Lord Abbett Investment Trust
U. S. Government Securities Series - Limited Duration U. S. Government
Securities Series
Balanced Series - High Yield Fund
[GRAPHIC OMITTED]
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED MAY 31, 1999
Four portfolios to help you
meet your goals
[LOGO]
<PAGE>
Report to Shareholders
For the Six Months Ended May 31, 1999
[PHOTO]
ROBERT S. DOW
CHAIRMAN
JUNE 4, 1999
Table of Contents
U. S. Government Securities Series
About the Series 1
Statement of Net Assets 4
Limited Duration U. S. Government Securities
Series
- --------------------------------------------
About the Series 3
Statement of Net Assets 8
Balanced Series
- --------------------------------------------
About the Series 3
Statement of Net Assets 10
High Yield Fund
- --------------------------------------------
Statement of Net Assets 10
Data On All Series
- --------------------------------------------
Statements of Operations 13
Statements of Changes in
Net Assets 14
Financial Highlights 15
Notes to Financial Statements 19
Lord Abbett Investment Trust completed the first half of its fiscal year on May
31, 1999, with combined net assets in excess of $1.8 billion. We are pleased to
present you this performance overview.
<TABLE>
<CAPTION>
Balanced Series U. S. Government Securities Series
Six Months Ended 5/31/99 Six Months Ended 5/31/99
------------------------ ------------------------
Class A Class B Class C Class A Class B Class C
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value $12.38 $12.36 $12.36 $2.54 $2.54 $2.54
Dividends $ .28 $ .21 $ .21 $ .08 $ .07 $ .07
Capital gains distributions $ 1.14 $ 1.14 $ 1.14 $ - $ - $ -
Total return* 8.0% 7.4% 7.5% -0.7% -1.1% -1.5%
</TABLE>
<TABLE>
<CAPTION>
Limited Duration
U. S. Government Securities Series High Yield Fund
Six Months Ended 5/31/99 12/31/98 Through 5/31/99
------------------------------------------------------------------------------
Class A Class C Class A Class B Class C Class Y**
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value $4.41 $4.40 $10.00 $9.98 $9.99 $10.00
Dividends $ .12 $ .10 $ .39 $ .36 $ .36 $ -
Total return* 1.6% 0.6% 3.0% 2.6% 2.6% -3.5%
</TABLE>
The worldwide "flight to quality" that drove U. S. Treasury bond yields down in
1998 gave way as global political and economic uncertainties began to resolve in
early 1999. Sparked by a series of late 1998 Fed Rate cuts, interest rates
remained low early in the year but gradually crept higher amid reports of
increased inflation.
Both the U. S. Government Securities Series and Limited Duration U. S.
Government Securities Series continued to emphasize mortgage-backed securities,
such as FNMAs, FHLMCs, collateralized mortgage obligations (CMOs) and commercial
mortgage-backed securities (CMBs). We believe that these sectors continue++ to
represent good value for investors as the incremental yield over Treasuries has
remained high. As releases of new economic data began to signal a slight
increase in inflation (and the potential for preemptive Federal Reserve Board
action), we invested in shortand long-term Treasuries rather than
intermediate-term Treasuries. This approach worked, as intermediates saw the
largest yield increase during the second quarter of 1999. During periods of low
relative prices, we will continue to take the opportunity to add to our
weighting of mortgagebacked securities.
The Balanced Series utilizes a "fund of funds" format which currently divides
assets approximately 55%/45% between Lord Abbett Affiliated Fund (equity) and
Lord Abbett Bond-Debenture Fund (fixed income), respectively.+ Affiliated Fund
benefited from the performance of some of its telecommunication, technology and
financial services stocks. We increased our exposure to insurance stocks, as we
expect this sector to benefit from consolidations. The overall strategy of
Bond-Debenture Fund is to identify good bond values while being careful about
credit selection. With a current allocation of over 65% in
high-yield/lower-rated issues (including convertibles), we reduced our corporate
bond holdings in basic industries such as steel, paper and chemicals as we
believe there is little opportunity for these companies to raise prices on their
products. We are emphasizing industries that have steady cash flows, such as
telecommunications, media and cable television providers. We expect that
longterm returns should be enhanced due to our selection of high-yield debt from
well-managed companies. Overall, we believe high-yield bonds continue to
represent particularly good value due to their significant yield advantage over
Treasuries.++
Lord Abbett High Yield Fund commenced operations on December 31, 1998. The Fund
invests in high-yield/lower-rated bonds with a focus on domestic debt, and has
the ability to invest up to 20% in foreign securities. The investment objective
of High Yield Fund is to seek high current income and the opportunity for
capital appreciation to produce a high total return.
