of that Series to be sold
prematurely (at a loss or gain, depending upon the circumstances) or (b) hamper
or prevent a contemplated portfolio security purchase by that Series.

Foreign Investments. Investment in each Series requires consideration of
certain factors that are not normally involved in investments in U.S.
securities. Generally, at least 80% of the assets of the International Series,
up to 10% of the net assets of the Growth & Income Series, and a substantial
amount of the assets of the World Bond-Debenture Series will be denominated or
traded in foreign currencies. Accordingly, a change in the value of any foreign
currency relative to the U.S. dollar will result in a corresponding change in
the U.S. dollar value of a Series' assets denominated or traded in that
currency. The performance of each Series will be measured in U.S. dollars, the
base currency of each Series. Securities markets of foreign countries in which a
Series may invest generally are not subject to the same degree of regulation as
the U.S. markets and may be more volatile and less liquid than the major U.S.
markets. Lack of liquidity may affect a Series' ability to purchase or sell
large blocks of securities and thus obtain the best price. There may be less
publicly-available information on publicly-traded companies, banks and
governments in foreign countries than is generally the case for such entities in
the United States. The lack of uniform accounting standards and practices among
countries impairs the validity of direct comparisons of valuation measures (such
as price/earnings ratios) for securities in different countries.

In addition, a Series may incur costs associated

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<PAGE>

with currency hedging and the conversion of foreign currency into U.S. dollars
and may be adversely affected by restrictions on the conversion or transfer of
foreign currency.

Other considerations include political and social instability,
expropriation, higher transaction costs and different securities settlement
practices. Settlement periods for foreign securities, which are sometimes longer
than those for securities of U.S. issuers, may affect portfolio liquidity. These
different settlement practices may cause missed purchasing opportunities and/or
the loss of interest on money market and debt investments pending further equity
or long-term debt investments.

In addition, foreign securities held by a Series may be traded on days
that the Series do not value their portfolio securities, such as Saturdays and
customary U.S. business holidays, and, accordingly, a Series' net asset value
may be significantly affected on days when shareholders do not have access to
the Series.

Many of the emerging or developing countries may have higher and more
rapidly fluctuating inflation rates, a higher demand for capital investment, a
higher dependence on export markets for their major industries, and a greater
need to develop basic economic infrastructures than more developed countries.

Also, it may be more difficult to obtain a judgment in a court outside the
United States.

OTHER COMMON POLICIES

Foreign Currency Hedging Techniques. Except for the Growth & Income
Series, each Series may utilize various foreign currency hedging techniques
described below when Fund management believes that the currency of a particular
foreign country may suffer a decline against the U.S. dollar.

A forward foreign currency contract involves an obligation to purchase or
sell a specific amount of a currency at a set price on a future date. Each
Series may enter into forward foreign currency contracts (but not in excess of
the amount the Series has invested in non-U.S. dollar-denominated securities at
the time any such contract is entered into) in primarily two circumstances.
First, when each Series enters into a contract for the purchase or sale of a
security denominated in a foreign currency, the Series may desire to "lock in"
the U.S. dollar price of a security. By entering into a forward contract for the
purchase or sale of the amount of foreign currency involved in the underlying
security transaction, the Series will be able to protect against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar and
the subject foreign currency during the period between the date of purchase or
sale and the date of settlement.

Second, each Series may enter into a forward contract to sell the amount
of foreign currency approximating the value of some or all of the Series'
portfolio securities denominated in such foreign currency or, in the
alternative, the Series may use a cross-currency-hedging technique whereby it
enters into such a forward contract to sell another currency (obtained in
exchange for the currency in which the portfolio securities are denominated if
such securities are sold) which it expects to decline in a similar manner.
Precise matching of the forward contract and the value of the securities
involved will generally not be possible since the future value of such
securities denominated in foreign currencies will change as a consequence of
market movements in the value of those securities between the date the forward
contract is entered into and the date the contract matures. Each Series intends
to enter into such forward contracts under this second circumstance
periodically.

Each Series also may transact in currency put and call options on U.S.
exchanges or U.S. over-the-counter markets ("OTC") to protect the dollar against
foreign currency exposure. A put option gives each Series, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency. The premiums paid
for such currency put and call options will not exceed 5% of the net assets of
each Series.

Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms and banks trade options which are more flexible than exchange-listed
options with respect to strike price and maturity date. These OTC options
generally are available on a wider range of currencies. OTC foreign-currency
options generally are more liquid than listed options and

10
<PAGE>

involve the credit risk associated with the individual issuer. OTC options
together with illiquid securities may comprise no more than 15% of each Series'
net assets.

A currency call option, upon payment of a premium, gives the purchaser of
the option the right to buy and the seller (writer) of the obligation to sell,
the underlying currency at the exercise price until the expiration of the
option. Each Series' purchase of a call option on a currency might be intended
to protect the Series against an increase in the price of the underlying
currency that it intends to purchase in the future by fixing the price at which
it may purchase such currency. Each Series may sell (write) a call option on a
foreign currency only in conjunction with a purchase of a put option on that
currency. Such a strategy is designed to reduce the cost of downside currency
protection by limiting currency appreciation potential. The face value of such
writing (as well as the cross-hedging described above) may not exceed 90% of the
value of the securities denominated in such currency (a) invested in by the
Series to cover such call writing or (b) to be crossed.

Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict each Series' ability to engage in transactions in
options, forward contracts and cross hedges.

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

Illiquid Securities. Each Series may invest up to 15% of its net assets in
illiquid securities. Bonds which are subject to legal or contractual
restrictions on resale, but which have been determined by the Board of Trustees
to be liquid, will not be subject to this limit. Investment by a Series in such
securities, initially determined to be liquid, could have the effect of
diminishing the level of a Series' liquidity during periods of decreased market
interest in such securities.

Borrowing. Each Series may borrow from banks (as defined in the Investment
Company Act of 1940, as amended, the "Act"), in amounts up to 33 1/3% of its
total assets (including the amount borrowed). Each Series may borrow up to an
additional 5% of its total assets for temporary purposes. Each Series may obtain
such short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities.

Diversification. Each Series intends to meet the diversification rules
under Subchapter M of the Internal Revenue Code. The Growth & Income Series and
the International Series met the diversification rules under Subchapter M for
the fiscal year ended October 31, 1997, and the period December 13, 1996 through
October 31, 1997, respectively. Generally, this requires, at the end of each
quarter of the taxable year, that (a) not more than 25% of each Series' total
assets be invested in any one issuer and (b) with respect to 50% of each Series'
total assets, no more than 5% of such Series' total assets be invested in any
one issuer except U.S. Government securities.

Except for the World Bond-Debenture Series which is a non-diversified
investment company, for purposes of the following 75% test, each Series is
prohibited as a "diversified" investment company, with respect to 75% of the
value of its total assets, from investing more than 5% of its total assets in
securities of any one issuer other than U.S. Government securities. For
diversification purposes, the identification of an "issuer" for the fixed-income
portion of a Series' assets will be determined on the basis of the source of
assets and revenues committed to meeting interest and principal payments of the
securities. When the assets and revenues of a sovereign state's political
subdivision are separate from those of the sovereign state government creating
the subdivision, and the security is backed only by the assets and revenues of
the subdivision, then the subdivision would be considered the sole issuer.
Similarly, if a revenue bond is backed only by the assets and revenues of a
nongovernmental user, then such user would be considered the sole issuer.

When-Issued or Delayed Delivery Securities. Each Series may purchase
securities on a when-issued basis and, while awaiting delivery and before paying
for them ("settlement"), normally may invest in short-term securi-

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<PAGE>

ties. Each Series does not start earning interest on these when-issued
securities until settlement and often they are sold prior to settlement. During
the period between purchase and settlement, the value of the securities will
fluctuate and assets consisting of cash and/or marketable securities marked to
market daily in an amount sufficient to make payment at settlement will be
segregated at our custodian in order to pay for the commitment. There is a risk
that market yields available at settlement may be higher than yields obtained on
the purchase date, which could result in depreciation of value.

While this investment strategy may contribute significantly to a portfolio
turnover rate substantially in excess of 100%, it is anticipated to have little
or no transaction costs or adverse tax consequences for the Series. Transaction
costs normally do not include brokerage because the Series' fixed-income
portfolio transactions usually are on a principal basis and, at the time of
purchase, the Series normally anticipates that any markups charged will be more
than offset by the anticipated economic benefits of the transactions. In the
remote situation where this anticipated result does not occur, the markups may
offset any benefits.

Covered Call Options. Each Series may write call options on securities it
owns, provided that the securities it holds to cover such options does not
represent more than 10% of net assets (in the case of the Growth &Income Series)
and 5% of net assets (in the case of the International Series). A call option on
stock gives the purchaser of the option, upon payment of a premium to the writer
of the option, the right to call upon the writer to deliver a specified number
of shares of a stock on or before a fixed date at a predetermined price.

It is currently intended that no more than 5% of each Series' net assets
will be at risk in the use of any one of the policies identified below.

Rights and Warrants. Each Series may invest in rights and warrants to
purchase securities provided that, at the time of the acquisition, its
investment in warrants, valued at the lower of cost or market, would not exceed
5% of the Series' total assets. Warrants which are not listed on the New York or
American Stock Exchange or a major foreign exchange may not exceed 2% of a
Series' total assets.

Repurchase Agreements. Each Series may enter into repurchase agreements
with respect to a security. A repurchase agreement is a transaction by which a
Series acquires a security and simultaneously commits to resell that security to
the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. Such repurchase agreement must, at all times, be
collateralized by cash or U.S. Government securities having a value equal to, or
in excess of, the value of the repurchase agreement.

Closed-end Investment Companies. Each Series may invest in shares of
closed-end investment companies if bought in the primary or secondary market
with a fee or commission no greater than the customary broker's commission.
Shares of such investment companies sometimes trade at a discount or premium in
relation to their net asset value and there may be duplication of fees, for
example, to the extent that a Series and the closed-end investment company both
charge a management fee.

Lending of Portfolio Securities. Each Series may seek to earn income by
lending its portfolio securities if the loan is collateralized and its terms are
in accordance with regulatory requirements. These loans may not exceed 30% of
the value of the Series' total assets. In such an arrangement, the Series loans
securities from its portfolio to registered broker-dealers. Such loans are
continuously collateralized by an amount at least equal to 100% of the market
value of the securities loaned. Cash collateral is invested in obligations
issued or guaranteed by the U. S. Government or its agencies, commercial paper
or bond obligations rated AA or A-1/P-1 by Standard & Poor's Rating Services
("S&P") or Moody's Investors Services, Inc. ("Moody's"), respectively, or
repurchase agreements with respect to the foregoing. As with other extensions of
credit, there are risks of delay in recovery and market loss should the
borrowers of the portfolio securities fail financially.

Portfolio Turnover. The portfolio turnover rate for the fiscal year ended
October 31, 1997 for the Growth & Income Series was 36.37%. The portfolio
turnover rate for the International Series for the fiscal period December 13,
1996 through October 31, 1997 was 29.72%. The portfolio turnover rate for the
World Bond-Debenture Series is expected to be within a range from 100% to 150%.
See the discussion of when-issued securities under "When-Issued or Delayed
Delivery Securities" as to why this will have little or no transaction cost or
adverse tax conse-

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<PAGE>

quences for the Series.

Change of Investment Objectives and Policies. No Series will change its
investment objective without shareholder approval. If a Series determines that
its objective can best be achieved by a change in investment policy or strategy,
it may make such change without shareholder approval by disclosing the changed
policy in its prospectus.

PURCHASES
================================================================================
ALTERNATIVE SALES ARRANGEMENTS

Classes of Shares. Each Series offers investors three different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and are likely to
have different share prices. Investors should read this section carefully to
determine which class represents the best investment option for their particular
situation.

Class A Shares. If you buy Class A shares, you pay an initial sales charge on
investments of less than $1 million (or on investments for employer-sponsored
retirement plans under the Internal Revenue Code (hereinafter referred to as
"Retirement Plans") with less than 100 eligible employees or on investments that
do not qualify to be under a "special retirement wrap program" defined under
Class A Share Net Asset Value. If you purchase Class A shares as part of an
investment of at least $1 million (or for Retirement Plans with at least 100
eligible employees or under a "special retirement wrap program") in shares of
one or more Lord Abbett-sponsored funds, you will not pay an initial sales
charge, but if you redeem any of those shares within 24 months after the month
in which you buy them, you may pay to the Fund a contingent deferred sales
charge ("CDSC") of 1% except for redemptions under a "special retirement wrap
program." Class A shares are subject to service and distribution fees that are
currently estimated to total approximately .24 of 1% annually for the Growth &
Income Series and .25 of 1% for the International Series and the World
Bond-Debenture Series of the annual net asset value of the Class A shares. The
initial sales charge rates, the CDSC and the Rule 12b-1 Plan applicable to the
Class A shares are described below under "General."

Class B Shares. If you buy Class B shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the sixth anniversary of
buying them, you will normally pay a CDSC to Lord Abbett Distributor llc ("Lord
Abbett Distributor"). That CDSC varies depending on how long you own shares.
Class B shares are subject to service and distribution fees at an annual rate of
1% of the annual net asset value of the Class B shares. The CDSC and the Rule
12b-1 Plan applicable to the Class B shares are described below under "General."

Class C Shares. If you buy Class C shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the first anniversary of
buying them, you will normally pay the Fund a CDSC of 1%. Class C shares are
subject to service and distribution fees at an annual rate of 1% of the annual
net asset value of the Class C shares. The CDSC and the Rule 12b-1 Plan
applicable to the C shares are described below under "General."

Which Class of Shares Should You Choose? Once you decide that a Series is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial adviser. Class-specific expenses and the effect of
the different types of sales charges on your investment will affect your
investment results over time. The most important factors are how much you plan
to invest and how long you plan to hold your investment. If your goals and
objectives change over time and you plan to purchase additional shares, you
should re-evaluate those factors to see if you should consider another class of
shares.

In the following discussion, to help provide you and your financial
adviser with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in a Series.

We used the sales charge rates that apply to Class A, Class B and Class C,
and considered the effect of the higher distribution fees on Class B and Class C
expenses (which will affect your investment return). Of course, the actual
performance of your investment cannot be predicted and will vary, based on a
Series' actual investment returns, the operating expenses borne by each class of
shares, and the class of shares you purchase. The factors briefly discussed
below are

13
<PAGE>

not intended to be investment advice, guidelines or recommendations, because
each investor's financial considerations are different. The discussion below of
the factors to consider in purchasing a particular class of shares assumes that
you will purchase only one class of shares and not a combination of shares of
different classes.

How Long Do You Expect to Hold Your Investment? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares. For
example, over time, the reduced sales charges available for larger purchases of
Class A shares may offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-specific expenses
on Class B or Class C shares for which no initial sales charge is paid. Because
of the effect of class-based expenses, your choice should also depend on how
much you plan to invest.

Investing for the Short Term. If you have a short-term investment horizon
(that is, you plan to hold your shares for not more than six years), you should
probably consider purchasing Class A or Class C shares rather than Class B
shares. This is because of the effect of the Class B CDSC if you redeem before
the sixth anniversary of your purchase, as well as the effect of the Class B
distribution fee on the investment return for that class in the short term.
Class C shares might be the appropriate choice (especially for investments of
less than $100,000), because there is no initial sales charge on Class C shares,
and the CDSC does not apply to amounts you redeem after holding them one year.

However, if you plan to invest more than $100,000 for the short term, then
the more you invest and the more your investment horizon increases toward six
years, the more attractive the Class A share option may become. This is because
the annual distribution fee on Class C shares will have a greater impact on your
account over the longer term than the reduced front-end sales charge available
for larger purchases of Class A shares. For example, Class A might be more
appropriate than Class C for investments of more than $100,000 expected to be
held for 5 or 6 years (or more). For investments over $250,000 expected to be
held 4 to 6 years (or more), Class A shares may become more appropriate than
Class C. If you are investing $500,000 or more, Class A may become more
desirable as your investment horizon approaches 3 years or more.

For most investors who invest $1 million or more or for Retirement Plans
with at least 100 eligible employees, in most cases Class A shares will be the
most advantageous choice, no matter how long you intend to hold your shares.

Investing for the Longer Term. If you are investing for the longer term
(for example, to provide for future college expenses for your child) and do not
expect to need access to your money for seven years or more, Class B shares may
be an appropriate investment option, if you plan to invest less than $100,000.
If you plan to invest more than $100,000 over the long term, Class A shares will
likely be more advantageous than Class B shares or Class C shares, as discussed
above, because of the effect of the expected lower expenses for Class A shares
and the reduced initial sales charges available for larger investments in Class
A shares under the Fund's Rights of Accumulation.

Of course, these examples are based on approximations of the effect of
current sales charges and expenses on a hypothetical investment over time, and
should not be relied on as rigid guidelines.

You should discuss your purchase order for a specific class of shares with
your investment professional.

