<PAGE>
Lord Abbett
Securities Trust
Growth & Income Series o International Series
World Bond-Debenture Series o Alpha Series
1999 ANNUAL REPORT
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Investment portfolios designed to help you
capture capital growth over the long term
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Visit our Web Site and get:
up to date statistics and other useful information at
www.lordabbett.com
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Report to Shareholders
For the Fiscal Year Ended October 31, 1999
[PHOTO]
Robert S. Dow
Chairman
November 8, 1999
Table of Contents
Growth & Income Series
- ---------------------------------------------
When We Shop for Stocks,
We Shop for Bargains 5
Statement of Net Assets 9
International Series
- ---------------------------------------------
An Experienced Global Manager
Can Help Uncover Great
Companies Worldwide 6
Statement of Net Assets 12
World Bond-Debenture Series
- ---------------------------------------------
The Flexibility You Need to Pursue
Outstanding Bond Performance
Worldwide 7
Statement of Net Assets 14
Alpha Series
- ---------------------------------------------
Three Great Small-Cap Funds
Make One Great Core
Investment 8
Statement of Net Assets 16
Data on All Series
- ---------------------------------------------
Statements of Operations 16
Statements of Changes
in Net Assets 17
Financial Highlights 19
Notes to Financial Statements 22
18
Lord Abbett Securities Trust completed its fiscal year on October 31, 1999. The
following is an overview of some class-specific data for the period under
review.
Growth & Income Series - Fiscal Year Ended 10/31/99
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $10.87 $10.85 $10.81
Dividends $ 0.050 $ 0.010 $ 0.010
Capital gains $ 0.325 $ 0.325 $ 0.325
Total return* 23.77% 23.17% 23.00%
International Series - Fiscal Year Ended 10/31/99
Class A Class B Class C Class Y Class P+
- --------------------------------------------------------------------------------
Net asset value $13.90 $13.75 $13.75 $14.00 $13.91
Dividends $ 0.085 $ 0.015 $ 0.015 $ 0.070 --
Capital gains $ 0.023 $ 0.023 $ 0.023 $ 0.023 --
Total return* 13.16% 12.31% 12.31% 13.65% 9.53%**
World Bond-Debenture Series - Fiscal Year Ended 10/31/99
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $9.24 $9.24 $9.22
Dividends $0.85 $0.78 $0.78
Capital gains $0.18 $0.18 $0.18
Total return* 6.33% 5.73% 5.50%
Alpha Series - Fiscal Year Ended 10/31/99
Class A Class B Class C
- --------------------------------------------------------------------------------
Net asset value $15.21 $15.05 $15.04
Dividends -- -- --
Capital gains -- -- --
Total return* 17.82% 17.12% 16.95%
About Growth & Income Series
Market Review
Evidence of a possible global economic recovery emerged early in 1999. By
mid-year, it became apparent that global economic conditions were generally
improving, as reflected in increasing demand for commodities such as paper,
metals and chemicals. Much of the global rebound was attributed to the Federal
Reserve Board's move in the autumn of 1998 to lower U.S. interest rates in an
effort to pump liquidity into many of the world's faltering economies. As global
markets continued to improve throughout 1999, the Federal Reserve Board decided
that this stimulus was no longer needed, resulting in a series of fall rate
hikes that have normalized U.S. interest rates from their record lows last year.
Overall, GDP growth in the U.S. remained strong throughout the period, with a
healthy labor market generating steady production and income gains.
* 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 returns.
** Not annualized.
+ International Series Class P shares commenced operations on 3/9/99, and
total return is calculated from inception. Portfolio Review
<PAGE>
Report to Shareholders
Portfolio Review
Rising interest rates in recent months caused a leadership shift in the
large-cap market as interest-rate-sensitive sectors, such as utilities and
financial services, underperformed, while technology stocks demonstrated
tremendous relative strength despite their high valuations. Over the course of
the year, the Series remained underweighted in the financial sector, in
anticipation of rising interest rates. Likewise, we were well-positioned to
benefit from the leadership position of the technology sector, with select
holdings generating strong gains. We also increased our exposure in basic
materials industries, in anticipation of further global economic recovery
throughout 2000 and 2001.
Outlook
We expect to see global economic growth continue throughout the coming year. In
response, we are adding holdings in sectors which this recovery is likely to
favor such as basic materials and capital goods. In the U.S., some signs are
emerging that the economy may be moderating. With a diminished risk of future
U.S. interest rate hikes, we are reconsidering financial services stocks, many
of which display solid fundamentals at attractive prices, a strategic adjustment
that could be especially timely as technology stocks become increasingly
expensive.
RISK: Lord Abbett Securities Trust - Growth & Income Series may invest up to 10%
of net assets in foreign securities. Foreign securities markets may not be
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. Foreign investments may
also be subject to currency exposure.
About International Series
Market Review
During the last months of 1998, many of the world's financial markets began to
signal a possible recovery from a two-year period of financial crisis and global
deflation. By mid 1999, it became apparent that this recovery was real, as
economic indicators pointed to a new phase of global economic expansion.
In the international equity markets, Europe, which remained subdued throughout
much of the period, picked up recently, as recession fears proved false. In
addition, many European companies posted better-than-expected earnings growth in
recent weeks due to a solid local economy and a weak euro, relative to the
dollar and the yen, which boosted exports. Japan, which benefited from a series
of economic initiatives during the period, continued to show signs of
improvement, as it attracted overseas money on the strength of its apparent
recovery and its relative importance to international investors.
Portfolio Review
The Series continued to implement its investment strategy of focusing on
attractively priced, industry-dominant companies with global leadership
potential. During the period, the Series remained overweighted in European and
Canadian companies that demonstrated superior corporate earnings, growth rates
and valuation levels relative to many companies in the Far East and emerging
markets. In general, we limited our exposure to Japanese companies in
traditional, old-style industries such as steel, chemicals and paper, because we
believe they require further corporate restructuring. In addition, the
sluggishness of Japan's overall economy does not bode well for those industries.
However, the Series has invested in select Japanese companies within new-style
industries, such as telecommunications and software. Indeed, a handful of these
high-tech issues have accounted for the majority of recent gains in the Japanese
markets.
1
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Outlook
During the next year, we expect European economic growth to average over 2%.
This modest growth rate, coupled with significant corporate restructuring
programs, will create an attractive combination of relative value and earnings
growth potential. In the Far East, we see an even greater dichotomy between
"Old-Japan-style" traditional industry and "New-Japan-style" high-tech
businesses. We expect "New-Japan-style" shares to continue to appreciate as
investors focus their capital in these rapidly growing sectors.
RISK: Lord Abbett Securities Trust - International Series will invest at least
80% of net assets in foreign securities under normal market conditions. The
Series primarily invests in small-cap securities, which may be more volatile in
price, normally have fewer shares outstanding and trade less frequently than
large companies. Foreign securities markets may not be subject to the same
degree of regulations as and may be more volatile and less liquid than the major
U.S. markets.
The Series' portfolio is actively managed and is subject to change.
About World Bond-Debenture Series
Market Commentary
Stronger global economic growth and a rebound in commodities prices were central
themes throughout the period. As expected, the U.S. Federal Reserve Board, as
well as several key European Central Banks, responded to this growth and the
ensuing concerns about inflation with interest rate hikes over the past few
months. Much of this anticipated rate tightening, however, had already been
discounted earlier in the year in the prices of both emerging market and global
high-yield issues, setting the stage for better performance moving forward. In
general, global growth has benefited many emerging market countries which tend
to be commodity producers.
Portfolio Review
Lord Abbett Securities Trust - World Bond-Debenture Series performed well during
the period compared to the Lipper Global Income Funds Index. Much of the Series'
global high-yield investment gains were generated in the cable and
telecommunications sectors where the consolidation of several European companies
increased demand for these issues. In the convertible sector, the Series added
value for shareholders by increasing exposure to investment-grade convertible
issues, both in the U.S. and in Europe. In the emerging markets, the Series
benefited from its positions in South Korean sovereign debt, which was recently
upgraded to investment grade, as well as from positions in other
higher-yielding, emerging market credits such as Malaysia, Mexico and Bulgaria.
Even the recent rate hikes by three major central banks - the U.S. Federal
Reserve, the European Central Bank and the Bank of England - have failed to
blunt the appetite for emerging markets debt. Another rate increase may,
however, call into question any further spread tightening.
Outlook
We anticipate that global growth should continue to improve, benefiting emerging
markets in the new year. Provided that the U.S. Federal Reserve Board succeeds
in engineering a soft landing for the U.S. economy, we expect that the
convertible and high-yield markets should remain attractive. Preemptive interest
rate hikes by the European Central Bank as well as by the Bank of England have
had little impact on the burgeoning European high-yield market, which has been
driven by the push to restructure the energy and telecommunication industries.
Overall, we expect that investor sentiment toward both emerging market and
corporate high-yield bonds will remain positive as investors throughout the
world continue to seek higher yielding assets. With its strategic focus, the
Series seems well-positioned to continue to benefit from the global growth
surge.
RISK: Lord Abbett Securities Trust - World Bond-Debenture Series has the ability
to invest substantially in high-yield securities. The risks of high-yield
securities include, but are not limited to, price volatility and the possibility
of default in the timely payment of interest and principal. In addition, the
Series has the ability to invest substantially in foreign securities. Foreign
securities markets may not be 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. Foreign investments are subject to currency exposure.
The Series' portfolio is actively managed and is subject to change.
2
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About Alpha Series
Market Review
o U.S. Small-Cap Market. Despite a brief rally during the second quarter, the
small-cap market in the U.S. has lagged the robust performance of the broad
market. Much of this underperformance can be attributed to the recent rise
in interest rates which particularly affected lower-liquidity, small-cap
issues. Within the small-cap arena, the small-cap growth sector has been
positively influenced by the continuing outperformance of Internet-related
stocks, while the less-liquid small-cap value sector has continued to lag.
o International Equity Markets. Investors have recently exhibited renewed
confidence in European markets as recessionary fears proved false and
corporate earnings rebounded from subdued levels. As concerns about renewed
inflation and the stability of emerging markets eased, investors around the
world became more confident that the promise of global economic recovery
had become a reality. During the period, many of the world's stock markets,
particularly the U.S., Japan and the Far Eastern emerging markets, rose
significantly. Japanese markets benefited from improved investor sentiment
as its economy continued to show signs of recovery.
Portfolio Review
o Lord Abbett Developing Growth Fund (Approximately 30% of Alpha Series'
portfolio). Technology stocks drove the small-cap growth sector during the
past year, and the Fund was well-positioned to benefit from these advances.
Select holdings in the energy and retail sectors also performed well.
o Lord Abbett Research Fund - Small-Cap Series (Approximately 30% of Alpha
Series' portfolio). As uncertainty regarding U.S. interest rates
intensified, the Series reduced its positions in economically sensitive
industries such as banking, housing and autos, in favor of sectors such as
technology and consumer goods. Select holdings in the energy sector, which
benefited from rebounding global commodities prices, also added value for
shareholders.
o Lord Abbett Securities Trust - International Series (Approximately 40% of
Alpha Series' portfolio). The Series continued to focus on "Best of Breed"
companies: those that show exceptional global leadership potential in their
respective industries. We maintained an overweighting in European and
Canadian companies which exhibited promising growth rates and attractive
valuation levels and strong gains were generated in most of our U.K.
holdings. Select investments were also made in "New-Japan-style" companies,
including technology, software and Internet ventures, which have accounted
for the majority of Japanese market gains in recent months.