Thank you for making Lord Abbett Investment Trust a part of your investment
portfolio. We remain committed to helping you achieve your financial goals in
the years ahead.
*Total return, which is not annualized, is the percent change in net asset value
assuming the reinvestment of all distributions.
**The inception date for High Yield Fund Class Y shares was 5/4/99.
+The portfolio is actively managed, and as a result, asset allocation may change
from time to time.
++ Unlike Treasury securities, an investment in the Series is neither insured
nor guaranteed by the U. S. government.
<PAGE>
ABOUT THE U. S. GOVERNMENT SECURITIES SERIES
Total Return is Important to Fixed-Income Investors
Over the last 15 years, an investment in the Series provided relatively stable
dividend income and, assuming the reinvestment of all distributions, grew by
over 393%. The Series surpassed the increase in inflation (as measured by the
Consumer Price Index), and the Lipper General U. S. Government Average over the
same 15-year period.
Lord Abbett U. S. Government Securities Series Versus Inflation (1)(2)
Growth of $100,000: 5/31/89-5/31/99
The U. S. Government Securities Series Distribution Rate on 5/31/99 was 5.84%
(3)
Lord Abbett U. S.
Government
Securities Series $393,591
Inflation
(Consumer Price
Index) $160,761
Lipper General U. S.
Government
Average $349,235
SEC Returns
Average annual compound returns for the periods ended June 30, 1999 at the
respective Class A share maximum sales charges (4) , with all distributions
reinvested:
<TABLE>
<CAPTION>
Limited Duration
U. S. Government U. S. Government
Securities Series (2) Securities Series (5) Balanced Series (5) High Yield Fund (5)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year: -2.40% 1.90% 4.80% -
5 years: 5.57% 4.65% - -
10 years or Life of Series: 6.86% 3.44% 13.09% -1.60%
SEC yield for the 30 days
ended 6/30/99: 5.40% 4.90% 3.75% 9.03%
</TABLE>
The results quoted herein represent past performance which is no indication of
future results. The investment return and principal value of an investment in
any Series of the Trust will fluctuate so that shares, on any given day or when
redeemed, may be worth more or less than their original cost. Each Series issues
separate classes of shares, with distinct pricing options. For a full discussion
of the differences in pricing alternatives, see the Trust's current prospectus.
(1) Total return is the percent change in value, assuming the reinvestment of
both dividends and capital gains distributions. The Series investment
reflects the deduction of the 3.75% sales charge applicable to Class A
share investments of $100,000.
(2) Lord Abbett Investment Trust- U. S. Government Securities Series was
established 7/15/96. Its predecessor, Lord Abbett U. S. Government
Securities Fund, was established 9/19/32. Any performance relating to the
Series for periods prior to 7/15/96 reflects performance of the Series'
predecessor.
(3) Based on the Class A share maximum offering price.
(4) The Class A share maximum sales charge is 5.75% for the Balanced Series,
4.75% for the U. S. Government Securities Series and High Yield Fund, and
3.00% for the Limited Duration U. S. Government Securities Series.
(5) Limited Duration U. S. Government Securities Series commenced operations
11/4/93; Balanced Series commenced operations 12/27/94; High Yield Fund
commenced operations 12/31/98.
1
<PAGE>
<TABLE>
<CAPTION>
ABOUT THE U. S. GOVERNMENT SECURITIES SERIES
Annual Total Returns Based on Calendar Year (1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
(6 Months
Only)
Annual Total Return (1) +12.7% +9.3% +16.9% +7.1% +9.2% -4.3% +15.7% +1.7% +9.2% +7.9% -1.6%
</TABLE>
(1) Total return reflects the percent change in value with both dividends and
capital gains distributions reinvested. Results shown are at net asset
value for Class A shares. For performance at the maximum Class A share
sales charge, see page 1. See Important Information on page 4.
A Portfolio of High-Quality Securities
Conservative shareholders gain the comfort of owning U. S. Government
securities, which have the top investment grade and carry the least credit risk
among fixed-income securities.
Lord Abbett's Focus on Quality:
Representative Structure as of 5/31/99(1)
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GNMA 18%(2)
FNMA 11%(2)
CMBS 18%(2)
FHLMC 29%(2)
U.S. Treasury Notes and Bonds 16%(2)
Agency Debentures 8%(2)
(1) The portfolio is actively managed and, as a result, its composition will
change from time to time.
(2) Each percentage amount shown is calculated based on the Fund's holdings of
Long-Term Investments only. A security subject to principal paydowns over
time (as is the case with most mortgage-related investments) is classified
as long-term if the expected average time until principal payments are
received, weighted by dollar amount, is greater than one year. All
short-term assets, including cash and cash equivalents, are excluded from
the calculation for purposes of this chart.
