<PAGE>
LORD ABBETT
INVESTMENT
TRUST
. Limited Duration U.S. Government Securities Series
. Balanced Series
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 1996
[PHOTO - Breif case and report]
Two portfolios
to help you
meet your goals
[LOGO]
<PAGE>
REPORT TO SHAREHOLDERS
For the Six Months Ended April 30, 1996
Lord Abbett Investment Trust completed the first half of its fiscal year on
April 30, 1996. Over these past six months, stock market averages remained near
all-time highs, despite weakness in bond markets. The weakness in the latter can
best be attributed to a reversal in investor expectations. Moderate economic
growth and low inflation paved the way for the Federal Reserve to make modest
reductions in short-term lending rates in December and January. Many investors
anticipated that additional reductions would be forthcoming. As it became clear
there would be no further, near-term action by the Federal Reserve, and as the
prospects for legislation requiring a balanced federal budget diminished,
investor disappointment set in, causing long-term bond rates to rise sharply in
March and April.
Our outlook for the markets is broadly positive. The U.S. economy has not
changed dramatically over these six months: economic growth remains modest and
inflation does not appear to be a big threat. It is becoming increasingly clear
that the U.S. economy is in the midst of a modest recovery. We forecast the
economy will grow at a rate averaging about 2 1/4% in 1996, with inflation
around 3%. Against this backdrop, it is likely the Federal Reserve will remain
neutral for the remainder of the year. Accordingly, we are optimistic that the
bond markets will stabilize over the next three to six months and yields on
long-term Government bonds should decline toward 6 1/2% - 6 1/4%. These factors
should benefit the financial markets.
Below is a brief overview of both portfolios, including total return (the
percent change in net asset value including the reinvestment of all
distributions).
ABOUT THE LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES
The Limited Duration U.S. Government Securities Series ended this six-month
period with net assets of $4.58 million. The Series' distribution rate was 5.73%
based on the period-end net asset value of $4.40 and the per-share monthly
dividend of $.021, annualized. Total return over this period was -.05%.
Today's market gives us the opportunity to purchase bonds at cheaper prices
(higher yields). Should long-term interest rates decline, as we forecast, these
bonds would appreciate in value. Your Fund maintains holdings in intermediate-
term U.S. Treasury securities, as well as higher yielding, mortgage-related
securities, which should perform well in an environment of modest economic
growth. To balance these investments, your Fund also maintains holdings in
short-term U.S. Treasury securities.
ABOUT THE BALANCED SERIES
The Balanced Series ended the period with net assets of $7.76 million. The
Series' distribution rate was 4.54% based on the April 30 net asset value of
$11.10 and the monthly dividend of $.042, annualized. The Series posted a total
return of 7.09% over the period.
The Fund targeted investment in 55% stocks and 45% bonds. We increased our
holdings of technology stocks, which experienced a drop in price late in 1995
and represented a good bargain. In addition, the unexpected rise of long-term
interest rates late in the period allowed us to increase our holdings of stocks
of financial companies at, what we believe, were attractive prices. With 1996's
corporate earnings expected to be little changed from last year's, and with few
areas in the market representing broadly compelling value, the equity component
of your Fund's performance will be driven by individual stock selection. The
fixed-income portion of the portfolio is positioned to benefit from the price
appreciation that would result from a decline in long-term interest rates.
Shareholders should understand that the consistently high stock market returns
over the last 18 months are well above the market's long-term trend, and are not
sustainable. We are confident, however, that our disciplined, value investment
style should help shareholders earn competitive returns while reducing
volatility.
We are pleased that Lord Abbett Investment Trust is a part of your investment
portfolio and thank you for the confidence and trust you have placed in us.
[PHOTO]
/s/ Ronald P. Lynch
Ronald P. Lynch
Chairman
[PHOTO]
/s/ Robert S. Dow
Robert S. Dow
President
June 21, 1996
- ----------------------
We would like to thank all shareholders who voted their proxy ballots. We are
pleased to announce that, on June 19, 1996, shareholders approved all the
proposals recommended by your Board of Trustees.