Outlook
o U.S. Small-Cap Market. With the recent series of Federal Reserve Board rate
increases now behind us, we expect the small-cap sector to show better
relative performance moving forward. We believe that a stable U.S. economy
along with an improving global economy will also assist the small-cap
market. Small caps, compared to their large-cap counterparts, remain
meaningfully undervalued. Therefore, we believe this represents a unique
opportunity to invest in select small companies.
o International Equity Markets. We believe that a moderate European growth
rate of approximately 2%, along with subsiding concerns about economic and
corporate earnings growth, will help European markets to perform well
moving into next year. Although we expect certain high-tech issues to
continue to buoy the Japanese market, we believe that Japan's overall
economy is still in recession with few short-term growth prospects. We will
continue to watch the economic developments in Japan, as we believe their
full economic recovery hinges largely on government spending.
RISK: The underlying Funds in this Series are primarily invested in small-cap
securities (including U.S. and global), which may be more volatile in price,
normally have fewer shares outstanding and trade less frequently than large-cap
companies. In addition, the underlying Funds have the ability to invest in
foreign securities, high-yield securities and derivatives. Foreign securities
markets may not be 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. Foreign
investments are subject to currency exposure. The risks of high-yield securities
include, but are not limited to, price volatility and the possibility of default
in the timely payment of interest and principal.
The Series' portfolio is actively managed and is subject to change.
3
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Report to Shareholders
On a final note, we are proud to announce that on January 17, 2000, we are
relocating our headquarters to the Colgate Center, at 90 Hudson Street, in
Jersey City, New Jersey. Lord Abbett has experienced strong growth during the
90s. We have more than doubled our assets under management in the last five
years to nearly $33 billion. We are very excited about the move and strongly
believe it to be in the best interest of our shareholders.
We are pleased that you have chosen one or more of the portfolios in Lord Abbett
Securities Trust to play a role in your diversified investment portfolio. We
appreciate the trust you have placed in Lord Abbett and aim to reward your
confidence in us by helping you achieve your long-term financial goals.
4
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When We Shop for Stocks, We Shop for Bargains
When it comes to stock selection, the portfolio manager of the Growth & Income
Series tries to be a savvy buyer. We have an experienced team of financial
professionals whose approach includes elements similar to those taken by smart
shoppers.
When you think about how you shop, you realize that you like to find bargains.
Savvy shoppers often check out the sales racks to find items with a low price
tag. Of course, just because "the price is right" does not mean that a product
is worth buying. A smart shopper will carefully inspect the item, checking it
for defects and overall quality. Another important test required by the smart
shopper: usability and function. If the item is not in style, or is something
that would not likely be used, there is probably no point in buying it.
Quantitative Research:
Performed on a universe of the 1,000 largest U.S. and multinational companies to
identify those stocks that we believe represent the best bargains: a "low price
tag."
Fundamental Research:
Conducted to assess a company's operating environment, resources and strategic
plans, and to determine its prospects for exceeding the earnings expectations
reflected in its stock price: "overall quality."
Business Cycle Analysis:
Used to assess the economic and interest-rate sensitivity of the Series'
portfolio. This analysis helps the portfolio manager assess how adding or
eliminating stocks changes a portfolio's overall sensitivity to economic
activity and interest rates: "Is it in style?"
Lord Abbett Securities Trust - Growth & Income Series-- A Strong Performer
Average Annual Class C Share Total Return(1) as of 10/31/99:
[GRAPHIC OMITTED]
(1) Reflects the percent change at net asset value for Class C shares which
includes the reinvestment of all distributions. The Series issues
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord
Abbett Distributor LLCat 800-874-3733 and ask for the current prospectus.
(2) The Series commenced operations on 1/3/94.
Growth & Income Series
SEC-required average annual total returns (for Class C shares) for the periods
ended 9/30/99, with all distributions reinvested:
[GRAPHIC OMITTED]
26.21% 19.25% 17.13%
1 Year 5 Years Life of Series(2)
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
5
<PAGE>
An Experienced Global Manager Can Help Uncover Great Companies Worldwide
Lord, Abbett & Co. is a minority owner of the International Series' sub-adviser
Fuji-Lord Abbett International, Limited (Fuji-Lord Abbett).
Fuji-Lord Abbett is:
o An investment management affiliate of Fuji Bank, one of the world's largest
banks
o A money manager whose services, until now, had been available only to
large, institutional accounts
o An asset manager with offices in Tokyo and London serving pension
investment needs for many premier international companies, including:
Bridgestone NISSAN
Hitachi SONY
MCI Canon Inc.
A Solid Investment Strategy
Fuji-Lord Abbett's strategy is based on the timely purchase of undervalued
foreign companies which have focused on benefiting from the future changes
within their industries. Their disciplined research process involves:
o Examining global trends to identify developments on an industry-by-industry
basis;
o Using this information, along with our research and experience, to try to
define the ideal company within each industry; and
o Assessing the companies in each industry to determine which are "best of
breed." In other words, determining which ones best match the "ideal"
company, based on a blend of both quantitative and fundamental analysis.
The International Series' portfolio currently consists of 54 companies, which
meet our goal of creating a portfolio where the performance of individual
holdings is not diluted across too many securities.
Lord Abbett Securities Trust - International Series
Total Returns Through 10/31/99(1):
[GRAPHIC OMITTED]
(1) Performance is at net asset value for Class A shares. The Series offers
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord
Abbett Distributor LLC at 800-874-3733 and ask for the current prospectus.
(2) The Series commenced operations on 12/13/96.
International Series
SEC-required average annual total return for Class A shares at the maximum sales
charge of 5.75% for the periods ended 9/30/99, with all distributions
reinvested:
13.2% 14.9%
1 Year Life of Series(2)
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
6
<PAGE>
The Flexibility You Need to Pursue
Outstanding Bond Performance Worldwide
Ask More from Your Fixed-Income Investments
Would you like to earn more current income while reducing overall risk in your
portfolio? Diversifying your current bond portfolio outside the United States
may potentially be an effective way to pursue both objectives.
Lord Abbett Securities Trust - World Bond-Debenture Series seeks high current
income and capital appreciation by participating in foreign debt markets.
Investing in these markets may provide substantial yield advantages as compared
with investing in U.S. bonds. The decision to diversify into non-U.S. bonds may
also make sense from a risk-diversification standpoint since the economies
underlying foreign markets are not necessarily synchronized with the U.S.
economy.
4-Way Portfolio Focus
The centerpiece of World Bond-Debenture Series is a strategic flexibility that
enables it to "go where the yield is" and pursue outstanding bond investment
opportunities worldwide.
As a preliminary step, the Series' experienced portfolio management team
conducts extensive research into economic, political and market factors to
uncover value among economic regions and individual countries. The team's
regional and country decisions are then supplemented by asset allocation
strategies for:
o High-Yield Corporate Debt: The Series' lower-rated debt holdings pay high
income and help to minimize the effects of interest-rate fluctuations.
Price appreciation may result if the credit rating of debt issuers is
upgraded.
o High-Grade Debt: High-quality corporate issues, U.S. Government and other
sovereign-backed securities provide a dependable stream of current income.
o Equity-Related Securities: Capital appreciation is sought by investing in
convertible bonds that may be exchanged for common stock. When the stock of
the underlying company rises, these equity-related issues generally
increase in value.
o Emerging Market Debt: Emerging-market debt securities provide attractive
high-income opportunities. Price appreciation may result from rating
upgrades of country debt.
Lord Abbett Securities Trust - World Bond-Debenture Series
Total Returns Through 10/31/99(1):
[GRAPHIC OMITTED]
(1) Performance is at net asset value for Class A shares. The Series offers
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord
Abbett Distributor LLC at 800-874-3733 and ask for a current prospectus.
(2) The Series commenced operations on 12/18/97.
World Bond-Debenture Series
SEC-required average annual total return for Class A shares at the maximum sales
charge of 4.75% for the periods ended 9/30/99, with all distributions
reinvested:
0.50% 0.34%
1 Year Life of Series(2)
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
7
<PAGE>
Three Great Small-Cap Funds
Make One Great Core Investment
Don't Chase Past Small-Cap Performance
Investing in small companies that are industry leaders or offer breakthrough
products can be very rewarding. U.S. growth, U.S. value and international
small-cap markets, however, seldom move in the same direction at the same time.
This means investors who chase small-cap returns by investing in sectors with
the best recent results are often disappointed when the sector they choose fails
to produce the highest immediate returns.
Choose Lord Abbett's Unique "Fund of Funds" Approach
We believe Lord Abbett Securities Trust - Alpha Series is a smart way to tap the
potential of the small-cap arena and merits your consideration as a core
investment. The Series' "fund of funds" approach accesses three distinct
portfolios and management teams.
o For U.S. Small-Cap Growth Exposure: Lord Abbett Developing Growth Fund
invests in stocks of small growing companies, many of which are highly
specialized and in niche markets (approximately 30% of Alpha Series
portfolio).
o For U.S. Small-Cap Value Exposure: Lord Abbett Research Fund - Small-Cap
Value Series invests in stocks of established undervalued small companies
(approximately 30% of Alpha Series portfolio).
o For International Small-Cap Exposure: Lord Abbett Securities Trust -
International Series invests mainly in stocks of small international
companies (approximately 40% of Alpha Series portfolio).
Please note that the Alpha Series portfolio is actively managed and that its
percentage allocations may change from time to time.
For Equity Unique "Fund of Funds" Benefits
o Provides potentially higher returns by diversifying globally among
small-cap markets.
o Potentially dampens portfolio risk by spreading investment decisions among
three distinct management teams.
o Eliminates the need to expensively reallocate your small-cap assets.
Lord Abbett Securities Trust - Alpha Series
Total Returns Through 10/31/99(1):
[GRAPHIC OMITTED]
(1) Performance is at net asset value for Class A shares. The Series offers
additional classes of shares with distinct pricing options. For a full
discussion of the differences in pricing alternatives, please call Lord
Abbett Distributor LLC at 800-874-3733 and ask for a current prospectus.
(2) The Series commenced operations on 12/29/97.
Alpha Series
SEC-required average annual total return for Class A shares at the maximum sales
charge of 5.75% for the periods ended 9/30/99, with all distributions
reinvested:
17.40% 3.54%
1 Year Life of Series(2)
Past performance is not an indication of future results. The investment return
and principal value of an investment will fluctuate so that shares, on any given
day or when redeemed, may be worth more or less than their original cost.
8
<PAGE>
A Note About Year 2000 Matters
As you may know, there has been extensive media coverage about possible problems
that may arise as a result of uncertainties about the ability of computers to
"understand" dates using the year 2000. Potentially, these problems could
disrupt the services and systems that the Fund relies on in its daily
operations.
As a general matter, we believe the financial industry has taken a leadership
role addressing year 2000 (Y2K) issues and this should help to inspire
confidence among concerned investors. More specifically, Lord Abbett, Lord
Abbett Distributor LLC and the Fund's transfer agent, custodian and other
providers of services critical to the Fund have been actively working on
reviewing and replacing or updating computer systems and computer-to-computer
interfaces, as needed. Each has completed or is in the process of testing new or
revised systems and interfaces and generally expects that their systems, as well
as those of their key external service providers, will be ready to handle Y2K
without significant problems. Furthermore, the Fund has been routinely taking
each company's Y2K preparations into account when considering or reviewing
investments.
In summary, while the Y2K problem is unprecedented and we cannot completely
eliminate the possibility that the Fund could be affected in some way, we are
confident that all parties involved are taking appropriate steps to resolve Y2K
concerns.
Important Information
Results quoted herein reflect appropriate Rule 12b-1 Plan expenses from
commencement of the Plan. Tax consequences are not reflected. If used as sales
material after 12/31/99, this report must be accompanied by Lord Abbett's
Performance Quarterly for the most recently completed calendar quarter.
