<PAGE>
Lord Abbett
Investment
Trust
. Limited Duration U.S. Government Securities Series
. Balanced Series
1995 ANNUAL REPORT
[PHOTO OF BRIEFCASE]
Two portfolios
to help you
meet your goals
<PAGE>
[PHOTO OF RONALD P. LYNCH]
/s/ Ronald P. Lynch
Ronald P. Lynch
Chairman
[PHOTO OF ROBERT S. DOW]
/s/ Robert S. Dow
Robert S. Dow
President
November 24, 1995
Report to Shareholders
For the Fiscal Year Ended October 31, 1995
Lord Abbett Investment Trust completed fiscal 1995 on October
31. The past twelve months have been marked by a return of
investor confidence in the U.S. equity and fixed-income
markets, as the success of the Federal Reserve's preemptive
strike against an overheating economy and rising inflation
became increasingly visible.
Early in 1995, industrial production and employment growth
slowed, while strong productivity and falling fringe benefits
costs kept employment costs flat. As a result, solid earnings
growth with declining inflation -- the hoped for "soft landing"
-- became a reality in 1995, justifying higher valuations for
both stocks and long-term bonds.
The first signs of an economic slowdown came in the form of
weaker auto sales, a significant slowdown in the housing market
and rising inventories in the manufacturing sector. While first
quarter 1995 Gross Domestic Product ("GDP") grew a modest 2.7%,
second quarter GDP slowed to 1.7%. The yield on 3-year and 5-
year U.S. Treasury notes fell approximately 2% during the first
three quarters of the year.
We anticipate the current interest-rate environment to
continue, with the Federal Reserve lowering the Federal Funds
Rate gradually over the next six months toward 5%.
Many positive factors remain in place. Global inflationary
expectations continue to abate; U.S. Government bond rates,
which peaked at over 8% a year ago, are close to 6%. Congress
continues to press its deficit reduction and welfare reform
mandates; U.S. corporations' commitment to cost reductions, new
technology and productivity have enhanced their global
competitiveness.
Below is a brief overview of both portfolios, including total
return (the percent change in net asset value, assuming the
reinvestment of all distributions).
ABOUT THE LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES
The Limited Duration U.S. Government Securities Series closed
the fiscal year with net assets of $8.9 million. The Series'
distribution rate was 5.83% based on the net asset value of
$4.53 and the per-share monthly dividend of $.022, annualized.
Total return for the year was 8.2%.
In addition to short- and intermediate-term U.S. Treasury
securities, the Series also maintains holdings in higher
yielding mortgage-related securities.
ABOUT THE BALANCED SERIES
The Balanced Series ended its abbreviated fiscal year (the
Series was added to the Trust on December 27, 1994) with net
assets of $5.7 million. The Series' distribution rate was 4.71%
based on the October 31 net asset value of $10.71 (this rate is
based on the monthly dividend of $.042, annualized). The Series
posted a total return of 16.3% since inception.
With aggregate corporate profits now peaking, equity
performance will increasingly depend on the market's
willingness to place higher valuations on individual companies
achieving earnings improvement. We continue to be overweighted
in financials, relative to the S&P 500, because declining
short-term rates should enhance the earnings outlook for this
group. Conversely, we remain underweighted in non-cyclical
consumer goods stocks due to a dearth of attractive values
there. Most other sectors approximate fair value, hence our
weightings are generally sector-neutral for the rest of the
portfolio. We are currently allocating 55% of the portfolio's
assets to stocks and 45% to bonds.
We are pleased to announce that Lord Abbett Investment Trust's
Board of Trustees has elected Robert S. Dow as President of the
Trust. Mr. Dow, who has been a partner of Lord, Abbett & Co.
for nine years, also serves as the Firm's Chief Investment
Officer.
We are pleased that you have chosen to make Lord Abbett
Investment Trust a part of your investment portfolio and look
forward to serving you in the years ahead.