Are There Differences in Account Features That Matter to You? Some account
features are available in whole or in part to Class A, Class B and Class C
shareholders. Other features (such as Systematic Withdrawal Plans) might not be
advisable in non-Retirement Plan accounts for Class B shareholders (because of
the effect of the CDSC on the entire amount of a withdrawal if it exceeds 12%
annually) and in any account for Class C shareholders during the first year of
share ownership (due to the CDSC on withdrawals during that year). See
"Systematic Withdrawal Plan" under "Shareholder Services" for more information
about the 12% annual waiver of the CDSC. You should carefully review how you
plan to use your investment account before deciding which class of shares you
buy. For example, the dividends payable to Class B and Class C shareholders will
be reduced by the expenses borne solely by each of these classes, such as the
higher distribution fee to which Class B and Class C shares are subject, as
described below.

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<PAGE>

How Does It Affect Payments to My Broker? A salesperson, such as a broker, or
any other person who is entitled to receive compensation for selling Fund shares
may receive different compensation for selling one class than for selling
another class. As discussed in more detail below, such compensation is primarily
paid at the time of sale in the case of Class A and B shares and is paid over
time, so long as shares remain outstanding, in the case of Class C shares. It is
important that investors understand that the primary purpose of the CDSC for the
Class B shares and the distribution fee for Class B and Class C shares is the
same as the purpose of the front-end sales charge on sales of Class A shares: to
compensate brokers and other persons selling such shares. The CDSC, if payable,
supplements the Class B distribution fee and reduces the Class C distribution
fee expenses for each Series and Class C shareholders.

GENERAL

How Much Must You Invest? You may buy our shares through any independent
securities dealer having a sales agreement with Lord Abbett Distributor, our
exclusive selling agent. Place your order with your investment dealer or send it
to Lord Abbett Securities Trust (P.O. Box 419100, Kansas City, Missouri 64141).
The minimum initial investment for each Series is $1,000, except for
Invest-A-Matic and Div-Move ($250 initial and $50 subsequent minimum) and
Individual Retirement Accounts ($250 minimum). For Retirement Plans there is no
minimum initial investment required. See "Shareholder Services." For information
regarding the proper form of a purchase or redemption order, call the Fund at
800-821-5129. This offering may be suspended, changed or withdrawn. Lord Abbett
Distributor reserves the right to reject any order.

The net asset value of our shares is calculated every business day as of
the close of the New York Stock Exchange ("NYSE") by dividing net assets by the
number of shares outstanding. Securities are valued at their market value as
more fully described in the Statement of Additional Information.

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

Lord Abbett Distributor may, for specified periods, allow dealers to
retain the full sales charge for sales of shares during such periods, or pay an
additional concession to a dealer who, during a specified period, sells a
minimum dollar amount of our shares and/or shares of other Lord Abbett-sponsored
funds. In some instances, such additional concessions will be offered only to
certain dealers expected to sell significant amounts of shares. Lord Abbett
Distributor may, from time to time, implement promotions under which Lord Abbett
Distributor will pay a fee to dealers with respect to certain purchases not
involving imposition of a sales charge. Additional payments may be paid from
Lord Abbett Distributor's own resources and will be made in the form of cash or,
if permitted, non-cash payments. The non-cash payments will include business
seminars at resorts or other locations, including meals and entertainment, or
the receipt of merchandise. The cash payments will include payment of various
business expenses of the dealer. In selecting dealers to execute portfolio
transactions for the Fund's portfolio, if two or more dealers are considered
capable of obtaining best execution, we may prefer the dealer who has sold our
shares and/or shares of other Lord Abbett-sponsored funds.

Buying Class A Shares. The offering price of Class A shares is based on the
per-share net asset value next computed after your order is accepted plus a
sales charge as follows:

Class A Share Volume Discounts. This section describes several ways to qualify
for a lower sales charge when purchasing Class A shares if you inform Lord
Abbett Distributor or the Fund that you are eligible at the time of purchase.
(1) Any purchaser (as described below) may aggregate a Class A share purchase in
the Fund with any share purchases of any other eligible Lord Abbett-sponsored
fund, together with the current value at maximum offering price of

15
<PAGE>

any shares in the Fund and in any eligible Lord Abbett-sponsored funds held by
the purchaser. (Holdings in the following funds are not eligible for the above
rights of accumulation: Lord Abbett Equity Fund ("LAEF"), Lord Abbett Series
Fund ("LASF"), any series of Lord Abbett Research Fund not offered to the
general public ("LARF") and Lord Abbett U.S. Government Securities Money Market
Fund ("GSMMF"), except for holdings in GSMMF which are attributable to any
shares exchanged from a Lord Abbett-sponsored fund.) (2) A purchaser may sign a
non-binding 13-month statement of intention to invest $50,000 or more in any
shares of the Fund or in any of the above eligible funds. If the intended
purchases are completed during the period, the total amount of your intended
purchases of any shares will determine the reduced sales charge rate for the
Class Ashares purchased during the period. If not completed, each Class A share
purchase will be at the sales charge for the aggregate of the actual share
purchases. Shares issued upon reinvestment of dividends or distributions are not
included in the statement of intention. The term "purchaser" includes (i) an
individual, (ii) an individual and his or her spouse and children under the age
of 21 and (iii) a trustee or other fiduciary purchasing shares for a single
trust estate or single fiduciary account (including a pension, profit-sharing,
or other employee benefit trust qualified under Section 401 of
- --------------------------------------------------------------------------------
Sales Charge as a Dealer's
Percentage of:
-------------- Concession
as a To Compute
Net Percentage Offering
Offering Amount of Offering Price, Divide
Size of Investment Price Invested Price NAV by
- --------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% 5.00% .9425
- --------------------------------------------------------------------------------
$ 50,000 to $99,999 4.75% 4.99% 4.00% .9525
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.75% 3.90% 3.25% .9625
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% 2.25% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75% .9800
- --------------------------------------------------------------------------------
$1,000,000 or more No Sales Charge 1.00%+ 1.0000
- --------------------------------------------------------------------------------
+ Authorized institutions receive concessions on purchases made by a
retirement plan, pursuant to a special retirement wrap program or by
another qualified purchaser within a 12-month period (beginning with the
first net asset value purchase) as follows: 1.00% on purchases of $5
million, 0.55% of the next $5 million, 0.50% of the next $40 million and
0.25% on purchases over $50 million. See "Class A Rule 12b-1 Plan" below.
- --------------------------------------------------------------------------------

the Internal Revenue Code -- more than one qualified employee benefit trust of a
single employer, including its consolidated subsidiaries, may be considered a
single trust, as may qualified plans of multiple employers registered in the
name of a single bank trustee as one account), although more than one
beneficiary is involved.

Class A Share Net Asset Value Purchases. Our Class A shares may be purchased at
net asset value by our directors, employees of Lord Abbett, employees of our
shareholder servicing agent and employees of any securities dealer having a
sales agreement with Lord Abbett Distributor who consents to such purchases or
by the trustee or custodian under any pension or profit-sharing plan or Payroll
Deduction IRA established for the benefit of such persons or for the benefit of
any national securities trade organization to which Lord Abbett or Lord Abbett
Distributor belongs or any company with an account(s) in excess of $10 million
managed by Lord Abbett on a private-advisory-account basis. For purposes of this
paragraph, the terms "directors" and "employees" include a director's or
employee's spouse (including the surviving spouse of a deceased director or
employee). The terms "directors" and "employees of Lord Abbett" also include
other family members and retired directors and employees. Our Class A shares
also may be purchased at net asset value (a) at $1 million or more, (b) with
dividends and distributions on Class A shares of other Lord Abbett-sponsored
funds, except for dividends and distributions on shares of LARF, LAEF and LASF,
(c) under the loan feature of the Lord Abbett-sponsored prototype 403(b) plan
for Class A share purchases representing the repayment of principal and
interest, (d) by certain unaffiliated authorized brokers, dealers, registered
investment advisers or other financial institutions who have entered into an
agreement with Lord Abbett Distributor in accordance with certain standards
approved by Lord Abbett Distributor, providing specifically for the use of our
Class A shares in particular investment products made available for a fee to
clients of such brokers, dealers, registered investment advisers and other
financial institutions ("mutual fund wrap fee programs"), (e) by employees,
partners and owners of unaffiliated consultants and advisers to Lord Abbett,
Lord Abbett Distributor or Lord Abbett-sponsored funds who consent to such
purchase if such persons provide services to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such fund
and (f) through Retirement Plans with at least 100 eligible employees.

There are no minimum initial or subsequent investment requirements for the
above-mentioned mutual

16
<PAGE>

fund wrap-fee programs.

Class A Rule 12b-1 Plan. The Fund has adopted a Class A share Rule 12b-1 Plan on
behalf of each Series (the "A Plans," each, an "A Plan") which authorizes the
payment of fees to authorized institutions (except as to certain accounts for
which tracking data is not available) in order to provide additional incentives
for them (a) to provide continuing information and investment services to their
Class A shareholder accounts and otherwise to encourage those accounts to remain
invested in the Series and (b) to sell Class A shares of the Series. Under each
A Plan, in order to save on the expense of shareholders' meetings and to provide
flexibility to the Board of Trustees, the Board, including a majority of the
outside trustees who are not "interested persons" of each Series as defined in
the Act, is authorized to approve annual fee payments from a Series' Class A
assets of up to 0.50 of 1% of the average net of such assets consisting of
distribution and service fees, each at a maximum annual rate not exceeding 0.25
of 1% (the "Fee Ceiling"). Institutions and persons permitted by law to receive
such fees are "authorized institutions."

In addition, the Board has approved for those authorized institutions
which qualify, a supplemental annual distribution fee equal to 0.10% of the
average daily net asset value of the Class A shares serviced by authorized
institutions which have a satisfactory program for the promotion and retention
of such shares satisfying Lord Abbett Distributor. Class A shares held pursuant
to a satisfactory program would, for example, (i) constitute a significant
percentage of the Fund's net assets, (ii) be held for a substantial length of
time and/or (iii) have a lower than average redemption rate.

Under the A Plans, the Board has approved payments by the Series to Lord
Abbett Distributor which uses or passes on to authorized institutions (1) an
annual service fee (payable quarterly) of .25% of the average daily net asset
value of the Class A shares serviced by authorized institutions and (2) a
one-time distribution fee of up to 1% (reduced according to the following
schedule: 1% of the first $5 million, .55% of the next $5 million, .50% of the
next $40 million and .25% over $50 million), payable at the time of sale on all
Class A shares sold during any 12-month period starting from the day of the
first net asset value sale (i) at the $1 million level by authorized
institutions, including sales qualifying at such level under the rights of
accumulation and statement of intention privileges or (ii) through Retirement
Plans with at least 100 eligible employees.

Under the A Plans, Lord Abbett Distributor is permitted to use payments
received to provide continuing services to Class A shareholder accounts not
serviced by authorized institutions and, with Board approval, to finance any
activity which is primarily intended to result in the sale of Class Ashares. Any
such payments are subject to the Fee Ceiling. Any payments under the Plans not
used by Lord Abbett Distributor in this manner are passed on to authorized
institutions.

Holders of Class A shares on which the 1% sales distribution fee has been
paid may be required to pay to the Series on behalf of its Class A shares a CDSC
of 1% of the original cost or the then net asset value, whichever is less, of
all Class A shares so purchased which are redeemed out of the Lord
Abbett-sponsored family of funds on or before the end of the twenty-fourth month
after the month in which the purchase occurred. (Exceptions are made for
redemptions by Retirement Plans due to any benefit payment such as plan loans,
hardship withdrawals, death, retirement or separation from service with respect
to plan participants or the distribution of any excess contributions. If the
Class A shares have been exchanged into another Lord Abbett-sponsored fund and
are thereafter redeemed out of the Lord Abbett family of funds on or before the
end of such twenty-fourth month, the charge will be collected for the Series'
Class A shares by the other fund. The Series will collect such a charge for
other Lord Abbett-sponsored funds in a similar situation.

Buying Class B Shares. Class B shares are sold at net asset value per share
without an initial sales charge. However, if Class B shares are redeemed for
cash before the sixth anniversary of their purchase, a CDSC may be deducted from
the redemption proceeds. That sales charge will not apply to shares purchased by
the reinvestment of dividends or capital gains distributions. The charge will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price. The Class B CDSC is paid to Lord
Abbett Distributor to compensate it for its services rendered in connection with
the distribution of Class B shares, including the payment and financing of sales
commissions. See "Class B Rule 12b-1 Plan" below.

17
<PAGE>

To determine whether the CDSC applies to a redemption, the Fund redeems
shares in the following order: (1) shares acquired by reinvestment of dividends
and capital gains distributions, (2) shares held until the sixth anniversary of
their purchase or later, and (3) shares held the longest before the sixth
anniversary of their purchase.

The amount of the CDSC will depend on the number of years since you
invested and the dollar amount being redeemed, according to the following
schedule:

In the table, an "anniversary" is the 365th day subsequent to a purchase
or a prior anniversary. All purchases are considered to have been made on the
business day the purchase was made. See "Buying Shares Through Your Dealer"
above.

If Class B shares are exchanged into the same class of another Lord
Abbett-sponsored fund and the new shares are subsequently redeemed for cash
before the sixth anniversary of the original purchase, the CDSC will be payable
on the new shares on the basis of the time elapsed from the original purchase.
The Series will collect such a charge for other Lord Abbett-sponsored funds in a
similar situation.

Waiver of Class B Sales Charges. The Class B CDSC will not be applied to shares
purchased in certain types of transactions nor will it apply to shares redeemed
in certain circumstances as described below.

The Class B CDSC will be waived for redemptions of shares (i) in
connection with the Systematic Withdrawal Plan and Div-Move services, as
described in more detail under "Shareholder Services" below; (ii) by Retirement
Plans due to any benefit payment such as plan loans, hardship withdrawals,
death, retirement or separation from service with respect to plan participants
or the distribution of any excess contributions, (iii) in connection with the
death of an individual shareholder (a natural person), and (iv) in connection
with mandatory distributions under 403(b) plans and individual retirement
accounts. If Class B shares represent a part of an individual's total IRA or
403(b) investment, the CDSC waiver is available only for that portion of a
mandatory distribution which bears the same relation to the entire mandatory
distribution as the B share investment bears to the total investment.

Class B Rule 12b-1 Plan. The Fund has adopted a Class B share Rule 12b-1 Plan on
behalf of each Series (the "B Plans," each a "B Plan") under which the Series
periodically pays (except as to certain accounts for which tracking data is not
available) Lord Abbett Distributor (i) an annual service fee of 0.25 of

Anniversary
of the Day on Contingent Deferred
Which the Purchase Sales Charge on
Order Was Accepted Redemptions
(As % of Amount
On Before Subject to Charge)
- --------------------------------------------------------------------------------
1st 5.0%
- --------------------------------------------------------------------------------
1st 2nd 4.0%
- --------------------------------------------------------------------------------
2nd 3rd 3.0%
- --------------------------------------------------------------------------------
3rd 4th 3.0%
- --------------------------------------------------------------------------------
4th 5th 2.0%
- --------------------------------------------------------------------------------
5th 6th 1.0%
- --------------------------------------------------------------------------------
on or after the None

1% of the average daily net asset value of the Class B shares and (ii) an annual
distribution fee of 0.75 of 1% of the average daily net asset value of the Class
B shares that are outstanding for less than 8 years.

Lord Abbett Distributor uses the service fee to compensate authorized
institutions for providing personal services for accounts that hold Class B
shares. Those services are primarily similar to those provided under the A Plan,
described above.

Lord Abbett Distributor pays an up-front payment to authorized
institutions totaling 4%, consisting of 0.25% for service and 3.75% for a sales
commission as described below.

Lord Abbett Distributor pays the 0.25% service fee to authorized
institutions in advance for the first year after Class B shares have been sold
by the authorized institutions. After the shares have been held for a year, Lord
Abbett Distributor pays the service fee on a quarterly basis. Lord Abbett
Distributor is entitled to retain such service fee payable under the B Plan with
respect to accounts for which there is no authorized institution of record or
for which such authorized institution did not qualify. Although not obligated to
do so, Lord Abbett Distributor may waive receipt from the Series or part or all
of the service fee payments.

The 0.75% annual distribution fee is paid to Lord Abbett Distributor to
compensate it for its services rendered in connection with the distribution of
Class B shares, including the payment and financing of sales commissions.
Although Class B shares are sold with-

18
<PAGE>

out a front-end sales charge, Lord Abbett Distributor pays authorized
institutions responsible for sales of Class B shares a sales commission of 3.75%
of the purchase price. This payment is made at the time of sale from Lord Abbett
Distributor's own resources. Lord Abbett has made arrangements to finance these
commission payments, which arrangements include non-recourse assignments by Lord
Abbett Distributor to the financing party of such distribution and CDSC payments
which are made to Lord Abbett Distributor by shareholders who redeem their Class
B shares within six years of their purchase.