Foreign investment risk factors include the potential for less regulation and
liquidity and more volatility than U.S. markets; currency fluctuation;
potentially less publicly-available information about companies, banks and
governments than for U.S. counterparts; lack of uniform accounting standards
among countries, impairing comparisons; potentially higher transaction costs and
different securities settlement practices.
<TABLE>
<CAPTION>
Statement of Net Assets
Growth & Income Series October 31, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stocks 96.61%
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense 1.24% Boeing Co.-World's leading commercial aircraft manufacturer 58,400 $ 2,690,050
Aluminum 2.07% Alcoa Inc.-Largest U.S. aluminum producer 73,700 4,477,275
- -----------------------------------------------------------------------------------------------------------------------=============
Apparel .36% VF Corp.-Leading producer of blue jeans and other apparel 26,000 781,625
Auto Parts: Original Delphi Automotive Systems Corp.-Supplier of automotive
Equipment .16% components, integrated systems, and modules 21,037 345,796
Automotive .67% General Motors Corp.-Worldwide auto producer 20,600 1,447,150
- -----------------------------------------------------------------------------------------------------------------------=============
Banks: Money Center 6.19% Bank of America Corp.-Major money-center bank 41,642 2,680,704
Chase Manhattan Corp.-Major money-center bank holding company 53,800 4,700,775
Fleet Boston Corp.-Provides a range of financial services 53,601 2,338,344
Mellon Financial Corp.-Commercial bank located in Pittsburgh, PA 100,000 3,693,750
Total 13,413,573
- -----------------------------------------------------------------------------------------------------------------------=============
Banks: Regional 2.21% Bank One Corp.-Leading bank holding company 35,640 1,338,727
Comerica Inc.-Midwestern regional bank holding company 42,150 2,505,291
KeyCorp.-Multi-regional bank holding company serving the Northwest U.S. 34,000 949,875
Total 4,793,893
- -----------------------------------------------------------------------------------------------------------------------=============
Cable Services 2.25% Time Warner Inc.-A major entertainment and communications firm 70,000 4,878,125
- -----------------------------------------------------------------------------------------------------------------------=============
Capital Goods 1.95% AlliedSignal Inc.-Major producer of aerospace components,
automotive parts and engineered materials 39,600 2,254,725
9
<PAGE>
Statement of Net Assets
Growth & Income Series October 31, 1999
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Rockwell International Corp.-Leading producer of space
systems and electrical and
electronic products including defense,
telecommunications and factory automation systems 40,700 $ 1,971,406
Total 4,226,131
- -----------------------------------------------------------------------------------------------------------------------=============
Chemicals 1.95% Dow Chemical Co.-Leading global chemical producer 27,700 3,275,525
Union Carbide Corp.-Major U.S.-based producer of plastics and chemicals 15,700 957,700
Total 4,233,225
- -----------------------------------------------------------------------------------------------------------------------=============
Communications Technology
3.06% *QUALCOMM Inc.-Leading producer of
communications technologies and products 29,800 6,637,950
- -----------------------------------------------------------------------------------------------------------------------=============
Computer Services 2.19% *Unisys Corp.-Provides information services,
technology, software and customer support 195,575 4,742,694
- -----------------------------------------------------------------------------------------------------------------------=============
Computer Technology 7.60% *Apple Computer Inc.-Main personal computer producer 42,000 3,365,250
International Business Machines Corp.-World's largest
computer manufacturer 55,600 5,469,650
*Sun Microsystems Inc.-Supplier of network
computer products including workstations,
servers, software, microprocessors, and a full
range of services and support 72,300 7,650,244
Total 16,485,144
- -----------------------------------------------------------------------------------------------------------------------=============
Computer: Hardware 2.73% *EMC Corp.-A supplier of high-performance
storage devices and related services 81,000 5,913,000
- -----------------------------------------------------------------------------------------------------------------------=============
Computer: Software .82% *Oracle Corp.-Supplies software for enterprise information management 37,200 1,769,325
Data Processing Equipment &
Components 2.41% First Data Corp.-Information supplier for credit card
processing and related services 114,500 5,231,219
- -----------------------------------------------------------------------------------------------------------------------=============
Drugs 5.87% American Home Products Corp.-Producer of drugs,
food, housewares and packaged
medicine and medical products 54,000 2,821,500
Bristol-Myers Squibb Company-Major worldwide
pharmaceutical concern with interests in
infant nutrition, non-prescription medications,
medical devices and toiletries 51,500 3,955,844
Pharmacia & Upjohn Inc.-Develops, makes and sells
prescription pharmaceutical & other
related health care products 50,000 2,696,875
SmithKline Beecham plc ADR-Major U.K. based health-care company 50,700 3,244,800
Total 12,719,019
- -----------------------------------------------------------------------------------------------------------------------=============
Electric Power 2.10% Cinergy Corp.-Supplier of electricity and natural gas
in southwestern Ohio and adjacent
Kentucky and Indiana territories 52,900 1,494,425
FPL Group-One of the nation's premier electric utilities,
serving about 7 million people in
Florida's east, southeast and southwest coasts 35,000 1,760,937
FirstEnergy Corp.-Major Midwestern electric utility holding company 50,000 1,303,125
Total 4,558,487
- -----------------------------------------------------------------------------------------------------------------------=============
Electronics: Emerson Electric Co.-Diversified manufacturer
Equipment/Components of consumer and industrial
.76% electrical components 27,600 1,657,725
- -----------------------------------------------------------------------------------------------------------------------=============
Electronics: Semiconductor Texas Instruments Inc.-Major producer of
1.75% semiconductors and electronic equipment 42,200 3,787,450
- -----------------------------------------------------------------------------------------------------------------------=============
Energy Equipment & Services Baker Hughes Inc.-Supplier of products, services and
1.36% systems to the worldwide oil and gas industry 105,500 2,947,406
- -----------------------------------------------------------------------------------------------------------------------=============
Financial Services 1.23% Morgan Stanley Dean Witter & Co.-Major brokerage and credit card company 24,200 2,669,562
- -----------------------------------------------------------------------------------------------------------------------=============
Financial: Miscellaneous .87% FNMA-America's largest supplier of conventional home mortgages 26,800 1,896,100
- -----------------------------------------------------------------------------------------------------------------------=============
Food 5.83% Best Foods-Producer of diversified packaged foods 50,900 2,990,375
ConAgra Inc.-Major producer of agricultural and consumer products 53,940 1,405,811
Heinz H.J. Co.-Domestic packaged foods producer 97,900 4,674,725
Ralston Purina Co.-Produces and sells dog and cat foods 72,000 2,263,500
Sara Lee Corp.-A diversified maker of branded food products,
apparel and household consumer products 48,000 1,299,000
Total 12,633,411
- -----------------------------------------------------------------------------------------------------------------------=============
Health Care Management
Services 1.51% CIGNA Corp.-Multi-line insurance and medical services 43,800 3,274,050
- -----------------------------------------------------------------------------------------------------------------------=============
Hospital Supplies 1.05% Baxter International Inc.-World's leading distributor and
major manufacturer of hospital supplies and related medical equipment 35,000 2,270,625
- -----------------------------------------------------------------------------------------------------------------------=============
Insurance 3.85% American General Corp.-A leading provider of financial
services, including life/health
insurance, annuities, consumer
credit and mortgage financing 52,300 3,880,006
Aon Corp.-Multi-line insurance company 91,600 3,251,800
10
<PAGE>
Statement of Net Assets
Growth & Income Series October 31, 1999
Shares or
Investments Principal Amount Value
- ------------------------------------------------------------------------------------------------------------------------------------
Chubb Corp.-Broad-based property and casualty insurance organization 22,000 $ 1,207,250
Total 8,339,056
- -----------------------------------------------------------------------------------------------------------------------=============
Machinery: Agriculture .55% Deere & Co.-World's largest manufacturer of farm equipment 32,800 1,189,000
- -----------------------------------------------------------------------------------------------------------------------=============
Metals & Minerals .90% Newmont Mining Corp.-Explores for and produces gold worldwide 88,900 1,950,244
- -----------------------------------------------------------------------------------------------------------------------=============
Natural Gas 3.75% Columbia Energy Group-Utility holding company and natural gas distributor 45,000 2,925,000
NICOR Inc.-Natural gas distributor in Illinois 70,000 2,712,500
The Coastal Corp.-A diversified gas pipeline company 59,400 2,502,225
Total 8,139,725
- -----------------------------------------------------------------------------------------------------------------------=============
Oil: Integrated International BP Amoco plc ADR-Major integrated petroleum and natural
6.63% gas company with sizeable interests in chemicals 74,868 4,323,627
Chevron Corp.-Worldwide petroleum company with important
interests in chemicals and minerals 23,600 2,154,975
Exxon Corp.-World's largest integrated oil company 48,000 3,555,000
Mobil Corp.-Large international oil company 45,000 4,342,500
Total 14,376,102
- -----------------------------------------------------------------------------------------------------------------------=============
Paper and Forest Products Champion International Corp.-Makes and sells paper for
3.34% business communications, commercial printing, publications,
newspapers, and wood products 35,800 2,069,687
Georgia Pacific Corp.-Producer of paper and forest products 70,100 2,782,094
International Paper Co.-Producer of paper and forest products 45,400 2,389,175
Total 7,240,956
- -----------------------------------------------------------------------------------------------------------------------=============
Photography .95% Eastman Kodak Co.-Leading manufacturer of photographic film and equipment 30,000 2,068,125
- -----------------------------------------------------------------------------------------------------------------------=============
Publishing 2.80% Gannett Co. Inc.-Major U.S. newspaper publisher 37,400 2,884,475
Tribune Co.-Major Chicago-based newsprint company 53,000 3,180,000
Total 6,064,475
- -----------------------------------------------------------------------------------------------------------------------=============
Retail 3.72% *Consolidated Stores Corp.-Major U.S. retailer specializing in
closeouts and toys 176,200 3,226,663
May Department Stores Co.-Leading department store retailer 37,500 1,300,781
Wal-Mart Stores Inc.-Largest U.S. discount retailer 62,400 3,537,300
Total 8,064,744
- -----------------------------------------------------------------------------------------------------------------------=============
Telecommunications .38% Sprint Corp (PCS Group)-Wireless communications 10,000 829,375
- -----------------------------------------------------------------------------------------------------------------------=============
Telephone: Long Distance 5.18% AT&T Corp.-Global telecommunications giant 100,500 4,698,375
*MCI WorldCom Inc.-Diversified telecommunications company 41,575 3,567,655
*Sprint Corp (FON Group)-Third largest long distance telephone system 40,000 2,972,500
Total 11,238,530
- -----------------------------------------------------------------------------------------------------------------------=============
Telephone: Regional 4.37% Alltel Corp.-Regional telephone holding company 46,800 3,896,100
Bell Atlantic Corp.-Regional telephone company 33,600 2,181,900
BellSouth Corp.-Regional telephone company 28,800 1,296,000
SBC Communications Inc.-Regional telephone monopoly 41,000 2,088,437
Total 9,462,437
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments in Common Stocks (Cost $132,352,327) 209,442,779
- -----------------------------------------------------------------------------------------------------------------------=============
Short-term Investments 3.04% Associates Corp. 5.32% due 11/1/1999 (Cost $6,600,000) $6,600,000 6,600,000
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments 99.65% (Cost $138,952,327) 216,042,779
- -----------------------------------------------------------------------------------------------------------------------=============
Cash and Receivables, Net of Liabilities .35% 754,522
====================================================================================================================================
Net Assets 100.00% $216,797,301
====================================================================================================================================
Class A Shares-Net asset value ($102,183,733 / 9,397,408 shares outstanding) $10.87
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $11.53
Class B Shares-Net asset value ($9,739,674 / 897,701 shares outstanding) $10.85
Class C Shares-Net asset value ($104,873,894 / 9,704,623 shares outstanding) $10.81
The descriptions of the companies are unaudited.