Who Owns the Series?
Investor Profile of Lord Abbett U. S. Government Securities Series
- ----------------------------------------------------------------------------
Fiduciaries Trusts 3,244
Pension & profit-sharing plans 4,686
Custodians for minors 1,621
Estates 147
- ----------------------------------------------------------------------------
Institutions Broker-held accounts 32,612
Corporate organizations 281
Religious, charitable & welfare organizations 213
Banks, credit unions & insurance companies 144
Clubs & fraternal organizations 91
Cemeteries & hospitals 57
Government agencies 26
Colleges & universities 16
- ----------------------------------------------------------------------------
Individuals Single & joint accounts & IRAs 33,236
============================================================================
Total Accounts in the Series on 5/31/99 76,374
2
<PAGE>
ABOUT THE LIMITED DURATION U. S. GOVERNMENT SECURITIES SERIES
The Series invests in intermediate-term U. S. Government securities. As of May
31, 1999, the Series' distribution rate was competitive with the yield for
10-year Treasuries, with less price volatility than the Treasuries. (1)
Lord Abbett Limited Duration U. S. Government Securities Series (2)
The Limited Duration U. S. Government Securities Series' Distribution Rate on
5/31/99 was 5.27% (3)
Growth of $100,000 (as of 5/31/99)
[GRAPHIC OMITTED]
1 Year $102,990
3 Years $116,753
Life of Series $121,854
Total return shown, above and below, reflects the percent change in value for
Class A shares with both dividends and capital gains reinvested.
ABOUT THE BALANCED SERIES
The Series allocates its assets between fixed-income securities and equity
holdings, based on our economic outlook. This strategy has provided investors
with strong total returns, while generating monthly income.
The Balanced Series' Average Annual Rate of Total Return Since Inception: 13.06%
(3)
Lord Abbett Balanced Series (4)
Growth of $100,000 (as of 5/31/99)
[GRAPHIC OMITTED]
1 Year $104,927
3 Years $138,033
Life of Series $172,246
(1) Unlike Treasury securities, an investment in the Series is neither insured
nor guaranteed by the U. S. government.
(2) The Limited Duration U. S. Government Securities Series commenced
operations on 11/4/93. Results reflect the deduction of the reduced 2.50%
sales charge applicable to Class A share investments of $100,000.
(3) Based on the Class A share maximum offering price.
(4) The Balanced Series commenced operations on 12/27/94. Results reflect the
deduction of the reduced 4.75% sales charge applicable to Class A share
investments of $100,000.
For Series' performance at the respective maximum Class A share sales
charges, see page 1.
3
<PAGE>
A Note About Year 2000 Matters
As you may know, there has been extensive media coverage about possible problems
that may arise as a result of uncertainties about the ability of computers to
"understand" dates using the year 2000. Potentially, these problems could
disrupt the services and systems that the Fund relies on in its daily
operations.
As a general matter, we believe the financial industry has taken a leadership
role addressing year 2000 (Y2K) issues and this should help to inspire
confidence among concerned investors. More specifically, Lord Abbett, Lord
Abbett Distributor LLC and the Fund's transfer agent, custodian and other
providers of services critical to the Fund have been actively working on
reviewing and replacing or updating computer systems and computer-to-computer
interfaces, as needed. Each has completed or is in the process of testing new or
revised systems and interfaces and generally expects that their systems, as well
as those of their key external service providers, will be ready to handle Y2K
without significant problems. Furthermore, the Fund has been routinely taking
each company's Y2K preparations into account when considering or reviewing
investments.
In summary, while the Y2K problem is unprecedented and we cannot completely
eliminate the possibility that the Fund could be affected in some way, we are
confident that all parties involved are taking appropriate steps to resolve Y2K
concerns.
Important Information
Each Series' respective SEC yield is calculated on its maximum offering price on
6/30/99, using a standard method which does not take into account certain
portfolio strategies. Series' distribution rates differ from SEC yields
primarily because each Series purchases short-and intermediate-term, high-coupon
securities at a premium and distributes to shareholders all of the interest
income on those securities without amortizing the premiums. This practice is
consistent with applicable tax regulations and generally accepted accounting
principles, but may result in a decrease in the net asset values of shares of
the Series as the market values of the premium securities decrease over time.
Dividends paid from this interest income are taxable to shareholders as ordinary
income. Neither the U. S. Government Securities Series nor the Limited Duration
U. S. Government Securities Series is insured or guaranteed by the U. S.
Government.
Results quoted herein represent past performance based on the current sales
charge schedules and reflect appropriate Rule 12b-1 Plan expenses. Tax
consequences are not reflected. The U. S. Government Securities Series' sales
charge structure has changed from the past. If interest rates rise, the value of
bonds purchased by the Series would decrease, causing a decrease in the Series'
share values. If used as sales material after 9/30/99, this report must be
accompanied by Lord Abbett's Performance Quarterly for the most recently
completed calendar quarter.