Ronald P. Lynch, Chairman
Robert S. Dow, President
November 24, 1995
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF NET ASSETS OCTOBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES Market
Principal Value
Security Amount (Note 1a)
--------------------------------------------------------------------- --------- ----------
INVESTMENTS IN SECURITIES 90.56%
<C> <S> <C> <C>
U.S. Treasury U.S. Treasury Notes 5 7/8% due 8/15/1998 $1,500M $1,507,265
38.48% U.S. Treasury Notes 6 1/8% due 7/31/2000 1,500M 1,518,750
U.S. Treasury Notes 6 1/4% due 8/31/2000 400M 407,000
----------
Total 3,433,015
==========
U.S. Government Financing Corp. Strips due 6/27/1998 350M 300,727
Agencies Student Loan Marketing Association 5.65% due 2/22/1999+ 1,700M 1,701,062
----------
22.44% Total 2,001,789
==========
Federal National 7% due on an announced basis 200M 201,530
Mortgage Association 7% due 2009 1,191M 1,201,101
Pass-Through Securities 9.30% CMO Class 90-20-G due 3/25/2018 412M 414,802
----------
20.37% Total 1,817,433
==========
Government National
Mortgage Association
Pass-Through
Securities
9.27% 10 1/2% due 2013 to 2020 747M 827,455
==========
Total Investments in Securities (Cost $7,961,511) 8,079,692
==========
OTHER ASSETS, LESS LIABILITIES 9.44%
Short-Term Investments, Federal Farm Credit Banks
at Cost 5.65% due 11/1/1995 500M 499,529
==========
Cash and Receivables, Net of Liabilities 342,406
----------
Total Other Assets, Less Liabilities 841,935
==========
Net Assets
100.00% (equivalent to $4.53 a share on 1,969,473 shares of beneficial
interest outstanding) $8,921,627
==========
</TABLE>
+The interest rate is subject to change periodically to the prevailing market
rate. The interest rate shown is the rate in effect on October 31, 1995.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF NET ASSETS OCTOBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------
BALANCED SERIES Market
Number of Value
Security Shares (Note 1a)
--------------------------------------------------------------------- --------- ----------
INVESTMENTS IN SECURITIES 93.86%
COMMON STOCKS 52.21%
<C> <S> <C> <C>
Aerospace .98% Boeing Co. 850 $ 55,780
=========
Apparel .38% VF Corp. 450 21,543
=========
Auto Parts Genuine Parts Company 2,300 91,137
1.94% TRW Inc. 300 19,725
Total 110,862
=========
Automobiles 1.19% General Motors Corp. 1,550 67,812
=========
Banks: Money Center
1.19% Chemical Banking Corp. 1,200 68,250
=========
Banks: Regional BankAmerica Corp. 950 54,625
1.54% Comerica Inc. 1,000 33,625
Total 88,250
=========
Chemicals Dow Chemical Co. 1,150 78,918
2.24% Union Carbide Corp. 1,300 49,237
Total 128,155
=========
Data Processing
Equipment .81% Hewlett-Packard Co. 500 46,312
=========
Data Processing
Services 1.81% General Motors Corp. (Electronic Data Systems) Class E 2,200 103,675
=========
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF NET ASSETS OCTOBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------
BALANCED SERIES Market
Number of Value
Security Shares (Note 1a)
------------------------------------------------------------------------ --------------------------
<C> <S> <C> <C>
Drugs/Health Care Merck & Co., Inc. 650 $ 37,375
Products SmithKline Beecham plc ADS 600 31,125
1.20% ----------
Total 68,500
==========
Electric Power Baltimore Gas & Electric Co. 1,750 46,812
2.93% CINergy Corp. 2,650 75,194
Public Service Enterprises Group Inc. 1,550 45,530
----------
Total 167,536
==========
Electrical Equipment
1.56% Emerson Electric Co. 1,250 89,062
==========
Electronics:
Components 1.65% AMP Inc. 2,400 94,200
==========
Financial: American Express Co. 1,050 42,656
Miscellaneous Transamerica Corp. 650 44,038
1.52% ----------
Total 86,694
==========
Food Conagra Inc. 950 36,694
4.89% Dean Foods Co. 900 25,088
Hershey Foods Corp. 1,250 74,688
RJR Nabisco 2,500 76,875
Supervalu Inc. 2,150 66,113
----------
Total 279,458
==========
Insurance Aetna Life & Casualty Co. 1,000 70,375
3.91% Chubb Corp. 500 44,938
CIGNA Corp. 700 69,388
SAFECO Corp. 600 38,513
----------
Total 223,214
==========
Machinery:
Diversified 1.10% Deere & Co. 700 62,562
==========
Multi-Industry
.75% Minnesota Mining & Mfg. Co. 750 42,656
==========
Natural Gas
Transmission 1.13% Coastal Corp. 2,000 64,750
==========
Office Equipment/