*Non-income producing security.
ADR American Depositary Receipt.
See Notes to Financial Statements.
11
<PAGE>
Statement of Net Assets
International Series October 31, 1999
Shares or
Investments Principal Amount Value
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in Securities 99.21%
- -----------------------------------------------------------------------------------------------------------------------=============
Foreign 93.72%
- ------------------------------------------------------------------------------------------------------------------------------------
Australia 2.90% *Novogen Limited-Biotechnology company specializing
in plant sterol-based OTC and eventually
ethical pharmaceutical products 2,900,000 $ 6,181,169
- -----------------------------------------------------------------------------------------------------------------------=============
Canada 7.32% *Ballard Power Systems Inc.-Designs, manufactures
and develops methanol- or hydrogen-based fuel cells that
are the only true zero emission power source for vehicles 300,000 8,421,125
*Descartes System Group Inc.-Supply chain automation &
integration software supplier 443,100 1,731,683
Timberwest Forest Corp.-Forestry land block consolidator
that also operates the assets to produce timber & pulp 800,000 5,437,369
Total 15,590,177
- -----------------------------------------------------------------------------------------------------------------------=============
Finland 2.52% Pohjola-Finland's largest general insurance company covering
both the life and the non-life sectors 100,000 5,374,380
- -----------------------------------------------------------------------------------------------------------------------=============
France 16.59% AXA-One of Europe's largest financial organizations 40,000 5,652,583
Alcatel-Core business consists of telecommunication systems
as well as railroad and energy transportation systems 40,000 6,259,572
Cap Gemini SA-Offers computer consulting services 30,000 4,552,416
Faurecia-Leading worldwide supplier of car seat
and exhaust pipe systems 21,375 1,292,934
*Guillemot Corp.-Designs, manufactures and distributes
computer accessories 13,400 987,052
*Sanofi-Synthelabo SA-2nd leading French pharmaceutical
group manufacturing health careproducts and medical
and surgical equipment 125,000 5,525,864
Telecom Reseaux Services-An information network service
company specialized in both data network
and voice network technologies 66,200 976,662
Thomson CSF-A major aerospace company 80,000 2,723,019
*UBI Soft Entertainment SA-One of the largest producers,
translators and distributors of
games software in Europe 48,475 7,115,797
UBI Soft Entertainment SA 3.8% Conv. Deb due 7/16/2005 -
One of the largest producers,
translators and distributors of
games software in Europe $1,562,000 271,596
Total 35,357,495
- -----------------------------------------------------------------------------------------------------------------------=============
Germany 26.66% CeWe Color Holding AG-The biggest independent photographic
laboratories group worldwide 50,000 1,153,911
DaimlerChrysler AG-World's 3rd largest manufacturer of cars and trucks 40,000 3,119,248
Drillisch AG-Reseller of mobile phone and long distance
telephone capacity in the CAD/CAM/CAE integration industry 360,000 3,148,754
GEA AG-Ord-One of the world's top suppliers of food
and pharmaceutical processing equipment 90,000 3,129,786
Gehe AG-Europe's largest pharmacy chain 100,000 3,498,616
IWKA AG-Multi-line engineering company making
packaging, robot welding and defense equipment 200,000 3,909,598
*LHS Group Inc.-Leading global provider of client/server,
modular, customer care & billing services to telecomm utilities 150,000 4,252,083
Marschollek Laut Und Part-Largest independent personal life
insurance and investment consultancy services 30,000 6,338,607
MobilCom AG-Provides mobile telephone service 45,000 2,337,855
Preussag AG-Diversified conglomerate with tourist/travel
agency and global manufacturing, wholesale, transport
and engineering operation 65,625 3,561,515
SAI Automotive AG-Europe's largest supplier of specialist
car interior modules-cockpits & doors 245,000 2,181,629
SAP AG Non Vtg Pref Dem-World's fourth-largest software
firm, dominating the global market for relational databases 500 220,771
SAP Ord-World's fourth-largest software firm,
dominating the global market for relational databases 12,500 4,652,527
SKW Trostberg AG-Specialist niche chemical firm producing
additives, coverings, adhesives, anti-corrosive paints and
oil well drilling products 390,000 2,885,093
*Takkt AG-Provides one-stop shopping for a variety of
equipment, supplies and accessories for the office, warehouse
and works sectors 100,000 579,590
*Vectron Systems AG-Manufactures and markets electronic
cash register systems and related data communications software 140,000 3,968,611
Vossloh AG-Manufacturer of electrical lighting equipment
as well as railway truck fasteners and the related
installation equipment 200,000 4,151,972
*W.E.T. Automotive Systems AG-Leading global supplier
of car seat heating systems 90,000 3,727,291
Total 56,817,457
- -----------------------------------------------------------------------------------------------------------------------=============
12
<PAGE>
Statement of Net Assets
International Series October 31, 1999
Shares or
Investments Principal Amount Value
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands 6.24% Getronics NV-Provides computer products and computer
services around the world 60,000 $ 2,997,007
Hunter Douglas NV-Major global supplier of decorative
building fittings especially window blinds 47,000 1,275,362
Numico NV-Develops, manufactures and markets nutritional products 125,000 5,104,344
Stork NV-Engineering and service company focused on aircraft parts,
processing machinery and food manufacturing equipment 200,000 3,930,674
Total 13,307,387
- -----------------------------------------------------------------------------------------------------------------------=============
- ------------------------------------------------------------------------------------------------------------------------------------
Switzerland 1.64% Baloise Holding Ltd.-Insurance group providing both life and non-life
insurance services 3,750 3,028,761
Saurer AG-Textile machinery and auto component manufacturing firm 1,100 462,276
Total 3,491,037
- -----------------------------------------------------------------------------------------------------------------------=============
- ------------------------------------------------------------------------------------------------------------------------------------
United Kingdom 29.85% Ashtead Group plc-Major construction plant and machinery hire firm 1,800,000 5,134,524
DBS Management plc-Supplies independent financial advisors with
financial product evaluation and administration software and services 1,000,000 3,000,483
First Technology plc-Designs and manufactures equipment and systems
for auto safety 944,500 7,709,912
General Electric Company plc-Electronics group 500,000 5,470,743
Jarvis plc-Specialist engineering and service company
focused on the installation and maintenance of related track and signals 1,000,000 4,299,322
Johnson Matthey plc-Precision metal-based refinery, alloy
manufacturing and trading company 120,000 1,106,808
London Bridge Software Holdings plc-Develops software
solutions and provides consultancy and related services for
credit risk management 79,300 3,533,220
Mayflower Corp.-Specialist supplier of bus, coach and car bodies 2,750,000 9,449,465
NXT plc-Makes high quality loudspeakers and has developed
the first commercial flatbed panel speaker 986,000 6,986,866
Pilkington plc-Manufactures and distributes glass for the
building and automotive markets 4,000,000 6,017,406
Precoat International plc-Processes and distributes
precoated steel in Europe and North America 760,000 1,793,055
Regal Hotel Group plc-Owns and operates more than 100 medium
quality, medium-sized hotels and inns 5,000,000 1,479,690
Trifast plc-Distributes and manufactures industrial fasteners,
particularly for electronics and electrical concerns 465,000 7,186,361
UTD Assurance Group-A major insurance provider 3,500,000 431,576
Total 63,599,431
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments in Foreign Securities (Cost $199,927,748) 199,718,533
====================================================================================================================================
United States 1.60%
- ------------------------------------------------------------------------------------------------------------------------------------
Eigner & Partner-A major software developer 9,979 2,384,981
*Net.B@nk, Inc.-Provider of banking services over the Internet 46,100 1,019,962
Total Investments in United States Securities (Cost $2,942,044) 3,404,943
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments in Common Stocks (Cost $202,869,792) 203,123,476
- -----------------------------------------------------------------------------------------------------------------------=============
Short-term Investments 3.89% FNMA Discount Note 5.23% due 11/1/1999 (Cost $8,285,000) $8,285,000 8,285,000
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments in Securities 99.21% (Cost $211,154,792) 211,408,476
- -----------------------------------------------------------------------------------------------------------------------=============
Cash and Receivables, Net of Liabilities .79% 1,678,116
====================================================================================================================================
Net Assets 100.00% $213,086,592
====================================================================================================================================
Class A Shares-Net asset value ($105,169,144 / 7,565,247 shares outstanding) $13.90
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $14.75
Class B Shares-Net asset value ($22,939,662 / 1,667,992 shares outstanding) $13.75
Class C Shares-Net asset value ($20,151,623 / 1,465,604 shares outstanding) $13.75
Class P Shares-Net asset value ($1,198.82 / 86.172 shares outstanding) $13.91
Class Y Shares-Net asset value ($64,824,964 / 4,629,782 shares outstanding) $14.00
The descriptions of the companies are unaudited.
*Non-income producing security.
See Notes to Financial Statements.
