1933 Act File No. 33-68090
1940 Act File No. 811-7988
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 11 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Amendment No. 10 [X]
LORD ABBETT INVESTMENT TRUST
Exact Name of Registrant as Specified in Charter
767 FIFTH AVENUE, NEW YORK, N. Y. 10153-0203
Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
Kenneth B. Cutler, Vice President & Secretary
767 FIFTH AVENUE, NEW YORK, N. Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately on filing pursuant to paragraph (b) of Rule 485
- ---------
on (date) pursuant to paragraph (b) of Rule 485
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60 days after filing pursuant to paragraph (a) (1) of Rule 485
- ---------
on (date) pursuant to paragraph (a) (1) of Rule 485
- ---------
X 75 days after filing pursuant to paragraph (a) (2) of Rule 485
- ---------
on (date) pursuant to paragraph (a) (2) of Rule 485
- ---------
If appropriate, check the following box:
- --------- this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
In accordance with Rule 24f-2 under the Investment Company Act of 1940, an
indefinite amount of Registrant's shares of Strategic Core Plus Series are being
registered by this registration statement under the Securities Act of 1933.
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EXPLANATORY NOTE
This Post-Effective Amendment No. 11 (the "Amendment") to the Registrant's
Registration statement relates to the Strategic Core Plus Series of the
Registrant.
The other series of shares of the Registrant are listed below and are
offered by the Prospectus in Part A of the Post-Effective Amendment to the
Registrant's Registration Statement as identified below. The following are
separate series of the Registrant. This Amendment does not relate to, amend or
otherwise affect the Prospectus contained in the prior Post-Effective Amendment,
and pursuant to Rule 485(d) under the Securities Acto of 1933, does not affect
the effectiveness of such Post-Effective Amendment.
Limited Duration Government Series
Balanced Series Post-Effective Amendment
U.S. Government Securities Series No. 10
LORD ABBETT INVESTMENT TRUST
N-1A
Cross Reference Sheet
Post-Effective Amendment No. 11
Pursuant to Rule 481(a)
Form N-1A Location In Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
1 Cover Page
2 Fee Table
3 N/A
4 (a) (i) Cover Page
4 (a) (ii)I Investment Objectives
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Last Page
5 (d) N/A
5 (e) Our Management
5 (f) N/A
5 (g) Purchases
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page; Purchases
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
7 (a) Back Cover Page
7 (b) (c) (d) Purchases
8 (a) (b) (c) (d) Redemptions
Purchases, Redemptions and Shareholder Services
9 N/A
10 Cover Page
11 Cover Page -- Table of Contents
12 N/A
13 (a) (b) (c) (d) Investment Objectives and Policies
14 Trustees and Officers
15 (a) (b) (c) Trustees and Officers
16 (a) (i) Investment Advisory and Other
Services
16 (a) (ii) Trustees and Officers
16 (a) (iii) Investment Advisory and Other
Services
16 (b) Investment Advisory and Other Services
16 (c) (d) (e) (g) N/A
16 (f) Purchases, Redemptions and Shareholder Services
16 (h) Investment Advisory and Other Services
16 (i) N/A
17 (a) Portfolio Transactions
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Form N-1A Location in Prospectus or
ITEM NO. STATEMENT OF ADDITIONAL INFORMATION
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases; Redemptions and Shareholder
Services; Notes to Financial Statements
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions and Shareholder Services
21 (b) (c) N/A
22 N/A
22 (b) Past Performance
23 Financial Statements; Supplementary
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LORD ABBETT
INVESTMENT TRUST
THE GENERAL MOTORS BUILDING
767 FIFTH AVENUE
NEW YORK, NY 10153-0203
800-426-1130
THE STRATEGIC CORE PLUS SERIES ("WE" OR THE "SERIES") IS A SEPARATE SERIES OF
LORD ABBETT INVESTMENT TRUST (THE "FUND"). THE FUND CURRENTLY CONSISTS OF FOUR
SERIES. ONLY SHARES OF THE STRATEGIC CORE PLUS SERIES ARE BEING OFFERED BY THIS
PROSPECTUS.
WE SEEK HIGH CURRENT INCOME. IN SEEKING THIS INVESTMENT OBJECTIVE, THE SERIES
INVESTS IN U.S. GOVERNMENT SECURITIES; INVESTMENT GRADE DEBT SECURITIES;
HIGH-YIELD, LOWER-RATED DEBT SECURITIES ("JUNK BONDS"); AND OBLIGATIONS OF
FOREIGN GOVERNMENTS AND OTHER FIXED-INCOME SECURITIES DENOMINATED IN FOREIGN
CURRENCIES. THERE CAN BE NO ASSURANCE THAT WE WILL ACHIEVE OUR OBJECTIVE.
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE SERIES AND THE
FUND THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. ADDITIONAL
INFORMATION ABOUT THE SERIES AND THE FUND HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE STATEMENT OF ADDITIONAL INFORMATION IS INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS AND MAY BE OBTAINED, WITHOUT CHARGE, BY WRITING
TO THE FUND OR BY CALLING 800-874-3733. ASK FOR "PART B OF THE PROSPECTUS -- THE
STATEMENT OF ADDITIONAL INFORMATION."
THE DATE OF THIS PROSPECTUS AND OF THE STATEMENT OF ADDITIONAL INFORMATION IS
DECEMBER ____, 1997.
PROSPECTUS
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS. SHAREHOLDER INQUIRIES SHOULD
BE MADE IN WRITING TO THE FUND OR BY CALLING 800-821-5129. YOU CAN ALSO MAKE
INQUIRIES THROUGH YOUR BROKER-DEALER.
SHARES OF THE SERIES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
AN INVESTMENT IN THE SERIES INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
CONTENTS PAGE
1 Investment Objective 2
2 Fee Table 2
3 How We Invest 2
4 Purchases 5
5 Our Management 6
6 Dividends, Capital Gains
Distributions and Taxes 6
7 Redemptions 7
8 Performance 7
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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1 INVESTMENT OBJECTIVE
Our investment objective is to seek high current income.
2 FEE TABLE
A summary of expenses of the Series is set forth in the table below. The example
should not be considered a representation of past or future expenses. Actual
expenses may be greater or less than those shown.
Shareholder Transaction Expenses
(as a percentage of offering price)
Maximum Sales Charge on Purchases
(See "Purchases") None
Deferred Sales Charge (See "Purchases") None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees (See "Our Management") None
Other Expenses (See "Our Management") None
Total Operating Expenses None
Example: Assume an annual return of 5% and there is no change in the level of
expenses described above. For a $1,000 investment, with reinvestment of all
dividends and distributions, you would pay the following total expenses,
assuming redemption on the last day of each period indicated.
1 year 3 years
None None
None None
The foregoing is provided to give investors a better understanding of the
expenses that are incurred by an investment in the Series.
3 HOW WE INVEST
The management of the Fund will allocate the Series' investments among the
following three sectors of the fixed-income securities markets:
U.S. GOVERNMENT AND INVESTMENT GRADE DEBT SECURITIES SECTOR -- consisting
primarily of debt obligations of the U.S. government, its agencies and
instrumentalities and debt securities which, at the time of purchase, are
"investment grade," i.e., rated within one of the four highest grades
determined either by Moody's Investors Service, Inc. or Standard & Poor's
Ratings Services.
HIGH-YIELD SECTOR -- consisting of high yield, lower-rated, higher risk
U.S. and foreign fixed-income securities; and
INTERNATIONAL SECTOR -- consisting of obligations of foreign governments,
their agencies and instrumentalities and other fixed-income securities
denominated in foreign currencies.
Lord, Abbett & Co. ("Lord Abbett") will continuously review the allocation
of assets among these three sectors and make adjustments as it deems
appropriate. Although there is no fixed limit on allocations for the U.S.
Government and Investment Grade Sector, under normal circumstances the
High-Yield and International Sectors each have a limit consisting of 20% of
the Series' net assets.
U.S. GOVERNMENT SECURITIES. U.S. Government securities include: (1) obligations
issued by the U.S. Treasury, differing only in their interest rates, maturities
and time of issuance, and including Treasury bills maturing in one year or less,
Treasury notes maturing in one to ten years and Treasury bonds with maturities
of over ten years and (2) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities which are supported by any of the following: (a)
the full faith and credit of the United States (such as Government National
Mortgage Association ("GNMA") certificates), (b) the right of the issuer to
borrow from the U.S. Treasury or (c) the credit of the instrumentality. Agencies
and instrumentalities include the Federal Home Loan Bank, Federal Home Loan
Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"),
Federal Farm Credit Bank, Student Loan Marketing Association, Tennessee Valley
Authority, Financing Corporation and Resolution Funding Corporation. Obligations
issued by the U.S. Treasury and by U.S. Government agencies and
instrumentalities include those so issued in a form separated into their
component parts of principal and coupon payments, i.e., "component securities."
A security backed by the U.S. Treasury or a U.S. Government agency, although
providing substantial protection against credit risk, is guaranteed only as to
the timely payment of interest and principal when held to maturity. The market
prices for such securities are not guaranteed and will fluctuate and,
accordingly, such securities will not protect investors against price changes
due to changing interest rates. Longer maturity U.S. Government securities may
exhibit greater price volatility in response to changes in interest rates than
shorter maturity securities. In addition, certain U.S. Government securities may
show even greater volatility if, for example, the interest payment component has
been removed, as with zero coupon bonds.
Investments in GNMA certificates, which are pools of home mortgages and other
mortgage-backed securities, are subject to prepayment of principal as mortgages
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are prepaid. We must reinvest these prepayments at prevailing rates, which may
be lower than the yield of the GNMA certificate or other mortgage-backed
securities. These prepayments will result in a further reduction in principal if
the GNMA certificate or other mortgage-backed security is trading over par.
Mortgage prepayments generally increase in a falling interest-rate environment
and, accordingly, often result in a reduction of principal. In a rising
interest-rate environment, prepayments tend to decline which increases the
duration and volatility of such GNMA certificates.
We may invest in liquid interest-only and principal-only mortgage-backed
securities backed by fixed-rate mortgages under guidelines established by the
Board of Trustees of the Fund to assure that they may be sold promptly in the
ordinary course of business at a value reasonably close to that used in
calculating the net asset value per share.
Although the longer maturity U.S. Government securities, zero coupon bonds, GNMA
certificates and other mortgage-backed securities mentioned above may be
volatile, this volatility, while not eliminated, is managed by the policy of
Lord Abbett to maintain the average duration of securities held within a range
of two years more than and two years less than the Lehman Aggregate Index. Since
this index currently has a duration of 4.7 years, currently this range is
between 2.7 years and 6.7 years.