- ----------------------
<PAGE>
IMPORTANT INFORMATION
It is the intent of the Trust to issue additional classes of
shares, with distinct pricing options, in July 1996. For a full
discussion of the differences in pricing alternatives, please
call 800-874-3733 and ask for the Trust's July 15, 1996
prospectus.
STATEMENT OF NET ASSETS April 30, 1996
<TABLE>
<CAPTION>
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES
PRINCIPAL MARKET VALUE
SECURITY AMOUNT (NOTE 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES 86.81%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury
33.21% U.S. TREASURY BONDS Strips due 2/15/2002 $2,200M $1,521,094
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government
Agencies
6.70% FINANCING CORP. Strips due 6/27/1998 350M 306,852
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National
Mortgage Association 6 1/2% due 2007 to 2011 612M 593,662
Pass-Through 7 % due 2008 to 2009 796M 791,016
Securities 9.30 % CMO Class 90-20-G due 3/25/2018 96M 95,827
32.32% Total 1,480,505
- ------------------------------------------------------------------------------------------------------------------------------------
Government National
Mortgage Association
Pass-Through Securities
14.58% 10 1/2% due 2013 to 2020 606M 667,841
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $4,019,467) 3,976,292
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES 13.19%
- ------------------------------------------------------------------------------------------------------------------------------------
Other Cash 548,966
------------------------------------------------------------------------------------------------------------------
Assets Receivable for: SECURITIES SOLD 588,190
Other 100,305
Total Other Assets 1,237,461
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities Payable for: SECURITIES PURCHASED 588,187
Other 45,320
--------------------------------------------------------------------------------------------------
Total Liabilities 633,507
--------------------------------------------------------------------------------------------------
Total Other Assets, Less Liabilities 603,954
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $4.40 a share on 1,041,581 shares of beneficial interest outstanding) $4,580,246
--------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
STATEMENT OF NET ASSETS April 30, 1996
BALANCED SERIES
NUMBER OF MARKET VALUE
SECURITY SHARES (NOTE 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES 90.69%
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS 53.12%
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace
.90% BOEING CO. 850 $ 69,805
- ------------------------------------------------------------------------------------------------------------------------------------
Auto Parts
1.54% GENUINE PARTS COMPANY 2,700 119,475
- ------------------------------------------------------------------------------------------------------------------------------------
Automobiles
1.71% GENERAL MOTORS CORP. 2,450 132,913
- ------------------------------------------------------------------------------------------------------------------------------------
Banks: Money Center CHASE MANHATTAN CORP. 1,300 89,538
1.68% FIRST CHICAGO NBD 1,000 41,250
Total 130,788
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
STATEMENT OF NET ASSETS April 30, 1996
BALANCED SERIES
<TABLE>
<CAPTION>
Number of Market Value
Security Shares (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Banks: Regional BankAmerica Corp. 1,350 $ 102,263
3.17% Comerica Inc. 1,750 76,125
First Union Corp. 1,100 67,650
Total 246,038
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals Dow Chemical Co. 1,650 146,644
2.94% Union Carbide Corp. 1,800 81,900
Total 228,544
- ------------------------------------------------------------------------------------------------------------------------------------
Data Processing
Equipment
1.70% Hewlett-Packard Co. 1,250 132,344
- ------------------------------------------------------------------------------------------------------------------------------------
Data Processing Services
1.09% General Motors Corp. (Electronic Data Systems) Class E 1,500 84,562
- ------------------------------------------------------------------------------------------------------------------------------------
Drugs/Health Care SmithKline Beecham plc ADR 1,400 75,600
Products Tambrands Inc. 1,300 62,238
3.00% Warner-Lambert Co. 850 94,988
Total 232,826
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Power Baltimore Gas & Electric Co. 2,450 64,619
2.11% CINergy Corp. 2,150 62,350
DTE Energy 1,200 37,200
Total 164,169
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment
2.05% Emerson Electric Co. 1,900 158,887
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics: Components