Supplies .54% Apple Computer Inc. 850 30,866
==========
Oil: Domestic .81% Ultramar Corp. 1,900 46,313
==========
Oil: International Chevron Corp. 1,150 53,763
2.85% Exxon Corp. 900 68,738
Mobil Corp. 400 40,300
----------
Total 162,801
==========
Paper and Forest Federal Paper Board Inc. 1,600 67,200
Products James River Corp. 900 28,913
3.58% Scott Paper Co. 1,150 61,238
Westvaco Corporation 1,700 47,175
----------
Total 204,526
==========
Printing and Publishing
1.25% Donnelley, R.R. & Sons Co. 1,950 71,175
==========
Retail Dayton Hudson Corp. 500 34,375
1.49% Sears, Roebuck & Co. 1,500 51,000
Total 85,375
==========
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
STATEMENT OF NET ASSETS OCTOBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------
BALANCED SERIES Number of Market
Shares or Value
Security Principal Amount (Note 1a)
-------------------------------------------------------------- ---------------- ----------
<C> <S> <C> <C>
Savings and Loan Ahmanson, H.F. & Co. 2,600 $ 65,000
2.19% Great Western Financial Corp. 2,650 59,956
----------
Total 124,956
==========
Telecommunications AT&T Corp. 1,250 80,000
3.19% MCI Communications Corp. 4,100 102,244
----------
Total 182,244
==========
Tire and Rubber
Goods .85% Cooper Tire & Rubber Company 2,100 48,563
==========
Tobacco
.94% American Brands Inc. 1,250 53,594
==========
Waste Management Browning Ferris Industries Inc. 1,650 48,056
1.80% WMX Technologies Inc. 1,950 54,844
----------
Total 102,900
==========
Total Investments in Common Stocks (Cost $2,741,034) 2,982,584
==========
U.S. GOVERNMENT OBLIGATIONS 41.65%
Federal National Mortgage Association 8 1/2% due 4/1/2025 773M 801,750
Federal National Mortgage Association 7% due 10/1/2025 196M 194,285
U.S. Treasury Bonds 7 1/2% due 11/15/2001 800M 865,375
U.S. Treasury Notes 6 1/2% due 8/15/2005 500M 517,890
----------
Total Investments in U.S. Government Securities (Cost $2,336,455) 2,379,300
==========
Total Investments in Securities (Cost $5,077,489) 5,361,884
==========
OTHER ASSETS, LESS LIABILITIES 6.14%
Cash and Receivables, Net of Liabilities 350,795
==========
Net Assets
100.00% (equivalent to $10.71 a share on 533,307 shares of beneficial
interest outstanding) $5,712,679
==========
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
===================================================================================================================================
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
YEAR ENDED 10/31/95 12/27/94
------------------- (COMMENCEMENT OF
LIMITED DURATION OPERATIONS) TO 10/31/95
U.S. GOVERNMENT -----------------------
INVESTMENT INCOME SECURITIES SERIES BALANCED SERIES
- --------------------------------------------------------------------------------- ------------------- -----------------------
<S> <C> <C> <C>
INCOME Interest $ 593,612 $ 98,067
Dividends - 38,946
Total income 593,612 137,013
----------- ---------
EXPENSES Management fee (Note 6) 42,286 23,330
Legal and audit 25,500 1,500
Reports to shareholders 20,000 4,000
Registration 20,600 1,658
Organization (Note 1e) 15,456 6,370
Shareholder servicing 11,200 800
Other 9,901 1,800
Management fees waived and expenses
assumed by Lord, Abbett & Co. (Note 6) (26,725) (27,906)
Net expenses 118,218 11,552
Net investment income 475,394 125,461
----------- ---------
<CAPTION>
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 5)
NET REALIZED GAIN (LOSS) FROM SECURITY TRANSACTIONS
(excluding short-term securities)
<S> <C> <C> <C>
Proceeds from sales 19,804,681 4,497,911
Cost of securities sold 19,938,700 4,439,070
Net realized gain (loss) (134,019) 58,841
----------- ---------
<CAPTION>
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
<S> <C> <C> <C>
Beginning of period (170,329) -
End of period 118,181 284,395
Net unrealized appreciation 288,510 284,395
Net realized and unrealized gain on investments 154,491 343,236
----------- ---------
<CAPTION>
<S> <C> <C> <C>
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 629,885 468,697
=========== =========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
For the Period
11/4/93
For the Period (Commencement of
12/27/94 Operations) to
Year Ended 10/31/95 (Commencement of 10/31/94
------------------- Operations) ----------------
Limited Duration to 10/31/95 Limited Duration