13
<PAGE>
Statement of Net Assets
World-Bond Debenture Series October 31, 1999
Principal Amount
Investments In Local Currency(000) USS Value
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Investments in Securities 95.82%
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign 58.99%
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina 1.70% Republic of Argentina Zero coupondue 2001 225 $ 199,687
- -----------------------------------------------------------------------------------------------------------------------=============
- -----------------------------------------------------------------------------------------------------------------------=============
Brazil 3.23% Republic of Brazil 115/8/2004 250 239,688
Republic of Brazil Discount 615/16/2024 200 138,740
Total 378,428
- -----------------------------------------------------------------------------------------------------------------------=============
Bulgaria 2.59% Bulgaria IAB61/2/2011 400 303,280
- -----------------------------------------------------------------------------------------------------------------------=============
- -----------------------------------------------------------------------------------------------------------------------=============
Canada 3.65% Call-Net Enterprises Inc. 0% to 2003, 8.94% to 2008** 350 208,250
Clearnet Communications 0% to 2004, 101/8% to 2009** 250 151,563
Rogers Communications Inc. 83/4/2007(a) 100 67,481
Total 427,294
- -----------------------------------------------------------------------------------------------------------------------=============
Costa Rica .71% Banco Central Costa Rica 61/4/2010 100 83,500
- -----------------------------------------------------------------------------------------------------------------------=============
France 1.78% AXA SA 21/2/2014(a) 198 208,652
- -----------------------------------------------------------------------------------------------------------------------=============
Germany 2.89% Deutsche Bank-Allianz 2/2003(a) 200 208,389
Sirona Dent Systems 91/8/2008(a)+ 325 129,581
Total 337,970
- -----------------------------------------------------------------------------------------------------------------------=============
- -----------------------------------------------------------------------------------------------------------------------=============
Greece 2.18% Hellenic Republic 61/2/2014(a) 55,000 164,959
Hellenic Republic 8.9/2003(a) 27,000 89,790
Total 254,749
- -----------------------------------------------------------------------------------------------------------------------=============
Ireland 1.84% Esat Telecom Group Inc. 117/8/2009(a) 200 215,850
- -----------------------------------------------------------------------------------------------------------------------=============
Malaysia 1.32% Republic of Malaysia 83/4/2009 150 154,617
- -----------------------------------------------------------------------------------------------------------------------=============
Mexico 11.67% Coca-Cola Femsa SA de CV 8.95/2006 100 98,250
Grupo Minero Mexico SA 81/4/2008 250 207,500
Grupo Televisa, SA 0% to 2001, 131/4% to 2008** 350 301,000
Pepsi-Gemex SA de CV 93/4/2004 250 247,500
TV Azteca SA de CV 101/2/2007 200 160,500
United Mexican States 93/4/2005 250 250,859
United Mexican States 97/8/2007 100 101,094
Total 1,366,703
- -----------------------------------------------------------------------------------------------------------------------=============
- -----------------------------------------------------------------------------------------------------------------------=============
Netherlands 3.52% United Pan-Europe Comm NCV 111/4/2009+ 200 200,500
United Pan-Europe Comm 0% to 2004, 121/2% to 2009**+ 400 212,000
Total 412,500
- -----------------------------------------------------------------------------------------------------------------------=============
Panama 2.08% Republic of Panama 87/8/2027 300 243,002
- -----------------------------------------------------------------------------------------------------------------------=============
Peru 3.19% Peru-Past Due Interest 41/2% to 2003, 5% to 2007,
6 mo & LIBOR+ 81.25% to 2017** 600 374,100
Philippines 2.51% Republic of Philippines 87/8/2008 300 293,625
- -----------------------------------------------------------------------------------------------------------------------=============
Poland 1.28% Poland-Reg'd-Par 3% to 1999, 31/2% to 2000,
33/4% to 2003, 4% to 2014, 5% to 2024** 100 61,100
Poland non-U.S. Glb bearer 5% to 1999, 6% to 2002, 7% to 2014** 100 88,470
Total 149,570
- -----------------------------------------------------------------------------------------------------------------------=============
Republic of Korea 1.79% Republic Of Korea 87/8/2008 200 209,656
- -----------------------------------------------------------------------------------------------------------------------=============
- -----------------------------------------------------------------------------------------------------------------------=============
United Kingdom 11.06% Comcast UK Cable Partners Ltd. 0% to 2000, 11.2% to 2007** 200 184,000
Esprit Telecom Group plc 107/8/2008 150 152,250
Esprit Telecom Group plc 11/2008(a) 350 188,580
Orange plc 85/8/2008(a) 200 336,218
RSL Communications plc 0% to 2003, 10% to 2008(a)** 300 99,812
Swiss Life Finance Ltd. Conv. 2/2003 150 150,938
Telewest plc 0% to 2004, 91/4% to 2009** 300 183,750
Total 1,295,548
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments in Foreign Securities (Cost $7,267,958) 6,908,731
- -----------------------------------------------------------------------------------------------------------------------=============
14
<PAGE>
Statement of Net Assets
World-Bond Debenture Series October 31, 1999
Principal Amount
In Local Currency(000)
Investments or Shares ("shs") USS Value
- ------------------------------------------------------------------------------------------------------------------------------------
United States 36.83%
- ------------------------------------------------------------------------------------------------------------------------------------
Allbritton Communications Co. 93/4/2007 125 $ 126,250
America West Airlines Inc. 103/4/2005 100 100,000
Arbor Software Corp. Conv. 41/2/2005+ 125 96,875
BE Aerospace Inc. 97/8/2006 85 83,087
Bresnan Communications 0% to 2004, 91/4% to 2009** 225 148,500
Chancellor Media AFM 101/2/2007 100 109,000
Chattem Inc. 87/8/2008 200 179,000
Cumulus Media Inc. 103/8/2008 150 155,250
Fox/Liberty Networks LLC 87/8/2007 200 203,000
GST Telecommunications Inc.* 3,000 shs 20,250
Global Crossing Holdings Ltd. 95/8/2008 150 152,625
Huntsman ICI Chemicals 101/8/2009(a) 200 210,233
Iron Mountain Inc. 101/8/2006 150 154,500
Jefferson-Pilot Corp. (NBX) $5.256 Conv. Pfd. 1,000 shs 107,000
Merrill Lynch & Co., Conv. 11/2/2005 200 203,000
Monsanto Co. Conv. Pfd. 6.5% 2,000 75,750
NTL Inc. 0% to 2004, 93/4% to 2009(a)** 250 233,257
Nextlink Communications Inc. 0% to 2004, 121/4% to 2009** 350 206,500
Nortek Inc. 87/8/2008 175 164,938
Orbital Imaging Corp. 115/8/2005 150 102,750
Orbital Imaging Corp. Warrants expiring 3/1/2005* 150 shs 3,000
Owens Illinois Inc. 4.750% Conv. Pfd. 2,000 shs 66,000
Pierce Leahy Corp. 111/8/2006 200 213,000
Renaissance Media Group 0% to 2003, 10% to 2008** 100 70,250
Roche Holdings Inc. Conv. Zero coupon due 2010+ 175 106,750
Scotts Co. 85/8/2009+ 200 191,000
Sinclair Broadcasting Group Inc. 10/2005 100 100,000
Splitrock Services Inc. 113/4/2008 50 45,875
Splitrock Services Inc. Warrants expiring 7/15/2008* 50 shs 3,850
STMicroelectronics NV Conv. Zero coupon due 2009 175 158,019
Trump Atlantic City Associates Funding 111/4/2006 100 81,500
Unitedglobalcom Conv. Pfd. 7% 4,000 shs 237,000
Viatel Inc. 111/4/2008 200 191,000
Viatel Inc. 141/2/2011 454 15,152
Total Investments in United States Securities (Cost $4,511,628) 4,314,161
- -----------------------------------------------------------------------------------------------------------------------=============
Total Long-Term Investments in Securities (Cost $11,779,586) 11,222,892
- -----------------------------------------------------------------------------------------------------------------------=============
- -----------------------------------------------------------------------------------------------------------------------=============
Short-term Investments 2.93% FNMA Discount 5.23% due 11/1/1999 93,000 93,000
Republic of Kazakhstan 91/4% due 12/20/1999 250,000 249,825
Total Short-term Investments (Cost $342,290) 342,825
- -----------------------------------------------------------------------------------------------------------------------=============
Total Investments in Securities 98.75% (Cost $12,121,876) 11,565,717
- -----------------------------------------------------------------------------------------------------------------------=============
Cash and Receivables, Net of Liabilities 1.25% 146,173
====================================================================================================================================
Net Assets 100.00% $11,711,890
====================================================================================================================================
Class A Shares-Net asset value ($8,459,468 / 915,285 shares outstanding) $9.24
Maximum offering price (net asset value plus sales charge of 4.75% of the offering price) $9.70
Class B Shares-Net asset value ($1,797,783 / 194,521 shares outstanding) $9.24
Class C Shares-Net asset value ($1,454,639 / 157,700 shares outstanding) $9.22
(a)Investments in non-U.S. dollar-denominated securities (18.94%). The remaining securities (81.06%)
are invested in U.S. dollar-denominated securities.
*Non-income producing security.
**Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay a predetermined coupon rate.
+Restricted security under Rule 144A.
See Notes to Financial Statements.
</TABLE>
15
<PAGE>
Statement of Net Assets
Alpha Series October 31, 1999
<TABLE>
<CAPTION>
Investments Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lord Abbett Developing Growth Fund, Inc.-Class Y 2,982,260 $ 50,251,086
Lord Abbett Research Fund-Small-Cap Value Series-Class Y 3,137,156 46,680,875
Lord Abbett Securities Trust-International Series-Class Y 4,622,948 64,721,275
Total Investments in Securities (Cost $159,572,598) 161,653,236
- -----------------------------------------------------------------------------------------------------------------------=============
Cash and Receivables, Net of Liabilities .29% 466,346
====================================================================================================================================
Net Assets 100.00% $162,119,582
====================================================================================================================================
Class A Shares-Net asset value ($75,170,286 / 4,940,950 shares outstanding) $15.21
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $16.14
Class B Shares-Net asset value ($52,304,209 / 3,475,804 shares outstanding) $15.05
Class C Shares-Net asset value ($34,645,087 / 2,304,011 shares outstanding) $15.04
</TABLE>
See Notes to Financial Statements.
Statements of Operations
<TABLE>
<CAPTION>
Year Ended 10/31/99
--------------------------------------------------------
Growth & World Bond-
Income International Debenture Alpha
Investment Income Series Series Series Series
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income Dividends $ 2,905,445 $ 638,632 $ 18,594 $ 257,222
Interest 350,548 3,486,558 1,134,806 7,662
Foreign taxes withheld (2,496) (181,782) (3,920) -
Total income 3,253,497 3,943,408 1,149,480 264,884
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 1,471,719 1,450,892 90,266 736,518
Management fee waived - - (90,266) (736,518)
12b-1 distribution plan-Class A 269,373 303,562 29,805 228,408
12b-1 distribution plan-Class B 63,256 206,678 17,113 486,555
12b-1 distribution plan-Class C 991,433 186,624 17,340 306,540
12b-1 distribution plan-Class P - 3 - -
Shareholder servicing 311,855 434,428 18,158 396,154
Reports to shareholders 62,353 68,163 6,491 48,450
Registration 56,029 56,460 32,508 59,408
Professional 49,434 51,468 14,015 24,433
Trustees' fees 7,289 7,520 691 5,651
Organization 1,222 5,109 8,206 8,603
Other 3,284 241,030 11,086 1,163
Total expenses before reductions and reimbursements 3,287,247 3,011,937 155,413 1,565,365
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses assumed by Lord Abbett - - (24,500) -
Expenses assumed by Underlying Funds - - - (538,832)
Expense reductions (13,361) (10,247) (344) (5,030)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 3,273,886 3,001,690 130,569 1,021,503
Net investment income (loss) (20,389) 941,718 1,018,911 (756,619)
Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Capital gains received from Underlying Funds - - - 960,345
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment and
foreign currency transactions 11,377,605 12,524,692 (372,840) 394,029
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments
and foreign currency holdings 27,515,696 9,033,914 8,453 19,567,107
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 38,893,301 21,558,606 (364,387) 20,921,481
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $38,872,912 $22,500,324 $ 654,524 $20,164,862
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended 10/31/99
-------------------------------------------------------------
Growth & World Bond-
Income International Debenture Alpha
Increase (Decrease) in Net Assets Series Series Series Series
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations Net investment income (loss) $ (20,389) $ 941,718 $ 1,018,911 $ (756,619)
Capital gains received from Underlying Funds - - - 960,345
Net realized gain (loss) from investment and
foreign currency transactions 11,377,605 12,524,692 (372,840) 394,029
Net change in unrealized appreciation of investments
and foreign currency holdings 27,515,696 9,033,914 8,453 19,567,107
Net increase in net assets resulting from operations 38,872,912 22,500,324 654,524 20,164,862
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (401,032) (567,116) (756,894) -
Class B (3,850) (20,005) (134,119) -
Class C (97,485) (17,514) (135,827) -
Class Y - (257,274) - -
Total (502,367) (861,909) (1,026,840) -
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain
from investment and foreign currency transactions:
Class A (2,606,705) (150,119) (146,447) -
Class B (125,113) (30,008) (26,529) -
Class C (3,168,272) (26,271) (29,787) -
Class Y - (82,695) - -
Total (5,900,090) (289,093) (202,763) -
---------------------------------------------------------------------------------------------------------------------
Total distributions (6,402,457) (1,151,002) (1,229,603) -
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales of shares 44,193,808 145,270,193 4,346,397 75,343,568
Net asset value of shares issued in reinvestment
of dividends and distributions 5,996,380 1,166,493 854,916 -
Total 50,190,188 146,436,686 5,201,313 75,343,568
- -----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (31,767,440) (107,731,921) (3,048,155) (39,667,616)
---------------------------------------------------------------------------------------------------------------------
Increase in net assets derived
from capital share transactions 18,422,748 38,704,765 2,153,158 35,675,952
---------------------------------------------------------------------------------------------------------------------
Increase in net assets 50,893,203 60,054,087 1,578,079 55,840,814
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of year 165,904,098 153,032,505 10,133,811 106,278,768
---------------------------------------------------------------------------------------------------------------------
End of year+ $216,797,301 $213,086,592 $ 11,711,890 $162,119,582
===================================================================================================================================
+ Including undistributed (overdistributed) net investment income of $(224,981), $801,470, $103,543 and 0, respectively.