The distribution fee and CDSC payments described above allow investors to
buy Class B shares without a front-end sales charge while allowing Lord Abbett
Distributor to compensate authorized institutions that sell Class B shares. The
CDSC is intended to supplement Lord Abbett Distributor's reimbursement for the
commission payments it has made with respect to Class B shares and its related
distribution and financing costs. The distribution fee payments are at a fixed
rate and the CDSC payments are of a nature that, during any year, both forms of
payment may not be sufficient to reimburse Lord Abbett Distributor for its
actual expenses. The Series is not liable for any expenses incurred by Lord
Abbett Distributor in excess of (i) the amount of such distribution fee payments
to be received by Lord Abbett Distributor and (ii) unreimbursed distribution
expenses of Lord Abbett Distributor incurred in a prior plan year, subject to
the right of the Board of Trustees or shareholders to terminate the B Plan. Over
the long term, the expenses incurred by Lord Abbett Distributor are likely to be
greater than such distribution fee and CDSC payments. Nevertheless, there exists
a possibility that for a short-term period Lord Abbett Distributor may not have
sufficient expenses to warrant reimbursement by receipt of such distribution fee
payments. Although Lord Abbett Distributor undertakes not to make a profit under
the B Plan, the B Plan is considered a compensation plan (i.e., distribution
fees are paid regardless of expenses incurred) in order to avoid the possibility
of Lord Abbett Distributor not being able to receive distribution fees because
of a temporary timing difference between its incurring expenses and receipt of
such distribution fees.

Automatic Conversion of Class B Shares. On the eighth anniversary of your
purchase of Class B shares, those shares will automatically convert to Class A
shares. This conversion relieves Class B shareholders of the higher annual
distribution fee that applies to Class B shares under the Class B Rule 12b-1
Plan. The conversion is based on the relative net asset values of the two
classes, and no sales charge or other charge is imposed. When Class B shares
convert, any other Class B shares that were acquired by the reinvestment of
dividends and distributions will also convert to Class A shares on a pro rata
basis. The conversion feature is subject to the continued availability of an
opinion of counsel or of a tax ruling described in "Purchases, Redemptions and
Shareholder Services" in the Statement of Additional Information.

Buying Class C Shares. Class C shares are sold at net asset value per share
without an initial sales charge. However, if Class C shares are redeemed for
cash before the first anniversary of their purchase, a CDSC of 1% will be
deducted from the redemption proceeds. That reimbursement charge will not apply
to shares purchased by the reinvestment of dividends or capital gains
distributions. The charge will be assessed on the lesser of the net asset value
of the shares at the time of redemption or the original purchase price. The
Class C CDSC is paid to the Series to reimburse it, in whole or in part, for the
service and distribution fee payments made by the Series at the time such shares
were sold, as described below.

To determine whether the CDSC applies to a redemption, the Series redeems
shares in the following order: (1) shares acquired by reinvestment of dividends
and capital gains distributions, (2) shares held for one year or more and (3)
shares held the longest before the first anniversary of their purchase. If Class
C shares are exchanged into the same class of another Lord Abbett-sponsored fund
and subsequently redeemed before the first anniversary of their original
purchase, the charge will be collected by the other fund on behalf of the
Series' Class C shares. The Series will collect such a charge for other Lord
Abbett-sponsored funds in a similar situation.

Class C Rule 12b-1 Plan. The Fund has adopted a Class C share Rule 12b-1 Plan on
behalf of each Series (the "C Plans", each a "C Plan") under which (except as to
certain accounts for which tracking data is not available) the Series pays
authorized institutions

19
<PAGE>

through Lord Abbett Distributor (1) a service fee and a distribution fee, at the
time shares are sold, not to exceed 0.25 and 0.75 of 1%, respectively, of the
net asset value of such shares and (2) at each quarter-end after the first
anniversary of the sale of shares, fees for services and distribution at annual
rates not to exceed 0.25 and 0.75 of 1%, respectively, of the average annual net
asset value of such shares outstanding (payments with respect to shares not
outstanding during the full quarter to be prorated). These service and
distribution fees are for purposes similar to those mentioned above with respect
to the A Plan. Sales in clause (1) exclude shares issued for reinvested
dividends and distributions and shares outstanding in clause (2) include shares
issued for reinvested dividends and distributions after the first anniversary of
their issuance. Lord Abbett Distributor may retain from the quarterly
distribution fee, for the payment of distribution expenses incurred directly by
it, an amount not to exceed .10% of the average annual net asset value of such
shares outstanding.

SHAREHOLDER SERVICES
===============================================================================

We offer the following shareholder services:

Telephone Exchange Privilege: Shares of any Series may be exchanged,
without a service charge: (a) for those of the same class of any other Series or
any other Lord Abbett-sponsored fund except for (i) LAEF, LASF and LARF and (ii)
certain tax-free, single-state series where the exchanging shareholder is a
resident of a state in which such series is not offered for sale and (b) for
shares of any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria
(together, "Eligible Funds").

You or your representative with proper identification can instruct the
Fund to exchange uncertificated shares of a class (held by the transfer agent)
by telephone. Shareholders have this privilege unless they refuse it in writing.
The Fund will not be liable for following instructions communicated by telephone
that it reasonably believes to be genuine and will employ reasonable procedures
to confirm that instructions received are genuine, including requesting proper
identification and recording all telephone exchanges. Instructions must be
received by the Fund in Kansas City (800-821-5129) prior to the close of the
NYSE to obtain each fund's net asset value per class share on that day.
Expedited exchanges by telephone may be difficult to implement in times of
drastic economic or market change. The exchange privilege should not be used to
take advantage of short-term swings in the market. The Fund reserves the right
to terminate or limit the privilege of any shareholder who makes frequent
exchanges. The Fund can revoke the privilege for all shareholders upon 60 days'
prior written notice. A prospectus for the other Lord Abbett-sponsored fund
selected by you should be obtained and read before an exchange. Exercise of the
Exchange Privilege will be treated as a sale for federal income tax purposes
and, depending on the circumstances, a capital gain or loss may be recognized.

Systematic Withdrawal Plan ("SWP"): Except for Retirement Plans for which
there is no such minimum, if the maximum offering price value of your
uncertificated shares is at least $10,000, you may have periodic cash
withdrawals automatically paid to you in either fixed or variable amounts. With
respect to Class B shares, the CDSC will be waived on redemptions of up to 12%
per year of the current net asset value of your account at the time your SWP is
established. For Class B shares (over 12% per year) and C shares, redemption
proceeds due to a SWP will be derived from the following sources in the order
listed: (1) shares acquired by reinvestment of dividends and capital gains, (2)
shares held for six years or more (Class B) or one year or more (Class C); and
(3) shares held the longest before the sixth anniversary of their purchase
(Class B) or before the first anniversary of their purchase (Class C). For Class
B share redemptions over 12% per year, the CDSC will apply to the entire
redemption. Therefore, please contact the Fund for assistance in minimizing the
CDSC in this situation. Shareholders should be careful in establishing a SWP,
especially to the extent that such a withdrawal exceeds the annual total return
for a class, in which case, the shareholder's original principal will be invaded
and, over time, may be depleted.

Div-Move: You can invest the dividends paid on your account ($250 minimum
initial and $50 subsequent minimum investment) into an existing account within
the same class in any Eligible Fund. The account must be either your account, a
joint account for you and your spouse, a single account for your spouse or a
custodial account for your minor child under the age of 21. Such dividends will
not be subject

20
<PAGE>

to a CDSC. You should read the prospectus of the other fund before investing.

Invest-A-Matic: You can make fixed, periodic investments ($250 minimum
initial and $50 subsequent minimum investment) into the Series and/or any
Eligible Fund by means of automatic money transfers from your bank checking
account. You should read the prospectus of the other fund before investing.

Retirement Plans: Lord Abbett makes available the retirement plan forms
and custodial agreements for IRAs (Individual Retirement Accounts including
Simple IRAs, Simplified Employee Pensions), 403(b) plans and pension and
profit-sharing plans, including 401(k) plans.

Householding: A single copy of an annual or semi-annual report will be
sent to an address to which more than one registered shareholder of the Fund
with the same last name has indicated mail is to be delivered, unless additional
reports are specifically requested in writing or by telephone.

All correspondence should be directed to Lord Abbett Securities Trust
(P.O. Box 419100, Kansas City, Missouri 64141; 800-821-5129).

OUR MANAGEMENT
================================================================================

Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Trustees with the advice of Lord Abbett ("Fund
Management"). We employ Lord Abbett as investment manager pursuant to a
Management Agreement. Lord Abbett has been an investment manager for over 67
years and currently manages approximately $25 billion in a family of mutual
funds and other advisory accounts. Under the Management Agreement, Lord Abbett
provides us with investment management services and personnel, pays the
remuneration of our officers and of our Trustees affiliated with Lord Abbett,
provides us with office space and pays for ordinary and necessary office and
clerical expenses relating to research, statistical work and supervision of our
portfolios and certain other costs. Lord Abbett provides similar services to
twelve other Lord Abbett-sponsored funds having various investment objectives
and also advises other investment clients. Lord Abbett Partner Robert G. Morris,
serves as Executive Vice President and portfolio manager for the Growth & Income
Series. Mr. Morris has been with Lord Abbett for over five years and has over
twenty-five years of investment experience. Christopher Taylor serves as
portfolio manager of the International Series. Mr. Taylor is Deputy Managing
Director of Fuji Investment Management Co. (Europe), Ltd. (the "Sub-Adviser").
He has been with the Sub-Adviser and its predecessor since 1987 and has 15 years
of investment experience. Zane E. Brown, Lord Abbett partner and its Director of
Fixed Income, is primarily responsible for the day-to-day management of the
World Bond-Debenture Series. Mr. Brown delegates management duties to other Lord
Abbett employees who may be Fund officers.

Lord Abbett has entered into an agreement with the Sub-Adviser, under
which the Sub-Adviser provides Lord Abbett with advice with respect to the
International Series' assets. The Sub-Adviser is controlled by Fuji Investment
Management Co. (Tokyo). Fuji Bank Limited of Tokyo, Japan ("Fuji Bank") directly
owns 40% of the outstanding voting stock of the Sub-Adviser. Fuji Investment
Management Co. (Tokyo) is an affiliate of Fuji Bank. Lord Abbett indirectly owns
a minor percentage of such outstanding voting stock. As of June 1, 1997, the
Sub-Adviser manages approximately $577 million, which is invested globally. The
Sub-Adviser furnishes Lord Abbett with advice and recommendations with respect
to the International Series' assets, including advice about the allocation of
investments among foreign securities markets and foreign equity and debt
securities markets and foreign equity and debt securities and, subject to
consultation with Lord Abbett, advice as to cash holdings and what securities in
the portfolio should be purchased, held or disposed of. The Sub-Adviser also
gives advice with respect to foreign currency matters.

Although, under normal circumstances, the International Series will be
invested at least 80% in equity securities of non-U.S. issuers, subject to the
direction of the Board of Trustees, Lord Abbett, in consultation with the
Sub-Adviser, will determine at least quarterly, and more frequently as Lord
Abbett determines, the percentage of assets of the International Series that
shall be allocated (the "Asset Allocation") for investment in the United States
and in foreign markets, respectively.

Under the Management Agreement, we are obligated to pay Lord Abbett a
monthly fee at the annual rate of 0.75 of 1% for each Series. With respect to
the International Series, Lord Abbett, when not waiving its

21
<PAGE>

management fee, is obligated to pay the Sub-Adviser a monthly fee equal to
one-half of Lord Abbett's fee as described above. Regardless of such waiver,
Lord Abbett is free to pay the Sub-Adviser.

As a percentage of average net assets, the effective management fees for
the most recent fiscal year for the International Series and the Growth & Income
Series were 0. 75 and 0.75 of 1%, respectively.

We will not hold annual meetings and expect to hold meetings of
shareholders only when necessary under applicable law or the terms of the Fund's
Declaration of Trust. Under the Declaration of Trust, a shareholders' meeting
may be called at the request of the holders of one-quarter of the outstanding
shares entitled to vote. See the Statement of Additional Information for more
details.

The Fund. The Fund was organized as a Delaware business trust on February 26,
1993. Its Class A, B and C shares have equal rights as to voting, liquidation,
assets, dividends and distributions except for differences resulting from
certain class-specific expenses.

DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
================================================================================

Dividends from net investment income are expected to be paid to shareholders of
the Growth &Income Series semi-annually and International Series annually. For
the World Bond-Debenture Series, net investment income is expected to be paid
quarterly as a dividend. Supplemental dividends may be paid by each Series in
December or January. Dividends from net investment income may be taken in cash
or reinvested in additional shares at net asset value without a sales charge. If
you elect a cash payment (i) a check will be mailed to you as soon as possible
after the monthly reinvestment date or (ii) if you arrange for direct deposit,
your payment will be wired directly to your bank account within one day after
the date on which the dividend is paid.

A long-term capital gains distribution is made by a Series when it has net
profits during the year from sales of securities which it has held more than one
year. If a Series realizes net short-term capital gains, they also will be
distributed. It is anticipated that capital gains will be distributed in
November. You may take them in cash or additional shares without a sales charge.

Dividends declared in October, November or December of any year to
shareholders of record as of a date in such a month will be treated for federal
income tax purposes as having been received by shareholders in that year if they
are paid before February 1 of the following year.

We intend to continue to meet the requirements of Subchapter M of the
Internal Revenue Code. We will try to distribute to shareholders all our net
investment income and net realized capital gains, so as to avoid the necessity
of the Fund paying federal income tax. Distributions by the Fund of any net
long-term capital gains will be taxable to a shareholder as long-term capital
gains regardless of how long the shareholder has held the shares. Under recently
enacted legislation, the maximum tax rate for a U.S. individual, estate or trust
is reduced to 20% for distributions derived from the sale of assets held by the
Fund for more than 18 months. (If the taxpayer is in the 15% tax bracket, the
rate is 10%.) For distributions derived from the sale of assets held by the Fund
for between 12 and 18 months, the tax rate remains at 28% (15% if the taxpayer
is in the 15% tax bracket).

Each Series may be subject to foreign withholding taxes which would reduce
the yield on their investments. Tax treaties between certain countries and the
United States may reduce or eliminate such taxes. See the Statement of
Additional Information for additional details.

Shareholders may be subject to a $50 penalty under the Internal Revenue
Code and we may be required to withhold and remit to the U.S. Treasury a portion
(31%) of any redemption or repurchase proceeds (including the value of shares
exchanged into another Lord Abbett-sponsored fund) and of any taxable dividend
or distribution on any account where the payee failed to provide a correct
taxpayer identification number or to make certain required certifications.

We will inform shareholders of the federal tax status of each dividend and
distribution after the end of each calendar year. Shareholders should consult
their tax advisers concerning applicable state and local taxes as well as the
tax consequences of gains or losses from the redemption or exchange of our

22
<PAGE>

shares.

REDEMPTIONS
================================================================================

To obtain the proceeds of an expedited redemption of $50,000 or less, you or
your representative with proper identification can telephone the Fund. The Fund
will not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine and will employ reasonable procedures to
confirm that instructions received are genuine, including requesting proper
identification, recording all telephone redemptions and mailing the proceeds
only to the named shareholder at the address appearing on the account
registration.

If you do not qualify for the procedure above, send your written redemption
request to Lord Abbett Securities Trust (P.O. Box 419100, Kansas City, Missouri
64141) with signature(s) and any legal capacity of the signer(s) guaranteed by
an eligible guarantor accompanied by any certificates for shares to be redeemed
and other required documentation. Payment will be made within three business
days. The Fund may suspend the right to redeem shares for not more than three
days (or longer under unusual circumstances as permitted by Federal law). If you
have purchased Series' shares by check and subsequently submit a redemption
request, redemption proceeds will be paid upon clearance of your purchase check,
which may take up to 15 days. To avoid delays you may arrange for the bank upon
which a check was drawn to communicate to the Fund that the check has cleared.

Shares also may be redeemed by the Fund at net asset value through your
securities dealer who, as an unaffiliated dealer, may charge you a fee. If your
dealer receives your order prior to the close of the NYSE and communicates it to
Lord Abbett, as our agent, prior to the close of Lord Abbett's business day, you
will receive the net asset value of the shares being redeemed as of the close of
the NYSE on that day. If the dealer does not communicate such an order to Lord
Abbett until the next business day, you will receive the net asset value as of
the close of the NYSE on that next business day. Shareholders who have redeemed
their shares have a one-time right to reinvest, in another account having the
identical class and registration, in any of the Eligible Funds at the then
applicable net asset value without the payment of a front-end sales charge. Such
reinvestment must be made within 60 days of the redemption and is limited to no
more than the amount of the redemption proceeds.

Under certain circumstances and subject to prior written notice, our Board
of Trustees may authorize redemption of all of the shares in any account in
which there are fewer than 50 shares.

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

PERFORMANCE
================================================================================

Lord Abbett Securities Trust -- Growth & Income Series and International Series
- -- completed its fiscal year on October 31, 1997 with net assets of $142,991,675
and $37,334,499, respectively.

Over the past year, the U.S. stock market continued to turn in good
performance. This advance was fueled by a surprising combination of strong
economic growth and declining inflation. Subdued inflation allowed interest
rates to decline further and stock prices to rise.