.81% AMP Inc. 1,400 62,650
- ------------------------------------------------------------------------------------------------------------------------------------
Financial: Miscellaneous
1.13% Transamerica Corp. 1,150 87,400
- ------------------------------------------------------------------------------------------------------------------------------------
Food Conagra Inc. 1,350 52,144
3.23% Hershey Foods Corp. 1,250 94,844
Supervalu Inc. 3,250 104,000
Total 250,988
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance Aetna Life & Casualty Co. 1,500 106,875
4.67% Chubb Corp. 1,100 104,088
CIGNA Corp. 550 62,356
SAFECO Corp. 2,700 89,100
Total 362,419
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery: Diversified
1.13% Deere & Co. 2,250 87,468
- ------------------------------------------------------------------------------------------------------------------------------------
Natural Gas Transmission
1.61% The Coastal Corporation 3,150 124,818
- ------------------------------------------------------------------------------------------------------------------------------------
Oil: Domestic Amoco Corporation 1,500 109,500
1.90% Ultramar Corp. 1,200 37,650
Total 147,150
- ------------------------------------------------------------------------------------------------------------------------------------
Oil: International Chevron Corp. 1,550 89,900
1.82% Mobil Corp. 450 51,750
Total 141,650
- ------------------------------------------------------------------------------------------------------------------------------------
Paper and Forest James River Corp. 3,200 85,600
Products Kimberly Clark Corp. 1,497 108,720
4.06% Westvaco Corporation 3,900 120,900
Total 315,220
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
STATEMENT OF NET ASSETS April 30, 1996
BALANCED SERIES
<TABLE>
<CAPTION>
NUMBER OF SHARE MARKET VALUE
SECURITY OR PRINCIPAL AMOUNT (NOTE 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Retail
.64% Sears, Roebuck & Co. 1,000 $ 49,875
- ------------------------------------------------------------------------------------------------------------------------------------
Savings and Loan Ahmanson, H.F. & Co. 3,500 83,125
1.97% Great Western Financial Corp. 3,050 70,150
Total 153,275
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications AT&T Corp. 1,850 113,313
3.17% MCI Communications Corp. 4,500 132,469
Total 245,782
- ------------------------------------------------------------------------------------------------------------------------------------
Tire and Rubber Goods Cooper Tire & Rubber Company 3,750 91,875
2.66% Goodyear Tire & Rubber Co. 2,200 114,675
Total 206,550
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco American Brands Inc. 1,800 74,925
2.00% RJR Nabisco 2,700 80,663
Total 155,588
- ------------------------------------------------------------------------------------------------------------------------------------
Waste Management
.43% WMX Technologies Inc. 950 33,013
--------------------------------------------------------------------------------------------------
Total Investments in Common Stocks (Cost $4,038,101) 4,124,197
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS 37.57%
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 7%
to be announced 1,800M 1,735,593
U.S. Treasury Bonds 6 7/8% due 8/15/2025 450M 444,445
U.S. Treasury Notes 5 1/4% due 1/31/2001 100M 95,483
U.S. Treasury Notes 6 1/2% due 8/15/2005 650M 641,265
Total Investments in U.S. Government Securities
(Cost $2,482,625) 2,916,786
--------------------------------------------------------------------------------------------------
Total Investments in Securities (Cost $6,520,726) 7,040,983
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities 9.31%
- ------------------------------------------------------------------------------------------------------------------------------------
Other Short-Term Federal Home Loan Banks 131/2% due 9/6/1996 800M 821,500
Assets Securities, Federal National Mortgage Association 14%
at Market due 9/25/1996 1,000M 1,033,594
Total (Cost $1,907,964) 1,855,094
------------------------------------------------------------------------------------------------------------------------
Cash 468,071
------------------------------------------------------------------------------------------------------------------------
Receivable for: Securities sold 44,331
Other 88,443
Total Other Assets 2,455,939
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities Payable for: Securities purchased 1,732,781
Other 201
Total Liabilities 1,732,982
Total Other Assets, Less Liabilities 722,957
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
100.00% (equivalent to $11.10 a share on 699,660 shares of beneficial interest outstanding) $7,763,940
--------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