<TABLE>
<CAPTION>
Statement of Net Assets
U. S. GOVERNMENT SECURITIES SERIES May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
Investments in Securities 115.13%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U. S. Treasury Obligations 14.49% U. S. Treasury Bonds Zero Coupon due 8/15/2020 * $410,000 $111,852,920
U. S. Treasury Bonds 8 3/4% due 5/15/2017 * 136 174,547
U. S. Treasury Notes Inflation Indexed 3 5/8% due 7/15/2002 30,372 31,268,855
U. S. Treasury Notes 6 1/4% due 4/30/2001 * 41,945 42,561,046
U. S. Treasury Notes 6 5/8% due 5/15/2007 * 58,642 61,638,196
Total 247,495,564
===========
U. S. Government Agency Federal Home Loan Mortgage Corp. 5 1/2% due 5/15/2002 12,202 12,087,606
Debentures 15.17% Federal Home Loan Mortgage Corp. 15% due 6/14/1999 125,000 125,429,625
Federal National Mortgage Association 5 1/4% due 1/15/2009 * 47,221 43,871,237
Federal National Mortgage Association 5 5/8% due 5/14/2004 79,253 77,878,436
Total 259,266,904
===========
</TABLE>
4
<PAGE>
Statement of Net Assets
U. S. GOVERNMENT SECURITIES SERIES May 31, 1999
<TABLE>
<CAPTION>
Principal
Amount
Investments (000) Value
----------- ----- -----
<S> <C> <C>
Federal Home Loan 5% due 6/1/1999 $ 26 $ 26,012
Mortgage Corporation 6 1/2% due on an announced basis 290,529 284,218,710
Pass-Through Securities 28.03%
7% due on an announced basis 185,364 185,740,289
10 1/2% due 5/1/2020 8,109 8,848,767
Total 478,833,778
===========
Federal National 5 1/2% due 11/1/2025 4,108 3,809,576
Mortgage Association 5.90% due 12/1/2008 7,503 7,257,110
Pass-Through Securities 26.36%
6% due 2028 8,646 8,223,074
6% due 12/1/2028 4,547 4,324,738
6.045% due 4/1/2009 6,033 5,852,058
6.08% due 10/1/2008 26,125 25,426,351
6.09% due 7/1/2008 3,968 3,891,672
6.29% due 6/1/2008 4,786 4,696,999
6.31% due 6/1/2008 6,300 6,187,924
6.32% due 6/1/2008 9,063 8,913,349
6.46% due 2006 to 2008 20,454 20,326,495
6 1/2% due 2008 to 2014 143,756 143,237,214
6.58% due 11/1/2004 3,043 3,056,563
6 5/8% due 10/1/2007 9,649 9,673,912
6.67% due 11/1/2004 7,842 7,908,416
6.68% due 10/1/2007 9,700 9,757,342
6.69% due 9/1/2007 7,871 7,922,284
6.715% due 10/1/2005 2,798 2,818,594
6 3/4% due 2007 12,240 12,363,095
6.765% due 5/1/2007 4,908 4,960,151
6.77% due 9/1/2004 4,575 4,630,261
6.775% due 10/1/2007 6,944 7,025,807
6.799% due 3/1/2007 5,805 5,886,863
6.80% due 2004 to 2007 7,786 7,888,981
6.802% due 10/1/2007 8,468 8,581,186
6.805% due 3/1/2007 4,903 4,973,834
6.812% due 10/1/2007 1,056 1,070,050
6.825% due 11/1/2007 4,239 4,302,389
6.84% due 10/1/2007 2,684 2,726,409
6.86% due 10/1/2004 6,730 6,841,895
6.907% due 6/1/2007 13,635 13,903,952
6.91% due 3/1/2007 4,903 5,004,109
6.935% due 4/1/2004 4,838 4,928,382
7% due 2007 to 2013 26,010 26,411,824
7.033% due 6/1/2007 2,329 2,390,471
7.04% due 12/1/2006 12,539 12,861,715
7.20% due 7/1/2006 2,281 2,357,539
7.205% due 6/1/2006 15,108 15,631,040
7.31% due 7/1/2003 362 372,859
7.43% due 6/1/2007 5,415 5,687,526
7 1/2% due 11/1/2023 6,131 6,242,595
Total 450,326,604
===========
Government National 7% due 2023 to 2028 64,399 64,458,896
Mortgage Association 7 1/2% due 2025 to 2028 135,575 138,752,207
Pass-Through Securities 17.64%