The financial services sector (primarily bank holdings) provided the
greatest amount of portfolio return, closely followed by consumer noncyclical
companies (which are companies whose performance is not tied to economic
conditions, such as drug and healthcare products, gas and electric companies),
where several pharmaceutical companies were stellar performers. Looking ahead,
healthcare and packaged foods continue to look attractive to us.

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

23
<PAGE>

during the period.

Yield and Total Return. Yield and total return data may, from time to time, be
included in advertisements about each Series. Each class of shares calculates
its "yield" by dividing the annualized net investment income per share on the
portfolio during a 30-day period by the maximum offering price on the last day
of the period. The yield of each class will differ because of the different
expenses (including actual 12b-1 fees) of each class of shares. The yield data
represents a hypothetical investment return on the portfolio, and does not
measure an investment return based on dividends actually paid to shareholders.
To show that return, a dividend distribution rate may be calculated. The
dividend distribution rate is calculated by dividing the dividends of a class
derived from net investment income during a stated period by the maximum
offering price on the last day of the period. Yields and dividend distribution
rates for Class A shares reflect the deduction of the maximum initial sales
charge, but may also be shown based on a Series' net asset value per share.
Yields for Class C shares do not reflect the deduction of the CDSC.

"Total return" for the one-, five- and ten-year periods represents the
average annual compounded rate of return on an investment of $1,000 in each
Series at the maximum public offering price. When total return is quoted for
Class A shares, it includes the payment of the maximum initial sales charge.
When total return is shown for Class C shares, it reflects the effect of the
applicable CDSC. Total return also may be presented for other periods or based
on investments at reduced sales charge levels or net asset value. Any quotation
of total return not reflecting the maximum sales charge (front-end, level, or
back-end) would be reduced if such sales charge were used. Quotations of yield
or total return for any period when an expense limitation is in effect will be
greater than if the limitation had not been in effect. See "Past Performance" in
the Statement of Additional Information for a more detailed description.

See "Performance" in the Statement of Additional Information for a more
detailed discussion concerning the computation of each Series' total return and
yield.
- --------------------------------------------------------------------------------

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

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

24
<PAGE>

25
<PAGE>

Each Series' performance shown in the comparison below will be greater than or
less than the lines for Class A and B shares, in the case of the Growth & Income
Series, and Class B and C shares, in the case of the International Series, based
on the differences in sales charges and fees paid by shareholders investing in
the different classes.

Comparison of changes in value of a $10,000 investment in Class C shares of Lord
Abbett Securities Trust -- Growth & Income Series, assuming reinvestment of all
dividends and distributions, to such an investment in the unmanaged Standard &
Poor's 500

[GRAPHIC OMITTED]

- --------------------------------------------------------------------------------
Total Return
for Class A Shares(2)
- --------------------------------------------------------------------------------
1 Year Life of Class
(7/15/96-10/31/97)
- --------------------------------------------------------------------------------
19.53 25.28%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return
for Class B Shares(2)
- --------------------------------------------------------------------------------
Life of Class
(6/15/97-10/31/97)
- --------------------------------------------------------------------------------
1.83%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return
for Class C Shares(2)
- --------------------------------------------------------------------------------
1 Year 3 Years Life of Class
(1/3/94-10/31/97)
- --------------------------------------------------------------------------------
26.20% 22.69% 18.16%
- --------------------------------------------------------------------------------

Comparison of changes in value of a $10,000 investment in Class A shares of Lord
Abbett Securities Trust -- International Series, assuming reinvestment of all
dividends and distributions, to such an investment in the unmanaged Morgan
Stanley European, Asia and Far East Index

[GRAPHIC OMITTED]

- --------------------------------------------------------------------------------
Total Return
for Class A Shares(4)
- --------------------------------------------------------------------------------
Life of Class
(12/13/96-10/31/97)
- --------------------------------------------------------------------------------
8.60%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return
for Class B Shares(2)
- --------------------------------------------------------------------------------
Life of Class
(6/2/97-10/31/97)
- --------------------------------------------------------------------------------
.28%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return
for Class C Shares(2)
- --------------------------------------------------------------------------------
Life of Class
(6/2/97-10/31/97)
- --------------------------------------------------------------------------------
4.50%
- --------------------------------------------------------------------------------

(1) Performance numbers for the Standard & Poor's 500, which is unmanaged, do
not reflect transaction costs or management fees. An investor cannot
invest directly in this index.
(2) Total return 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 return.
(3) Performance numbers for Morgan Stanley European, Asia and Far East Index
("EAFE"), which is unmanaged, do not reflect transaction costs or
management fees. An investor cannot invest directly in this index. Since
EAFE only starts on the first day of the month, in the case of the EAFE
comparison to the International Series, which commenced operations on
12/13/96, EAFE starts on 11/30/96.
(4) Total return 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 return.

26
<PAGE>

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

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

Transfer Agent and Dividend
Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141

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

Auditors
Deloitte & Touche LLP

Counsel
Debevoise & Plimpton

Printed in the U.S.A.
LST-1-398

(3/98)

LORD ABBETT
SECURITIES TRUST
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203

<PAGE>

================================================================================
LORD ABBETT
================================================================================
================================================================================
Statement of Additional Information March 19, 1998
================================================================================

Lord Abbett Securities Trust
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett Distributor") at The General Motors Building, 767 Fifth Avenue,
New York, New York 10153-0203. This Statement relates to, and should be read in
conjunction with, the Prospectus dated March 19, 1998.

Lord Abbett Securities Trust (referred to as "we" or the "Fund") was organized
as a Delaware business trust on February 26, 1993. The Fund has four series, but
only Growth & Income Series and the International Series (the "Series") is
described in this Statement of Additional Information. Each of the Series has
three classes of shares (A, B and C). All shares have equal noncumulative voting
rights and equal rights with respect to dividends, assets and liquidation,
except for certain class-specific expenses. They are fully paid and
nonassessable when issued and have no preemptive or conversion rights.

Rule 18f-2 under the Investment Company Act of 1940, as amended (the "Act")
provides that any matter required to be submitted, by the provisions of the Act
or applicable state law or otherwise, to the holders of the outstanding voting
securities of an investment company such as the Fund shall not be deemed to have
been effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each class or series affected by such matter. Rule 18f-2
further provides that a class or series shall be deemed to be affected by a
matter unless the interests of each class or series in the matter are
substantially identical or the matter does not affect any interest of such class
or series. However, the Rule exempts the selection of independent public
accountants, the approval of principal distributing contracts and the election
of trustees from its separate voting requirements.

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

TABLE OF CONTENTS Page

1. Investment Objective and Policies 2

2. Trustees and Officers 5

3. Investment Advisory and Other Services 8

4. Portfolio Transactions 9

5. Purchases, Redemptions and Shareholder Services 11

6. Past Performance 16

7. Taxes 17

8. Information About the Fund 18

9. Financial Statements 19

1
<PAGE>

1.
Investment Objective and Policies

Fundamental Investment Restrictions

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

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

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

2
<PAGE>

except to the extent permitted in each Series' prospectus and statement of
additional information, as they may be amended from time to time; or (10) buy
from or sell to any of its officers, trustees, employees, or its investment
adviser or any of its officers, trustees, partners or employees, any securities
other than shares of beneficial interest in each Series.

Lending Portfolio Securities

Each Series may lend portfolio securities to registered broker-dealers. These
loans, if and when made, may not exceed 30% of each Series' total assets. Each
Series loan of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government securities") or other permissible means at least equal to the market
value of the loaned securities. From time to time, each Series may pay a part of
the interest received with respect to the investment of collateral to a borrower
and/or a third party that is not affiliated with the Fund and is acting as a
"placing broker." No fee will be paid to affiliated persons of the Fund.

By lending portfolio securities, each Series can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in permissible investments, such as U.S.
Government securities or obtaining yield in the form of interest paid by the
borrower when U.S. Government securities or other forms of non-cash collateral
are received. Each Series will comply with the following conditions whenever it
loans securities: (i) each Series must receive at least 100% collateral from the
borrower; (ii) the borrower must increase the collateral whenever the market
value of the securities loaned rises above the level of the collateral; (iii)
each Series must be able to terminate the loan at any time; (iv) each Series
must receive reasonable compensation for the loan, as well as any dividends,
interest or other distributions on the loaned securities; (v) each Series may
pay only reasonable fees in connection with the loan and (vi) voting rights on
the loaned securities may pass to the borrower except that, if a material event
adversely affecting the investment in the loaned securities occurs, the Trustees
must terminate the loan and regain the right to vote the securities.

Repurchase Agreements

Each Series may enter into repurchase agreements with respect to a security. A
repurchase agreement is a transaction by which each Series acquires a security
and simultaneously commits to resell that security to the seller (a bank or
securities dealer) at an agreed upon price on an agreed upon date. The resale
price reflects the purchase price plus an agreed upon market rate of interest
which is unrelated to the coupon rate or date of maturity of the purchased
security. In this type of transaction, the securities purchased by each Series
have a total value in excess of the value of the repurchase agreement. Each
Series requires at all times that the repurchase agreement be collateralized by
cash or U.S. Government securities having a value equal to, or in excess of, the
value of the repurchase agreement. Such agreements permit each Series to keep
all of its assets at work while retaining flexibility in pursuit of investments
of a longer term nature.

The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, each
Series may incur a loss upon disposition of them. If the seller of the agreement
becomes insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of each Series and
are therefore subject to sale by the trustee in bankruptcy. Even though the
repurchase agreements may have maturities of seven days or less, they may lack
liquidity, especially if the issuer encounters financial difficulties. While
Fund management acknowledges these risks, it is expected that they can be
controlled through stringent selection criteria and careful monitoring
procedures. Fund management intends to limit repurchase agreements to
transactions with dealers and financial institutions believed by Fund management
to present minimal credit risks. Fund management will monitor creditworthiness
of the repurchase agreement sellers on an ongoing basis.

The Series will enter into repurchase agreements only with those primary
reporting dealers that report to the Federal Reserve Bank of New York and with
the 100 largest United States commercial banks and the underlying securities
purchased under the agreements will consist only of those securities in which
the Series otherwise may invest.

Warrants

3
<PAGE>

Pursuant to Texas regulations, each Series will not invest more than 5% of its
assets in warrants and not more than 2% of such value in warrants not listed on
the New York or American Stock Exchanges, except when they form a unit with
other securities. As a matter of operating policy, we will not invest more than
5% of our net assets in rights.

Covered Call Options

As stated in the Prospectus, each Series may write covered call options which
are traded on a national securities exchange with respect to securities in its
portfolio in an attempt to increase its income and to provide greater
flexibility in the disposition of its portfolio securities. A "call option" is a
contract sold for a price (the "premium") giving its holder the right to buy a
specific number of shares of stock at a specific price prior to a specified
date. A "covered call option" is a call option issued on securities already
owned by the writer of the call option for delivery to the holder upon the
exercise of the option. During the period of the option, each Series forgoes the
opportunity to profit from any increase in the market price of the underlying
security above the exercise price of the option (to the extent that the increase
exceeds its net premium). Each Series may enter into "closing purchase
transactions" in order to terminate its obligation to deliver the underlying
security (this may result in a short-term gain or loss). A closing purchase
transaction is the purchase of a call option (at a cost which may be more or
less than the premium received for writing the original call option) on the same
security, with the same exercise price and call period as the option previously
written. If a Series is unable to enter into a closing purchase transaction, it
may be required to hold a security that it might otherwise have sold to protect
against depreciation. Neither Series intends to write covered call options with
respect to securities with an aggregate market value of more than 5% of its
gross assets at the time an option is written. This percentage limitation will
not be increased without prior disclosure in the current Prospectus.

The Fund's custodian will segregate cash or liquid high-grade debt securities in
an amount not less than that required by Securities Exchange Commission ("SEC")
Release 10666 with respect to Series assets committed to written covered call
options. If the value of the segregated securities declines, additional cash or
debt securities will be added on a daily basis (i.e., marked-to-market) so that
the segregated amount will not be less than the amount of each Series'
commitments with respect to such written options.

Other International Series Investment Policies (which can be changed without
shareholder approval)

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

Although some financial futures contracts by their terms call for the actual
delivery or acquisition of securities, in most cases, a party will close out the
contractual commitment before delivery without having to make or take delivery
of the security by purchasing (or selling, as the case may be) on a commodities
exchange an identical futures contract calling for delivery in the same month.
Such a transaction, if effected through a member of an exchange, cancels the
obligation to make or take delivery of the securities. All transactions in the
futures market are made, offset or fulfilled through a clearing house associated
with the exchange on which the contracts are traded. The International Series
will incur brokerage fees when it purchases or sells contracts and will be
required to maintain margin deposits. At the time it enters into a futures
contract, it is required to deposit with its custodian, on behalf of the broker,
a specified amount of cash or eligible securities called "initial margin." The
initial margin required for a futures contract is set by the exchange on which
the contract is traded.

4
<PAGE>

Subsequent payments, called "variation margin," to and from the broker are made
on a daily basis as the market price of the futures contract fluctuates. The
costs incurred in connection with futures transactions could reduce the Series'
return. Futures contracts entail risks. If the investment adviser's judgment
about the general direction of interest rates or markets is wrong, the overall
performance may be poorer than if no such contracts had been entered into.

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

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

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

Portfolio Turnover

For the fiscal year ended October 31, 1997 the portfolio turnover rate was
36.37% for the Growth & Income Series. For the period December 13, 1996 to
October 31, 1997 the portfolio turnover rate was 29.72% for the International
Series.

Trustees and Officers

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

Robert S. Dow, age 52, Chairman and President
E. Wayne Nordberg, age 59, Vice President

5
<PAGE>

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

E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York

Chief Executive Officer of Courtroom Television. Formerly President and Chief
Executive Officer of Time Warner Cable Programming, Inc. Prior to that,
formerly President and Chief Operating Officer of Home Box Office, Inc. Age
56.

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

Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 67.

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

Retired. Former Chairman of Independent Election Corporation of America, a
proxy tabulating firm. Age 72.

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

Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994-1997). Prior to that, he
was Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer
of branded snack foods (1992-1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J. B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 64.

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

President and Chief Executive Officer of Rochester Button Company. Age 69.

Thomas J. Neff
Spencer Stuart U.S.
277 Park Avenue
New York, New York

Chairman of Spencer Stuart U.S., an executive search consulting firm. Age 60.

6
<PAGE>

The second column of the following table sets forth the compensation accrued for
the Fund's outside trustees. The third and fourth columns set forth information
with respect to the equity-based benefits accrued for outside directors/trustees
maintained by the Lord Abbett-sponsored funds. The fourth column sets forth the
total compensation payable by such funds to the outside directors/trustees. No
trustee of the Fund associated with Lord Abbett and no officer of the Fund
received any compensation from the Fund for acting as a trustee or officer.

For the Fiscal Year Ended October 31, 1997

(1) (2) (3) (4)

Pension or For Year Ended
Retirement Benefits December 31, 1997
Accrued by the Total Compensatio
Aggregate Fund and Accrued by the Fund
Compensation Twelve Other Lord and Twelve Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Director the Fund(1) Funds(2) Funds(3)
- ---------------- ----------- -------- ---------------------
E. Thayer Bigelow $ 450 $17,068 $56,000
Stewart S. Dixon $ 442 $32,190 $55,000
John C. Jansing $ 442 $45,0854 $55,000
C. Alan MacDonald $ 460 $30,703 $57,400
Hansel B. Millican, Jr $ 446 $37,747 $55,000
Thomas J. Neff $ 449 $19,853 $56,000

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

3. This column shows aggregate compensation, including directors fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the
year ended December 31, 1997. The amounts of the aggregate compensation
payable by the Fund as of October 31, 1997 deemed invested in Fund shares,
including dividends reinvested and changes in net asset value applicable
to such deemed investments, were: Mr. Bigelow, $939; Mr. Dixon, $21,556;
Mr. Jansing, $22,346; Mr. MacDonald, $9,515; Mr. Millican, $21,626; and
Mr. Neff, $22,587. If the amounts deemed invested in Fund shares were
added to each director's actual holdings of Fund shares as of October 31,
1997, each would own, the following: Mr. Bigelow, 107 shares; Mr. Dixon,
2,890 shares; Mr. Jansing, 6,920 shares; Mr. MacDonald, 1,083 shares; Mr.
Millican, 2,460 shares; and Mr. Neff, 2,996 shares.

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

7
<PAGE>

of Lord Abbett; the others are employees: Zane Brown, age 46, Executive Vice
President; Paul A. Hilstad, age 55, Vice President and Secretary (with Lord
Abbett since 1995; formerly Senior Vice President and General Counsel of
American Capital Management & Research, Inc.); Stephen I. Allen, age 44; Daniel
E. Carper, age 46; Daria L. Foster, age 43; Lawrence H. Kaplan, age 41 (with
Lord Abbett since 1997 - formerly Vice President and Chief Counsel of Salomon
Brothers Asset Management Inc from 1995 to 1997, prior thereto Senior Vice
President, Director and General Counsel of Kidder Peabody Asset Management,
Inc.); Thomas F. Konop, age 55; Robert G. Morris, age 53; Robert J. Noelke, age
41; A. Edward Oberhaus, age 38; Keith F. O'Connor, age 42; John J. Walsh, age
61, Vice Presidents; and Donna M. McManus, age 37, Treasurer (with Lord Abbett
since 1996, formerly a Senior Manager at Deloitte & Touche LLP).