3
<PAGE>
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1996
BALANCED SERIES
<TABLE>
<CAPTION>
LIMITED DURATION
U.S. GOVERNMENT
INVESTMENT INCOME SECURITIES SERIES BALANCED SERIES
- ------------------------------------------- ----------------- ------------------
<S> <C> <C> <C>
INCOME Interest $ 186,449 $ 133,566
--------------------------- ----------------- ------------------
Dividends - 49,276
--------------------------- ----------------- ------------------
Total income 186,449 182,842
- ------------------------------------------- ----------------- ------------------
EXPENSES Management fees (Note 6) 14,803 25,672
--------------------------- ----------------- ------------------
Legal and audit 30,345 2,644
--------------------------- ----------------- ------------------
Registration 14,395 4,714
--------------------------- ----------------- ------------------
Reports to shareholders 10,800 4,423
--------------------------- ----------------- ------------------
Organization (Note 1e) 7,113 3,880
--------------------------- ----------------- ------------------
Shareholder servicing 5,130 4,058
--------------------------- ----------------- ------------------
Other 6,000 5,581
--------------------------- ----------------- ------------------
Management fees waived and
expenses assumed by
Lord, Abbett & Co. (Note 6) (41,179) (25,672)
--------------------------- ----------------- ------------------
Net expenses 47,407 25,300
--------------------------- ----------------- ------------------
Net investment income 139,042 157,542
--------------------------- ----------------- ------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5)
- --------------------------------------------------------------------------------
REALIZED GAIN FROM SECURITIES TRANSACTIONS
--------------------------- ----------------- ------------------
Proceeds from sales 9,687,319 8,183,490
--------------------------- ----------------- ------------------
Cost of securities sold 9,614,973 8,105,017
--------------------------- ----------------- ------------------
Net realized gain 72,346 78,473
- --------------------------------------------------------------------------------
UNREALIZED APPRECIATION (DEPRECIATION) OF
INVESTMENTS
--------------------------- ----------------- ------------------
Beginning of period 118,180 284,395
--------------------------- ----------------- ------------------
End of period (43,175) 467,387
--------------------------- ----------------- ------------------
Net unrealized appreciation
(depreciation) (161,355) 182,992
--------------------------- ----------------- ------------------
Net realized and unrealized
gain (loss) on investments (89,009) 261,465
--------------------------- ----------------- ------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 50,033 $ 419,007
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Period
Year Ended 12/27/94
Six Months Ended 4/30/96 10/31/95 (Commencement
---------------------------------- ----------------- of Operations)
Limited Duration Limited Duration to 10/31/95
U.S. Government U.S. Government -------------------
Increase (Decrease) in Net Assets Securities Series Balanced Series Securities Series Balanced Series
- -------------------------------------------------------- ---------------------------------- ----------------- -------------------
<S> <C> <C> <C> <C> <C>
Operations Net investment income $ 139,042 $ 157,542 $ 475,394 $ 125,461
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net realized gain (loss) from
securities transactions 72,346 78,473 (134,019) 58,841
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net unrealized appreciation
(depreciation) of investments (161,355) 182,992 288,510 284,395
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net increase in net assets resulting
from operations 50,033 419,007 629,885 468,697
- -------------------------------------------------------- ------------------- ------------- ----------------- -------------------
Undistributed net investment income included in price of
shares reacquired (Note 1d) - 467 - 10,626
- -------------------------------------------------------- ------------------- ------------- ----------------- -------------------
Distributions to shareholders from:
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net investment income (170,286) (152,459) (497,675) (133,379)
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net realized gain from securities
transactions - (60,852) - -
---------------------------------------- ------------------- ------------- ----------------- -------------------
Total distributions (170,286) (213,311) (497,675) (133,379)
- -------------------------------------------------------- ------------------- ------------- ----------------- -------------------
Share transactions