8% due 2024 to 2028 87,069 90,569,632
</TABLE>
5
<PAGE>
Statement of Net Assets
U. S. GOVERNMENT SECURITIES SERIES May 31, 1999
<TABLE>
<CAPTION>
Principal
Amount
Investments (000) Value
----------- ----- -----
9% due 2018 to 2020 $ 3,803 $ 4,084,301
10% due 2018 to 2019 3,233 3,481,265
Total 301,346,301
===========
<S> <C> <C> <C>
Collateralized Mortgage Federal Home Loan Mortgage Corp. 1702-A PL 5% due 10/15/2016 3,655 3,638,043
Obligations 13.44% Federal National Mortgage Association 1994-19 A 5% due 1/25/2024 15,436 15,315,223
Federal Home Loan Mortgage Corp. 1605 A 5 1/8% due 8/15/2006 965 960,126
Federal National Mortgage Association 94-23 PT 5 1/8% due 7/25/2017 635 630,565
Federal Home Loan Mortgage Corp. 1488 CA 5.20% due 5/15/2005 1,195 1,190,639
Federal National Mortgage Association 94-28 A 5 1/4% due 8/25/2018 1,999 1,987,952
Federal Home Loan Mortgage Corp. 1638 A 5 1/4% due 1/15/2019 4,507 4,491,462
Federal National Mortgage Association 96-53 FA 5.2875% due 12/25/2003 13,869 13,911,992
Federal Home Loan Mortgage Corp. 1488 PH 5.3375% due 4/15/2008 1,707 1,702,592
Federal Home Loan Mortgage Corp. 1558 F 5.3375% due 5/15/2022 7,137 7,192,681
Federal National Mortgage Association G94-1 F 5.3875% due 1/25/2024 7,658 7,423,060
Federal National Mortgage Association 1993-147 FG 5.4875% due 8/25/2023 4,446 4,458,810
Federal National Mortgage Association 1993-221 B 5 1/2% due 11/25/2006 553 551,585
Federal National Mortgage Association 1993-196 E 5 1/2% due 2/25/2007 3,943 3,929,763
Federal National Mortgage Association 93-194 PG 5.65% due 4/25/2005 224 223,135
Federal National Mortgage Association 93-206 5.65% due 5/25/2017 4,069 4,059,637
Federal National Mortgage Association 1993-59 E 5 3/4% due 4/25/2006 1,508 1,504,283
Federal National Mortgage Association 93-192 Z 5 3/4% due 8/25/2006 5,526 5,515,983
Federal National Mortgage Association 93-208 E 5 3/4% due 4/25/2018 6,940 6,926,653
Federal Home Loan Mortgage Corp. 1637 E 5 3/4% due 2/15/20194,018 4,015,749
Federal Home Loan Mortgage Corp. 1521 C 5.80% due 7/15/2000 309 308,830
Federal National Mortgage Association 93-134 D 5.90% due 11/25/2005 175 174,553
Federal Home Loan Mortgage Corp. 16 PE 6% due 8/25/2015 4,223 4,217,395
Federal National Mortgage Association 93-212 C 6% due 11/25/2000 3,107 3,103,577
Federal Home Loan Mortgage Corp. 1393 C 6% due 1/15/2004 455 453,942
Federal Home Loan Mortgage Corp. 1561 ZB 6% due 8/15/2006 5,148 5,154,051
Federal National Mortgage Association 98-13 PA 6% due 4/18/2008 14,783 14,764,847
Federal National Mortgage Association 98-19 PA 6% due 6/18/2008 8,487 8,479,514
Federal National Mortgage Association 98-24 QA 6% due 2/18/2009 36,063 36,073,952
Federal National Mortgage Association 1993-145 A 6% due 8/25/2017 936 928,754
Federal Home Loan Mortgage Corp. 1737 E 6% due 12/15/2017 10,717 10,746,674
Federal National Mortgage Association 93-94 E 6% due 3/25/2019 1,040 1,038,255
Federal Home Loan Mortgage Corp. 1484 G 6% due 6/15/2019 666 665,646
Federal Home Loan Mortgage Corp. 2155 A 6% due 5/15/2029 15,000 14,971,875
Federal Home Loan Mortgage Corp. 1540 C 6.05% due 2/15/2011 215 215,055