The Fund does not hold annual meetings of shareholders unless one or more
matters are required to be acted on by shareholders under the Act. Under the
Fund's Declaration of Trust, shareholder meetings may be called at any time by
certain officers of the Fund or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Fund's shareholders or upon other matters deemed to be necessary or desirable or
(ii) upon the written request of the holders of at least one-quarter of the
shares of the Fund outstanding and entitled to vote at the meeting.

As of October 31, 1997, our trustees and officers, as a group, owned less than
1% of our outstanding shares.

Investment Advisory and Other Services

As described under "Our Management" in the Prospectus, Lord Abbett is the
investment manager for the Series. The ten general partners of Lord Abbett, all
of whom are officers and/or trustees of the Fund, are: Stephen I. Allen, Zane E.
Brown, Daniel E. Carper, Robert S. Dow, Daria L. Foster, Paul A. Hilstad, Robert
G. Morris, Robert J. Noelke, E. Wayne Nordberg and John J. Walsh. The address of
each partner is The General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203. The other general partners of Lord Abbett who are neither
officers nor trustees of the Fund are W. Thomas Hudson and Michael McLaughlin.

The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, each Series is obligated to pay
Lord Abbett a monthly fee, based on average daily net assets for each month, at
the annual rate of .75 of 1%. For the year ended October 31, 1997 such fees
amounted to $999,092 of the Growth & Income Series and $127,715 of the
International Series.

Although not obligated to do so, Lord Abbett has waived or may waive all or part
of its management fees and has assumed or may assume other expenses of each
Series. For the fiscal year ended October 31, 1997 Lord Abbett did not waive
management fees.

As discussed in the Prospectus under "Our Management," each Series is
contingently obligated to repay to Lord Abbett the amounts of such assumed other
expenses.

Each Series pays all expenses not expressly assumed by Lord Abbett, including,
without limitation, 12b-1 expenses, outside trustees' fees and expenses,
association membership dues, legal and auditing fees, taxes, transfer and
dividend disbursing agent fees, shareholder servicing costs, expenses relating
to shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.

The Fund has agreed with the State of California to limit operating expenses
(including management fees but excluding taxes, interest, extraordinary expenses
and brokerage commissions) to 2 1/2% of average annual net assets up to
$30,000,000, 2% of the next $70,000,000 of such assets and 1 1/2% of such assets
in excess of $100,000,000. However, as described in the Prospectuses, the Fund
has adopted a Plan pursuant to Rule 12b-1 of the Act for each class of shares of
the Series. Annual Plan distribution expenses up to 1% of the Series' average
net assets during its fiscal year may be excluded from this expense limitation.
The expense limitation is a condition the registration of investment company
shares for sale in the State and applies so long as our shares are registered
for sale in that State.

8
<PAGE>

Deloitte & Touche LLP, Two World Financial Center, New York, New York 10128, are
the independent auditors of the Fund and must be approved at least annually by
our trustees to continue in such capacity. Deloitte & Touche LLP perform audit
services for the Fund including the examination of financial statements included
in our annual report to shareholders.

The Bank of New York ("BNY"), 48 Wall Street, New York, New York 10286, is the
Fund's custodian. Rules adopted by the Securities & Exchange Commission under
the Act permit the International Series to maintain its foreign assets in the
custody of certain eligible foreign banks and securities depositories. The
International Series? portfolio securities and cash, when invested in foreign
securities and not held by BNY or its foreign branches, are held by
sub-custodians of BNY approved by the Board of Trustees of the Fund in
accordance with such rules.

The Sub-Custodians of BNY are:

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

Portfolio Transactions

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

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

In transactions on stock exchanges in the United States, commissions are
negotiated, whereas on many foreign stock exchanges commissions are fixed. In
the case of securities traded in the foreign and domestic over-the-counter
markets, there is generally no stated commission, but the price usually includes
an undisclosed commission or markup. Purchases from underwriters of newly-issued
securities for inclusion in the Fund's portfolios usually will include a
concession paid to the underwriter by the issuer and purchases from dealers
serving as market makers will include the spread between the bid and asked
prices. When commissions are negotiated, we pay a commission rate that we
believe is appropriate to give maximum assurance that our brokers will provide
us, on a continuing basis, the highest level of brokerage services available.
While we do not always seek the lowest possible commission on particular trades,
we pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe

9
<PAGE>

that our commission rates are in line with the rates that many other
institutions pay. Our traders are authorized to pay brokerage commissions in
excess of those that other brokers might accept on the same transactions in
recognition of the value of the services performed by the executing brokers,
viewed in terms of either the particular transaction or the overall
responsibilities of Lord Abbett with respect to us and the other accounts they
manage. Such services include showing us trading opportunities including blocks,
a willingness and ability to take positions in securities, knowledge of a
particular security or market, proven ability to handle a particular type of
trade, confidential treatment, promptness and reliability.

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

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

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

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

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

For the period January 3, 1994 to October 31, 1994 and for the fiscal years
ended October 31, 1995, 1996 and 1997 we paid total commissions to independent
broker-dealers of $15,489, $58,435, $85,334 and $273,174.

10
<PAGE>

Purchases, Redemptions
and Shareholder Services

Securities in the Fund's portfolios are valued at their market values as of the
close of the NYSE. Market value will be determined as follows: securities listed
or admitted to trading privileges on any national or foreign 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, or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Securities traded only
in the over-the-counter market are valued at the mean between the bid and asked
prices, except that securities admitted to trading on the NASDAQ National Market
System are valued at the last sales price. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Trustees.

All assets and liabilities expressed in foreign currencies will be converted
into United States dollars at the mean between the buying and selling rates of
such currencies against United States dollars last quoted by any major bank. If
such quotations are not available, the rate of exchange will be determined in
accordance with policies established by the Fund's Board of Trustees. The Board
of Trustees will monitor, on an ongoing basis, the Fund's method of valuation.

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

As disclosed in the Prospectus, we calculate our net asset values and are
otherwise open for business on each day that the NYSE is open for trading. The
NYSE is closed on Saturdays and Sundays and the following holidays -- New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.

The net asset value per share for the Class A shares will be determined in the
same manner as for the Class B and C shares (net assets divided by shares
outstanding). Our Class A shares will be sold with a front-end sales charge of
5.75%.

The maximum offering prices of each Series' Class A shares on October 31, 1997
were computed as follows:

Growth & Income International
Series Series
--------------- ----------

Net asset value per share (net assets
divided by shares outstanding $8.79 $10.86

Maximum offering price per
share (net asset value divided
by .9425 in both cases) $9.33 $11.52

The maximum offering prices of each Series' Class B shares on October 31, 1997
were computed as follows:

Net asset value per share (net assets
divided by shares outstanding $8.80 $10.83

The maximum offering prices of each Series' Class C shares on October 31, 1997
were computed as follows:

Net asset value per share (net assets
divided by shares outstanding $8.80 $10.83

11
<PAGE>

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

Conversion of Class B Shares. The conversion of Class B shares on the eighth
anniversary of their purchase is subject to the continuing availability of a
private letter ruling from the Internal Revenue Service, or an opinion of
counsel or tax adviser, to the effect that the conversion of Class B shares does
not constitute a taxable event for the holder under Federal income tax law. If
such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. Although
Class B shares could then be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the holder.

Class A, B and C Rule 12b-1 Plans. As described in the Prospectus, the Fund has
adopted a Distribution Plan and Agreement on behalf of each Series pursuant to
Rule 12b-1 of the Act for each class of shares available in the applicable
series: the "A Plan," the "B Plan" and the "C Plan," respectively. In adopting
each Plan and in approving its continuance, the Board of Trustees has concluded
that there is a reasonable likelihood that each Plan will benefit its respective
Class and such Class' shareholders. The expected benefits include greater sales
and lower redemptions of Class shares, which should allow each Class to maintain
a consistent cash flow, and a higher quality of service to shareholders by
authorized institutions than would otherwise be the case. During the last fiscal
year, the Growth & Income Series accrued or paid through Lord Abbett to
authorized institutions $135,432 under the A Plan, $602 under the B Plan and
$785,927 under the C Plan. For the period December 13, 1996 (Commencement of
Operations) to October 31, 1997 the International Series accrued or paid through
Lord Abbett to authorized institutions $41,058 under the A Plan, $3,180 under
the B Plan and $6,653 under the C Plan . Lord Abbett used all amounts received
under the A, B and C Plans for the Growth & Income Series for payments to
dealers for (i) providing continuous services to the Class A shareholders, such
as answering shareholder inquiries, maintaining records, and assisting
shareholders in making redemptions, transfers, additional purchases and
exchanges and (ii) their assistance in distributing Class A shares of the Fund.

Each Plan requires the trustees to review, on a quarterly basis, written reports
of all amounts expended pursuant to the Plan and the purposes for which such
expenditures were made. Each Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the trustees,
including a majority of the trustees who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to the Plan ("outside trustees"), cast in
person at a meeting called for the purpose of voting on the Plan. No Plan may be
amended to increase materially above the limits set forth therein the amount
spent for distribution expenses thereunder without approval by a majority of the
outstanding voting securities of the applicable class and the approval of a
majority of the trustees, including a majority of the outside trustees. Each
Plan may be terminated at any time by vote of a majority of the outside trustees
or by vote of a majority of its Class's outstanding voting securities.

Contingent Deferred Sales Charges. A Contingent Deferred Sales Charge ("CDSC"),
applies upon early redemption of shares regardless of class, and (i) will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price and (ii) will not be imposed on (a)
the aggregate dollar amount of your account, in the case of Class A shares, and
(b) the percentage of each share redeemed, in the case of class B and C shares,
representing an increase in net asset value over the initial purchase price
(including increases due to the reinvestment of dividends and capital gains
distributions).

Class A Shares. As stated in the Prospectus, a CDSC of 1% is imposed with
respect to those Class A shares (or Class A shares of another Lord
Abbett-sponsored fund or series acquired through exchange of such shares) on
which a Series has paid the one-time distribution fee of 1% if such shares are
redeemed out of the Lord Abbett-sponsored family of funds within a period of 24
months from the end of the month in which the original sale occurred.

Class B Shares. As stated in the Prospectus, if Class B shares (or Class B
shares of another Lord Abbett-sponsored fund or series acquired through exchange
of such shares) are redeemed out of the Lord Abbett-sponsored family of funds
for cash

12
<PAGE>

before the sixth anniversary of their purchase, a CDSC will be deducted from the
redemption proceeds. The Class B CDSC is paid to Lord Abbett Distributor to
reimburse its expenses, in whole or in part, for providing distribution-related
service in connection with the sale of Class B shares.

The amount of the contingent deferred sales charge will depend on the number of
years since you invested and the dollar amount being redeemed, according to the
following schedule:

Anniversary of the Day on Contingent Deferred Sales Charge
Which the Purchase Order Was Accepted on Redemptions (As % of Amount
Subject to Charge)
Before the 1st.................................5.0%
On the 1st, before the 2nd.....................4.0%
On the 2nd, before the 3rd.....................3.0%
On the 3rd, before the 4th.....................3.0%
On the 4th, before the 5th.....................2.0%
On the 5th, before the 6th ....................1.0%
On or after the 6th anniversary................None

In the table, an "anniversary" is the 365th day subsequent to the acceptance of
a purchase order or a prior anniversary. All purchases are considered to have
been made on the business day on which the purchase order was accepted.

Class C Shares. As stated in the Prospectus, if Class C shares are redeemed for
cash before the first anniversary of their purchase, the redeeming shareholder
will be required to pay to the Series on behalf of Class C shares a CDSC of 1%
of the lower of cost or the then net asset value of Class C shares redeemed. If
such shares are exchanged into the same class of another Lord Abbett-sponsored
fund and subsequently redeemed before the first anniversary of their original
purchase, the charge will be collected by the other fund on behalf of this
Series' Class C shares.

General. Each percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage".

With respect to Class A and Class B shares, no CDSC is payable on redemptions by
participants or beneficiaries from employer-sponsored retirement plans under the
Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service and for returns of
excess contributions to retirement plan sponsors. In the case of Class A and
Class C shares, the CDSC is received by the applicable Series and is intended to
reimburse all or a portion of the amount paid by the Series if the shares are
redeemed before the Series has had an opportunity to realize the anticipated
benefits of having a long-term shareholder account in the Series. In the case of
Class B shares, the CDSC is received by Lord Abbett Distributor and is intended
to reimburse its expenses of providing distribution-related service to the
applicable Series (including recoupment of the commission payments made) in
connection with the sale of Class B shares before Lord Abbett Distributor has
had an opportunity to realize its anticipated reimbursement by having such a
long-term shareholder account subject to the B Plan distribution fee.

13
<PAGE>

CDSC) occurred, in the case of the Class A and Class C shares and (ii) to Lord
Abbett Distributor if the original purchase was subject to a CDSC, in the case
of the Class B shares. Thus, if shares of a Lord Abbett fund are exchanged for
shares of the same class of another such fund and the shares of the same class
tendered ("Exchanged Shares") are subject to a CDSC, the CDSC will carry over to
the shares of the same class being acquired, including GSMMF and AMMF ("Acquired
Shares"). Any CDSC that is carried over to Acquired Shares is calculated as if
the holder of the Acquired Shares had held those shares from the date on which
he or she became the holder of the Exchanged Shares. Although the Non-12b-1
Funds will not pay a distribution fee on their own shares, and will, therefore,
not impose their own CDSC, the Non-12b-1 Funds will collect the CDSC (a) on
behalf of other Lord Abbett funds, in the case of the Class A and Class C shares
and (b) on behalf of Lord Abbett Distributor, in the case of the Class B shares.
Acquired Shares held in GSMMF and AMMF which are subject to a CDSC will be
credited with the time such shares are held in GSMMF but will not be credited
with the time such shares are held in AMMF. Therefore, if your Acquired Shares
held in AMMF qualified for no CDSC or a lower Applicable Percentage at the time
of exchange into AMMF, that Applicable Percentage will apply to redemptions for
cash from AMMF, regardless of the time you have held Acquired Shares in AMMF.

In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
acquired). No CDSC will be imposed when the investor redeems (i) shares
representing an aggregate dollar amount of your account, in the case of Class A
shares, (ii) that percentage of each share redeemed, in the case of Class B and
C shares, derived from increases in the value of the shares above the total cost
of shares being redeemed due to increases in net asset value, (ii) shares with
respect to which no Lord Abbett fund paid a 12b-1 fee and, in the case of Class
B shares, Lord Abbett Distributor paid no sales charge or service fee (including
shares acquired through reinvestment of dividend income and capital gains
distributions) or (iii) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) and for one year or more (in the case of Class C
shares). In determining whether a CDSC is payable, (a) shares not subject to the
CDSC will be redeemed before shares subject to the CDSC and (b) of the shares
subject to a CDSC, those held the longest will be the first to be redeemed.

Exchanges. The Prospectus briefly describes the Telephone Exchange Privilege.
You may exchange some or all of your shares of any class for those in the same
class of: (i) Lord Abbett-sponsored funds currently offered to the public with a
sales charge (front-end, back-end or level ), (ii) GSMMF or (iii) AMMF, to the
extent offers and sales may be made in your state. You should read the
prospectus of the other fund before exchanging. In establishing a new account by
exchange, shares of the Fund being exchanged must have a value equal to at least
the minimum initial investment required for the other fund into which the
exchange is made.

Shareholders in other Lord Abbett-sponsored funds and AMMF have the same right
to exchange their shares for the corresponding class of the Fund's shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fund in Kansas City if the instructions are received prior to
the close of the NYSE in proper form. No sales charges are imposed except in the
case of exchanges out of GSMMF or AMMF (unless a sales charge (front-end,
back-end or level) was paid on the initial investment in a Lord Abbett-sponsored
fund). Exercise of the exchange privilege will be treated as a sale for federal
income tax purposes, and, depending on the circumstances, a gain or loss may be
recognized. In the case of an exchange of shares that have been held for 90 days
or less where no sales charge is payable on the exchange, the original sales
charge incurred with respect to the exchanged shares will be taken into account
in determining gain or loss on the exchange only to the extent such charge
exceeds the sales charge that would have been payable on the acquired shares had
they been acquired for cash rather than by exchange. The portion of the original
sales charge not so taken into account will increase the basis of the acquired
shares.

Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are AMMF and other Lord Abbett-sponsored funds which are eligible for the
exchange privilege, except Lord Abbett Series Fund ("LASF") which offers its
shares only in connection with certain variable annuity contracts, Lord Abbett
Equity Fund ("LAEF") which is not issuing shares, and series of Lord Abbett
Research Fund not offered to the general public ("LARF").