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net proceeds from sales of shares 1,960,654 1,946,253 3,553,091 5,431,809
---------------------------------------- ------------------- ------------- ----------------- -------------------
Net asset value of shares issued to
shareholders in reinvestment of net
investment income and realized gain from
securities transactions 129,315 184,571 406,123 111,751
---------------------------------------- ------------------- ------------- ----------------- -------------------
Total 2,089,969 2,130,824 3,959,214 5,543,560
---------------------------------------- ------------------- ------------- ----------------- -------------------
Cost of shares reacquired (6,311,097) (285,726) (5,425,858) (177,825)
---------------------------------------- ------------------- ------------- ----------------- -------------------
Increase (decrease) in net assets
derived from share transactions (4,221,128) 1,845,098 (1,466,644) 5,365,735
- -------------------------------------------------------- ------------------- ------------- ----------------- -------------------
Increase (decrease) in net assets (4,341,381) 2,051,261 (1,334,434) 5,711,679
- -------------------------------------------------------- ------------------- ------------- ----------------- -------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period 8,921,627 5,712,679 10,256,061 1,000
---------------------------------------- ------------------- ------------- ----------------- -------------------
End of period (including undistributed
net investment income of $47,803 and
$8,258, respectively, as of April 30,
1996 and undistributed net investment
income of $79,047 and $2,708,
respectively, as of October 31, 1995) $4,580,246 $7,763,940 $ 8,921,627 $5,712,679
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
5
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Limited Duration U.S. Government Securities Series
For the Period
11/4/93
Six Months Year (Commencement
Ended Ended of Operations)
Per Share Operating Performance: 4/30/96 10/31/95 to 10/31/94
------------------------------------------------------------ ------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 4.53 $ 4.44 $ 4.85
------------------------------------------------- ------------ ------------ --------------
Income (loss) from investment operations
----------------------------------------- ------------ ------------ --------------
Net investment income .0868+ .2316 .2650+
----------------------------------------- ------------ ------------ --------------
Net realized and unrealized gain (loss)
on investments (.0875) .1017 (.4123)
----------------------------------------- ------------ ------------ --------------
Total from investment operations (.0007) .3333 (.1473)
------------------------------------------------- ------------ ------------ --------------
Distributions
----------------------------------------- ------------ ------------ --------------
Dividends from net investment income (.1293) (.2433) (.2627)
------------------------------------------------------------ ------------ ------------ --------------
Net asset value, end of period $ 4.40 $ 4.53 $ 4.44
------------------------------------------------------------ ------------ ------------ --------------
Total Return* (.05)%+ 8.16% (3.09)%+
------------------------------------------------------------ ------------ ------------ --------------
Ratios/Supplemental Data:
------------------------------------------------------------ ------------ ------------ --------------
Net assets, end of period (000) $4,580 $8,922 $10,256
----------------------------------------- ------------ ------------ --------------
Ratios to Average Net Assets:
------------------------------------------------- ------------ ------------ --------------
Expenses, including waiver 0.80%+ 1.40% 0.89%+
----------------------------------------- ------------ ------------ --------------
Expenses, excluding waiver 1.50%+ 1.71% 0.89%+
----------------------------------------- ------------ ------------ --------------
Net investment income 2.35%+ 5.62% 5.61%+
------------------------------------------------- ------------ ------------ --------------
Portfolio turnover rate 92.35% 222.00% 895.63%
------------------------------------------------------------ ------------ ------------ --------------
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Financial Highlights
Balanced Series
For the Period
12/27/94
Six Months (Commencement
Ended of Operations)
Per Share Operating Performance: 4/30/96 to 10/31/95
---------------------------------------------------------------------------- -------------- ------------------
<S> <C> <C>
Net asset value, beginning of period $ 10.71 $ 9.52
----------------------------------------------------------------- -------------- --------------