Federal National Mortgage Association 1993-129 D 6.10% due 6/25/2005 2,275 2,272,675
Federal Home Loan Mortgage Corp. 1544 E 6 1/4% due 6/15/2008 383 384,171
Federal Home Loan Mortgage Corp. 2132 JD 6 1/2% due 3/15/2001 1,384 1,391,837
Federal National Mortgage Association 1993-10 PE 6 1/2% due 10/25/2004 1,791 1,789,145
Federal National Mortgage Association 98-27 PA 6 1/2% due 3/18/2008 17,218 17,260,671
Federal National Mortgage Association 1993-187 SE 6.65159% due 11/25/2016 6,069 5,970,369
Federal Home Loan Mortgage Corp. 73 G IO 1095.35% due 10/15/2020 9 237,689
Federal Home Loan Mortgage Corp. 1095 A PO due 6/15/2021 872 686,711
Federal Home Loan Mortgage Corp. 1148 F PO due 10/15/2021 2,301 1,842,090
Federal Home Loan Mortgage Corp. 1363 B PO due 8/15/2022 2,634 2,074,432
Federal Home Loan Mortgage Corp. 1372 C PO due 9/15/2022 1,643 1,302,684
Federal Home Loan Mortgage Corp. 1059 U IO 409% due 4/15/2021 15 183,674
6
<PAGE>
Statement of Net Assets
U. S. GOVERNMENT SECURITIES SERIES May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
Federal Home Loan Mortgage Corp. 1020 S IO 900.95% due 12/15/2020 $ 9 $ 186,110
Federal Home Loan Mortgage Corp. 1241 X IO 982.65% due 4/15/2022 4 96,850
Federal Home Loan Mortgage Corp. 1200 IB IO 1007% due 2/15/2022 2 41,692
Federal Home Loan Mortgage Corp. 1082 D IO 1007.80% due 5/15/2021 34 811,288
Federal National Mortgage Association 1991-158 E IO 1008% due 12/25/2021 9 231,549
Federal Home Loan Mortgage Corp. 1180 G IO 1008.40% due 11/15/2021 5 127,127
Federal Home Loan Mortgage Corp. 1058 I IO 1008 1/2% due 4/15/2021 5 141,136
Federal Home Loan Mortgage Corp. 1046I IO 1009% due 2/15/2021 7 149,331
Federal Home Loan Mortgage Corp. 1049 N IO 1010 1/2% due 2/15/2021 23 614,266
Federal Home Loan Mortgage Corp. 1137 M IO 118 5.4969% due 9/15/2021 9 272,671
Federal Home Loan Mortgage Corp. 1066 S IO 1195.60% due 4/15/2021 23 740,416
Total 229,735,437
===========
Total Investments (Cost $1, 987, 756,851) 1,967,004,588
=============
Other Assets, Less Liabilities (15. 13)%
- ----------------------------------------
Short-Term Investments FHLB Discount Note 4.68% due 6/1/1999 83,437 83,437,000
FNMA Discount Note 4.72% due 6/1/1999 7,563 7,563,000
Total (Cost $91,000,000) 91,000,000
==========
Other (See Note 5) 66,058,128
==========
Receivable for: Securities sold 260,854,580
Interest 10,542,749
Capital stock sold 476,681
Total Other Assets 428,932,138
===========
Payable for: Securities purchased 602,781,421
Collateral on securities loaned 66,058,128
Dividends 9,935,960
Capital stock reacquired 5,032,055
Other 3,682,291
Total Liabilities 687,489,855
===========
Total Other Assets, Less Liabilities (258,557,717)
============
Net Assets 100.00% $1,708,446,871
==============
Class A Shares- Net asset value ($1,537,365,526/606,127,691 shares outstanding) $2.54
Maximum offering price (net asset value plus sales charge of 4.75% of the offering price) $2.67
Class B Shares- Net asset value ($31,451,882/12,394,405 shares outstanding) $2.54
Class C Shares- Net asset value ($139,629,463/54,960,640 shares outstanding) $2.54
+ Securities (or a portion of securities) on loan. See Note 5.