While growth of capital is not an objective, capital appreciation may result
from efforts to secure high current income.
INVESTMENT GRADE DEBT SECURITIES. We may invest in debt securities which,
at the time of purchase, are rated investment grade. These investment grade debt
securities include corporate bonds and debentures, mortgage-backed securities,
asset-backed securities, zero coupon securities and securities issued on a
when-issued or delayed-delivery basis.
HIGH-YIELD SECURITIES. We seek unusual values, particularly in lower-rated debt
securities, some of which are convertible into common stocks or have warrants to
purchase common stocks.
Higher yield on debt securities can occur during periods of inflation when the
demand for borrowed funds is high. Also, buying lower-rated bonds when the
credit risk is above average but, we think, likely to decrease, can generate
higher yields. Such debt securities normally will consist of secured debt
obligations of the issuer (i.e., bonds), general unsecured debt obligations of
the issuer (i.e., debentures) and debt securities which are subordinate in right
of payment to other debt of the issuer.
Capital appreciation potential is an important consideration in the selection of
portfolio securities. Capital appreciation may be obtained by (1) investing in
debt securities when the trend of interest rates is expected to be down; (2)
investing in convertible debt securities or debt securities with warrants
attached entitling the holder to purchase common stock; and (3) investing in
debt securities of issuers in financial difficulties when, in our opinion, the
problems giving rise to such difficulties can be successfully resolved, with a
consequent improvement in the credit standing of the issuers. Such investments
involve corresponding risks that interest and principal payments may not be made
if such difficulties are not resolved. In no event will we invest more than 10%
of our gross assets at the time of investment in debt securities which are in
default as to interest or principal.
Normally we invest in long-term debt securities when we believe that interest
rates in the long run will decline and prices of such securities generally will
be higher. When we believe that long-term interest rates will rise, we will
endeavor to shift our portfolio into shorter-term debt securities whose prices
might not be affected as much by an increase in interest rates.
FOREIGN SECURITIES. While the Series' portfolio investments in foreign debt
securities may be made in securities of the type described above of issuers
domiciled in developed countries, investments also may be made in the securities
of companies domiciled in developing countries. Such foreign debt securities
normally will be limited to issues where there does not appear to be substantial
risk of nationalization, exchange controls, confiscation or other government
restrictions.
The Series may invest without limit in U.S. Dollar denominated American
Depository Receipts ("ADRs"), which are bought and sold in the United States.
The Series may, to a limited extent, engage in foreign currency option and
forward contract transactions as a hedge and not for speculation.
OTHER POLICIES. We may hold or sell any property or securities which we may
obtain through the exercise of conversion rights or warrants or as a result of
any
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reorganization, recapitalization or liquidation proceedings for any issuer
of securities owned by us. In no event will we voluntarily purchase any
securities other than debt securities, if, at the time of such purchase or
acquisition, the value of the property and securities, other than debt
securities, in our portfolio is greater than 35% of the value of our gross
assets. A purchase or acquisition will not be considered "voluntary" if made in
order to avoid loss in value of a conversion or other premium.
We may invest up to 15% of our net assets in illiquid securities. Securities
which are subject to legal or contractual restrictions on resale, but which have
been determined by the Board of Trustees to be liquid, such as Rule 144A
securities, will not be subject to this limit. Investment by the Series in such
securities, initially determined to be liquid, could have the effect of
diminishing the level of the Series' liquidity during periods of decreased
market interest in such securities.
We may, but have no present intention to, invest in financial futures and
options on financial futures and commit more than 5% of our gross assets to the
lending of our portfolio securities.
We may not borrow in excess of 5% of our gross assets taken at cost or market
value, whichever is lower at the time of borrowing, and then only as a temporary
measure for extraordinary or emergency purposes.
We will not change our investment objective without shareholder approval.
RISK FACTORS -- FOREIGN SECURITIES. Securities markets of foreign countries in
which the Series may invest generally are not subject to the same degree of
regulation as the U.S. markets and may be more volatile and less liquid than the
major U.S. markets. Lack of liquidity may affect the Series' ability to purchase
or sell large blocks of securities and thus obtain the best price. There may be
less publicly-available information on publicly-traded companies, banks and
governments in foreign countries than generally is the case for such entities in
the United States. The lack of uniform accounting standards and practices among
countries impairs the validity of direct comparisons of valuation measures (such
as price/earnings ratios) for securities in different countries. Other
considerations include political and social instability, expropriation, higher
transaction costs, withholding taxes that cannot be passed through as a tax
credit or deduction to shareholders, currency fluctuations and different
securities settlement practices. Settlement periods for foreign securities,
which are sometimes longer than those for securities of U.S. issuers, may affect
portfolio liquidity. In addition, foreign securities held by the Series may be
traded on days that the Series does not value its portfolio securities, such as
Saturdays and customary business holidays and, accordingly, the Series' net
asset values may be significantly affected on days when shareholders do not have
access to the Series.
Foreign securities involve currency risk. The U.S. Dollar value of a foreign
security tends to decrease when the value of the U.S. Dollar rises against the
foreign currency in which the security is denominated and tends to increase when
the value of the U.S. Dollar falls against such currency. Fluctuations in
exchange rates may also affect the earning power and asset value of the foreign
entity issuing the security. Dividend and interest payment, and restrictions on
capital flows may be imposed. Losses and other expenses may be incurred in
converting between various currencies.
RISK FACTORS -- HIGH YIELD. We may invest substantially in lower-rated bonds
because they tend to have higher yields. In general, the market for lower-rated
bonds is more limited than that for higher-rated bonds and, therefore, may be
less liquid. Market prices of lower-rated bonds may fluctuate more than those of
higher-rated bonds, particularly in times of economic change and stress. In
addition, because the market for lower-rated corporate debt securities has in
past years experienced wide fluctuations in the values of certain of these
securities, past experience may not provide an accurate indication of the future
performance of that market or of the frequency of default, especially during
periods of recession. Objective pricing data for lower-rated bonds may be more
limited than for higher-rated bonds and valuation of such securities may be more
difficult and require greater reliance upon judgment.
While the market for lower-rated bonds may be relatively insensitive to interest
rate changes, the market prices of these bonds structured as zero coupon or
pay-in-kind securities may be affected to a greater extent by such changes and
thus may be more volatile than prices of lower-rated securities paying interest
periodically in cash. Lower-rated bonds that are callable prior to maturity may
be more susceptible to refunding during periods of falling interest rates,
requiring replacement with lower-yielding securities.
<PAGE>
Since the risk of default generally is higher among lower-rated bonds, the
research and analysis performed by Lord Abbett are especially important in the
selection of such bonds. If bonds are rated BB/Ba or lower, they are described
as "high-yield bonds" because of their generally higher yields and are referred
to colloquially as "junk bonds" because of their greater risks. In selecting
lower-rated bonds for investment, Lord Abbett does not rely upon ratings, which
evaluate only the safety of principal and interest, not market value risk, and
which, furthermore, may not accurately reflect an issuer's current financial
condition. We do not have any minimum rating criteria for our investments in
bonds. Some issuers may default as to principal and/or interest payments
subsequent to our purchase of their securities. Through portfolio
diversification, good credit analysis and attention to current developments and
trends in interest rates and economic conditions, investment risk can be
reduced, although there is no assurance that losses will not occur.
Laws enacted from time to time could limit the tax or other advantages of, and
the issuance of, lower-rated securities and could adversely affect their
secondary market and the financial condition of their issuers. On the other
hand, such legislation (curtailing the supply of new issues) could improve the
liquidity, market values and demand for outstanding issues.
4 PURCHASES
The Series' shares may only be purchased by employees and partners of Lord
Abbett, directors (trustees) of Lord Abbett-managed funds and spouses and other
family members of such employees, partners and directors (trustees). All shares
may be purchased at the net asset value per share next computed after the order
is received by Lord Abbett. For the Series the minimum initial investment is
$1,000. Subsequent investments may be made in any amount. Place your order with
Lord Abbett or send it to Lord Abbett Investment Trust - Strategic Core Plus
Series (P.O. Box 419100, Kansas City, Missouri 64141).
The net asset value of the Series' shares is calculated every business day as of
the close of the New York Stock Exchange ("NYSE"), by dividing net assets by
shares outstanding. Securities in the Series' portfolio are valued at their
market value as more fully described in the Statement of Additional Information.
A business day is a day on which the NYSE is open for trading. We are not
obligated to maintain the offering or its terms and the offering may be
suspended, changed or withdrawn. Lord Abbett Distributor LLC ("Lord Abbett
Distributor") reserves the right to reject any order. Certificates representing
shares of the Series will not be issued. This will relieve shareholders of the
responsibility and inconvenience of safekeeping share certificates and save the
Series unnecessary expense. If you have any questions, call the Series at
800-821-5129.
TELEPHONE EXCHANGE PRIVILEGE: Shares may be exchanged, without a service charge,
for those of any other Lord Abbett-sponsored fund except for (i) Lord Abbett
Equity Fund, (ii) Lord Abbett Series Fund and (iii) certain tax-free
single-state series where the exchanging shareholder is a resident of a state in
which such series is not offered for sale (together, "Eligible Funds").
You or YOUR REPRESENTATIVE WITH PROPER IDENTIFICATION can instruct the Series to
exchange shares by telephone. Shareholders have this privilege unless they
refuse it in writing. The Series will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine and will
employ reasonable procedures to confirm that instructions received are genuine,
including requesting proper identification, and recording all telephone
exchanges. Instructions must be received by the Series in Kansas City
(800-521-5315) prior to the close of the NYSE to obtain the Series' net asset
value per share on that day. Expedited exchanges by telephone may be difficult
to implement in times of drastic economic or market change. The exchange
privilege should not be used to take advantage of short-term swings in the
market. The Fund reserves the right to terminate or limit the privilege of any
shareholder who makes frequent exchanges. The Fund can revoke the privilege for
all shareholders upon 60 days' prior written notice. A prospectus for the other
Lord Abbett-sponsored fund selected by you should be obtained and read before an
exchange. Exercise of the Exchange Privilege will be treated as a sale for
federal income tax
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purposes and, depending on the circumstances, a capital gain
or loss may be recognized.