See Notes to Financial Statements.
</TABLE>
17
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
12/18/97 12/29/97
(Commencement (Commencement
of Operations) of Operations)
Year Ended 10/31/98 to 10/31/98 to 10/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
Growth & World Bond-
Income International Debenture Alpha
Increase (Decrease) in Net Assets Series Series Series Series
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations Net investment income $ 716,975 $ 734,578 $ 419,904 $ (255,720)
Capital gains received from Underlying Funds - - - -
Net realized gain (loss) from investment and
foreign currency transactions 5,911,754 772,716 (256,978) (164,572)
Net change in unrealized appreciation of
investments and foreign currency holdings 9,416,949 (11,465,508) (573,481) (17,486,469)
Net increase (decrease) in net assets
resulting from operations 16,045,678 (9,958,214) (410,555) (17,906,761)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (260,319) (75,253) (273,961) -
Class B - - (31,624) -
Class C - - (44,552) -
Class Y - - - -
Total (260,319) (75,253) (350,137) -
---------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain
from investment and foreign currency transactions:
Class A (3,955,825) - - -
Class B (22,589) - - -
Class C (5,643,683) - - -
Class Y - - - -
Total (9,622,097) - - -
---------------------------------------------------------------------------------------------------------------------
Total distributions (9,882,416) (75,253) (350,137) -
- ------------------------------------------------------------------------------------------------------------------------------------
Share transactions:
Net proceeds from sales of shares 31,813,070 152,668,725 12,071,035 131,488,957
Net asset value of shares issued to
shareholders in reinvestment of dividends
and distributions 9,259,717 71,968 256,482 -
Total 41,072,787 152,740,693 12,327,517 131,488,957
---------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (24,323,626) (27,009,220) (2,433,514) (7,313,428)
---------------------------------------------------------------------------------------------------------------------
Increase in net assets derived from
capital share transactions 16,749,161 125,731,473 9,894,003 124,175,529
---------------------------------------------------------------------------------------------------------------------
Increase in net assets 22,912,423 115,698,006 9,133,311 106,268,768
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of year 142,991,675 37,334,499 1,000,500 10,000
---------------------------------------------------------------------------------------------------------------------
End of year+ $165,904,098 $153,032,505 $10,133,811 $106,278,768
=====================================================================================================================
+Including undistributed net investment income of $297,775, $721,661, $262,939 and $0, respectively.
See Notes to Financial Statements.
</TABLE>
18
<PAGE>
Financial Highlights
Growth & Income Series
<TABLE>
<CAPTION>
Class A Shares Class B Shares
- -------------------------------------------------------------------------------------------- -------------------------------------
Year Ended Year Ended
10/31, 7/15/96(a) 10/31, 6/5/97(a)
Per Share Operating Performance: 1999 1998 1997 to 10/31/96 1999 1998 to 10/31/97
- -------------------------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.15 $ 8.79 $ 7.09 $ 6.50 $9.13 $ 8.80 $ 8.20
- -------------------------------------------------------------------------------------------- -------------------------------------
Income from investment operations
Net investment income (loss) .04(e) .057 .093 .028 (.04)(e) -(d) -(d)
Net realized and unrealized
gain on investments 2.06 .928 1.781 .589 2.10 .92 .60
Total from investment operations 2.10 .985 1.874 .617 2.06 .92 .60
- -------------------------------------------------------------------------------------------- -------------------------------------
Distributions
Dividends from net investment income (.05) (.035) (.099) (.027) (.01) - -
Distributions from net realized gain (.33) (.590) (.075) - (.33) (.590) -
Total distributions (.38) (.625) (.174) (.027) (.34) (.590) -
- -------------------------------------------------------------------------------------------- -------------------------------------
Net asset value, end of year $10.87 $ 9.15 $ 8.79 $ 7.09 $10.85 $ 9.13 $ 8.80
- -------------------------------------------------------------------------------------------- -------------------------------------
Total Return(b) 23.77% 11.97% 26.78% 12.10%(c) 23.17% 11.17% 7.19%(c)
====================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver 1.30%(f) 1.22% 1.29% .39%(c) 1.98%(f) 1.98% .86%(c)
Expenses, excluding waiver 1.30%(f) 1.22% 1.29% .39%(c) 1.98%(f) 1.98% .86%(c)
Net investment income (loss) .36% .88% 1.15% .40%(c) (.38)% .09% .01%(c)
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31,
Per Share Operating Performance: 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.11 $ 8.80 $ 7.09 $ 6.04 $ 5.07
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income (loss) (.03)(e) .011 .032 .0949 .12
Net realized and unrealized gain on investments 2.07 .889 1.790 1.0986
.97
Total from investment operations 2.04 .900 1.822 1.1935 1.09
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.01) - (.037) (.1035) (.12)
Distributions from net realized gain (.33) (.590) (.075) (.04) -
Total distributions (.34) (.590) (.112) (.144) (.12)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $10.81 $ 9.11 $ 8.80 $ 7.09 $ 6.04
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 23.00% 10.94% 26.24% 20.02% 21.83%
====================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver 1.98%(f) 1.98% 2.05% 1.55% 1.16%
Expenses, excluding waiver 1.98%(f) 1.98% 2.05% 2.01% 1.91%
Net investment income (loss) (.31)% .12% .39% 1.36% 2.06%
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Year Ended 10/31,
Supplemental Data for AllClasses: 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $216,797 $165,904 $ 142,992 $ 113,962 $ 32,770
Portfolio turnover rate 37.68% 45.83% 36.37% 23.84% 23.17%
============================================================================================================================
</TABLE>
(a) Commencement of offering respective class shares.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Amount less than $.01.
(e) Calculated using average shares outstanding during the year.
(f) The ratio includes expenses paid through an expense offset arrangement.
See Notes to Financial Statements.
19
<PAGE>
Financial Highlights
International Series
<TABLE>
<CAPTION>
Class A Shares Class B Shares
---------------------------------------- --------------------------------------
Year Ended Year Ended
10/31, 12/13/96(a) 10/31, 6/2/97(b)
Per Share Operating Performance: 1999 1998 to 10/31/97 1999 1998 to 10/31/97
- ------------------------------------------------------------------------------------------ --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.39 $10.86 $ 9.42 $12.28 $10.83 $10.26
- ------------------------------------------------------------------------------------------ --------------------------------------
Income (loss) from investment operations
Net investment income (loss) .07(e) .11(e) .07 (.02)(e) .02(e) (.03)
Net realized and unrealized gain
on investments and foreign
currency holdings 1.55 1.45 1.37 1.53 1.43 .60
Total from investment operations 1.62 1.56 1.44 1.51 1.45 .57
- ------------------------------------------------------------------------------------------ --------------------------------------
Distributions
Dividends from net investment income (.09) (.03) - (.02) - -
Distributions from net realized gain (.02) - - (.02) - -
Total distributions (.11) (.03) - (.04) - -
- ------------------------------------------------------------------------------------------ --------------------------------------
Net asset value, end of year $13.90 $12.39 $10.86 $13.75 $12.28 $10.83
- ------------------------------------------------------------------------------------------ --------------------------------------
Total Return(c) 13.16% 14.36% 15.21% (d) 12.31% 13.39% 5.56%(d)
==================================================================================================================================
Ratios to Average Net Assets:
Expenses 1.51%(f) 1.31% 1.23%(d) 2.19%(f) 2.03% .87%(d)
Net investment income (loss) .52% .80% .41%(d) (.16)% .18% (0.46)%(d)
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Class P Shares Class Y Shares
-------------------------------------------------------------------------------
Year Ended
10/31, 6/2/97(b) 3/9/99(b) Year Ended 12/30/97(b)
Per Share Operating Performance: 1999 1998 to 10/31/97 to 10/31/99 10/31/99 to 10/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.28 $10.83 $10.26 $12.70 $12.41 $11.28
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income (loss) (.02)(e) .02(e) (.03) .08 .12 .15(e)
Net realized and unrealized gain on investments
and foreign currency holdings 1.53 1.43 .60 1.13 1.56 .98
Total from investment operations 1.51 1.45 .57 1.21 1.68 1.13
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.02) - - - (.07) -
Distributions from net realized gain (.02) - - - (.02) -
Total distributions (.04) - - - (.09) -
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $13.75 $12.28 $10.83 $13.91 $14.00 $12.41
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(c) 12.31% 13.39% 5.56%(d) 9.53% 13.65% 10.02%(d)
===================================================================================================================================
Ratios to Average Net Assets:
Expenses 2.19%(f) 2.05% .87%(d) .98%(d) (f) 1.20%(f) .84%(d)
Net investment income (loss) (.15)% .12% (0.46)%(d) .60%(d) .86% 1.11%(d)
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Year Ended
10/31, 12/13/96(a)
Supplemental Data for All Classes: 1999 1998 to 10/31/97
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net assets, end of year (000) $213,087 $153,033 $37,334
Portfolio turnover rate 75.15% 20.52% 29.72%
===================================================================================================================
</TABLE>
(a) Commencement of operations.
(b) Commencement of offering respective class shares.
(c) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(d) Not annualized.
(e) Calculated using average shares outstanding during the year.
(f) The ratio includes expenses paid through an expense offset arrangement.
See Notes to Financial Statements.
20
<PAGE>
Financial Highlights
World Bond-Debenture Series
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
------------------------------- ----------------------------- ------------------------------
Year Ended Year Ended Year Ended
10/31, 12/18/97(a) 10/31, 12/19/97(b) 10/31, 12/19/97(b)
Per Share Operating Performance: 1999 to 10/31/98 1999 to 10/31/98 1999 to 10/31/98
- -------------------------------------------------------------------- ------------------------------ -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $9.66 $10.00 $9.65 $10.00 $9.65 $10.00
- -------------------------------------------------------------------- ------------------------------ -----------------------------
Income (loss) from investment operations
Net investment income .83(e) .511 .76(e) .406 .78(e) .395
Net realized and unrealized
gain (loss) on
investments and foreign
currency holdings (.22) (.425) (.21) (.372) (.25) (.361)
Total from investment operations .61 .086 .55 .034 .53 .034
-------------------------------------------------------------- ------------------------------ -----------------------------
Distributions
Dividends from net investment income (.85) (.426) (.78) (.384) (.78) (.384)
Distributions from net realized gain (.18) - (.18) - (.18) -
Total distributions (1.03) (.426) (.96) (.384) (.96) (.384)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $9.24 $ 9.66 $9.24 $ 9.65 $9.22 $ 9.65
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(c) 6.33% .75%(d) 5.73% .24%(d) 5.50% .24%(d)
===================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .89% .55%(d) 1.56% 1.28%(d) 1.56% 1.28%(d)
Expenses, excluding waiver 1.84% 1.20%(d) 2.51% 1.93%(d) 2.51% 1.93%(d)
Net investment income 8.64% 7.08%(d) 7.91% 6.67%(d) 8.16% 6.62%(d)
==============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Year Ended
10/31, 12/18/97(a)
Supplemental Data for All Classes: 1999 to 10/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net assets, end of year (000) $11,712 $10,134
Portfolio turnover rate 74.80% 159.14%
===================================================================================================================================
</TABLE>
(a)Commencement of operations. (b )Commencement of offering respective class
shares. (c) Total return does not consider the effects of sales loads and
assumes the reinvestment of all distributions. (d) Not annualized. (e)
Calculated using average shares outstanding during the year. See Notes to
Financial Statements.