U.S. Government --------------- U.S. Government
Increase (Decrease) in Net Assets Securities Series Balanced Series Securities Series
- -------------------------------------------------------------------------- ------------------- --------------- -----------------
<S> <C> <C> <C>
Operations Net investment income $ 475,394 $ 125,461 $ 520,817
Net realized gain (loss) from securities transactions (134,019) 58,841 (707,221)
Net unrealized appreciation (depreciation) of investments 288,510 284,395 (170,329)
Net increase (decrease) in net assets resulting
from operations 629,885 468,697 (356,733)
Undistributed net investment income included
in price of shares reacquired (Note 1d) -- 10,626 --
<CAPTION>
Distributions to shareholders from net investment income (497,675) (133,379) (526,078)
Share transactions
<S> <C> <C> <C>
Net proceeds from sales of shares 3,553,091 5,431,809 13,508,461
Net asset value of shares issued to shareholders
in reinvestment of net investment income
and realized gain from security transactions 406,123 111,751 406,671
Total 3,959,214 5,543,560 13,915,132
Cost of shares reacquired (5,425,858) (177,825) (2,876,260)
Increase (decrease) in net assets derived
from share transactions (1,466,644) 5,365,735 11,038,872
<CAPTION>
Net increase (decrease) in net assets (1,334,434) 5,711,679 10,156,061
<S> <C> <C> <C>
Net Assets
=========== ========== ===========
Beginning of period 10,256,061 1,000 100,000
End of period (including (overdistributed) undistributed
net investment income of $(79,047) and $2,708, respec-
tively, as of October 31, 1995 and (overdistributed) net
investment income of $(5,261) as of October 31, 1994) $ 8,921,627 $5,712,679 $10,256,061
=========== ========== ===========
</TABLE>
See Notes to Financial Statements.
<TABLE>
====================================================================================================================================
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Duration U.S. Government Securities Series
Year For the Period 11/4/93
Ended (Commencement of
Per Share Operating Performance: 10/31/95 Operations) to 10/31/94
- ------------------------------------------------------------------------------------- -------- ------------------------
<S> <C> <C>
Net asset value, beginning of period $ 4.44 $ 4.85
Income (loss) from investment operations
Net investment income .2316 .2650+
Net realized and unrealized gain (loss) on investments .1017 (.4123)
Total from investment operations .3333 (.1473)
======= ========
Distributions
Dividends from net investment income (.2433) (.2627)
======= ========
Net asset value, end of period $ 4.53 $ 4.44
======= ========
Total Return* 8.16% (3.09)%+
======= ========
Ratios/Supplemental Data:
Net assets, end of period (000) $8,922 $10,256
======= ========
Ratios to Average Net Assets:
Expenses, including waiver 1.40% 0.89%+
Expenses, excluding waiver 1.71% 0.89%+
Net investment income 5.62% 5.61%+
Portfolio turnover rate 222.00% 895.63%
======= ========
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
=================================================================================================
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------
Balanced Series For the Period
12/27/94
(Commencement
of Operations) to
Per Share Operating Performance: 10/31/95
- --------------------------------------------------------------------------- -----------------
<S> <C>
Net asset value, beginning of period $ 9.52
Income from investment operations
Net investment income .365+
Net realized and unrealized gain on investments 1.185
-------
Total from investment operations 1.55
-------
Distributions
Dividends from net investment income (.36)
-------
Net asset value, end of period $10.71
-------
Total Return* 16.32%+
=======
Ratios/Supplemental Data:
Net assets, end of period (000) $5,713
Ratios to Average Net Assets:
Expenses, including waiver .37%+
Expenses, excluding waiver 1.26%+
Net investment income 4.39%+
Portfolio turnover rate 131.80%
=======
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES The Company was organized as a Delaware
business trust on August 16, 1993 and is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company. On
November 4, 1993, Lord Abbett Investment Trust - Limited Duration U.S.