5 OUR MANAGEMENT
Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Trustees with the advice of Lord Abbett (herein
referred to as "management"). We employ Lord Abbett as investment manager for
the Series pursuant to a Management Agreement. Lord Abbett has been an
investment manager for over 67 years and currently manages approximately $24
billion in a family of mutual funds and other advisory accounts. Under the
Management Agreement, Lord Abbett is obligated to provide the Series with
investment management services and executive and other personnel, pay the
remuneration of our officers and of our trustees affiliated with Lord Abbett,
provide us with office space and pay for ordinary and necessary office and
clerical expenses relating to research, statistical work and supervision of the
Series' portfolio and certain other costs. Lord Abbett provides similar services
to twelve other Lord Abbett-sponsored funds having various investment objectives
and also advises other investment clients. Zane E. Brown, a Lord Abbett partner
and its Director of Fixed Income, is primarily responsible for the day-to-day
management of the Series.
Under the Management Agreement, the Series is obligated to pay Lord Abbett a
monthly fee based on its average daily net assets for each month at the annual
rate of .50%. Because Lord Abbett intends to waive the payment of the management
fee for the year after commencement of operations of the Series, the effective
fee payable to Lord Abbett by the Series as a percentage of average daily net
assets is expected to be at the annual rate of zero percent for such period. In
addition, we pay all expenses not expressly assumed by Lord Abbett. The Series'
ratio of expenses, including management fee expenses, to average net assets for
such one-year period is expected to be zero percent.
6 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
With respect to the Series, dividends from taxable net investment income may be
taken in cash or invested in additional shares at net asset value (without a
sales charge) and will be paid to shareholders annually in December.
A capital gains distribution is made when the Series has net profits during the
year from sales of securities. Any capital gains distributions will be made
annually in December. They may be taken in cash or invested in more shares at
net asset value without a sales charge.
Dividends and distributions declared in October, November or December of any
year will be treated for federal income tax purposes as having been received by
shareholders of the Series in that year if they are paid before February 1 of
the following year. A supplemental capital gains distribution also may be paid
in December.
The Series intends to meet the requirements of Subchapter M of the Internal
Revenue Code. The Series will try to distribute to shareholders all of its net
investment income and net realized capital gains, so as to avoid the necessity
of paying federal income tax. Shareholders, however, must report dividends and
capital gains distributions as taxable income. Dividends derived from the
Series' ordinary income and net short-term capital gains are taxable to
Shareholders at ordinary income rates. Under recently enacted legislation, the
maximum tax rate on long-term capital gains for a U.S. individual, estate or
trust is reduced to 20% and the "holding period" for long-term capital gains
treatment is increased from one-year to eighteen months. (If the taxpayer is in
the 15% tax bracket, the rate is 10%.) An individual, estate or trust with a
holding period greater than one year but less than 18 months has "mid-term"
gains taxed at a maximum rate of 28% (15% if the taxpayer is in the 15% tax
bracket). Although it has not yet done so, Treasury has the authority to amend
the tax law governing taxation of shareholders of a regulated investment company
to reflect these changes. Although the Series does not know when and what
regulations will be promulgated, it believes that the regulations should provide
that whether received in cash or shares, regardless of how long a taxpayer has
held the shares of the Series, distributions derived from net long-term or
mid-term capital gains will be
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taxable to shareholders as long-term or mid-term
capital gains, respectively.
Shareholders may be subject to a $50 penalty under the Internal Revenue Code and
we may be required to withhold and remit to the U.S. Treasury a portion (31%) of
any redemption or repurchase proceeds and of any dividend or distribution on any
account, where the payee (shareholder) failed to provide a correct taxpayer
identification number or to make certain required certifications.
Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict the Series' ability to engage in transactions in options,
forward contracts and cross hedges.
We will inform shareholders of the federal tax status of each dividend and
distribution after the end of each calendar year.
Shareholders should consult their tax advisers concerning applicable state and
local taxes as well as on the tax consequences of gains or losses from the
redemption or exchange of our shares.
7 REDEMPTIONS
To obtain the proceeds of an expedited redemption of $50,000 or less, you or
your representative with proper identification can telephone the Fund. This
privilege is automatically extended to all shareholders. The Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine with respect to the Fund and, therefore, will employ
reasonable procedures to confirm that instructions received are genuine,
including requesting proper identification, recording all telephone redemptions
and mailing the proceeds only to the named shareholder at the address appearing
on the account registration.
If you cannot use the expedited redemption procedures described above to redeem
shares directly, send your request to Lord Abbett Investment Trust - Strategic
Core Plus Series (P.O. Box 419100, Kansas City, Missouri 64141) with
signature(s) and any legal capacity of the signer(s) guaranteed by an eligible
guarantor.
Under certain circumstances and subject to prior written notice, our Board
of Trustees may authorize redemption of all of the shares in any account in
which there are fewer than 25 shares.
8 PERFORMANCE
YIELD AND TOTAL RETURN. Yield and total return data may, from time to time, be
included in advertisements about the Series. The Series' "yield" is calculated
by dividing the annualized net investment income per share on the portfolio
during a 30-day period by the net asset value on the last day of the period. The
yield data represents a hypothetical investment return on the portfolio, and
does not measure an investment return based on dividends actually paid to
shareholders. To show that return, a dividend distribution rate may be
calculated. The dividend distribution rate is calculated by dividing the
dividends of the Series' shares derived from net investment income during a
stated period by the net asset value on the last day of the period. Yields and
dividend distribution rates for Series' shares is shown at net asset value
without the deduction of any sales charge.
"Total return" for the one-, five- and ten-year periods represents the average
annual compounded rate of return on an investment of $1,000 in the Series at the
net asset value. When total return is quoted for Series' shares, it is shown at
net asset value without the deduction of any sales charge. Quotations of yield
or total return for any period when an expense limitation is in effect will be
greater than if the limitation had not been in effect. See "Past Performance" in
the Statement of Additional Information for a more detailed description.
See "Performance" in the Statement of Additional Information for a more detailed
discussion concerning the computation of the Series' total return and yield.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFER IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER.
NO PERSON IS AUTHORIZED TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS OR IN SUPPLEMENTAL LITERATURE AUTHORIZED BY THE
FUND, AND NO PERSON IS ENTITLED TO RELY UPON ANY INFORMATION OR REPRESENTATION
NOT CONTAINED HEREIN OR THEREIN.
<PAGE>
Investment Manager and Underwriter
Lord, Abbett & Co. and Lord Abbett Distributor LLC
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
Custodian
The Bank of New York
48 Wall Street
New York, New York 10286
Transfer Agent and Dividend
Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
Auditors
Deloitte & Touche LLP
Counsel
Debevoise & Plimpton
Printed in the U.S.A.
LAIT-1-597
(5/97)
<PAGE>
Lord Abbett
Investment Trust
Strategic Core Plus Series
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION DECEMBER , 1997
LORD ABBETT INVESTMENT TRUST
STRATEGIC CORE PLUS SERIES
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord Abbett Distributor LLC
("Lord Abbett Distributor") at The General Motors Building, 767 Fifth Avenue,
New York, New York 10153-0203. This Statement relates to, and should be read in
conjunction with, the Prospectus dated December ----, 1997.
Lord Abbett Investment Trust (referred to as the "Fund") was organized as a
Delaware business trust on August 16, 1993. The Fund's trustees have authority
to create separate classes and series of shares of beneficial interest, without
further action by shareholders. The Fund has four series--Lord Abbett U.S.
Government Securities Series, Lord Abbett Limited Duration U.S. Government
Securities Series, Lord Abbett Balanced Series and a new series - Strategic Core
Plus Series (sometimes referred to as "U.S. Government Securities Series",
"Limited Duration Government Series", "Balanced Series", and " Core Series",
respectively, or "we" or the "Series", individually or collectively). Only
shares of the Core Series are offered in this Statement and those shares
consists of Class A shares. All shares have equal noncumulative voting rights
and equal rights with respect to dividends, assets and liquidation, except for
certain class- specific expenses. They are fully paid and nonassessable when
issued and have no preemptive or conversion rights. Further classes or series
may be added in the future. The Investment Company Act of 1940, as amended (the
"Act") requires that where more than one class or series exists, each class or
series must be preferred over all other classes or series in respect of assets
specifically allocated to such class or series.
Rule 18f-2 under the Act provides that any matter required to be submitted, by
the provisions of the Act or applicable state law or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Fund
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the matter are substantially identical or the matter does not affect any
interest of such class or series. However, the Rule exempts the selection of
independent public accountants, the approval of principal distributing contracts
and the election of trustees from its separate voting requirements.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
TABLE OF CONTENTS Page
1. Investment Policies.......................................2
2. Trustees and Officers.....................................6
3. Investment Advisory and Other Services....................8
4. Portfolio Transactions....................................8
5. Purchases, Redemptions
and Shareholder Services.................................10
6. Performance..............................................11
7. Taxes....................................................12
8. Information About the Fund...............................12
9. Financial Statements.....................................13
<PAGE>
1.