Income from investment operations
--------------------------------------------------------- -------------- --------------
Net investment income .259+ .365+
--------------------------------------------------------- -------------- --------------
Net realized and unrealized gain on investments .493 1.185
--------------------------------------------------------- -------------- --------------
Total from investment operations .752 1.55
----------------------------------------------------------------- -------------- --------------
Distributions
--------------------------------------------------------- -------------- --------------
Dividends from net investment income (.252) (.36)
--------------------------------------------------------- -------------- --------------
Distribution from net realized gain (.11) -
---------------------------------------------------------------------------- -------------- --------------
Net asset value, end of period $ 11.10 $ 10.71
---------------------------------------------------------------------------- -------------- --------------
Total Return* 7.09%+ 16.32%+
---------------------------------------------------------------------------- -------------- --------------
Ratios/Supplemental Data:
---------------------------------------------------------------------------- -------------- --------------
Net assets, end of period (000) $ 7,764 $5,713
--------------------------------------------------------- -------------- --------------
Ratios to Average Net Assets:
----------------------------------------------------------------- -------------- --------------
Expenses, including waiver 0.37%+ 0.37%+
--------------------------------------------------------- -------------- --------------
Expenses, excluding waiver 0.74%+ 1.26%+
--------------------------------------------------------- -------------- --------------
Net investment income 2.30%+ 4.39%+
----------------------------------------------------------------- -------------- --------------
Portfolio turnover rate 129.46% 131.80%
---------------------------------------------------------------------------- -------------- --------------
</TABLE>
*Total return does not consider the effects of sales loads.
+Not annualized.
See Notes to Financial Statements.
6
<PAGE>
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 securities transactions, if any, will be
distributed to shareholders in December 1996. At April 30, 1996, accumulated net
realized gains (losses) for financial reporting purposes aggregated $(752,282)
of which a primary portion will expire in the year 2002, for the Limited
Duration U.S. Government Securities Series and $76,462 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 the 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 values of the Series.
3. SHARE TRANSACTIONS Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED 4/30/96 YEAR ENDED 10/31/95
---------------------------------------- ------------------- FOR THE PERIOD 12/27/94
LIMITED DURATION LIMITED DURATION (COMMENCEMENT OF
U.S. GOVERNMENT U.S. GOVERNMENT OPERATIONS) TO 10/31/95
SECURITIES SERIES BALANCED SERIES SECURITIES SERIES BALANCED SERIES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales of shares 433,274 175,285 791,731 539,264
- -----------------------------------------------------------------------------------------------------------------------------------
Shares issued to shareholders in
reinvestment of net investment
income and net realized gain
from securities transactions 28,607 16,704 90,672 10,681
- -----------------------------------------------------------------------------------------------------------------------------------
Total 461,881 191,989 882,403 549,945
- -----------------------------------------------------------------------------------------------------------------------------------
Shares reacquired (1,389,773) (25,636) (1,220,911) (16,743)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in shares (927,892) 166,353 (338,508) 533,202
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
4. CAPITAL PAID IN At April 30, 1996, capital paid in aggregated $5,327,900 for
the Limited Duration U.S. Government Securities Series and $7,211,833 for the
Balanced Series.
5. PURCHASES AND SALES OF SECURITIES Purchases and sales of investment
securities (other than short-term investments) were as follows:
Series Purchases Sales
- --------------------------------------------------------------------------------
Limited Duration U.S. Government
Securities Series $ 5,168,690 $9,185,358
- --------------------------------------------------------------------------------
Balanced Series 9,491,719 8,125,377
- --------------------------------------------------------------------------------
Security gains and losses are computed on the identified cost basis.