Government Securities Series commenced operations when the Company received an
initial capital contribution of $100,000 and issued 20,619 shares of the
Government Series to the partners of Lord, Abbett & Co. On December 22, 1994,
Lord Abbett Investment Trust - Balanced Series received an initial capital
contribution of $1,000 and issued 105 shares of the Balanced Series to the
partners of Lord, Abbett & Co. The following is a summary of significant
accounting policies consistently followed by the Company. The policies are in
conformity with generally accepted accounting principles.
(a) Market value is determined as follows: Securities listed or admitted to
trading privileges on any securities exchange are valued at the last sales price
on the exchange on which such securities are traded, as of the close of business
on the day the securities are being valued or, lacking any sales, at the latest
price on the basis of current quotations from dealers (as in the case of bonds),
from valuations furnished by an independent pricing service or, in their
absence, fair value as determined under procedures approved by the Board of
Trustees.
(b) It is the policy of the Company to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income in taxable distributions. Therefore, no federal income tax
provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date and interest is recorded on
the accrual basis. Discounts on strips are accrued to maturity using the
constant yield method. The Company has elected not to amortize premiums on U.S.
Government bonds, which is consistent with the treatment for federal income tax
purposes.
(d) With respect to the Balanced Series, a portion of the proceeds from sales
and costs of repurchases of shares, equivalent to the amount of distributable
net investment income on the date of the transaction, is credited or charged to
undistributed income. Undistributed net investment income per share thus is
unaffected by sales or repurchases of shares.
(e) The organization expenses of each Series of the Company are amortized evenly
over a period of five years from their respective commencements of operations.
2. DISTRIBUTIONS Dividends from net investment income are declared daily and
paid monthly with respect to the Limited Duration U.S. Government Securities
Series and declared quarterly and paid monthly with respect to the Balanced
Series. Taxable net realized gain from security transactions, if any, will be
distributed to shareholders in December 1995. At October 31, 1995, accumulated
net realized gains (losses) for financial statement purposes aggregated
$(824,628) of which a primary portion will expire in the year 2002, for the
Limited Duration U.S. Government Securities Series and $58,841 for the Balanced
Series.
Income and capital gains distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gains amounts in accordance with generally
accepted accounting principles. These differences are primarily caused by
differences in timing of recognition of certain components of income, expenses
or capital gains and losses. Where such differences are permanent in nature,
they are reclassified based upon their ultimate characterization for federal
income tax purposes. Any such reclassifications will have no effect on net
assets, results of operations or net asset value of the fund.
6
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. SHARE TRANSACTIONS Transactions in shares were as follows:
<TABLE>
For the Period 11/4/93
Year Ended 10/31/95 For the Period 12/27/94 (Commencement of
------------------- Commencement of Operations) to 10/31/94
Limited Duration Operations) to 10/31/95 -----------------------
U.S. Government ----------------------- Limited Duration U.S.
Securities Series Balanced Series Government Securities Series
- ------------------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Sales of shares 791,731 539,264 2,826,671
Shares issued to shareholders in reinvestment
of net investment income 90,672 10,681 88,548
Total 882,403 549,945 2,915,219
Shares reacquired (1,220,911) (16,743) (627,857)
Increase (decrease) in shares (338,508) 533,202 2,287,362
</TABLE>
4. CAPITAL PAID In At October 31, 1995, capital paid in aggregated $9,549,027
for the Limited Duration U.S. Government Securities Series and $5,366,735 for
the Balanced Series.
5. PURCHASES AND SALES OF SECURITIES Purchases and sales of investment
securities (other than short-term investments) were as follows:
<TABLE>
Series Purchases Sales
- -------------------------------------------------- ----------- -----------
<S> <C> <C>
Limited Duration U.S. Government Securities Series $17,212,624 $18,694,339
Balanced Series 9,516,560 4,497,911
</TABLE>
Security gains and losses are computed on the identified cost basis.
As of October 31, 1995, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were as follows:
<TABLE>
Unrealized Unrealized
Series Appreciation Depreciation
- -------------------------------------------------- ------------ ------------
<S> <C> <C>
Limited Duration U.S. Government Securities Series $129,325 $11,144
Balanced Series 312,663 28,268
</TABLE>
The cost of investments for federal income tax purposes is substantially the
same as that used for financial statement purposes.