14
<PAGE>

Statement of Intention. Under the terms of the Statement of Intention to invest
$50,000 or more over a 13-month period as described in the Prospectus, shares of
a Lord Abbett-sponsored fund (other than shares of LAEF, LASF, LARF, GSMMF and
AMMF, unless holdings in GSMMF and AMMF are attributable to shares exchanged
from a Lord Abbett-sponsored fund offered with a front-end, back-end or level
sales charge) currently owned by you are credited as purchases (at their current
offering prices on the date the Statement is signed) toward achieving the stated
investment and reduced initial sales charge for Class A shares. Class A shares
valued at 5% of the amount of intended purchases are escrowed and may be
redeemed to cover the additional sales charge payable if the Statement is not
completed. The Statement of Intention is neither a binding obligation on you to
buy, nor on the Fund to sell, the full amount indicated.

Rights of Accumulation. As stated in the Prospectus, purchasers (as defined in
the Prospectus) may accumulate their investment in Lord Abbett-sponsored funds
(other than LAEF, LARF, LASF, GSMMF, and AMMF unless holdings in GSMMF or AMMF
are attributable to shares exchanged from a Lord Abbett-sponsored fund offered
with a front-end, back-end or level sales charge) so that a current investment,
plus the purchaser's holdings valued at the current maximum offering price,
reach a level eligible for a discounted sales charge for Class A shares.

Net Asset Value Purchases of Class A Shares. As stated in the Prospectus, our
Class A shares may be purchased at net asset value by our directors, employees
of Lord Abbett, employees of our shareholder servicing agent and employees of
any securities dealer having a sales agreement with Lord Abbett who consents to
such purchases or by the director or custodian under any pension or
profit-sharing plan or Payroll Deduction IRA established for the benefit of such
persons or for the benefit of employees of any national securities trade
organization to which Lord Abbett belongs or any company with an account(s) in
excess of $10 million managed by Lord Abbett on a private-advisory-account
basis. For purposes of this paragraph, the terms "directors" and "employees"
include a director's or employee's spouse (including the surviving spouse of a
deceased director or employee). The terms "our directors" and "employees of Lord
Abbett" also include retired directors and employees and other family members
thereof.

Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for LARF, LAEF and LASF, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered into an agreement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, ("mutual fund wrap fee program"), (e)
by employees, partners and owners of unaffiliated consultants and advisors to
Lord Abbett, Lord Abbett Distributor or Lord Abbett-sponsored funds who consent
to such purchase if such persons provide service to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such funds
and (f) through Retirement Plans with at least 100 eligible employees.

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

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

Our Board of Trustees may authorize redemption of all of the shares in any
account in which there are fewer than 60 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 6 months prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.

15
<PAGE>

Div-Move. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account of any class into an existing account of the
same class in any other Eligible Fund. The account must be either your account,
a joint account for you and your spouse, a single account for your spouse, or a
custodial account for your minor child under the age of 21. You should read the
prospectus of the other fund before investing.

Invest-A-Matic. The Invest-A-Matic method of investing in the Fund and/or any
other Eligible Fund is described in the Prospectus. To avail yourself of this
method you must complete the application form, selecting the time and amount of
your bank checking account withdrawals and the funds for investment, include a
voided, unsigned check and complete the bank authorization.

Systematic Withdrawal Plans. The Systematic Withdrawal Plan ("SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least $10,000.
Lord Abbett prototype retirement plans have no such minimum. With respect to a
SWP for Class B shares, on redemptions over 12% per year, the CDSC will apply to
the entire redemption. Therefore, please contact the Fund for assistance in
minimizing the CDSC in this situation. With respect to Class C shares, the CDSC
will be waived on and after the first anniversary of their purchase. The SWP
involves the planned redemption of shares on a periodic basis by receiving
either fixed or variable amounts at periodic intervals. Since the value of
shares redeemed may be more or less than their cost, gain or loss may be
recognized for income tax purposes on each periodic payment. Normally, you may
not make regular investments at the same time you are receiving systematic
withdrawal payments because it is not in your interest to pay a sales charge on
new investments when in effect a portion of that new investment is soon
withdrawn. The minimum investment accepted while a withdrawal plan is in effect
is $1,000. The SWP may be terminated by you or by us at any time by written
notice.

Retirement Plans. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms and custodial agreements for IRAs (Individual
Retirement Accounts, including Simple IRAs and Simplified Employee Pensions),
403(b) plans and qualified pension and profit-sharing plans, including 401(k)
plans. The forms name Investors Fiduciary Trust Company as custodian and contain
specific information about the plans. Explanations of the eligibility
requirements, annual custodial fees and allowable tax advantages and penalties
are set forth in the relevant plan documents. Adoption of any of these plans
should be on the advice of your legal counsel or qualified tax adviser.

6.
Past Performance

Each Series computes the average annual compounded rate of total return for each
Class during specified periods that would equate the initial amount invested to
the ending redeemable value of such investment by adding one to the computed
average annual total return, raising the sum to a power equal to the number of
years covered by the computation and multiplying the result by $1,000, which
represents a hypothetical initial investment. The calculation assumes deduction
of the maximum sales charge (as described in the next paragraph) from the amount
invested and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at net asset value. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the average annual total return computation.

In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment (unless the return is shown at net asset value). For Class B
shares, the payment of the applicable CDSC (5.0% prior to the first anniversary
of purchase, 4.0% prior to the second anniversary of purchase, 3.0% prior to the
third and fourth anniversaries of purchase, 2.0% prior to the fifth anniversary
of purchase, 1.0% prior to the sixth anniversary of purchase and no CDSC on and
after the sixth anniversary of purchase) is applied to the Series' investment
result for that class for the time period shown (unless the total return is
shown at net asset value). For Class C shares, the 1.0% CDSC is applied to the
applicable Series' investment result for that class for the time period shown
prior to the first anniversary of purchase (unless the total return is shown at
net asset value). Total returns also assume that all dividends and capital gains
distributions during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.

16
<PAGE>

Using the computation method described above, the Growth & Income Series'
average annual compounded rates of total return for the fiscal year ending on
October 31, 1997 were 19.60% and 26.20% for the Series' Class A and C shares,
respectively. The total return for Class B shares for the period June 5, 1997
through October 31, 1997 was 1.84% (not annualized).

The total return for the International Series for the period December 13, 1996
to October 31, 1997 was 8.60% (not annualized). The total return for the Class B
and Class C shares for the period June 5, 1997 through October 31, 1997 was
0.32% (not annualized) and 4.54% (not annualized), respectively..

Each Series' yield quotation for each class is based on a 30-day period ended on
a specified date, computed by dividing such Series' net investment income per
share earned during the period by such Series' maximum offering price per share
on the last day of the period. This is determined by finding the following
quotient: take the Class' dividends and interest earned during the period minus
its expenses accrued for the period and divide by the product of (i) the average
daily number of Class shares outstanding during the period that were entitled to
receive dividends and (ii) the Series' maximum offering price per share on the
last day of the period. To this quotient add one. This sum is multiplied by
itself five times. Then one is subtracted from the product of this
multiplication and the remainder is multiplied by two. Yield for the Class A
shares reflects the deduction of the maximum initial sales charge, but may also
be shown based on the Series' net asset value per share. Yields for Class B and
Class C shares do not reflect the deduction of the CDSC.

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

7.
Taxes

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

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

The Fund will be subject to a 4% non-deductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar-year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax. Dividends paid by the Fund will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.

As described in the Prospectus under "Risk Factors," the International Series
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that Series shareholders who are
subject to United States federal income tax will be entitled to claim a federal
income tax credit or deduction for foreign income taxes paid by the Series.

17
<PAGE>

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

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

8.
Information About the Fund

Shareholder Liability. Delaware law provides that Fund shareholders shall be
entitled to the same limitations of personal liability extended to stockholders
of private corporations for profit. The courts of some states, however, may
decline to apply Delaware law on this point. The Fund's Declaration of Trust
contains an express disclaimer of shareholder liability for the acts,
obligations, or affairs of the Fund and requires that a disclaimer be given in
each contract entered into or executed by the Fund. The Declaration provides for
indemnification out of the Fund's property of any shareholder or former
shareholder held personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect and the portfolio is unable to
meet its obligations. Lord Abbett believes that, in view of the above, the risk
of personal liability to shareholders is extremely remote.

Under The Fund's Declaration of Trust, the trustees may, without shareholder
vote, cause the Fund to merge or consolidate into, or sell and convey all or
substantially all of, the assets of the Fund to one or more trusts, partnerships
or corporations, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Fund's registration
statement. In addition, the trustees may, without shareholder vote, cause the
Fund to be incorporated under Delaware law.

Derivative actions on behalf of the Fund may be brought only by shareholders
owning not less than 50% of the then outstanding shares of the Fund.

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

18
<PAGE>

9.
Financial Statements

The financial statements for the period from December 13, 1996 to October 31,
1997 with respect to the International Series and the fiscal year ended October
31, 1997 with respect to the Growth & Income Series and the report of Deloitte &
Touche LLP, independent auditors, on such financial statements contained in the
1997 Annual Report to Shareholders of Lord Abbett Securities Trust are
incorporated herein by reference to such financial statements and report in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting.

19
<PAGE>

LORD ABBETT March 19, 1998

Statement of Additional Information

Lord Abbett Securities Trust
World Bond-Debenture Series
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett Distributor") at The General Motors Building, 767 Fifth Avenue,
New York, New York 10153-0203. This Statement of Additional Information, relates
to, and should be read in conjunction with, the Prospectus dated March 19, 1998.

Lord Abbett Securities Trust (sometimes referred to as the "Fund") was organized
as a Delaware business trust on February 26, 1993. The Fund has four series, but
only World Bond-Debenture Series ("we" or the "Series") is described in this
Statement of Additional Information. The Series has three classes of shares (A,
B and C). All Fund shares have equal noncumulative voting rights and equal
rights with respect to dividends, assets and liquidation, except for certain
class-specific expenses. They are fully paid and nonassessable when issued and
have no preemptive or conversion rights. Although no present plans exist to do
so, further series may be added in the future. The Investment Company Act of
1940, as amended (the "Act"), requires that where more than one series exists,
each series must be preferred over all other series in respect of assets
specifically allocated to such series.

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

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

TABLE OF CONTENTS Page

1. Investment Policies 2
2. Trustees and Officers 4
3. Investment Advisory and Other Services 7
4. Portfolio Transactions 7
5. Purchases, Redemptions and
Shareholder Services 9
6. Past Performance 15
7. Taxes 16
8. Information About the Fund 17
9. Financial Statements 17
10. Appendix 18

<PAGE>

1.
Investment Policies

Fundamental Investment Restrictions

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

Non-Fundamental Investment Restrictions. In addition to the investment
restrictions above which cannot be changed without shareholder approval, we also
are subject to the following non-fundamental investment policies which may be
changed by the Board of Trustees without shareholder approval. The Series may
not: (1) borrow in excess of 33 1/3% of its total assets, and then only as a
temporary measure for extraordinary or emergency purposes; (2) make short sales
of securities or maintain a short position except to the extent permitted by
applicable law; (3) invest knowingly more than 15% of its net assets (at the
time of investment) in illiquid securities, except for securities qualifying for
resale under Rule 144A of the Securities Act of 1933, deemed to be liquid by the
Board of Directors; (4) invest in the securities of other investment companies
except as permitted by applicable law; (5) invest in securities of issuers
which, with their predecessors, have a record of less than three years'
continuous operations, if more than 5% of the Series' total assets would be
invested in such securities (this restriction shall not apply to
mortgaged-backed securities, asset-backed securities or obligations issued or
guaranteed by the U. S. Government, its agencies or instrumentalities); (6) hold
securities of any issuer if more than 1/2 of 1% of the securities of such issuer
are owned beneficially by one or more officers or trustees of the Fund or by one
or more partners or members of the Series' underwriter or investment adviser if
these owners in the aggregate own beneficially more than 5% of the securities of
such issuer; (7) invest in real estate limited partnership interests or
interests in oil, gas or other mineral leases, or exploration or other
development programs, except that the Series may invest in securities issued by
companies that engage in oil, gas or other mineral exploration or other
development activities; (8) write, purchase or sell puts, calls, straddles,
spreads or combinations thereof, except to the extent permitted in the Series'
prospectus and statement of additional information, as they may be amended from
time to time; (9) buy from or sell to any of its officers, trustees, employees,
or its investment adviser or any of its officers, directors, partners or
employees, any securities other than shares
<PAGE>

of the Series; or (10) invest more than 10% of the market value of its gross
assets at the time of investment in debt securities which are in default as to
interest or principal.

Portfolio Turnover Rate. For the first year of operation, our portfolio turnover
is expected to be between 100% and 150%.

Investment Techniques

The Series intends to utilize, from time to time, one or more of the investment
techniques described below, including covered call options, rights and warrants
and repurchase agreements. While some of these techniques involve risk when
utilized independently, the Series intends to use them to reduce risk and
volatility in its portfolios.

Covered Call Options. The Series may write covered call options on securities it
owns ("call options"). A call option on securities gives the purchaser of the
option, upon payment of a premium to the writer of the option, the right to call
upon the writer to deliver a specified security on or before a fixed date at a
predetermined price.

The writing of call options will, therefore, involve a potential loss of
opportunity to sell securities at higher prices. In exchange for the premium
received. The writer of a fully collateralized call option gives up the gain
possibility of the underlying security beyond the call price and continues to
have the downside risk of such securities. In addition, in exchange for the
premium received, the writer of the call gives up the gain possibility of the
stock appreciating above the call price. While an option that has been written
is in force, the maximum profit that may be derived from the optioned security
is the sum of the premium less brokerage commissions and fees plus the
difference between the strike price of the call and the market price of the
underlying security.

Repurchase Agreements. The Series may enter into repurchase agreements with
respect to a security. A repurchase agreement is a transaction by which the
Series acquires a security and simultaneously commits to resell that security to
the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. The resale price reflects the purchase price plus an
agreed-upon market rate of interest which is unrelated to the coupon rate or
date of maturity of the purchased security. In this type of transaction, the
securities purchased by the Series have a total value in excess of the value of
the repurchase agreement. The Series requires at all times that the repurchase
agreement be collateralized by cash or U.S. Government securities having a value
equal to, or in excess of, the value of the repurchase agreement. Such
agreements permit the Series to keep all of its assets at work while retaining
flexibility in pursuit of investments of a longer-term nature.

The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, the Series
may incur a loss upon their disposition. If the seller of the agreement becomes
insolvent and subject to liquidation or reorganization under the Bankruptcy Code
or other laws, a bankruptcy court may determine that the underlying securities
are collateral not within the control of the Series and are therefore subject to
sale by the trustee in bankruptcy. Even though the repurchase agreements may
have maturities of seven days or less, they may lack liquidity, especially if
the issuer encounters financial difficulties. While the Series acknowledges
these risks, it is expected that they can be controlled through stringent
selection criteria and careful monitoring procedures. The Series intends to
limit repurchase agreements to transactions with dealers and financial
institutions believed by the Series to present minimal credit risks. The Series
will monitor creditworthiness of the repurchase agreement sellers on an ongoing
basis.

Lending Portfolio Securities

The Series may lend its portfolio securities to registered broker-dealers. These
loans, if and when made, may not exceed 30% of theSeries' total assets. The
Series' lending of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government securities") or other permissible means. The cash or instruments
collateralizing the Series' lending of securities will be maintained at all
times in an amount at least equal to the current market value of the loaned
securities. From time to time, the Series may allow a part of the interest
received with respect to the investment of collateral to be paid to the borrower
and/or a third party that is not affiliated with the Series and is acting as a
"placing broker." No fee will be paid to affiliated persons of the Series.

3
<PAGE>

By lending portfolio securities, the Series can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in permissible investments, such as U.S.
Government securities, or obtaining yield in the form of interest paid by a
borrower when such U.S. Government securities are used as collateral. The Series
will comply with the following conditions whenever it lends securities: (i) the
Series must receive at least 100% collateral from the borrower; (ii) the
borrower must increase the collateral whenever the market value of the
securities loaned rises above the level of the collateral; (iii) the Series must
be able to terminate the loan at any time; (iv) the Series must receive
reasonable compensation with respect to the loan, as well as any dividends,
interest or other distributions on the loaned securities; (v) the Series may pay
only reasonable fees in connection with the loan; and (vi) voting rights on the
loaned securities may pass to the borrower, except that if a material event
adversely affecting the investment in the loaned securities occurs, the Fund's
Board of Trustees must terminate the loan and regain the right to vote the
securities.

When-Issued Transactions

As stated in the Prospectus, the Series may purchase portfolio securities on a
when-issued basis. When-issued transactions involve a commitment by the Series
to purchase securities, with payment and delivery ("settlement") to take place
in the future, in order to secure what is considered to be an advantageous price
or yield at the time of entering into the transaction. When the Series enters
into a when-issued purchase, it becomes obligated to purchase securities and it
assumes all the rights and risks attendant to ownership of a security, although
settlement occurs at a later date. The value of fixed-income securities to be
delivered in the future will fluctuate as interest rates vary. At the time the
Series makes the commitment to purchase a security on a when-issued basis, it
will record the transaction and reflect the liability for the purchase and the
value of the security in determining its net asset value. The Series generally
has the ability to close out a purchase obligation on or before the settlement
date, rather than take delivery of the security. Under no circumstances will
settlement for such securities take place more than 120 days after the purchase
date.