Investment Policies
FUNDAMENTAL INVESTMENT RESTRICTIONS
We are subject to the following investment restrictions which cannot be changed
without approval of a majority of our outstanding shares. The Series may not:
(1) borrow money, except that (i) the Series may borrow from banks (as defined
in the Act) in amounts up to 33 1/3% of its total assets (including the amount
borrowed), (ii) the Series may borrow up to an additional 5% of its total assets
for temporary purposes, (iii) the Series may obtain such short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities and (iv) the Series may purchase securities on margin to the extent
permitted by applicable law; (2) pledge its assets (other than to secure
borrowings, or to the extent permitted by the Series' investment policies as
permitted by applicable law); (3) engage in the underwriting of securities,
except pursuant to a merger or acquisition or to the extent that, in connection
with the disposition of its portfolio securities, it may be deemed to be an
underwriter under federal securities laws; (4) make loans to other persons,
except that the acquisition of bonds, debentures or other corporate debt
securities and investment in government obligations, commercial paper,
pass-through instruments, certificates of deposit, bankers acceptances,
repurchase agreements or any similar instruments shall not be subject to this
limitation, and except further that the Series may lend its portfolio
securities, provided that the lending of portfolio securities may be made only
in accordance with applicable law; (5) buy or sell real estate (except that the
Series may invest in securities directly or indirectly secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein) or commodities or commodity contracts (except to the extent
the Series may do so in accordance with applicable law and without registering
as a commodity pool operator under the Commodity Exchange Act as, for example,
with futures contracts)); (6) with respect to 75% of its gross assets, buy
securities of one issuer representing more than (i) 5% of the its gross assets,
except securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or (ii) 10% of the voting securities of such issuer; (7)
invest more than 25% of its assets, taken at market value, in the securities of
issuers in any particular industry (excluding securities of the U.S. Government,
its agencies and instrumentalities); and (8) issue senior securities to the
extent such issuance would violate applicable law.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by changes in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
In addition to the investment restrictions above which cannot be changed without
shareholder approval, we also are subject to the policies described in the
Prospectus and the following investment policies which may be changed by the
Board of Trustees without shareholder approval. The Series may not: (1) borrow
in excess of 5% of its gross assets taken at cost or market value, whichever is
lower at the time of borrowing, and then only as a temporary measure for
extraordinary or emergency purposes; (2) make short sales of securities or
maintain a short position except to the extent permitted by applicable law; (3)
invest knowingly more than 15% of its net assets (at the time of investment) in
illiquid securities, except for securities qualifying for resale under Rule 144A
of the Securities Act of 1933, deemed to be liquid by the Board of Trustees; (4)
invest in the securities of other investment companies except as permitted by
applicable law; (5) hold securities of any issuer if more than 1/2 of 1% of the
securities of such issuer are owned beneficially by one or more officers or
trustees of the series or by one or more partners or members of the Fund's
underwriter or investment adviser if these owners in the aggregate own
beneficially more than 5% of the securities of such issuer; (6) invest in
warrants if, at the time of the acquisition, its investment in warrants, valued
at the lower of cost or market, would exceed 5% of the Series' total assets
(included within such limitation, but not to exceed 2% of the Series' total
assets, are warrants which are not listed on the New York or American Stock
Exchange or a major foreign exchange); (7) invest in real estate limited
partnership interests or interests in oil, gas or other mineral leases, or
exploration or other development programs, except that the Fund may invest in
securities issued by companies that engage in oil, gas or other mineral
exploration or other development activities; (8) write, purchase or sell puts,
calls, straddles, spreads or combinations thereof, except to the extent
permitted in the Fund's prospectus and statement of additional information, as
they may be amended from time to time; or (9) buy from or sell to any of its
officers, trustees, employees, or its
2
<PAGE>
investment adviser or any of its officers, trustees, partners or employees, any
securities other than shares of beneficial interest in such series.
Although there is no current intention to do so, the Series may invest in
financial futures and options on financial futures.
FOREIGN CURRENCY HEDGING TECHNIQUES
The Series may utilize various foreign currency hedging techniques described
below, including forward foreign currency contracts and foreign currency put and
call options.
FORWARD FOREIGN CURRENCY CONTRACTS. A forward foreign currency contract involves
an obligation to purchase or sell a specific amount of a specific currency at a
set price at a future date. The Series expects to enter into forward foreign
currency contracts in primarily two circumstances. First, when the Series enters
into a contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency involved in the underlying security transaction, the Series
will be able to protect against a possible loss resulting from an adverse change
in the relationship between the U.S. dollar and the subject foreign currency
during the period between the date the security is purchased or sold and the
date on which payment is made or received.
Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, the Series may enter into
a forward contract to sell the amount of foreign currency approximating the
value of some or all of the Series' portfolio securities denominated in such
foreign currency or, in the alternative, the Series may use a cross-hedging
technique whereby it sells another currency which the Series expects to decline
in a similar way but which has a lower transaction cost. Precise matching of the
forward contract amount and the value of the securities involved will not
generally be possible since the future value of such securities denominated in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the forward contract is entered into and
the date it matures. The Series does not intend to enter into such forward
contracts under this second circumstance on a continuous basis.
FOREIGN CURRENCY PUT AND CALL OPTIONS. The Series may also purchase foreign
currency put options and write foreign currency call options on U.S. exchanges
or U.S. over-the-counter markets. A put option gives the Series, upon payment of
a premium, the right to sell a currency at the exercise price until the
expiration of the option and serves to insure against adverse currency price
movements in the underlying portfolio assets denominated in that currency.
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. Unlisted options
generally are available in a wider range of currencies, including those of most
of the developed countries. Unlisted foreign currency options are generally less
liquid than listed options and involve the credit risk associated with the
individual issuer. Unlisted options are subject to a limit of 5% of the Series'
net assets illiquid securities.
A call option written by the Series gives the purchaser, upon payment of a
premium, the right to purchase from the Series a currency at the exercise price
until the expiration of the option. The Series may write a call option on a
foreign currency only in conjunction with a purchase of a put option on that
currency. Such a strategy is designed to reduce the cost of downside currency
protection by limiting currency appreciation potential. The face value of such
writing may not exceed 90% of the value of the securities denominated in such
currency invested in by the Fund or in such cross currency (referred to above)
to cover such call writing.
3
<PAGE>
LENDING PORTFOLIO SECURITIES
The Series may lend portfolio securities to registered brokers-dealers. These
loans, if and when made, may not exceed 30% of the Series' total assets. The
Series' loans of securities will be collateralized by cash or marketable
securities issued or guaranteed by the U.S. Government or its agencies ("U.S.
Government securities") or other permissible means in an amount at least equal
to the market value of the loaned securities. From time to time, the Series may
pay a part of the interest received with respect to the investment of collateral
to the borrower and/or a third party that is not affiliated with the Fund and is
acting as a "placing broker." No fee will be paid to affiliated persons of the
Fund.
By lending portfolio securities, the Series can increase its income by
continuing to receive income on the loaned securities as well as by either
investing the cash collateral in permissible investments, such as U.S.
Government securities, or obtaining yield in the form of interest paid by the
borrower when such U.S. Government securities or other forms of non-cash
collateral are used as security. The Series will comply with the following
conditions whenever it loans securities: (i) the Series must receive at least
100% collateral from the borrower; (ii) the borrower must increase the
collateral whenever the market value of the securities loaned rises above the
level of the collateral; (iii) the Series must be able to terminate the loan at
any time; (iv) the Series must receive reasonable compensation with respect to
the loan, as well as any dividends, interest or other distributions on the
loaned securities; (v) the Series may pay only reasonable fees in connection
with the loan; and (vi) voting rights on the loaned securities may pass to the
borrower except that, if the Fund has knowledge of a material event adversely
affecting the investment in the loaned securities, the Fund must terminate the
loan and regain the right to vote the securities.
REPURCHASE AGREEMENTS
The Series may enter into repurchase agreements with respect to a security. A
repurchase agreement is a transaction by which the Series acquires a security
and simultaneously commits to resell that security to the seller (a bank or
securities dealer), and the seller commits to repurchase that security, at an
agreed upon price on an agreed upon date. The resale price reflects the purchase
price plus an agreed upon market rate of interest which is unrelated to the
coupon rate or date of maturity of the purchased security. (In this type of
transaction, the securities purchased by the Series have a total value in excess
of the value of the repurchase agreement.) The Series requires at all times that
the repurchase agreement be collateralized by cash or U.S. Government securities
having a value equal to, or in excess of, the value of the repurchase agreement.
Such agreements permit the Series to keep all of its assets at work while
retaining flexibility in pursuit of investments of a longer term nature.
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to provide additional
collateral or to repurchase the underlying securities at a time when the value
of these securities has declined, the Series may incur a loss upon disposition
of them. If the seller of the agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a
bankruptcy court may determine that the underlying securities are collateral not
within the control of the Series and are therefore subject to sale by the
trustee in bankruptcy. Even though the repurchase agreements may have maturities
of seven days or less, they may lack liquidity, especially if the issuer
encounters financial difficulties. While Fund management acknowledges these
risks, it is expected that they can be controlled through stringent selection
criteria and careful monitoring procedures. Fund management intends to limit
repurchase agreements for the Series to transactions with dealers and financial
institutions believed by Fund management to present minimal credit risks. Fund
management will monitor creditworthiness of the repurchase agreement sellers on
an ongoing basis.
The Series will enter into repurchase agreements only with those primary
reporting dealers that report to the Federal Reserve Bank of New York and with
the 100 largest United States commercial banks and the underlying securities
purchased under the agreements will consist only of those securities in which
the Series otherwise may invest.
4
<PAGE>
WHEN-ISSUED TRANSACTIONS
As stated in the Prospectus, the Series may purchase portfolio securities on a
when-issued basis. When-issued transactions involve a commitment by the Series
to purchase securities, with payment and delivery ("settlement") to take place
in the future, in order to secure what is considered to be an advantageous price
or yield at the time of entering into the transaction. The value of fixed-income
securities to be delivered in the future will fluctuate as interest rates vary.
During the period between purchase and settlement, the value of the securities
will fluctuate and assets consisting of cash and/or marketable securities
(normally short-term U.S. Government securities) marked to market daily in an
amount sufficient to make payment at settlement will be segregated at our
custodian in order to pay for the commitment. There is a risk that market yields
available at settlement may be higher than yields obtained on the purchase date
which could result in depreciation of value of fixed-income when-issued
securities. At the time the Series makes the commitment to purchase a security
on a when-issued basis, it will record the transaction and reflect the liability
for the purchase and the value of the security in determining its net asset
value. The Series, generally, has the ability to close out a purchase obligation
on or before the settlement date rather than take delivery of the security.
Under no circumstance will settlement for such securities take place more than
120 days after the purchase date.
AVERAGE DURATION
The Series limits its average dollar weighted portfolio duration to a range of
between two years more than and two years less than the Lehman Aggregate Index.
Since this index currently has a duration of 4.7 years, this range currently is
between 2.7 years and 6.7 years. However, many of the securities in which the
Series invests will have remaining durations in excess of 6.7 years.
Some of the securities in the Series' portfolio may have periodic interest rate
adjustments based upon an index such as the 91-day Treasury Bill rate. This
periodic interest rate adjustment tends to lessen the volatility of the
security's price. With respect to securities with an interest rate adjustment
period of one year or less, the Series will, when determining average-weighted
duration, treat such a security's maturity as the amount of time remaining until
the next interest rate adjustment.
Instruments such as GNMA, FNMA, FHLMC securities and similar securities backed
by amortizing loans generally have shorter effective maturities than their
stated maturities. This is due to changes in amortization caused by demographic
and economic forces such as interest rate movements. These effective maturities
are calculated based upon historical payment patterns and therefore have shorter
duration than would be implied by their stated final maturity. For purposes of
determining the Series' average maturity, the maturities of such securities will
be calculated based upon the issuing agency's payment factors using
industry-accepted valuation models.
PORTFOLIO TURNOVER
The Series portfolio turnover rate for its first year of operation is not
expected to exceed 100%. As discussed above, the Series may purchase securities
on a when-issued basis with settlement taking place after the purchase date
(without amortizing any premiums). If this investment technique is used, it is
expected to contribute significantly to the portfolio turnover rates. However,
it will have little or no transaction cost or adverse tax consequences.