See Notes to Financial Statements.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
LIMITED DURATION U. S. GOVERNMENT SECURITIES SERIES May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
<S> <C> <C> <C>
Investments in Securities 114.46%
- ------------------------------------------------------------------------------------------------------------------------------------
U. S. Treasury Obligations 3.42% U. S. Treasury Notes Inflation Indexed 3 5/8% due 7/15/2002 $ 133 $ 136,927
U. S. Treasury Notes 6 1/4% due 4/30/2001 1,880 1,907,612
Total 2,044,539
=========
U. S. Government Agency
Debentures 4.10% Federal National Mortgage Association 5 5/8% due 5/14/2004 635 623,987
=========
Federal Home Loan 6 1/2% due on an announced basis 2,065 2,020,148
Mortgage Corporation 7% due on an announced basis 1,193 1,195,422
Pass-Through Securities 21.11%
Total 3,215,570
=========
Federal National 6% due 12/1/2028 174 165,267
Mortgage Association 6% due 12/1/2028 200 189,846
Pass-Through Securities 15.37%
6 1/2% due 2003 to 2013 828 826,135
6.67% due 11/1/2004 99 99,414
6.77% due 12/1/2003 98 99,080
6.80% due 1/1/2004 294 297,291
6.85% due 12/1/2003 98 99,364
6.86% due 10/1/2004 99 100,257
6.935% due 4/1/2004 294 299,902
7.245% due 9/1/2003 34 34,695
7.28% due 10/1/2003 58 59,614
7.31% due 7/1/2003 68 70,351
Total 2,341,216
=========
Government National 7% due 2028 841 842,641
Mortgage Association 8% due 2027 to 2028 477 495,690
Pass-Through Securities 11.66%
10% due 6/15/2019 47 50,946
10 1/2% due 2016 to 2020 354 385,765
Total 1,775,042
=========
Collateralized Mortgage Federal National Mortgage Association 1993-248 PA 4 1/2% due 4/25/2023 171 168,748
Obligations 48.80% Federal Home Loan Mortgage Corp. 1702-A PL 5% due 10/15/2016 91 90,951
Federal National Mortgage Association 94-23 PT 5 1/8% due 7/25/2017 167 165,793
Federal National Mortgage Association 93-87 N 5 1/4% due 11/25/2016 90 90,052
Federal National Mortgage Association 94-28 A 5 1/4% due 8/25/2018 59 58,469
Federal Home Loan Mortgage Corp. 1638 A 5 1/4% due 1/15/2019 113 112,756
Federal National Mortgage Association 96-53 FA 5.2875% due 12/25/2003 84 83,976
Federal Home Loan Mortgage Corp. 1488 PH 5.3375% due 4/15/2008 59 58,710
Federal Home Loan Mortgage Corp. 1558 F 5.3375% due 5/15/2022 126 126,562
Federal National Mortgage Association G94-1 F 5.3875% due 1/25/2024 115 111,169
Federal National Mortgage Association 1993-147 FG 5.4875% due 8/25/2023 75 75,573
Federal National Mortgage Association 96-53 FA 5 1/2% due 12/25/2018 26 25,402
Federal National Mortgage Association 1993-221 B 5 1/2% due 11/25/2006 138 137,896
Federal Home Loan Mortgage Corp. 1604 E 5 1/2% due 3/15/2007 284 283,319
Federal National Mortgage Association 93-214 E 5 1/2% due 3/25/2007 74 73,750
Federal Home Loan Mortgage Corp. 1591 PE 5 1/2% due 11/15/2016 287 286,160
Federal Home Loan Mortgage Corp. 1506 PE 5.65% due 7/15/2005 165 164,630
Federal National Mortgage Association 93-206 5.65% due 5/25/2017 138 137,615
Federal Home Loan Mortgage Corp. 1506 E 5.70% due 4/15/2005 239 238,838
Federal National Mortgage Association 1993-59 E 5 3/4% due 2006 145 144,681
Federal National Mortgage Association 1993-141 PE 5 3/4% due 5/25/2017 286 284,976
Federal Home Loan Mortgage Corp. 1584E 5 3/4% due 10/15/2016 612 611,977
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
LIMITED DURATION U. S. GOVERNMENT SECURITIES SERIES May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
<S> <C> <C> <C>
Federal National Mortgage Association 1993-147 E 5 3/4% due 11/25/2016 $ 105 $ 105,099
Federal National Mortgage Association 1993-167 EA 5 3/4% due 2/25/2017 166 165,210
Federal National Mortgage Association 93-41 PE 5 3/4% due 4/25/2019 131 130,960
Federal Home Loan Mortgage Corp. 1521 C 5.80% due 7/15/2000 34 34,314
Federal National Mortgage Association 1994-13 PE 5.80% due 12/25/2006 327 326,412
Federal Home Loan Mortgage Corp. 1614 G 5.80% due 2/15/2019 70 69,787
Federal National Mortgage Association 1994-120 PD 5.85% due 12/25/2006 315 314,736
Federal National Mortgage Association 93-134 D 5.90% due 11/25/2005 87 87,277
Federal National Mortgage Association G 93-22 E 5.95% due 6/25/2016 229 228,280
Federal Home Loan Mortgage Corp. X-109 AG 6% due 2005 130 129,522
Federal Home Loan Mortgage Corp. 16 PE 6% due 8/25/2015 331 330,208