As of April 30, 1996, unrealized appreciation and depreciation of investments
based on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Unrealized Unrealized
Series Appreciation Depreciation
<S> <C> <C>
Limited Duration U.S. Government
Securities Series $ 38,819 $ 81,994
- --------------------------------------------------------------------------------
Balanced Series 575,620 108,233
- --------------------------------------------------------------------------------
</TABLE>
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Lord, Abbett & Co.
provided the Company with investment management, research, statistical and
advisory services and paid officers remuneration and certain other expenses of
the Company. With respect to the Limited Duration U.S. Government Securities
Series for the six months ended April 30, 1996, Lord, Abbett & Co. waived
$14,803 in management fees and assumed $26,376 of other expenses. With respect
to the Balanced Series, for the six months ended April 30, 1996, Lord, Abbett &
Co. waived $25,672 in management fees. 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
shares of the Company after concessions were paid to authorized distributors:
<TABLE>
<CAPTION>
Lord, Abbett & Co. Distributors'
Series Commissions Concessions
- --------------------------------------------------------------------------------
<S> <C> <C>
Limited Duration U.S.
Government Securities Series $2,460 $16,412
- --------------------------------------------------------------------------------
Balanced Series 8,248 51,890
- --------------------------------------------------------------------------------
</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 $80 (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 April 30, 1996,
the aggregate amount in Trustees' accounts maintained under the plan was $283.
Copyright 1996 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.
There is no guarantee that the forecasts contained within this publication will
come to pass.
All rights reserved. Printed in the U.S.A.
8
<PAGE>
LORD, ABBETT & CO.
A Tradition of Performance Through
Disciplined
Investing
[PHOTO]
(seated)
Robert S. Dow, 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 47 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. Below, we feature one of our independent trustees, Stewart S.
Dixon.
Stewart S. Dixon,
Trustee - Lord Abbett
Investment Trust
[PHOTO]
An alumnus of Yale University, Mr. Dixon also holds a law degree from the
University of Michigan and has practiced law for nearly 40 years. He was one of
the founding partners of the firm of Wildman, Harrold, Allen & Dixon (Chicago)
in 1967, where he practices in the areas of corporate/ securities; anti-trust;
and estate planning.
He serves as a director of Ortho S.A. Sprague Memorial Institute and as a
trustee of the Chicago Historical Society. He has served as a director of
Children's Memorial Hospital, the Infant Welfare Society and the Chicago
Zoological Society. He has been an independent trustee for all of Lord Abbett's
funds since 1976.
9
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
GROWTH
INCOME
<S> <C> <C> <C> <C> <C>
Growth Growth & Balanced Fund Income Funds Tax-Free Money
Funds Income Funds U.S. Government Income Funds Market Fund
Balanced Series Securities Series*
Developing Affiliated Fund . National U.S. Government
Growth Fund Bond-Debenture . California Securities
Growth & Fund . Connecticut Money Market
Mid-Cap Value Income Trust . Florida Fund*+
Fund Global Fund- . Georgia Growth
Income Series . Hawaii
Global Fund- . Michigan
Equity Series Limited . Minnesota
Duration U.S. . Missouri
Government . New Jersey
Securities Series* . New York
. Pennsylvania
. Texas
. Washington
</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.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for Lord Abbett Investment
Trust.
For more complete information about any other 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.
+ There can be no assurance that this Fund will be able to maintain a
stable net asset valueof $1.00 per share. This Fund is managed to maintain,
and has maintained, its stable $1.00 per share price.
Numbers to Keep Handy
For Literature: 800-874-3733
For Account Information: 800-821-5129
For Fund Information: 800-426-1130
[LOGO] Lord, Abbett & Co.
Investment Management
A Tradition of Performance Through Disciplined Investing
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