2.
Trustees and Officers

Robert S. Dow, age 52, Chairman and President
E. Wayne Nordberg, age 59, Vice President

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

E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York

Chief Executive Officer of Courtroom Television Network. Formerly President
and Chief Executive Officer of Time Warner Cable Programming, Inc. Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 56.

4
<PAGE>

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

Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 67.

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

Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 72.

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

Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of the Marketing Partnership,
Inc., a full service marketing consulting firm (1994-1997). Prior to that,
formerly Chairman and Chief Executive Officer of Lincoln Snacks, Inc.,
manufacturer of branded snack foods (1992-1994). Currently serves as Director of
Den West Restaurant Co., J.B. Williams, and Fountainhead Water Company. Age 64.

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

President and Chief Executive Officer of Rochester Button Company. Age 69.

Thomas J. Neff
Spencer Stuart U.S.
277 Park Avenue
New York, New York

Chairman of Spencer Stuart U.S., an executive search consulting firm. Age 60.

The second column of the following table sets forth the compensation accrued for
the Fund's outside directors. The third column sets forth information with
respect to the equity-based benefits accrued for outside directors by the Lord
Abbett-sponsored funds. The fourth column sets forth information with respect to
the retirement plan for outside directors maintained by each of the Lord
Abbett-sponsored funds. The fifth column sets forth the total compensation
payable by such funds to the outside directors. No director of the Fund
associated with Lord Abbett and no officer of the Fund received any compensation
from the Fund for acting as a director or officer.

For The Fiscal Year Ended October 31, 1997
------------------------------------------
(1) (2) (3) (4)

For Year Ended
Equity-Based December 31, 1997
Benefits Accrued Total Compensation

5
<PAGE>

Aggregate By The Fund And Accrued By The Fund
Compensation Twelve Other Lord And Twelve Other Lord
Accrued By Abbett-Sponsored Abbett-Sponsored
Name Of Director The Fund(1) Funds(2) Funds(3)
- ---------------- ----------- ----------------- ---------------------
E. Thayer Bigelow $450 $16,641 $56,000
Stewart S. Dixon $442 $32,015 $55,000
John C. Jansing $442 $46,430 $55,000
C. Alan MacDonald $460 $29,994 $57,400
Hansel B. Millican, Jr. $446 $38,069 $55,000
Thomas J. Neff $449 $18,804 $56,000

1. Outside trustees' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by the Fund to its
outside trustees is being deferred under a plan that deems the deferred
amounts to be invested in shares of the Fund for later distribution to the
trustees. The amounts of the aggregate compensation payable by the Fund as
of October 31, 1997, deemed invested in Fund shares, including dividends
reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, 939; Mr. Dixon, 21,555; Mr. Jansing,
165,003; Mr. MacDonald, 9,515; Mr. Millican, 21,626 and Mr. Neff, 22,587.
If the amounts deemed invested in Fund shares were added to each trustee's
actual holdings of Fund shares as of October 31, 1997, each would own the
following: Mr. Bigelow, shares; Mr. Dixon, shares; Mr. Jansing, shares;
Mr. MacDonald, shares; Mr.Millican, shares; Mr. Neff, shares.

2. Each Lord Abbett-sponsored fund has a retirement plan providing that
outside directors(trustees) may receive annual retirement benefits for
life equal to 100% of their final annual retainers following retirement at
or after age 72 with at least 10 years of service. Each plan also provides
for a reduced benefit upon early retirement under certain circumstances, a
pre-retirement death benefit and actuarially reduced joint-and-survivor
spousal benefits. Such retirement plans, and the deferred compensation
plans referred to in footnote one, were amended during 1996 to, among
other things, enable outside directors(trustees) to elect to convert their
prospective benefits under the retirement plans to equity-based benefits
under the deferred compensation plans (renamed the equity-based plans and
hereinafter referred to as such). Five of the six outside
directors(trustees) made such an election. Mr. Jansing did not. The
amounts accrued in column 3 were accrued by the Lord Abbett-sponsored
funds for the twelve months ended October 31, 1997 with respect to the
equity-based plans. Under the 1996 amendments, the annual retainer was
increased to $50,000 and the annual retirement benefits were increased
from 80% to 100% of a trustee's final annual retainer. Thus, if Mr.
Jansing were to retire at or after age 72 and the annual retainer payable
by the funds were the same as it is today, he would receive annual
retirement benefits of $50,000.

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

Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Brown, Carper, Ms. Foster, Messrs. Hilstad, Morris, Noelke, Nordberg and
Walsh are partners of Lord Abbett; the others are employees; Zane Brown, age 46,
Executive Vice President; Paul A. Hilstad, age 55 (with Lord Abbett since 1995 -
formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.), Vice President and Secretary; Stephen I. Allen,
age 44; Daniel E. Carper, age 46; Daria Foster, age 43; Lawrence H. Kaplan, age
41 (with Lord Abbett since 1997 formerly Vice President and Chief Counsel of
Salomon Brothers Asset Management Inc - 1995 to 1997, prior thereto Senior Vice
President and Associate General Counsel of Kidder, Peabody & Co. Incorporated);
Thomas F. Konop, age 55; Robert Noelke, age 41; E. Wayne Nordberg, age 59; A.
Edward Oberhaus, age 38, Keith F. O'Connor, age 42, John J. Walsh, age 62, Vice
Presidents; and Donna M. McManus, age 37, Treasurer.

The Fund does not hold annual meetings of shareholders unless one or more
matters are required to be acted on by shareholders under the Act. Under the
Fund's Declaration of Trust, shareholder meetings may be called at any time by
certain officers of the Fund or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Fund's shareholders or upon other matters deemed to be necessary or desirable or
(ii) upon the written request of the holders of at least one-quarter of the
shares of the Series outstanding and entitled to vote at the meeting.

As of December 26, 1997, Lord, Abbett & Co. owns all of our shares. Therefore,
those trustees and officers who are also partners of Lord, Abbett & Co. own as a
group, 100% of our outstanding shares.

6
<PAGE>

3.
Investment Advisory and Other Services

As described under "Our Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. Ten of the twelve general partners of Lord Abbett, all of
whom are officers and/or directors of the Fund, are: Stephen I. Allen, Zane E.
Brown, Daniel E. Carper, Robert S. Dow, Daria L. Foster, Paul A. Hilstad, Robert
G. Morris, Robert J. Noelke, E. Wayne Nordberg and John J. Walsh. The other
general partners of Lord Abbett who are neither officers nor directors of the
Fund are W. Thomas Hudson and Michael McLaughlin. The address of each partner is
The General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203.

The services performed by Lord Abbett are described in the Prospectus under "Our
Management". Under the Management Agreement, we are obligated to pay Lord Abbett
a monthly fee, based on average daily net assets for each month, at the annual
rate of .50 of 1% of the Series' average daily net assets. This fee is allocated
among Classes A, B and C based on the classes' proportionate shares of such
average daily net assets.

We pay all expenses not expressly assumed by Lord Abbett, including, without
limitation, 12b-1 expenses, outside trustees' fees and expenses, association
membership dues, legal and auditing fees, taxes, transfer and dividend
disbursing agent fees, shareholder servicing costs, expenses relating to
shareholder meetings, expenses of preparing, printing and mailing stock
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums, brokerage and other
expenses connected with executing portfolio transactions.

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

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

4.
Portfolio Transactions

With respect to the Series, purchases and sales of portfolio securities usually
will be principal transactions and normally such securities will be purchased
directly from the issuer or from an underwriter or market maker for the
securities. Therefore, the Series usually will pay no brokerage commissions for
such purchases. Purchases from underwriters of portfolio securities will include
a commission or concession paid by the issuer to the underwriter and purchases
from dealers serving as market makers will include a dealer's markup. Principal
transactions, including riskless principal transactions, are not afforded the
protection of the safe harbor in Section 28(e) of the Securities Exchange Act
of 1934.

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

7
<PAGE>

In transactions on stock exchanges in the United States, commissions are
negotiated, whereas on many foreign stock exchanges commissions are fixed. In
the case of securities traded in the foreign and domestic over-the-counter
markets, there is generally no stated commission, but the price usually includes
an undisclosed commission or markup. Purchases from underwriters of newly-issued
securities for inclusion in the Series' portfolio usually will include a
concession paid to the underwriter by the issuer and purchases from dealers
serving as market makers will include the spread between the bid and asked
prices. When commissions are negotiated, we pay a commission rate that we
believe is appropriate to give maximum assurance that our brokers will provide
us, on a continuing basis, the highest level of brokerage services available.
While we do not always seek the lowest possible commissions on particular
trades, we believe that our commission rates are in line with the rates that
many other institutions pay. Our traders are authorized to pay brokerage
commissions in excess of those that other brokers might accept on the same
transactions in recognition of the value of the services performed by the
executing brokers, viewed in terms of either the particular transaction or the
overall responsibilities of Lord Abbett with respect to us and the other
accounts they manage. Such services include showing us trading opportunities
including blocks, a willingness and ability to take positions in securities,
knowledge of a particular security or market, proven ability to handle a
particular type of trade, confidential treatment, promptness and reliability.

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

8
<PAGE>

5.
Purchases, Redemptions
and Shareholder Services

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

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

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

The maximum offering price of Class A shares on December 26, 1997 was computed
as follows:

Class A
-------

Net asset value per share (net assets divided
by shares outstanding)................................$10.03

Maximum offering price per share (net asset
value divided by .9525)...............................$10.53

9
<PAGE>

All assets and liabilities expressed in foreign currencies will be converted
into United States dollars at the mean between the buying and selling rates of
such currencies against United States dollars last quoted by any major bank. If
such quotations are not available, the rate of exchange will be determined in
accordance with policies established by the Board of Trustees of the Fund. The
Board of Trustees will monitor, on an ongoing basis, the Fund's method of
valuation.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of business
on each business day in New York. In addition, European or Far Eastern
securities trading generally or in a particular country or countries may not
take place on all business days in New York. Furthermore, trading takes place in
various foreign markets on days which are not business days in New York and on
which the Series' net asset values are not calculated. Such calculation does not
take place contemporaneously with the determination of the prices of the
majority of the portfolio securities used in such calculation. Events affecting
the values of portfolio securities that occur between the time their prices are
determined and the close of the NYSE will not be reflected in the Series'
calculation of net asset values unless the Fund's trustees determine that the
particular event would materially affect net asset value, in which case an
adjustment will be made.

The net asset value per share for the Class B and C shares is determined in the
same manner as for the Class A shares (net assets divided by shares
outstanding). Our Class B and C shares are offered at net asset value.

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

Class A, B and C Rule 12b-1 Plans. As described in the Prospectus, the Series
has adopted a Distribution Plan and Agreement pursuant to Rule 12b-1 of the Act
for each of the three Series Classes: the "A Plan", the "B Plan" and the "C
Plan", respectively. In adopting each Plan and in approving its continuance, the
Board of Trustees has concluded that there is a reasonable likelihood that each
Plan will benefit its respective Class and such Class' shareholders. The
expected benefits include greater sales and lower redemptions of Class shares,
which should allow each Class to maintain a consistent cash flow, and a higher
quality of service to shareholders by authorized institutions than would
otherwise be the case. Lord Abbett used all amounts received under each Plan for
payments to dealers for (i) providing continuous services to shareholders, such
as answering shareholder inquiries, maintaining records, and assisting
shareholders in making redemptions, transfers, additional purchases and
exchanges and (ii) their assistance in distributing shares of the Fund.

10
<PAGE>

Contingent Deferred Sales Charges. A Contingent Deferred Sales Charge ("CDSC")
(i) applies regardless of class, (ii) will not apply to shares purchased by the
reinvestment of dividends or capital gains distributions; (iii) will be assessed
on the lesser of the net asset value of the shares at the time of redemption or
the original purchase price and (iv) will not be imposed on the amount of your
account value represented by the increase in net asset value over the initial
purchase price (including increases due to the reinvestment of dividends and
capital gains distributions) and upon early redemption of shares.

Class A Shares. As stated in the Prospectus, subject to certain exceptions ,a
CDSC of 1% is imposed with respect to those Class A shares (or Class A shares of
another Lord Abbett-sponsored fund or series acquired through exchange of such
shares) on which the Fund has paid the one-time distribution fee of 1% if such
shares are redeemed out of the Lord Abbett-sponsored family of funds within a
period of 24 months from the end of the month in which the original sale
occurred.

Class B Shares. As stated in the Prospectus, subject to certain exceptions, if
Class B shares (or Class B shares of another Lord Abbett-sponsored fund or
series acquired through exchange of such shares) are redeemed out of the Lord
Abbett-sponsored family of funds for cash before the sixth anniversary of their
purchase, a CDSC will be deducted from the redemption proceeds. The Class B CDSC
is paid to Lord Abbett Distributor to reimburse its expenses, in whole or in
part, for providing distribution-related service to the Fund in connection with
the sale of Class B shares.

To determine whether the CDSC applies to a redemption, the Fund redeems shares
in the following order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held on or after the sixth anniversary
of their purchase, and (3) shares held the longest before such sixth
anniversary.

The amount of the contingent deferred sales charge will depend on the number of
years since you invested and the dollar amount being redeemed, according to the
following schedule:

Class C Shares. As stated in the Prospectus, subject to certain exceptions if
Class C shares are redeemed for cash before the first anniversary of their
purchase, the redeeming shareholder will be required to pay to the Fund on
behalf of Class C shares a CDSC of 1% of the lower of cost or the then net asset
value of Class C shares redeemed. If such shares are exchanged into the same
class of another Lord Abbett-sponsored fund and subsequently redeemed before the
first anniversary of their original purchase, the charge will be collected by
the other fund on behalf of this Fund's Class C shares.

General. The percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage."

11
<PAGE>

redemptions which continue as investments in another fund participating in the
program. With respect to Class B shares, no CDSC is payable for redemptions (i)
in connection with Systematic Withdrawal Plan and Div-Move services as described
below under those headings, (ii) in connection with mandatory distribution under
403(b) plans and IRAs and (iii) in connection with death of the shareholder. In
the case of Class A and Class C shares, the CDSC is received by the Fund and is
intended to reimburse all or a portion of the amount paid by the Fund if the
shares are redeemed before the Fund has had an opportunity to realize the
anticipated benefits of having a long-term shareholder account in the Fund. In
the case of Class B shares, the CDSC is received by Lord Abbett Distributor and
is intended to reimburse its expenses of providing distribution-related service
to the Fund (including recoupment of the commission payments made) in connection
with the sale of Class B shares before Lord Abbett Distributor has had an
opportunity to realize its anticipated reimbursement by having such a long-term
shareholder account subject to the B Plan distribution fee.

The other funds and series which participate in the Telephone Exchange Privilege
(except (a) Lord Abbett U.S. Government Securities Money Market Fund, Inc.
("GSMMF"), (b) certain series of Lord Abbett Tax-Free Income Fund and Lord
Abbett Tax-Free Income Trust for which a Rule 12b-1 Plan is not yet in effect,
and (c) any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria,
hereinafter referred to as an "authorized money market fund" or "AMMF"
(collectively, the "Non-12b-1 Funds")) have instituted a CDSC for each class on
the same terms and conditions. No CDSC will be charged on an exchange of shares
of the same class between Lord Abbett funds or between such funds and AMMF. Upon
redemption of shares out of the Lord Abbett family of funds or out of AMMF, the
CDSC will be charged on behalf of and paid: (i) to the fund in which the
original purchase (subject to a CDSC) occurred, in the case of the Class A and
Class C shares and (ii) to Lord Abbett Distributor if the original purchase was
subject to a CDSC, in the case of the Class B shares. Thus, if shares of a Lord
Abbett fund are exchanged for shares of the same class of another such fund and
the shares of the same class tendered ("Exchanged Shares") are subject to a
CDSC, the CDSC will carry over to the shares of the same class being acquired,
including GSMMF and AMMF ("Acquired Shares"). Any CDSC that is carried over to
Acquired Shares is calculated as if the holder of the Acquired Shares had held
those shares from the date on which he or she became the holder of the Exchanged
Shares. Although the Non-12b-1 Funds will not pay a distribution fee on their
own shares, and will, therefore, not impose their own CDSC, the Non-12b-1 Funds
will collect the CDSC (a) on behalf of other Lord Abbett funds, in the case of
the Class A and Class C shares and (b) on behalf of Lord Abbett Distributor, in
the case of the Class B shares. Acquired Shares held in GSMMF and AMMF which are
subject to a CDSC will be credited with the time such shares are held in GSMMF
but will not be credited with the time such shares are held in AMMF. Therefore,
if your Acquired Shares held in AMMF qualified for no CDSC or a lower Applicable
Percentage at the time of exchange into AMMF, that Applicable Percentage will
apply to redemptions for cash from AMMF, regardless of the time you have held
Acquired Shares in AMMF.