Financial Highlights
Alpha Series
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
--------------------------- ------------------------------- ----------------------------
Year Ended Year Ended Year Ended
10/31, 12/29/97(a) 10/31, 12/29/97(a) 10/31, 12/29/97(a)
Per Share Operating Performance: 1999 to 10/31/98 1999 to 10/31/98 1999 to 10/31/98
- ------------------------------------------------------------------- ------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.91 $13.52 $12.85 $13.52 $12.86 $13.52
- ------------------------------------------------------------------- ------------------------------- ----------------------------
Income (loss) from investment operations
Net investment income (loss)(d) .07 (.03) (.03) (.11) (.04) (.11)
Net realized and unrealized
loss on investments 2.23 (.58) 2.23 (.56) 2.22 (.55)
Total from investment operations 2.30 (.61) 2.20 (.67) 2.18 (.66)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $15.21 $12.91 $15.05 $12.85 $15.04 $12.86
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 17.82% (4.51)%(c) 17.12% (4.96)%(c) 16.95% (4.88)%(c)
==================================================================================================================================
Ratios to Average Net Assets:
Expenses, including waiver .33% .21%(c) 1.00% .83%(c) 1.00% .82%(c)
Expenses, excluding waiver .83% .63%(c) 1.50% 1.26%(c) 1.50% 1.24%(c)
Net investment income (loss) .15% (.18)%(c) (.83)% (.81)%(c) (.84)% (.82)%(c)
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Year Ended
10/31, 12/29/97(a)
Supplemental Data for AllClasses: 1999 to 10/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net assets, end of year (000) $162,120 $106,279
Portfolio turnover rate 1.67% 0.01%
===================================================================================================================================
(a)Commencement of operations. (b) Total return does not consider the effects of sales loads and assumes the reinvestment of all
distributions. (c) Not annualized. (d) Calculated using average shares outstanding during the year. See Notes to Financial
Statements. Notes to Financial Statements
</TABLE>
21
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Securities Trust (the "Trust") is an open-end management investment
company, organized as a Delaware business trust. The Trust currently consists of
seven separate portfolios ("Series")-This report covers the following four
Series: Lord Abbett Growth & Income Series ("Growth & Income Series"), Lord
Abbett International Series ("International Series"), Lord Abbett World
Bond-Debenture Series ("World Bond-Debenture Series") and Lord Abbett Alpha
Series ("Alpha Series"). The Alpha Series invests in other funds ("Underlying
Funds") managed by Lord Abbett & Co. ("Lord Abbett"). Each Series is diversified
as defined under the Investment Company Act of 1940. The financial statements
have been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the date of
the financial statements:
The following summarizes the significant accounting policies of the Trust: (a)
Security valuation is determined as follows: Portfolio securities listed or
admitted to trading privileges on any national securities exchange are valued at
the last sales price on the principal securities exchange on which such
securities are traded, or, if there is no sale, at the mean between the last bid
and ask prices on such exchange. Securities traded in the over-the-counter
market are valued at the mean between the last bid and ask prices in such
market, except that securities admitted to trading on the NASDAQ National Market
System are valued at the last sales price if it is determined that such price
more accurately reflects the value of such securities. Investments in the
Underlying Funds are valued at the closing net asset value per share of each
Underlying Fund on the day of valuation. Short-term securities maturing in 60
days or less are valued at amortized cost which approximates market value.
Securities for which market quotations are not available are valued at fair
value under procedures approved by the Board of Trustees. (b) Transactions
denominated in foreign currencies are recorded in the Trust's records at the
rate prevailing when earned or incurred. Asset and liability accounts that are
denominated in foreign currencies are adjusted to reflect current exchange
rates. (c) The International and World Bond-Debenture Series may use forward
currency contracts to hedge the risk to the portfolios of unfavorable movements
in foreign exchange rates. (d) It is the policy of the Trust to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income. Therefore, no federal
income tax provision is required. (e) Security transactions are recorded on the
date that the securities are purchased or sold (trade date). Realized gains and
losses from investment transactions are calculated on the identified cost basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Net
investment income (other than distribution and service fees) and realized and
unrealized gains or losses are allocated to each class of shares based upon the
relative proportion of net assets at the beginning of the day. (f) Organization
expenses are amortized evenly over a period of five years.
2. Management Fee and Other Transactions with Affiliates
The Trust has a management agreement with Lord Abbett pursuant to which Lord
Abbett supplies the Trust with investment management services and executive and
other personnel, pays the remuneration of officers, provides office space and
pays for ordinary and necessary office and clerical expenses relating to
research and statistical work and supervision of the Trust's investment
portfolios. The management fee is based on average daily net assets at the rate
of 0.75% per annum for International and World Bond-Debenture Series and 0.50%
per annum for the Alpha Series. The management fee for Growth & Income Series is
based on average daily net assets at the following annual rates: 0.75% on the
first $200 million; 0.65% on the next $300 million; and 0.50% on the excess over
$500 million. Lord Abbett waived its fee for the World Bond-Debenture and Alpha
Series for the year ended October 31, 1999. At October 31, 1999, management fees
payable were $118,043 forGrowth & Income Series and $139,980 for International
Series. Lord Abbett has entered into a sub-advisory agreement with Fuji-Lord
Abbett International, Ltd. ("sub-adviser"). Lord Abbett is a minority owner of
the sub-adviser. The sub-adviser furnishes investment advisory services in
connection with the management of the International Series. Lord Abbett pays for
the cost of the sub-adviser's services.
Each Series of the Trust has Rule 12b-1 plans and agreements with respect to one
or more classes of shares as described below (the "Class A, Class B, Class C,
and Class P Plans") with Lord Abbett Distributor LLC ("Distributor"), an
affiliate of Lord Abbett. Each Series makes payments to Distributor which uses
or passes on such payments to authorized institutions. Pursuant to the Class A
Plan, each Series pays Distributor (1) an annual service fee of 0.25% of the
average daily net asset value of Class A shares, (2) a one-time distribution fee
of up to 1% on certain qualifying purchases and (3) an annual distribution fee
of 0.10% of the average daily net asset value ofClass A shares. Pursuant to the
Class B Plan, each Series pays Distributor an annual service and distribution
fee of 0.25% and 0.75%, respectively, of the average daily net asset value of
the Class B shares. Pursuant to the Class C Plan, each Series pays Distributor
(1) a service fee and a distribution fee, at the time such shares are sold, not
to exceed 0.25% and 0.75%, respectively, of the net asset value of such shares
sold and (2) at each quarter-end after the first anniversary of the sale of such
shares, a service fee and a distribution fee at an annual rate not to exceed
0.25% and 0.75%, respectively, of the average annual net asset value of such
shares outstanding. Pursuant to the Class P Plan of International Series, the
Series pays Distributor an annual service and distribution fee of 0.20% and
0.25%, respectively, of the average daily net asset value of the Class P shares.
Class Y does not have a Rule 12b-1 plan. At October 31, 1999, the 12b-1 fees
payable were $534,054 for Growth & Income Series, $279, 869 for International
Series, $23,887 for World Bond-Debenture Series and $497,499 for Alpha Series.
TheAlpha Series has entered into a Servicing Arrangement with the Underlying
Funds pursuant to which each Underlying Fund will pay a portion of the expenses
(excluding management fee, distribution and service fees) of the Alpha Series in
proportion to the average daily value of shares owned by the Alpha Series. Other
expenses for International Series, one of the Underlying Funds, include
approximately $215,000 accrued pursuant to this Servicing Arrangement.
Distributor received the following commissions for the year ended October 31,
1999 on sales of shares of the Trust after concessions were paid to authorized
distributors:
Distributor Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
Growth & Income $96,453 $557,906
- --------------------------------------------------------------------------------
International 124,988 744,196
World Bond-Debenture 7,693 66,025
- --------------------------------------------------------------------------------
Alpha 133,617 831,574
- --------------------------------------------------------------------------------
3. Distributions
Dividends from net investment income, if any, are declared and paid
semi-annually for the Growth &Income Series, annually for the International and
Alpha Series, and monthly for the World Bond-Debenture Series. Net realized
gains from investment transactions, if any, are distributed to share-
22
<PAGE>
holders at least annually. At October 31, 1999, the accumulated undistributed
net realized gain (loss) for financial reporting purposes, aggregated
$11,295,103 for the Growth & Income Series, $12,509,461 for the International
Series, $(874,286) for the World Bond-DebentureSeries and $905,226 for the Alpha
Series.
Distributions declared on November 17, 1999 and paid on November 26, 1999 to
shareholders of record on November 17, 1999 were as follows:
Rate Aggregate
Per Share Amount
- --------------------------------------------------------------------------------
Growth & Income Series-Capital Gains-Class A $ 0.562 $5,344,419
- --------------------------------------------------------------------------------
Growth & Income Series-Capital Gains-Class B $ 0.562 $ 517,598
- --------------------------------------------------------------------------------
Growth & Income Series-Capital Gains-Class C $ 0.562 $5,449,178
- --------------------------------------------------------------------------------
International Series-Net Investment Income-Class A $ 0.064 $ 478,159
- --------------------------------------------------------------------------------
International Series-Net Investment Income-Class P $ 0.054 $ 5
- --------------------------------------------------------------------------------
International Series-Net Investment Income-Class Y $ 0.104 $ 481,497
- --------------------------------------------------------------------------------
International Series-Capital Gains-Class A $ 0.822 $6,141,354
- --------------------------------------------------------------------------------
International Series-Capital Gains-Class B $ 0.822 $1,364,850
- --------------------------------------------------------------------------------
International Series-Capital Gains-Class C $ 0.822 $1,200,016
- --------------------------------------------------------------------------------
International Series-Capital Gains-Class P $ 0.822 $ 71
- --------------------------------------------------------------------------------
International Series-Capital Gains-Class Y $ 0.822 $3,805,681
- --------------------------------------------------------------------------------
Alpha Series-Net Investment Income-Class A $ 0.213 $1,048,750
- --------------------------------------------------------------------------------
Alpha Series-Net Investment Income-Class B $ 0.120 $ 421,495
- --------------------------------------------------------------------------------
Alpha Series-Net Investment Income-Class C $ 0.120 $ 277,872
- --------------------------------------------------------------------------------
Alpha Series-Capital Gains-Class A $ 0.107 $ 526,837
- --------------------------------------------------------------------------------
Alpha Series-Capital Gains-Class B $ 0.107 $ 375,833
- --------------------------------------------------------------------------------
Alpha Series-Capital Gains-Class C $ 0.107 $ 247,769
- --------------------------------------------------------------------------------
At October 31, 1999, the World Bond-Debenture Series had a capital loss
carryforward of $874,286, of which $450,150 will expire in 2006 and $424,136 in
2007.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gain amounts in accordance with generally
accepted accounting principles.