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Lord, Abbett & Co.
received a management fee of $15,561 from the Limited Duration U.S. Government
Securities Series for the period November 1, 1994 through February 28, 1995 for
which it supplied investment management, research, statistical and advisory
services and paid officers' remuneration and certain other expenses of the
Company. For the period March 1, 1995 through October 31, 1995 Lord, Abbett &
Co. waived $26,725 in management fees. With respect to the Balanced Series, from
December 27, 1994 through October 31, 1995 Lord, Abbett & Co. waived $23,330 in
management fees and assumed $4,576 of other expenses.The management fee is based
on average daily net assets for each month at the annual rate of .50 of 1% for
the Limited Duration U.S. Government Securities Series and .75 of 1% of average
daily net assets for each month for the Balanced Series.
Lord, Abbett & Co. may waive its management fees and pay or reimburse the Trust
for certain of its other expenses. Any such expenses paid are subject to
repayment by the Series, pursuant to a formula based on the asset size and
expense ratio of each Series. The Series shall not be obligated to repay Lord,
Abbett & Co. after five full fiscal years after the commencement of the
repayment formula or the termination of the Management Agreement, whichever is
earlier. Lord, Abbett & Co. received the following commissions on sales of the
Company after concessions were paid to authorized distributors:
<TABLE>
Lord, Abbett & Co. Distributors'
Series Commissions Concessions
- -------------------------------------------------- ------------------ -----------
<S> <C> <C>
Limited Duration U.S. Government Securities Series $5,429 $ 33,461
Balanced Series 6,781 159,331
</TABLE>
Each Series of the Company adopted a Rule 12b-1 Plan providing for the quarterly
payment of compensation to dealers of (1) an annual service fee of .25% of the
average daily net asset value of shares sold by dealers from the commencement of
the Series' public offering and (2) with respect to sales at the breakpoint of
$1 million or more, a one-time distribution fee, at the time of sale, of 1% of
the first $3 million, plus .50% of the next $7 million, plus .25% of the
remainder of the net asset value of shares sold on or after the effective date.
Series' Plans commence on the first day of the calendar quarter subsequent to
net assets reaching $100 million in the case of the Limited Duration U.S.
Government Securities Series, and $50 million in the case of the Balanced
Series.
7. TRUSTEES' REMUNERATION The Trustees of the Company associated with Lord,
Abbett & Co. and all officers of the Company receive no compensation from the
Company for acting as such. Outside Trustees' fees, including attendance fees
for board and committee meetings, and outside Trustees' retirement costs, are
allocated among all funds in the Lord Abbett group based on net assets of each
fund. The direct remuneration accrued during the period for outside Trustees of
the Company as a group was $266 (exclusive of expenses), a portion of which has
been deemed invested in shares of the Company under a deferred compensation plan
contemplating future payment of the value of those shares. As of October 31,
1995, the aggregate amount in Trustees' accounts maintained under the plan was
$220.
7
<PAGE>
================================================================================
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders,
Lord Abbett Investment Trust:
We have audited the accompanying statements of net assets of Lord Abbett
Investment Trust-Limited Duration U.S. Government Securities Series and Balanced
Series as of October 31, 1995, 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, 1995 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.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett
Investment Trust-Limited Duration U.S. Government Securities Series and Balanced
Series at October 31, 1995, the results of their operations, the changes in
their net assets and the financial highlights for each of the periods presented
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
December 8, 1995
Copyright (C) 1995 by Lord Abbett Investment Trust, 767 Fifth Avenue, New York,
NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Investment 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.
All rights reserved. Printed in the U.S.A.
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This report to shareholders inaugurates a new procedure whereby a single copy of
the report is sent to an address to which more than one registered shareholder
of the Fund with the same last name has indicated mail is to be delivered,
unless additional reports are specifically requested in writing or by telephone.
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8
<PAGE>
Lord, Abbett & Co.