In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
acquired). No CDSC will be imposed when the investor redeems (i) amounts derived
from increases in the value of the account above the total cost of shares being
redeemed due to increases in net asset value, (ii) shares with respect to which
no Lord Abbett fund paid a 12b-1 fee and, in the case of Class B shares, Lord
Abbett Distributor paid no sales charge or service fee (including shares
acquired through reinvestment of dividend income and capital gains
distributions) or (iii) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) and for one year or more (in the case of Class C
shares). In determining whether a CDSC is payable, (a) shares not subject to the
CDSC will be redeemed before shares subject to the CDSC and (b) of the shares
subject to a CDSC, those held the longest will be the first to be redeemed.

12
<PAGE>

Statement of Intention. Under the terms of the Statement of Intention as
described in the Prospectus you may invest $100,000 or more over a 13-month
period in shares of a Lord Abbett-sponsored fund (other than shares of LAEF,
LASF, LARF, GSMMF and AMMF, unless holdings in GSMMF and AMMF are attributable
to shares exchanged from a Lord Abbett-sponsored fund offered with a front-end,
back-end or level sales charge). Shares currently owned by you are credited as
purchases (at their current offering prices on the date the Statement is signed)
toward achieving the stated investment and reduced initial sales charge for
Class A shares. Class A shares valued at 5% of the amount of intended purchases
are escrowed and may be redeemed to cover the additional sales charge payable if
the Statement of Intention is not completed. The Statement of Intention is
neither a binding obligation on you to buy, nor on the Fund to sell, the full
amount indicated.

13
<PAGE>

Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for LARF, LAEF and LASF, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered into an agreement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, ("mutual fund wrap fee program"), (e)
by employees, partners and owners of unaffiliated consultants and advisors to
Lord Abbett, Lord Abbett Distributor or Lord Abbett-sponsored funds who consent
to such purchase if such persons provide service to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such
funds, (f) through Retirement Plans with at least 100 eligible employees,
through a special retirement wrap program sponsored by an authorized institution
having one or more characteristics distinguishing it, in the opinion of Lord
Abbett Distributor, from a mutual fund wrap program. Such characteristics
include, among other things, the fact that an authorized institution does not
charge its clients any fee of a consulting or advisory nature that is
economically equivalent to the distribution fee under Class A 12b-1 Plan and the
fact that the program relates to participant-directed Retirement Plan.

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

Systematic Withdrawal Plans. The Systematic Withdrawal Plan ("SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least $10,000.
Lord Abbett prototype retirement plans have no such minimum. With respect to
Class B shares the CDSC will be waived on redemptions of up to 12% per year of
the current net asset value of your account at the time the SWP is established.
For Class B share redemptions over 12% per year, the CDSC will apply to the
entire redemption. Therefore, please contact the Fund for assistance in
minimizing the CDSC in this situation. With respect to Class C shares, the CDSC
will be waived on and after the first anniversary of their purchase. The SWP
involves the planned redemption of shares on a periodic basis by receiving
either fixed or variable amounts at periodic intervals. Since the value of
shares redeemed may be more or less than their cost, gain or loss may be
recognized for income tax purposes on each periodic payment. Normally, you may
not make regular investments at the same time you are receiving systematic
withdrawal payments because it is not in your interest to pay a sales charge on
new investments when in effect a portion of that new investment is soon
withdrawn. The minimum

14
<PAGE>

investment accepted while a withdrawal plan is in effect is $1,000. The SWP may
be terminated by you or by us at any time by written notice.

Retirement Plans. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms including 401(k) plans and custodial agreements for
IRAs (Individual Retirement Accounts, including SIMPLE IRAs and Simplified
Employee Pensions), 403(b) plans and qualified pension and profit-sharing plans.
The forms name Investors Fiduciary Trust Company as custodian and contain
specific information about the plans excluding 401(k) plans. Explanations of the
eligibility requirements, annual custodial fees and allowable tax advantages and
penalties are set forth in the relevant plan documents. Adoption of any of these
plans should be on the advice of your legal counsel or qualified tax adviser.

6.
Past Performance

The Series computes the average annual compounded rate of total return for each
class during specified periods that would equate the initial amount invested to
the ending redeemable value of such investment by adding one to the computed
average annual total return, raising the sum to a power equal to the number of
years covered by the computation and multiplying the result by one thousand
dollars which represents a hypothetical initial investment. The calculation
assumes deduction of the maximum sales charge (as described in the next
paragraph) from the amount invested and reinvestment of all income dividends and
capital gains distributions on the reinvestment dates at prices calculated as
stated in the Prospectus. The ending redeemable value is determined by assuming
a complete redemption at the end of the period covered by the average annual
total return computation.

In calculating total returns for Class A shares, the current maximum sales
charge of 4.75% (as a percentage of the offering price) is deducted from the
initial investment (unless the return is shown at net asset value). For Class B
shares, the payment of the applicable CDSC (5.0% prior to the first anniversary
of purchase, 4.0% prior to the second anniversary of purchase, 3.0% prior to the
third and fourth anniversaries of purchase, 2.0% prior to the fifth anniversary
of purchase, 1.0% prior to the sixth anniversary of purchase and no CDSC on and
after the sixth anniversary of purchase) is applied to the Series's investment
result for that class for the time period shown (unless the total return is
shown at net asset value). For Class C shares, the 1.0% CDSC is applied to the
Series' investment result for that class for the time period shown prior to the
first anniversary of purchase (unless the total return is shown at net asset
value). Total returns also assume that all dividends and capital gains
distributions during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.

Using the computation method described above, the Series' average annual
compounded rates of total return for the period from December 18, 1997
(commencement of operations) to March , 1998 was %, % and %, for the Series'
Class A, B and C shares, respectively.

Yield quotation for each Class is based on a 30-day period ended on a specified
date, computed by dividing our net investment income per share earned during the
period by the maximum offering price per share of such Class on the last day of
the period. This is determined by finding the following quotient: take the
Class' dividends and interest earned during the period minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of shares of such Class outstanding during the period that were entitled to
receive dividends and (ii) the maximum offering price per share of such Class on
the last day of the period. To this quotient add one. This sum is multiplied by
itself five times. Then one is subtracted from the product of this
multiplication and the remainder is multiplied by two. Yield for the Class A
shares reflects the deduction of the maximum initial sales charge, but may also
be shown based on the Fund's net asset value per share. Yields for Class B and C
shares do not reflect the deduction of the CDSC. For the 30-day period ended
March , 1998, the yield for the Class A, B and C shares of the Series were %,
% and %, respectively.

15
<PAGE>

7.
Taxes

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

The Series will be subject to a 4% non-deductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar-year distribution requirement. The Series intends
to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax. Dividends paid by the Series will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.

As described in the Prospectus, the Series may be subject to withholding taxes
and other taxes imposed by foreign countries. If, at the close of any fiscal
year, more than 50% of the assets of the Series of the Fund consist of stock or
securities of foreign corporations, the Series may elect to treat foreign income
taxes paid by the Series as having been paid directly by its shareholders. If a
Series qualifies for and makes such an election, the shareholders of the Series
will be required to (i) include in ordinary gross income (in addition to taxable
dividends actually received) their pro rata share of foreign income taxes paid
by the Series and (ii) treat such pro rata share as foreign income taxes paid by
them. Such shareholders may then use such pro rata portion of foreign income
taxes as foreign tax credits, subject to applicable limitations, or,
alternatively, deduct them in computing their taxable income. Shareholders who
do not itemize deductions for federal income tax purposes will not be entitled
to deduct their pro rata portion of foreign taxes paid by the Series, although
such shareholders will be required to include their share of such taxes in gross
income. Shareholders who claim a foreign tax credit for foreign taxes paid by
the Series may be required to treat a portion of dividends received from the
Series as separate category income for purposes of computing the limitations on
the foreign tax credit. Tax-exempt shareholders will ordinarily not benefit from
this election. Each year that the Series qualifies for and makes the election
described above, its shareholders will be notified of the amount of (i) each
shareholder's pro rata share of foreign income taxes paid by the Series and (ii)
the portion of dividends which represents income from each foreign country.

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

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

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

16
<PAGE>

Series elected to make a "qualified electing fund" election, in lieu of the
foregoing requirements, the Series might be required to include in income each
year a portion of the ordinary earnings and net capital gains of the qualified
electing fund, even if such amount were not distributed to the Series.

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

8.
Information About the Fund

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

9.
Financial Statements

The financial statements for the fiscal year ended October 31, 1997 and the
report of Deloitte & Touche LLP, independent accountants, on such financial
statements contained in the 1997 Annual Report to Shareholders of Lord Abbett
Securities Trust are incorporated herein by reference to such financial
statements and report, in reliance upon the authority of Deloitte & Touche LLP
as experts in auditing and accounting.

10.
Appendix

Corporate Bond Ratings

17
<PAGE>

Moody's Investors Service, Inc.'s Corporate Bond Ratings

Aaa - Bonds which are rated Aaa are judged to be of the best quality and carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.

Aa - Bonds which are rated Aa are judged to be of high-quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa - Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.

Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Standard & Poor's Corporation's Corporate Bond Ratings

AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.

AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong and in the majority of instances they
differ from AAA issues only in small degree.

A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.

18
<PAGE>

BB-B-CCC-CC-C - Debt rated BB, B, CCC, CC and C is regarded as having
predominately speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of speculation and
'CCC' the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

D - Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes such payments will
be made during such grace period. The 'D' rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
<PAGE>

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

Part A - Financial Highlights for the period December 31, 1994
(commencement of operations - Growth & Income Series) to
October 31, 1995; fiscal years ended October 31, 1996 and 1997.

Part B - Statement of Net Assets (Growth & Income Series) at
October 31, 1996. Statement of Operations (Growth & Income
Series) for the fiscal year ended October 31, 1996 and 1997.

(b) Exhibits -

99.B11 Form Of Unanimous Shareholder's Consent*

* Filed Herewith

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

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

None.

Item 26. Number of Record Holders of Securities
(as of February 20, 1998)

Growth & Income Series
Class A - 3,482
Class B - 207
Class C - 4,468

International Series
Class A - 4,240
Class B - 918
Class C - 953

Item 27. Indemnification

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

The Trust shall indemnify each of its Trustees, officers, employees
and agents (including any individual who serves at its request as
director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor
or otherwise) against all liabilities and expenses, including but
not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees reasonably
incurred by him or her in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body in which he

C-1
<PAGE>

or she may be or may have been involved as a party or otherwise or
with which he or she may be or may have been threatened, while
acting as Trustee or as an officer, employee or agent of the Trust
or the Trustees, as the case may be, or thereafter, by reason of his
or her being or having been such a Trustee, officer, employee or
agent, except with respect to any matter as to which he or she shall
have been adjudicated not to have acted in good faith in the
reasonable belief that his or her action was in the best interests
of the Trust or any Series thereof. Notwithstanding anything herein
to the contrary, if any matter which is the subject of
indemnification hereunder relates only to one Series (or to more
than one but not all of the Series of the Trust), then the indemnity
shall be paid only out of the assets of the affected Series. No
individual shall be indemnified hereunder against any liability to
the Trust or any Series thereof or the Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her
office. In addition, no such indemnity shall be provided with
respect to any matter disposed of by settlement or a compromise
payment by such Trustee, officer, employee or agent, pursuant to a
consent decree or otherwise, either for said payment or for any
other expenses unless there has been a determination that such
compromise is in the best interests of the Trust or, if appropriate,
of any affected Series thereof and that such Person appears to have
acted in good faith in the reasonable belief that his or her action
was in the best interests of the Trust or, if appropriate, of any
affected Series thereof, and did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. All determinations
that the applicable standards of conduct have been met for
indemnification hereunder shall be made by (a) a majority vote of a
quorum consisting of disinterested Trustees who are not parties to
the proceeding relating to indemnification, or (b) if such a quorum
is not obtainable or, even if obtainable, if a majority vote of such
quorum so directs, by independent legal counsel in a written
opinion, or (c) a vote of Shareholders (excluding Shares owned of
record or beneficially by such individual). In addition, unless a
matter is disposed of with a court determination (i) on the merits
that such Trustee, officer, employee or agent was not liable or (ii)
that such Person was not guilty of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office, no indemnification shall be provided
hereunder unless there has been a determination by independent legal
counsel in a written opinion that such Person did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her
office.

The Trustees may make advance payments out of the assets of the
Trust or, if appropriate, of the affected Series in connection with
the expense of defending any action with respect to which
indemnification might be sought under this Section 4.3. The
indemnified Trustee, officer, employee or agent shall give a written
undertaking to reimburse the Trust or the Series in the event it is
subsequently determined that he or she is not entitled to such
indemnification and (a) the indemnified Trustee, officer, employee
or agent shall provide security for his or her undertaking, (b) the
Trust shall be insured against losses arising by reason of lawful
advances, or (c) a majority of a quorum of disinterested Trustees or

C-2
<PAGE>

an independent legal counsel in a written opinion shall determine,
based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the
indemnitee ultimately will be found entitled to indemnification. The
rights accruing to any Trustee, officer, employee or agent under
these provisions shall not exclude any other right to which he or
she may be lawfully entitled and shall inure to the benefit of his
or her heirs, executors, administrators or other legal
representatives.

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

Item 28. Business and Other Connections of Investment Adviser

Lord, Abbett & Co. acts as investment manager and/or principal
underwriter for twelve other Lord Abbett open-end investment
companies (of which it is principal underwriter for thirteen), and
as investment adviser to approximately 6,220 private accounts as of
December 31, 1997. Other than acting as Trustees (directors) and/or
officers of open-end investment companies managed by Lord, Abbett &
Co., none of Lord, Abbett & Co.'s partners has, in the past two
fiscal years, engaged in any other business, profession, vocation or
employment of a substantial nature for his own account or in the
capacity of director, officer, employee, partner or trustee of any
entity except as follows:

John J. Walsh
Trustee
Brooklyn Hospital
Parkside Avenue
Brooklyn, N.Y.

Item 29. Principal Underwriter

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

C-3
<PAGE>

Lord Abbett Series Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Investment Trust

Investment Adviser
American Skandia Trust (Lord Abbett Growth and Income
Portfolio)

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

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

Robert S. Dow Chairman and President
Paul A. Hilstad Vice President & Secretary
Stephen I. Allen Vice President
Zane E. Brown Vice President
Daniel E. Carper Vice President
Daria L. Foster Vice President
Robert G. Morris Vice President
Robert J. Noelke Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President

The other general partners of Lord, Abbett & Co. who are neither
officers nor directors of the Registrant are W. Thomas Hudson and Michael
McLaughlin.

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

Item 30. Location of Accounts and Records

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

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

Certain records such as correspondence may be physically maintained
at the main office of the Registrant's Transfer Agent, Custodian, or
Shareholder Servicing Agent within the requirements of Rule 31a-3.

Item 31. Management Services

None.

Item 32. Undertakings

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

The Registrant undertakes, if requested to do so by the holders of
at least 10% of the Registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the question
of removal of a director or directors and to assist in

C-4
<PAGE>

communications with other shareholders as required by Section 16(c).

C-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
19th day of March, 1998.

LORD ABBETT SECURITIES TRUST

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

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

Chairman, President
/s/ Robert S. Dow and Trustee 3/19/98
Robert S. Dow (Title) (Date)

Vice President and
/s/ Keith F. O'Connor Chief Financial Officer 3/19/98
Keith F. O'Connor (Title) (Date)

/s/ E. Wayne Nordberg Trustee 3/19/98
E. Wayne Nordberg (Title) (Date)

/s/ Stewart S. Dixon Trustee 3/19/98
Stewart S. Dixon (Title) (Date)

/s/ John C. Jansing Trustee 3/19/98
John C. Jansing (Title) (Date)

/s/ C. Alan MacDonald Trustee 3/19/98
C. Alan MacDonald (Title) (Date)

/s/ Hansel B. Millican, Jr. Trustee 3/19/98
Hansel B. Millican, Jr. (Title) (Date)

/s/ Thomas J. Neff Trustee 3/19/98
Thomas J. Neff (Title) (Date)

/s/ E. Thayer Bigelow Trustee 3/19/98
E. Thayer Bigelow (Title) (Date)

UNANIMOUS SHAREHOLDER'S CONSENT

The UNDERSIGNED being the record and beneficial owners of all shares of
the outstanding capital stock of the World Bond-Debenture Series of Lord Abbett
Securities Trust ("the Fund"), does hereby consent to the taking of the actions
set forth below without a shareholders meeting in accordance with the provisions
of Section 5.13 of the Declaration and Agreement of Trust, as amended to this
date.

1. Approval of the Addendum to the Management Agreement between the
Fund (on behalf of the Series) and Lord, Abbett & Co. in the form
attached hereto increasing the management fee to 0.75 of 1%.

DST Systems, Inc. Lord, Abbett & Co.

By /s/ Jonathan Boehn /s/ Robert S. Dow
----------------------- --------------------
Jonathan Boehn Robert S. Dow
Group Vice President Managing Partner

The Lord, Abbett & Co.
Profit Sharing Plan

BY:
------------------- -------------------
Trustee Of The Lord, Abbett & Co. Zane E. Brown
Profit Sharing Plan
Dated: March , 1998