Transaction costs normally will exclude brokerage because the Series'
fixed-income portfolio transactions are usually on a principal basis and any
markups charged normally will be more than offset by the beneficial economic
consequences anticipated at the time of purchase or no purchase will be made.
Generally, short-term losses on short-term U.S. Government securities purchased
under this investment technique tend to offset any short-term gains due to such
high portfolio turnover.
5
<PAGE>
2.
Trustees and Officers
The following trustees are partners of Lord Abbett, The General Motors Building,
767 Fifth Avenue, New York, New York 10153-0203. They have been associated with
Lord Abbett for over five years and are also an officers and/or directors or
trustees of the twelve other Lord Abbett-sponsored funds. They are "interested
persons" as defined in the Act, and as such, may be considered to have an
indirect financial interest in the Rule 12b-1 Plan described in the Prospectus.
Robert S. Dow, age 52, Chairman and President
E. Wayne Nordberg, age 59, Vice President
The following outside trustees are also directors or trustees of the
twelve other Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Courtroom Television Network
600 Third Avenue
New York, New York
Chief Executive Officer of Courtroom Television Network. Formerly President and
Chief Executive Officer of Time Warner Cable Programming, Inc. Prior to that,
President and Chief Operating Officer of Home Box Office, Inc. Age 56.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 66.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 71.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service marketing
consulting firm. Formerly Chairman and Chief Executive Officer of Lincoln Foods,
Inc., manufacturer of branded snack foods (1992-1994). Formerly President and
Chief Executive Officer of Nestle Foods Corporation, and prior to that,
President and Chief Executive Officer of Stouffer Foods Corp., both subsidiaries
of Nestle S.A. (Switzerland). Currently serves as Director of Den West
Restaurant Co., J.B. Williams, and Fountainhead Water Company. Age 64.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
6
<PAGE>
President and Chief Executive Officer of Rochester Button Company. Age 69.
Thomas J. Neff
Spencer Stuart U.S.
277 Park Avenue
New York, New York
Chairman of Spencer Stuart U.S., an executive search consulting firm.
Age 59.
The second column of the following table sets forth the compensation accrued for
the Fund's outside trustees. The third column sets forth information with
respect to the equity-based benefits accrued for outside directors/trustees by
the Lord Abbett-sponsored funds. The fourth column sets forth the total
compensation payable by such funds to the outside directors/trustees. No trustee
of the Fund associated with Lord Abbett and no officer of the Fund received any
compensation from the Fund for acting as a trustee or officer.
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1996
(1) (2) (3) (4)
For Year Ended
Equity-Based December 31, 1996
Benefits Accrued Total Compensation
Aggregate by each Fund and Accrued by each Fund and
Compensation Nine Other Lord Twelve Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
NAME OF DIRECTOR THE FUND1 FUNDS2 FUNDS3
<S> <C> <C> <C>
E. Thayer Bigelow $10,590 $11,563 $48,200
Stewart S. Dixon $10,314 $22,283 $46,700
John C. Jansing $10,371 $28,242 $46,700
C. Alan MacDonald $10,649 $29,942 $48,200
Hansel B. Millican, Jr. $10,970 $24,499 $49,600
Thomas J. Neff $10,348 $15,990 $46,900
<FN>
1. Outside trustees fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on net
assets of each fund. A portion of the fees payable by the Fund to its
outside trustees are being deferred under a plan that deems the deferred
amounts to be invested in shares of the Fund for later distribution to the
trustees. The amounts of the aggregate compensation payable by the Fund as
of November 30, 1996, deemed invested in Fund shares, including dividends
reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, $27,143; Mr. Dixon, $101,138; Mr. Jansing,
$125,269; Mr. MacDonald, $80,318; Mr. Millican, $126,245 and Mr. Neff,
$125,238.
2. Each Lord Abbett-sponsored fund has a retirement plan providing that
outside directors may receive annual retirement benefits for life equal to
100% of their final annual retainers following retirement at or after age
72 with at least 10 years of service. Each plan also provides for a reduced
benefit upon early retirement under certain circumstances, a pre-retirement
death benefit and actuarially reduced joint-and-survivor spousal benefits.
Such retirement plans, and the deferred compensation plans referred to in
footnote one, have been amended recently to, among other things, enable
outside trustees to elect to convert their prospective benefits under the
retirement plans to equity-based benefits under the deferred compensation
plans (renamed the equity-based plans and hereinafter referred to as such).
Five of the six outside trustees made such an election. Mr. Jansing did
not. The amounts accrued in column 3 were accrued by the Lord
Abbett-sponsored funds for the twelve months ended November 30, 1996 with
respect to the equity-based plans. These accruals were based on the plans
as in effect before the recent amendments and on the fees payable to
outside trustees of the Fund for the twelve months ended November 30, 1996.
Under the recent amendments, the annual retainer was increased to $50,000
and the annual retirement benefits were increased from 80% to 100% of a
trustee's final annual retainer. Thus, if Mr. Jansing were to retire at or
after age 72 and the annual retainer payable by the funds were the same as
it today, he would receive annual retirement benefits of $50,000.
7
<PAGE>
3. This column shows aggregate compensation, including trustees fees and
attendance fees for board and committee meetings, of a nature referred to
in footnote one, accrued by the Lord Abbett-sponsored funds during the year
ended December 31, 1995.
</FN>
</TABLE>
Except where indicated, the following executive officers of each Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Brown, Carper, Cutler, Ms. Foster, Messrs. Morris, Noelke, Nordberg and
Walsh are partners of Lord Abbett; the others are employees; Zane E. Brown, age
45, Executive Vice President; Kenneth B. Cutler, age 65, Vice President and
Secretary; Stephen I. Allen, age 44; Daniel E. Carper, age 45; Daria Foster, age
43; Robert G. Morris, Age 53; Robert Noelke, age 40; E. Wayne Nordberg, age 59;
Paul A. Hilstad, age 54 (with Lord Abbett since 1995 - formerly Senior Vice
President and General Counsel of American Capital Management & Research, Inc.);
Thomas F. Konop, age 55; A. Edward Oberhaus, age 37; John J. Walsh, age 61, Vice
Presidents; and Keith F. O'Connor, age 42, Vice President and Treasurer.
The Fund does not hold annual meetings of shareholders unless one or more
matters are required to be acted on by shareholders under the Act. Under the
Fund's Declaration of Trust, shareholder meetings may be called at any time by
certain officers of the Fund or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Fund's shareholders or upon other matters deemed to be necessary or desirable or
(ii) upon the written request of the holders of at least one-quarter of the
shares of the Series outstanding and entitled to vote at the meeting.
3.
Investment Advisory and Other Services
As described under "Our Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. The ten general partners of Lord Abbett, all of whom are
officers and/or directors of the Fund, are: Stephen I. Allen, Zane E. Brown,
Daniel E. Carper, Kenneth B. Cutler, Robert S. Dow, Daria L. Foster, Robert G.
Morris, Robert J. Noelke, E. Wayne Nordberg and John J. Walsh. The address of
each partner is The General Motors Building, 767 Fifth Avenue, New York, New
York 10153-0203.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, we are obligated to pay Lord
Abbett a monthly fee, based on average daily net assets for each month, at the
annual rate of .50 of 1%.
The Series pays all of its expenses not expressly assumed by Lord Abbett,
including, without limitation, 12b-1 expenses, outside trustees' fees and
expenses, association membership dues, legal and audit fees, taxes, transfer and
dividend disbursing agent fees, shareholder servicing costs, expenses relating
to shareholder meetings, expenses of preparing, printing and mailing share
certificates and shareholder reports, expenses of registering our shares under
federal and state securities laws, expenses of preparing, printing and mailing
prospectuses to existing shareholders, insurance premiums and brokerage and
other expenses connected with executing portfolio transactions.
Although not obligated to do so, Lord Abbett may waive all or part of its
management fees and or may assume other expenses of the Series.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281, are
the independent public accountants of the Fund and must be approved at least
annually by our trustees to continue in such capacity. Deloitte & Touche LLP
perform audit services for the Fund including the examination of financial
statements included in our annual report to shareholders.
Bank of New York, 40 Wall Street, New York, New York, is the Fund's custodian.
4.
Portfolio Transactions
It is expected that purchases and sales of the Series' fixed-income portfolio
securities usually will be principal transactions and normally such securities
will be purchased directly from the issuer or from an underwriter or market
maker for the securities. Therefore, the Series usually will pay no brokerage
commissions for such purchases. Purchases from underwriters of portfolio
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securities will include a commission or concession paid by the issuer to the
underwriter and purchases from dealers serving as market makers will include a
dealer's markup. Principal transactions, including riskless principal
transactions, are not afforded the protection of the safe harbor in Section 28
(e) of the Securities Exchange Act of 1934.
The Series' policy is to have purchases and sales of portfolio securities
executed at most favorable prices, considering all costs of the transaction
including brokerage commissions and dealer markups and markdowns, consistent
with obtaining best execution, except to the extent that we may pay a higher
commission rate as described below. This policy governs the selection of brokers
or dealers and the market in which the transaction is executed. To the extent
permitted by law, we may, if considered advantageous, make a purchase from or
sale to another Lord Abbett-sponsored fund without the intervention of any
dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts --
investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. They are responsible for the negotiation of
prices and any commissions.
We may pay a brokerage commission on the purchase or sale of a security that
could be purchased from or sold to a market maker if our net cost of the
purchase or the net proceeds to us of the sale are at least as favorable as we
could obtain on a direct purchase or sale. Brokers who receive such commissions
may also provide research services at least some of which are useful to Lord
Abbett in their overall responsibilities with respect to us and the other
accounts they manage. Research includes trading equipment and computer software
packages, acquired from third-party suppliers, that enable Lord Abbett to access
various information bases and may include the furnishing of analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and, when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.
If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate with us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to them of portfolio business.
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5.
Purchases, Redemptions
and Shareholder Services
Securities in the Series' portfolio are valued at their market values as of the
close of the NYSE. Market value will be determined as follows: securities listed
or admitted to trading privileges on any national securities exchange are valued
at the last sales price on the principal securities exchange on which such
securities are traded or, if there is no sale, at the mean between the last bid
and asked prices on such exchange or, in the case of bonds, in the
over-the-counter market if, in the judgment of the Fund's officers, that market
more accurately reflects the market value of the bonds. Securities traded only
in the over-the-counter market are valued at the mean between the bid and asked
prices, except that securities admitted to trading on the NASDAQ National Market
System are valued at the last sales price. Securities for which market
quotations are not available are valued at fair value under procedures approved
by the Board of Trustees.