4. Capital
Transactions in shares of beneficial interest for the Growth & Income Series
were as follows:
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 2,628,331 $ 27,027,631 1,916,824 $17,374,528
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 301,078 2,760,885 470,043 3,900,320
Total 2,929,409 29,788,516 2,386,867 21,274,848
- --------------------------------------------------------------------------------
Shares reacquired (1,497,971) (15,141,616) (1,119,700) (9,997,500)
Increase 1,431,438 $ 14,646,900 1,267,167 $11,277,348
- --------------------------------------------------------------------------------
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 646,865 $ 6,690,769 351,815 $3,196,791
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 13,395 123,096 2,736 22,576
Total 660,260 6,813,865 354,551 3,219,367
- --------------------------------------------------------------------------------
Shares reacquired (135,302) (1,390,159) (19,528) (175,415)
Increase 524,958 $ 5,423,706 335,023 $3,043,952
- --------------------------------------------------------------------------------
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 1,020,638 $ 10,475,408 1,238,147 $ 11,241,751
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 339,411 3,112,399 648,459 5,336,821
Total 1,360,049 13,587,807 1,886,606 16,578,572
- --------------------------------------------------------------------------------
Shares reacquired (1,493,299) (15,235,665) (1,570,614) (14,150,711)
Increase (decrease) (133,250) $ (1,647,858) 315,992 $ 2,427,861
- --------------------------------------------------------------------------------
Transactions in shares of beneficial interest for the International Series were
as follows:
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 4,846,083 $ 66,870,262 4,503,630 $ 61,680,518
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 56,456 717,663 6,701 71,968
Total 4,902,539 67,587,925 4,510,331 61,752,486
- --------------------------------------------------------------------------------
Shares reacquired (3,845,434) (53,707,844) (1,017,196) (13,021,404)
Increase 1,057,105 $ 13,880,081 3,493,135 $ 48,731,082
- --------------------------------------------------------------------------------
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 727,191 $ 9,645,998 1,222,629 $16,942,824
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 3,886 51,717 - -
Total 731,077 9,697,715 1,222,629 16,942,824
- --------------------------------------------------------------------------------
Shares reacquired (360,473) (4,824,986) (77,687) (962,598)
Increase 370,604 $ 4,872,729 1,144,942 $15,980,226
- --------------------------------------------------------------------------------
Year Ended Year Ended
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 3,886,561 $ 52,956,781 1,839,301 $ 24,518,535
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 3,396 45,553 - -
Total 3,889,957 53,002,334 1,839,301 24,518,535
- --------------------------------------------------------------------------------
Shares reacquired (3,541,853) (48,775,206) (992,256) (12,825,218)
Increase 348,104 $ 4,227,128 847,045 $ 11,693,317
- --------------------------------------------------------------------------------
23
<PAGE>
Notes to Financial Statements
Year Ended
October 31, 1999
- --------------------------------------------------------------------------------
Class P Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 86 $1,127
- --------------------------------------------------------------------------------
Shares reacquired - -
Increase 86 $1,127
- --------------------------------------------------------------------------------
Year Ended 12/30/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class Y Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 1,185,525 $15,796,025 3,464,016 $49,526,848
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 27,395 351,560 - -
Total 1,212,920 16,147,585 3,464,016 49,526,848
- --------------------------------------------------------------------------------
Shares reacquired (29,754) (423,885) (17,400) (200,000)
Increase 1,183,166 $15,723,700 3,446,616 $49,326,848
- --------------------------------------------------------------------------------
Transactions in shares of beneficial interest for the World Bond-Debenture
Series were as follows:
Year Ended 12/18/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 288,744 $2,819,452 872,491 $ 9,065,643
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 66,196 637,644 20,089 201,411
Total 354,940 3,457,096 892,580 9,267,054
- --------------------------------------------------------------------------------
Shares reacquired (206,397) (1,984,856) (225,888) (2,331,174)
Increase 148,543 $1,472,240 666,692 $ 6,935,880
- --------------------------------------------------------------------------------
Year Ended 12/19/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 104,575 $1,012,874 120,952 $1,264,229
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 9,010 86,541 2,061 20,483
Total 113,585 1,099,415 123,013 1,284,712
- --------------------------------------------------------------------------------
Shares reacquired (37,348) (358,336) (4,729) (48,478)
Increase 76,237 $ 741,079 118,284 $1,236,234
- --------------------------------------------------------------------------------
Year Ended 12/19/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 52,904 $ 514,071 166,740 $1,741,163
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 13,577 130,731 3,490 34,588
Total 66,481 644,802 170,230 1,775,751
- --------------------------------------------------------------------------------
Shares reacquired (73,535) (704,963) (5,476) (53,862)
Increase (decrease)(7,054) $ (60,161) 164,754 $1,721,889
- --------------------------------------------------------------------------------
Transactions in shares of beneficial interest for the Alpha Series were as
follows:
Year Ended 12/29/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 2,317,161 $ 33,875,154 4,111,581 $60,901,622
- --------------------------------------------------------------------------------
Shares reacquired (1,216,119) (18,000,823) (272,413) (3,501,712)
Increase 1,101,042 $ 15,874,331 3,839,168 $57,399,910
- --------------------------------------------------------------------------------
Year Ended 12/29/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 1,436,209 $ 20,914,895 2,961,179 $44,641,341
- --------------------------------------------------------------------------------
Shares reacquired (776,830) (11,344,308) (144,754) (1,903,606)
Increase 659,379 $ 9,570,587 2,816,425 $42,737,735
- --------------------------------------------------------------------------------
Year Ended 12/29/97 to
October 31, 1999 October 31, 1998
- --------------------------------------------------------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Sales of shares 1,409,046 $20,553,519 1,743,733 $25,945,994
- --------------------------------------------------------------------------------
Shares reacquired (698,835) (10,322,485) (149,933) (1,908,110)
Increase 710,211 $10,231,034 1,593,800 $24,037,884
- --------------------------------------------------------------------------------
As of October 31, 1999, paid in capital for each Series was as follows:
Series
- --------------------------------------------------------------------------------
Growth & Income $128,636,727
- --------------------------------------------------------------------------------
International $199,521,977
WorldBond-Debenture $ 13,050,278
- --------------------------------------------------------------------------------
Alpha $159,133,718
- --------------------------------------------------------------------------------
5. Purchases and Sales of Securities
Purchases and sales of investment securities (other than U.S. Government
obligations, short-term investments and foreign currency transactions) were as
follows:
Series Purchases Sales
- --------------------------------------------------------------------------------
Growth & Income $ 84,970,312 $ 72,668,966
- --------------------------------------------------------------------------------
International $187,622,085 $138,091,445
WorldBond-Debenture $ 10,589,275 $ 8,547,424
Alpha $ 38,476,347 $ 2,447,978
- --------------------------------------------------------------------------------
As of October 31, 1999, net unrealized appreciation, unrealized appreciation and
unrealized depreciation of investments based on cost for federal income tax
purposes were as follows:
Net Unrealized
Appreciation Unrealized Unrealized
Series (Depreciation) Appreciation(Depreciation)
- --------------------------------------------------------------------------------
Growth & Income $77,090,452 $78,453,724 $ (1,363,272)
- --------------------------------------------------------------------------------
International $ 253,684 $29,390,206 $(29,136,522)
World Bond-Debenture $ (556,159) $ 192,621 $ (748,780)
Alpha $ 2,080,638 $ 5,117,048 $ (3,036,410)
- --------------------------------------------------------------------------------
The cost of investments for federal income tax purposes is the same as that used
for financial reporting purposes. At October 31, 1999, the World Bond-Debenture
Series had the following outstanding forward currency contracts:
(Notes to Financial Statements continued on back cover)
24
<PAGE>
Foreign Value at
Currency Settlement Date Current Unrealized
Contracts Type Local Currency U.S. Dollars Value Depreciation
- --------------------------------------------------------------------------------
British
Pounds,
expiring
3/16/2000 Sell (83,818) $ (134,761) $ (137,831) $ (3,070)
- --------------------------------------------------------------------------------
Hong Kong
Dollars,
expiring
9/14/2000 Sell (7,864,100) $(1,000,000) $ (1,005,085) $ (5,085)
Turkish Lira,
expiring
1/25/2000 Buy 273,600,000 $ 500,000 $ 496,669 $ (3,331)
- --------------------------------------------------------------------------------
Total $ (634,761) $ (646,247) $(11,486)
- --------------------------------------------------------------------------------
6. Trustees` Remuneration
The Trustees of theTrust associated with Lord Abbett and all officers of the
Trust receive no compensation from the Trust for acting as such. Outside
Trustees' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on net assets of each fund. Trustees' fees payable at October
31, 1999, under a deferred compensation plan were $153,496.
7. Expense Reduction
The Trust has entered into an arrangement with its transfer agent whereby
credits realized as a result of uninvested cash balances were used to reduce a
portion of the Trust's expenses.
8. Line of Credit
The Growth & Income and International Series, respectively with certain other
funds managed by Lord Abbett, have available a $200,000,000 unsecured revolving
credit facility ("Facility"), from a consortium of banks, to be used for
temporary or emergency purposes as an additional source of liquidity to fund
redemptions of investor shares. Any borrowings under this Facility will bear
interest at current market rates as defined in the agreement. The fee for this
Facility was at an annual rate of 0.06% during the year. Effective December 17,
1999, this fee was increased to 0.09% per annum. There were no loans outstanding
pursuant to this Facility at October 31, 1999, nor was the Facility utilized at
any time during the year.
Independent Auditors' Report
The Board of Trustees and Shareholders,
Lord Abbett Securities Trust:
We have audited the accompanying statements of net assets of Lord Abbett
Securities Trust-Growth & Income Series, International Series, World
Bond-Debenture Series and Alpha Series as of October 31, 1999, the related
statements of operations and of changes in net assets and the financial
highlights for each of the periods presented. These financial statements and the
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1999 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
I
n our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett
Securities Trust-Growth & Income Series, International Series, World
Bond-Debenture Series and Alpha Series at October 31, 1999, the results of their
operations, the changes in their net assets and their financial highlights for
the respective periods presented, in conformity with generally accepted
accounting principles.
[GRAPHIC OMITTED]
Deloitte & Touche LLP
New York, New York
December 20, 1999
Copyright(C)1999 by Lord Abbett Securities Trust, 767 Fifth Avenue, New York, NY
10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Securities Trust, is to be distributed only if preceded or
accompanied by a current prospectus which includes information concerning each
Series' investment objective and policies, sales charges and other matters.
There is no guarantee that the forecasts contained within this publication will
come to pass.
All rights reserved. Printed in the U.S.A.
<PAGE>
Our Management
Board of Trustees
Robert S. Dow
E. Thayer Bigelow*+
William H. T. Bush*
Robert B. Calhoun
Stewart S. Dixon*
John C. Jansing*
C. Alan MacDonald*+
Hansel B. Millican, Jr.*
Thomas J. Neff*+
* Outside Director
+ Audit Committee
Officers
Robert S. Dow, Chairman and President
Zane E. Brown, Executive Vice President
Robert G. Morris, Executive Vice President
Robert P. Fetch, Executive Vice President
Stephen J. McGruder, Executive Vice President
Paul A. Hilstad, Vice President
and Secretary
Daniel E. Carper, Vice President
Timothy W. Horan, Vice President
Jerald Lanzotti, Vice President
Fernando Saldanha, Vice President
Christopher J. Towle, Vice President
John J. Walsh, Vice President
W. Thomas Hudson, Jr., Vice President
Lesley Jane Dixon, Vice President
Gerard S.E. Heffernan, Jr., Vice President
Cinda C. Hughes, Vice President
Gregory M. Macosko, Vice President
Eli M. Salzmann, Vice President
Joan A. Binstock, Vice President
Tracie E. Richter, Vice President
Lawrence H. Kaplan, Vice President
and Assistant Secretary
A. Edward Oberhaus III, Vice President
Donna M. McManus, Treasurer
Lydia Guzman, Assistant Secretary
Robert M. Hickey, Assistant Secretary
Investment Manager and
Underwriter
Lord, Abbett & Co. and
Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
212-848-1800
Custodian
The Bank of New York
New York, NY
Transfer Agent
United Missouri Bank of
Kansas City, N.A.
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Wilmer, Cutler & Pickering
Washington, DC
Numbers to Keep Handy
For Shareholder Account or Statement
Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit OurWeb Site:
www.lordabbett.com
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(12/99)