A Tradition of Performance Through
DISCIPLINED
INVESTING
[PHOTO OF ROBERT S. DOW, ROBERT G. MORRIS, JULIE M. CANNELL, ZANE E. BROWN]
(seated)
Robert S. Dow, portfolio manager, partner, chief investment officer and
president of all Lord Abbett's funds
(standing, left to right)
Robert G. Morris, partner and director of equity investments
Julie M. Cannell, associate director of research
Zane E. Brown, director of fixed income and
portfolio manager -- Lord Abbett Investment Trust
A successful long-term track record is evidence of a successful investment
strategy. For decades we, at Lord, Abbett & Co., have believed that investing
with a disciplined, value approach is the best way to achieve competitive
returns and reduce portfolio risk. This commitment and the dedication of our
team of 42 investment professionals have helped us earn the trust of financial
professionals and investors for over 65 years.
About Your
Trust's
Board of
Trustees
The Securities and Exchange Commission (SEC) views the role of the independent
Board of Trustees as one of the most important components in overseeing a mutual
fund. The Board of Trustees watches over your Trust's general operations and
represents your interests. Board members review and approve every contract
between your Trust and Lord, Abbett & Co. (the Trust's investment manager). They
meet regularly to review a wide variety of information and issues regarding your
Trust. Every member of the Board possesses extensive business experience; Lord
Abbett Investment Trust's shareholders are indeed fortunate to have a group of
independent trustees with diverse backgrounds to provide a variety of viewpoints
in the oversight of their Trust.
John C. Jansing,
Trustee -- Lord Abbett
Investment Trust
[PHOTO OF JOHN C. JANSING]
An alumnus of Dartmouth College, Mr. Jansing is the founder and retired Chairman
of Independent Election Corporation of America, a proxy tabulating firm. His
diversified business career has spanned 40 years and includes extensive
experience in the investment company industry.
Mr. Jansing has served on the American Stock Exchange Board of Governors as well
as on a Securities and Exchange Commission Special Advisory Committee on
Investment Advisors. He has been an independent director/trustee for all of Lord
Abbett's funds since 1978.
<PAGE>
Investing in the
LORD ABBETT
Family of Funds
<TABLE>
<CAPTION>
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GROWTH
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INCOME
--------------------------------------------------------------------------------------------------
GROWTH GROWTH & BALANCED INCOME TAX-FREE MONEY
FUNDS INCOME FUNDS FUND FUNDS INCOME FUNDS MARKET FUND
<S> <C> <C> <C> <C> <C>
Developing Affiliated Fund Investment Trust- U.S. . National U.S.
Growth Fund Balanced Series Government . California Government
Fundamental Securities Fund* . Connecticut Securities
Value Value Fund . Florida Money Market
Appreciation Bond-Debenture . Georgia Fund+
Fund Fund . Hawaii
. Michigan
Global Fund- Global Fund- . Minnesota
Equity Series Income Series . Missouri
. New Jersey
Investment . New York
Trust-Limited . Pennsylvania
Duration U.S. . Texas
Government . Washington
Securities Series*
</TABLE>
FINDING THE RIGHT MUTUAL FUND CAN BE CONFUSING. AT LORD, ABBETT & CO., WE
BELIEVE YOUR FINANCIAL ADVISER PROVIDES VALUE IN HELPING YOU IDENTIFY AND
UNDERSTAND YOUR INVESTMENT OBJECTIVES AND, ULTIMATELY, OFFERING FUND
RECOMMENDATIONS SUITABLE FOR YOUR INDIVIDUAL NEEDS.
For more complete information about a Lord Abbett fund, including charges and
expenses, call your financial adviser or Lord, Abbett & Co. at 800-874-3733 for
a prospectus. Read it carefully before investing.
WHEN YOU INVEST IN A FAMILY OF FUNDS, YOU BENEFIT FROM:
DIVERSIFICATION. You and your financial adviser can diversify your investments
between equity and income funds.
FLEXIBILITY. As your investment goals change, your financial adviser can help
you reallocate your portfolio.
As an investor in the Lord Abbett Family of Funds, you have access to 25
portfolios designed to meet a variety of investment needs. While you may
reallocate your assets among our funds at any time, we recommend speaking with
your financial adviser to help you customize your investment plan.
* An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that this Fund will be able to
maintain a stable net asset value of $1.00 per share. This Fund is managed to
maintain, and has maintained, its stable $1.00 per share price.
[Logo] LORD, ABBETT & CO
Investment Management
A Tradition of Performance Through Disciplined Investing