With respect to the foreign assets of the Series, all assets and liabilities
expressed in foreign currencies will be converted into United States dollars at
the mean between the buying and selling rates of such currencies against United
States dollars last quoted by any major bank. If such quotations are not
available, the rate of exchange will be determined in accordance with policies
established by the Board of Trustees of the Fund. The Board of Trustees will
monitor, on an ongoing basis, the Fund's method of valuation.
Information concerning how we value our shares for the purchase and redemption
of our shares is described in the Prospectus under "Purchases" and
"Redemptions", respectively.
As disclosed in the Prospectus, we calculate our net asset value and are
otherwise open for business on each day that the New York Stock Exchange
("NYSE") is open for trading. The NYSE is closed on Saturdays and Sundays and
the following holidays -- New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas.
The offering price of Class A shares of the Series for the period indicated
below were computed as follows:
DECEMBER , 1997
Strategic Core Plus
SERIES
Net asset value per share (net assets divided
by shares outstanding).................................$10.00
EXCHANGES. The Prospectus briefly describes the Telephone Exchange Privilege.
You may exchange some or all of your shares for those of (i) Lord
Abbett-sponsored funds currently offered to the public with a sales charge
(front-end, back-end or level), or (ii) Lord Abbett U.S. Government Securities
Money Market Fund, the ('GSMMF"). You should read the prospectus of the other
fund before exchanging. In establishing a new account by exchange, shares of the
Fund being exchanged must have a value equal to at least the minimum initial
investment required for the fund into which the exchange is made.
Shareholders in other Lord Abbett-sponsored funds have the same right to
exchange their shares for the corresponding class of the Series' shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fund in Kansas City if the instructions are received prior to
the close of the NYSE in proper form. No sales charges are imposed except in the
case of exchanges out of GSMMF (unless a sales charge (front-end, back-end or
level) was paid on the initial investment in a Lord Abbett sponsored fund).
Exercise of the exchange privilege will be treated as a sale for federal income
tax purposes, and, depending on the circumstances, a gain or loss may be
recognized. In the case of an exchange of shares that have been held for 90 days
or less where no sales charge is payable on the exchange, the original sales
charge incurred with respect to the exchanged shares will be taken into account
in determining gain or loss on the exchange only to the extent such charge
exceeds the sales charge that would have been
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payable on the acquired shares had they been acquired for cash rather than by
exchange. The portion of the original sales charge not so taken into account
will increase the basis of the acquired shares.
Shareholders have the exchange privilege unless they refuse it in writing. You
should not view the exchange privilege as a means for taking advantage of
short-term swings in the market, and we reserve the right to terminate or limit
the privilege of any shareholder who makes frequent exchanges. We can revoke or
modify the privilege for all shareholders upon 60 days' prior notice. "Eligible
Funds" are and other Lord Abbett-sponsored funds which are eligible for the
exchange privilege, except Lord Abbett Series Fund ("LASF") which offers its
shares only in connection with certain variable annuity contracts, Lord Abbett
Equity Fund ("LAEF") which is not issuing shares, and any series of Lord Abbett
Research Fund not offered to the general public ("LARF").
REDEMPTIONS. A redemption order is in proper form when it contains all of the
information and documentation required by the order form or supplementally by
Lord Abbett Distributor or the Fund to carry out the order. The signature(s) and
any legal capacity of the signer(s) must be guaranteed by an eligible guarantor.
See the Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Trustees may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 30 days' prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
6.
Performance
The Series computes the average annual compounded rate of total return for its
Class A shares during specified periods that would equate the initial amount
invested to the ending redeemable value of such investment by adding one to the
computed average annual total return, raising the sum to a power equal to the
number of years covered by the computation and multiplying the result by $1,000,
which represents a hypothetical initial investment. The calculation assumes
deduction of no sales charge (as described in the next paragraph) from the
amount invested and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at net asset value. The ending
redeemable value is determined by assuming a complete redemption at the end of
the period(s) covered by the average annual total return computation.
In calculating total returns for Class A shares, no sales charge with respect to
the Series (as a percentage of the offering price) is deducted from the initial
investment . Total returns also assume that all dividends and capital gains
distributions during the period are reinvested at net asset value per share, and
that the investment is redeemed at the end of the period.
The Series' yield quotation is based on a 30-day period ended on a specified
date, computed by dividing our net investment income per share earned during the
period by our net asset value per share on the last day of the period. This is
determined by finding the following quotient: take the Series' dividends and
interest earned during the period minus its expenses accrued for the period and
divide by the product of (i) the average daily number of Series shares
outstanding during the period that were entitled to receive dividends and (ii)
the Series' net asset value per share on the last day of the period. To this
quotient add one. This sum is multiplied by itself five times. Then one is
subtracted from the product of the multiplication and the remainder is
multiplied by two. Yield for the Class A shares is shown based on the Fund's net
asset value per share.
It is important to remember that any figures developed using the formulas above
represent past performance and an investor should be aware that the investment
return and principal value of the Series investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Therefore, there is no assurance that this performance will be repeated in
the future.
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7.
Taxes
The value of any shares redeemed, repurchased or otherwise sold may be more or
less than your tax basis in the shares at the time the redemption, repurchase or
sale is made. Any gain or loss generally will be taxable for federal income tax
purposes. Any loss realized on the sale, redemption or repurchase of Series
shares which you have held for six months or less will be treated for federal
income tax purposes as a long-term capital loss to the extent of any
distribution designated by the Fund as a "capital gains distribution" which you
received with respect to such shares. Losses on the sale of Series shares are
not deductible if, within a period beginning 30 days before the date of the sale
and ending 30 days after the date of the sale, the taxpayer acquires stock or
securities that are substantially identical.
The Series will be subject to a 4% nondeductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar year distribution requirement. The Series intends
to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax. Dividends paid by the Series will qualify for the
dividends-received deduction for corporations to the extent that they are
derived from dividends paid by domestic corporations.
As described in the Prospectus under "Risk Factors", the Series may be subject
to foreign withholding taxes which would reduce the yield on its investments.
Tax treaties between certain countries and the United States may reduce or
eliminate such taxes. It is expected that Series shareholders who are subject to
United States federal income tax will be entitled to claim a federal income tax
credit or deduction for foreign income taxes paid by the Series.
Gains and losses realized by the Series on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.
The foregoing discussion relates solely to U.S. federal income tax law as
applicable to United States persons (United States citizens or residents and
United States domestic corporations, partnerships, trusts and estates). Each
shareholder who is not a United States person should consult his tax adviser
regarding the U.S. and foreign tax consequences of the ownership of shares of
the Series, including a 30% (or lower treaty rate) United States withholding tax
on dividends representing ordinary income and net short-term capital gains and
the applicability of United States gift and estate taxes to non-United States
persons who own Series shares.
8.
Information About the Fund
SHAREHOLDER LIABILITY. Delaware law provides that Fund shareholders shall be
entitled to the same limitations of personal liability extended to shareholders
of private corporations for profit. The courts of some states, however, may
decline to apply Delaware law on this point. The Fund's Declaration of Trust
contains an express disclaimer of shareholder liability for the acts,
obligations, or affairs of the Fund or any series and requires that a disclaimer
be given in each contract entered into or executed by the Fund. The Declaration
provides for indemnification out of the Fund's property of any shareholder or
former shareholder held personally liable for the obligations of the Fund. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect and the portfolio is unable to
meet its obligations. Lord Abbett believes that, in view of the above, the risk
of personal liability to shareholders is extremely remote.
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<PAGE>
GENERAL. The assets of the Fund received for the issue or sale of the shares of
each Series and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to each Series, and
constitute the underlying assets of such Series. The underlying assets of each
Series are recorded on the books of account of the Fund, and are to be charged
with the liabilities with respect to such Series and with a share of the general
expenses of the Fund. Expenses with respect to the Fund are to be allocated in a
manner and on a basis (generally in proportion to relative assets) deemed fair
and equitable by the trustees. In the event of the dissolution or liquidation of
the Fund, the holders of the shares of each Series are entitled to receive as a
class the underlying assets of such Series available for distribution.
Under the Fund's Declaration of Trust, the trustees may, upon shareholder vote,
cause the Fund to merge or consolidate into, or sell and convey all or
substantially all of, the assets of the Fund or any Series to one or more
trusts, partnerships or corporations, so long as the surviving entity is an
open-end management investment company that will succeed to or assume the Fund's
registration statement. In addition, the trustees may, without shareholder vote,
cause the Fund to be incorporated under Delaware law.
Derivative actions on behalf of the Fund or any Series may be brought only by
shareholders owning not less than 50% of the then outstanding shares of the Fund
or any Series, as applicable.
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment account. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security seven days
before or after any Lord Abbett-sponsored fund trades in such security,
profiting from trades of the same security within 60 days and trading on
material non-public information. The Code imposes similar requirements and
restrictions on the independent Trustees of the Fund to the extent contemplated
by the recommendations of such Advisory Group.
9.
Financial Statements
The financial statements for fiscal year ended November 30, 1996 and the half
year ended May 31, 1997 and the report of Deloitte & Touche LLP, independent
public accountants, on such annual financial statements contained in the 1996
Annual Report to Shareholders of the Lord Abbett Investment Trust are
incorporated herein by reference to such financial statements and report in
reliance upon the authority of Deloitte & Touche LLP as experts in auditing and
accounting.
13
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PART C OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Part A - Financial Highlights for the period
November 4, 1993 (commencement of operations - Limited
Duration Government Series) to October 31, 1994 and the
fiscal years ended October 31, 1995 and 1996; the
period December 27, 1994 (commencement of operations -
Balanced Series) to October 31, 1995 and the fiscal
year ended October 31, 1996.
Part B - Statement of Net Assets at October 31, 1996.
Statement of Operations for the year ended October 31,
1996.
(b) Exhibits -
99.B1 Form of Amendment to Declaration of Trust*
99.B5 Form of Addendum to Management Agreement
between Lord Abbett Investment Trust and
Lord, Abbett & Co.*
99.B18 Form of Plan entered into by Registrant
pursuant to Rule 18f-3.*
* Filed herewith.
Exhibit items not listed above have either alread been filed
or are not applicable.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF RECORD HOLDERS OF SECURITIES
(as of August 29, 1997)
U.S. Government Securities 88,974 -(Class A)
414 -(Class B)
5,163 -(Class C)
Limited Duration Government 188-(Class A)
191-(Class C)
Balanced 752-(Class A)
863-(Class C)
Item 27. INDEMNIFICATION
The Registrant is a Delaware Business Trust established under
Chapter 38 of Title 12 of the Delaware Code. The Registrant's
Declaration and Instrument of Trust at Section 4.3 relating to
indemnification of Trustees, officers, etc. states the
following.
The Trust shall indemnify each of its Trustees, officers,
employees and agents (including any individual who serves at
its request as director, officer, partner, trustee or the like
of another organization in which it has any interest as a
shareholder, creditor or otherwise) against all liabilities
and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by him or her
in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before
any court or administrative or legislative body in which he or
she may be or may have been involved as a party or otherwise
or with which he or she may be or may have been threatened,
while acting as Trustee or as an officer, employee or agent of
the Trust or the Trustees, as the case may be, or thereafter,
by reason of his or her being or having been such a Trustee,
officer, employee or agent, EXCEPT with respect to any matter
as to which he or she shall have been adjudicated not to have
acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust or any Series
thereof. Notwithstanding anything herein to the contrary, if
any matter which is the subject of indemnification hereunder
relates only to one Series (or to more than one but not all of
the Series of the Trust), then the indemnity shall be paid
only out of the assets of the affected Series. No individual
shall be indemnified hereunder against any liability to the
Trust or any Series thereof or the Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her
office. In addition, no such indemnity shall be provided with
respect to any matter disposed of by settlement or a
compromise payment by such Trustee, officer, employee or
agent, pursuant to a consent decree or otherwise, either for
said payment or for any other expenses unless there has been a
determination that such compromise is in the best interests of
the Trust or, if appropriate, of any affected Series thereof
and that such Person appears to have acted in good faith in
the reasonable belief that his or her action was in the best
interests of the Trust or, if appropriate, of any affected
Series thereof, and did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. All
determinations that the applicable standards of conduct have
been met for indemnification hereunder shall be made by (A) a
majority vote of a quorum consisting of disinterested Trustees
who are not parties to the proceeding relating to
indemnification, or (b) if such a quorum is not obtainable or,
even if obtainable, if a majority vote of such quorum so
directs, by independent legal counsel in a written opinion, or
(C) a vote of Shareholders (excluding Shares owned of record
or beneficially by such individual). In addition, unless a
matter is disposed of with a court determination (I) on the
merits that such Trustee, officer, employee or agent was not
liable or (II) that such Person was not guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, no
indemnification shall be provided hereunder unless there has
been a determination by independent legal counsel in a written
opinion that such Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.
The Trustees may make advance payments out of the assets of
the Trust or, if appropriate, of the affected Series in
connection with the expense of defending any action with
respect to which indemnification might be sought under this
Section 4.3. The indemnified Trustee, officer, employee or
agent shall give a written undertaking to reimburse the Trust
or the Series in the event it is subsequently determined that
he or she is not entitled to such indemnification and (A) the
indemnified Trustee, officer, employee or agent shall provide
security for his or her undertaking, (B) the Trust shall be
insured against losses arising by reason of lawful advances,
or (C) a majority of a quorum of disinterested Trustees or an
independent legal counsel in a written opinion shall
determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be found entitled
to indemnification. The rights accruing to any Trustee,
officer, employee or agent under these provisions shall not
exclude any other right to which he or she may be lawfully
entitled and shall inure to the benefit of his or her heirs,
executors, administrators or other legal representatives.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expense incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such Trustee,
officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Lord, Abbett & Co. acts as investment manager and/or principal
underwriter for twelve other Lord Abbett open-end investment
companies (of which it is principal underwriter for thirteen),
and as investment adviser to approximately 5,700 private
accounts. Other than acting as Trustees (directors) and/or
officers of open-end investment companies managed by Lord,
Abbett & Co., none of Lord, Abbett & Co.'s partners has, in
the past two fiscal years, engaged in any other business,
profession, vocation or employment of a substantial nature for
his own account or in the capacity of director, officer,
employee, partner or trustee of any entity except as follows:
John J. Walsh
Trustee
Brooklyn Hospital
Parkside Avenue
Brooklyn, N.Y.
Item 29. PRINCIPAL UNDERWRITER
(a) Lord Abbett Affiliated Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Mid-Cap Value Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett Government Securities Money Market Fund, Inc.
Lord Abbett Tax-Free Income Trust
Lord Abbett Global Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Series Fund, Inc.
Lord Abbett Research Fund, Inc.
Lord Abbett Securities Trust
INVESTMENT ADVISER
American Skandia Trust (Lord Abbett Growth and Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
BUSINESS ADDRESS (1) WITH REGISTRANT
Robert S. Dow Chairman and President
Kenneth B. Cutler Vice President & Secretary
Stephen I. Allen Vice President
Zane E. Brown Vice President
Daniel E. Carper Vice President
Daria L. Foster Vice President
Robert G. Morris Vice President
Robert J. Noelke Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address at
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Registrant maintains the records, required by Rules 31a - 1(a)
and (b), and 31a - 2(a) at its main office.
Lord,Abbett & Co. maintains the records required by Rules
31a - 1(f) and 31a - 2(e) at its main office.
Certain records such as correspondence may be physically
maintained at the main office of the Registrant's Transfer
Agent, Custodian, or Shareholder Servicing Agent within the
requirements of Rule 31a-3.
Item 31. MANAGEMENT SERVICES
None.
Item 32. UNDERTAKINGS
The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.
The Registrant undertakes, if requested to do so by the
holders of at least 10% of the Registrant's outstanding
shares, to call a meeting of shareholders for the purpose of
voting upon the question of removal of a director or directors
and to assist in communications with other shareholders as
required by Section 16(c).
The Registrant undertakes to file a post-effective amendment
to the registration statement, using financial statements with
respect to the Strategic Core Plus Series which need not be
certified, within 4 to 6 months after the effective date of
the registration statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
16 th day of September 1997.
LORD ABBETT INVESTMENT TRUST
By s/Robert S. Dow
-------------------------
Robert S. Dow
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Chairman, President
s/Robert S. Dow and Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
Robert S. Dow (Title) (Date)
Vice President and
s/Keith F. O'Connor Treasurer September 16, 1997
- ----------------------- ----------------------------- ---------------------
Keith F. O'Connor (Title) (Date)
s/E. Wayne Nordberg Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
E. Wayne Nordberg (Title) (Date)
s/Stewart S. Dixon Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
Stewart S. Dixon (Title) (Date)
s/John C. Jansing Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
John C. Jansing (Title) (Date)
s/Alan MacDonald Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
C. Alan MacDonald (Title) (Date)
s/Hansel B. Millican, Jr. Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
Hansel B. Millican, Jr. (Title) (Date)
s/Thomas J. Neff Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
Thomas J. Neff (Title) (Date)
s/E. Thayer Bigelow Trustee September 16, 1997
- ----------------------- ----------------------------- ---------------------
E. Thayer Bigelow (Title) (Date)
<PAGE>
LORD ABBETT INVESTMENT TRUST
AMENDMENT TO
DECLARATION OF TRUST
The undersigned, being at least a majority of the Trustees of
Lord Abbett Investment Trust, a Delaware business trust (the "Trust"), organized
pursuant to a Declaration of Trust dated August 16, 1993 (the "Declaration"), do
hereby establish, pursuant to Section 5.3 of the Declaration, a new series of
the Trust to be designated as the Strategic Core Plus Series. The initial class
of shares shall be designated the Class A shares. Any variations between such
classes as to purchase price, determination of net asset value, the price, terms
and manner of redemption, special and relative rights as to dividends and on
liquidation, and conditions under which such classes shall have separate voting
rights, shall be as set forth in the Declaration or as elsewhere determined by
the Board of Trustees of the Trust.
This instrument shall constitute an amendment to the
Declaration.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this ___ day of _________, 1997.
- --------------------------------- ------------------------------
Robert S. Dow John C. Jansing
- --------------------------------- ------------------------------
E. Wayne Nordberg C. Alan MacDonald
- --------------------------------- ------------------------------
E. Thayer Bigelow Hansel B. Millican, Jr.
- --------------------------------- ------------------------------
Stewart S. Dixon Thomas J. Neff
<PAGE>
Addendum to Management
Agreement between Lord Abbett
Investment Trust and Lord, Abbett & Co.
DATED SEPTEMBER , 1997 (THE "AGREEMENT")
Lord, Abbett & Co. and Lord Abbett Investment Trust (the "Trust") on
behalf of Lord Abbett Strategic Core Plus Series ("Fund Series") do hereby agree
that the annual management fee rate for the Fund Series with respect to
paragraph 2 of the Agreement shall be .50% of 1% of the average daily net assets
of the Fund Series.
For purposes of Section 15 (a) of the Act, this Addendum and the
Agreement shall together constitute the investment advisory contract of the
Series.
LORD, ABBETT & CO.
BY: ________________________
Managing Partner
LORD ABBETT INVESTMENT TRUST
(on behalf of Lord Abbett Strategic Core Plus Series)
BY: _______________________
Vice President
Dated: September , 1997
<PAGE>
Amended and Restated Plans as of August 1,1997
Pursuant to Rule 18f-3(d)
under the Investment Company Act of 1940
(As adopted August 15, 1996)
Rule 18f-3 (the "Rule") under the Investment Company Act of 1940, as
amended (the "1940 Act"), requires that the Board of Directors or Trustees of an
investment company desiring to offer multiple classes pursuant to the Rule adopt
a plan setting forth the separate arrangement and expense allocation of each
class, and any related conversion features or exchange privileges. This document
constitutes an amended and restated plan (individually, a "Plan" and
collectively, the "Plans") of each of the investment companies, or series
thereof, listed on Schedule A attached hereto (each, a "Fund"). The Plan of any
Fund is subject to amendment by action of the Board of Directors or Trustees
(the "Board") of such Fund and without the approval of shareholders of any
class, to the extent permitted by law and by the governing documents of such
Fund.
The Board, including a majority of the non-interested Board members,
has determined that the following separate arrangement and expense allocation,
and the related conversion features, if any, and exchange privileges, of each
class of each Fund are in the best interest of each class of each Fund
individually and each Fund as a whole.
1. CLASS DESIGNATION. Shares of all Funds except Lord Abbett Series Fund, Inc.
shall be divided into Class A shares, Class B shares, Class C, Class Y and
Pension Class shares as indicated for each Fund on Schedule A attached hereto.
In the case of the Lord Abbett Series Fund - Growth & Income Portfolio, shares
shall be divided into Variable Contract Class shares and Pension Class shares as
indicated on Schedule A.
2. SALES CHARGES AND DISTRIBUTION AND SERVICE FEES.
(a) INITIAL SALES CHARGE. Class A shares will be traditional front-end
sales charge shares, offered at their net asset value ("NAV") plus a sales
charge in the case of each Fund as described in such Fund's prospectus as from
time to time in effect.
Class B shares, Class C shares, Class Y shares, Variable Contract Class
shares and Pension Class shares will be offered at their NAV without an initial
sales charge.
(b) SERVICE AND DISTRIBUTION FEES. In respect of the Class A shares,
Class B shares, Class C shares, Variable Contract Class shares and Pension Class
shares, each Fund will pay service and/or distribution fees under plans from
time to time in effect adopted for such classes pursuant to Rule 12b-1 under the
1940 Act (each, a "12b-1 Plan").
Pursuant to a 12b-1 Plan with respect to the Class A shares, if
effective, each Fund will generally pay (i) at the time such shares are sold, a
one-time distribution fee of up to 1% of the NAV of the shares sold in the
amount of $1 million or more, including sales qualifying at such level under the
rights of accumulation and statement of intention privileges, or to retirement
plans with 100 or more eligible employees, as described in the Fund's prospectus
as from time to time in effect, (ii)
<PAGE>
a continuing distribution fee at an annual rate of 0.10% of the average daily
NAV of the Class A share accounts of dealers who meet certain sales and
redemption criteria, and (iii) a continuing service fee at an annual rate not to
exceed 0.25% of the average daily NAV of the Class A shares. The Board will have
the authority to increase the distribution fees payable under such 12b-1 Plan by
a vote of the Board, including a majority of the independent directors thereof,
up to an annual rate of 0.25% of the average daily NAV of the Class A shares.
The effective dates of various of the 12b-1 Plans for the Class A shares are
based on achievement by the Funds of specified total net assets for the Class A
shares of such Funds.
Pursuant to a 12b-1 Plan with respect to the Class B shares, if
effective, each Fund will generally pay a continuing annual fee of up to 1% of
the average annual NAV of such shares then outstanding (each fee comprising .25%
in service fee and .75% in distribution fee).
Pursuant to a 12b-1 Plan with respect to the Class C shares, if
effective, each Fund will generally pay a one-time service and distribution fee
at the time such shares are sold of up to 1% of their NAV and a continuing
annual fee, commencing 12 months after the first anniversary of such sale, of up
to 1% of the average annual NAV of such shares then outstanding (each fee
comprising .25% in service fees and .75% in distribution fees).
Pursuant to a 12b-1 plan with respect to the Variable Contract Class,
if operational, the Growth & Income Portfolio will generally pay a continuing
annual fee of up to .15% of the average annual NAV of such shares then
outstanding to reimburse an insurance company for its expenditure related to the
distribution of such shares which expenditures are not also reimbursable
pursuant to fees paid under the variable contract issued by such insurance
company.
Pursuant to a 12b-1 Plan with respect to the Pension Class, if
operational, the Growth & Income Portfolio will generally pay a continuing
annual fee of .45% of the average annual NAV of such shares then outstanding.
The Board will have the authority to increase the distribution fees payable
under such 12b-1 Plan by a vote of the Board, including a majority of the
independent directors thereof, up to an annual rate of 0.75% of the average
daily NAV of such shares (consisting of distribution and service fees, at
maximum annual rates not exceeding 0.50 and 0.25 of 1%, respectively).
The Class Y shares do not have a Rule 12b-1 Plan.
(c) CONTINGENT DEFERRED SALES CHARGES ("CDSC"). Subject to some
exceptions, Class A shares subject to the one-time sales distribution fee of up
to 1% under the Rule 12b-1 Plan for the Class A shares will be subject to a CDSC
equal to 1% of the lower of the cost or the NAV of such shares if the shares are
redeemed for cash on or before the end of the twenty-fourth month after the
month in which the shares were purchased.
Class B shares will be subject to a CDSC ranging from 5% to 1% of the
lower of the cost or the NAV of the shares, if the shares are redeemed for cash
before the sixth anniversary of their purchase. The CDSC for the Class B shares
may be waived for certain transactions. Class C shares will be subject to a CDSC
equal to 1% of the lower of the cost or the NAV of the shares if the shares are
redeemed for cash before the first anniversary of their purchase.
<PAGE>
Neither the Class Y, Variable Contract Class nor the Pension Class
shares will be subject to a CDSC.
3. CLASS-SPECIFIC EXPENSES. The following expenses shall be allocated, to the
extent such expenses can reasonably be identified as relating to a particular
class and consistent with Revenue Procedure 96-47, on a class-specific basis:
(a) fees under a 12b-1 Plan applicable to a specific class (net of any CDSC paid
with respect to shares of such class and retained by the Fund) and any other
costs relating to implementing or amending such Plan, including obtaining
shareholder approval of such Plan or any amendment thereto; (b) transfer and
shareholder servicing agent fees and shareholder servicing costs identifiable as
being attributable to the particular provisions of a specific class; (c)
stationery, printing, postage and delivery expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxy
statements to current share holders of a specific class; (d) Securities and
Exchange Commission registration fees incurred by a specific class; (e) Board
fees or expenses identifiable as being attributable to a specific class; (f)
fees for outside accountants and related expenses relating solely to a specific
class; (g) litigation expenses and legal fees and expense relating solely to a
specific class; (h) expenses incurred in connection with shareholders meetings
as a result of issues relating solely to a specific class and (i) other expenses
relating solely to a specific class, provided, that advisory fees and other
expenses related to the management of a Fund's assets (including custodial fees
and tax-return preparation fees) shall be allocated to all shares of such Fund
on the basis of NAV, regardless of whether they can be specifically attributed
to a particular class. All common expenses shall be allocated to shares of each
class at the same time they are allocated to the shares of all other classes.
All such expenses incurred by a class of shares will be charged directly to the
net assets of the particular class and thus will be borne on a pro rata basis by
the outstanding shares of such class. For all Funds, with the exception of
Series Fund - Growth & Income Portfolio, Blue Sky expenses will be treated as
common expenses. In the case of Series Fund - Growth & Income Portfolio, Blue
Sky expenses will be allocated entirely to the Pension Class, as the Variable
Contract Class of Series Fund Growth & Income Portfolio has no Blue Sky
expenses.
4. INCOME AND EXPENSE ALLOCATIONS. Income, realized and unrealized capital gains
and losses and expenses not allocated to a class as provided above shall be
allocated to each class on the basis of the net assets of that class in relation
to the net assets of the Fund, except that, in the case of each daily dividend
Fund, income and expenses shall be allocated on the basis of relative net assets
(settled shares).
5. DIVIDENDS AND DISTRIBUTIONS. Dividends and Distributions paid by a Fund on
each class of its shares, to the extent paid, will be calculated in the same
manner, will be paid at the same time, and will be in the same amount, except
that the amount of the dividends declared and paid by a particular class may be
different from that paid by another class because of expenses borne exclusively
by that class.
6. NET ASSET VALUES. The NAV of each share of a class of a Fund shall be
determined in accordance with the Articles of Incorporation or Declaration of
Trust of such Fund with appropriate adjustments to reflect the allocations of
expenses, income and realized and unrealized capital gains and losses of such
Fund between or among its classes as provided above.
<PAGE>
7. CONVERSION FEATURES. The Class B shares will automatically convert to Class A
shares 8 years after the date of purchase. Such conversion will occur at the
relative NAV per share of each Class without the imposition of any sales charge,
fee or other charge. When Class B shares convert, any other Class B shares that
were acquired by the shareholder by the reinvestment of dividends and
distributions will also convert to Class A shares on a pro rata basis. The
conversion of Class B shares to Class A shares after 8 years is subject to the
continuing availability of a private letter ruling from the Internal Revenue
Service or an opinion of counsel to the effect that the conversion does not
constitute a taxable event for the Class B shareholder under Federal income tax
law. If such a revenue ruling or opinion is no longer available, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect.
Subject to amendment by the Board, Class A shares and Class C shares
shall not be subject to any automatic conversion feature.
8. EXCHANGE PRIVILEGES. Except as set forth in a Fund's prospectus as from time
to time in effect, shares of any class of such Fund may be exchanged, at the
holder's option, for shares of the same class of another Fund, or other Lord
Abbett-sponsored fund or series thereof, without the imposition of any sales
charge, fee or other charge.
Each Plan is qualified by and subject to the terms of the then current
prospectus for the applicable Fund; provided, however, that none of the terms
set forth in any such prospectus shall be inconsistent with the terms contained
herein. The prospectus for each Fund contains additional information about that
Fund's classes and its multiple-class structure.
Each Plan is being adopted for a Fund with the approval of, and all
material amendments thereto must be approved by, a majority of the Board of such
Fund, including a majority of the Board who are not interested persons of the
Fund.
<PAGE>
The Lord Abbett - Sponsored Funds
ESTABLISHING MULTI-CLASS STRUCTURES
CLASSES
Lord Abbett Affiliated Fund, Inc. A, B, C, P, Y
Lord Abbett Bond-Debenture Fund, Inc. A, B, C, P*, Y
Lord Abbett Developing Growth Fund, Inc. A, B, C, P*
Lord Abbett Mid-Cap Value Fund, Inc. A, B, C, P*
Lord Abbett Global Fund, Inc.
Equity Series A, B, C, P*
Income Series A, B, C, P*
Lord Abbett Investment Trust
Balanced Series A, C
Limited Duration U.S. Government
Securities Series A, C
U.S. Government Securities Series A, B, C, P*
Lord Abbett Securities Trust
Growth & Income Trust A, B, C, P*
International Series A, B, C, P*, Y
Lord Abbett Tax-Free Income Fund, Inc.
California Series A, C
National Series A, B, C
New York Series A, C
Lord Abbett Tax-Free Income Trust
Florida Series A, C
Lord Abbett U.S. Government Securities
Money Market Fund, Inc. A, B, C
Lord Abbett Research Fund, Inc.
Large-Cap Series A, B, C, P*
Small-Cap Series A, B, C, P*, Y
Lord Abbett Series Fund
Growth & Income Portfolio Variable Contract Class
Growth & Income Portfolio Pension Class
* Pursuant to authority granted by the Board of Directors to the appropriate
officers of the funds, these classes and their related plans (12b-1 and 18f-3)
will commence operations upon Blue Sky and SEC clearance in the discretion of
such officers.