Federal National Mortgage Association 93-212 C 6% due 11/25/2000 133 133,010
Federal Home Loan Mortgage Corp. 1393 C 6% due 1/15/2004 51 50,438
Federal Home Loan Mortgage Corp. 1697 PR 6% due 4/15/2006 63 63,549
Federal Home Loan Mortgage Corp. 1561 ZB 6% due 8/15/2006 111 111,439
Federal National Mortgage Association G-93-11 C 6% due 1/25/2007 142 141,577
Federal National Mortgage Association 98-13 PA 6% due 4/18/2008 100 99,380
Federal National Mortgage Association 98-24 QA 6% due 2/18/2009 136 135,925
Federal National Mortgage Association 1993-61 E 6% due 8/25/2016 100 100,168
Federal Home Loan Mortgage Corp. 1540 C 6.05% due 2/15/2011 100 100,026
Federal National Mortgage Association 93-118 E 6.10% due 12/25/2004 96 95,487
Federal National Mortgage Association 1993-129 D 6.10% due 6/25/2005 104 103,657
Federal Home Loan Mortgage Corp. 1995 EM 6 3/8% due 8/15/2011 148 148,540
Federal Home Loan Mortgage Corp. 1404 C 6.40% due 2/15/2005 188 187,539
Federal Home Loan Mortgage Corp. 43 PD 6 1/2% due 4/17/2010 123 123,068
Federal National Mortgage Association 1993-10 PE 6 1/2% due 10/25/2004 138 137,882
Federal Home Loan Mortgage Corp. 1533 A 6 1/2% due 4/15/2020 149 149,315
Federal National Mortgage Association 1993-187 SE 6.65159% due 11/25/2016 99 97,079
Total 7,431,887
=========
Total Investments (Cost $17, 549,763) 17,432,241
==========
Other Assets, Less Liabilities (14.46)%
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Investments FNMA Discount Note 4.72% due 6/1/1999 (Cost $805,000) 805 805,000
==========
Cash 116,302
==========
Receivable for: Securities sold 957,853
Interest 251,617
Capital stock sold 132,676
Total Other Assets 2,263,448
==========
Payable for: Securities purchased 4,381,348
Other 84,913
Total Liabilities 4,466,261
==========
Total Other Assets, Less Liabilities (2,202,813)
==========
Net Assets 100.00% $15,229,428
- ------------------
Class A Shares- Net asset value ($8,779,137/1,990,490 shares outstanding) $4.41
Maximum offering price (net asset value plus sales charge of 3.00% of the offering price) $4.55
Class C Shares- Net asset value ($6,450,291/1,466,441 shares outstanding) $4.40
See Notes to Financial Statements.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
BALANCED SERIES May 31, 1999
Shares or
Investments Principal Amount Value
----------- ---------------- -----
<S> <C> <C> <C>
Investments in Securities 99.36%
- -------------------------------------
Lord Abbett Affiliated Fund, Inc.- Class Y 2,907,135 $46,804,878
Lord Abbett Bond-Debenture Fund, Inc.- Class Y 3,827,721 35,406,416
Total (Cost $80,067,688) 82,211,294
===========
Other Assets, Less Liabilities .64%
- ---------------------------------------
Short-term Investment FNMA Discount Note 4.72% due 6/1/1999 (Cost $559,780) $560,000 559,780
===========
Cash and Receivables, Net of Liabilities (30,676)
===========
Total Other Assets, Less Liabilities 529,104
===========
Net Assets 100.00% $82,740,398
===========
Class A Shares- Net asset value ($61,398,320/4,960,008 shares outstanding) $12.38
Maximum offering price (net asset value plus sales charge of 5.75% of the offering price) $13.14
Class B Shares- Net asset value ($10,343,816/837,114 shares outstanding) $12.36
Class C Shares- Net asset value ($10,998,262/889,550 shares outstanding) $12.36
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
HIGH YIELD FUND May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
Investments in Securities 97. 44%
- ---------------------------------
High-Yield Corporate Debt 96.85%
- --------------------------------
<S> <C> <C> <C>
Air Transportation 2.12% America West Airlines Inc. 10 3/4/2005 $450 $ 474,750
=============
Automotive 9.38% Accuride Corp. 9 1/4/2008 485 487,425
Blue Bird Body Company 10 3/4/2006 190 202,350
Collins & Aikman Products Co. 11 1/2/2006 500 512,500
Diamond Triumph Auto 9 1/4/2008 + 250 246,250
Dura Operating Corp. 9/2009 + 450 445,500
LDM Technologies Inc. 10 3/4/2007 200 207,000
Total 2,101,025
=============
Broadcasting 9.88% Allbritton Communications Co. 9 3/4/2007 455 470,925
Chancellor Media Corp. 10 1/2/2007 75 82,031
Fox/Liberty Networks LLC Zero coupon due 2007+ 485 390,425
Grupo Televisa, S. A. 11 7/8/2006 (F) 240 246,000
Interep National Radio Sales Inc. 10/2008 250 258,125
Sinclair Broadcasting Group Inc. 10/2005 600 618,000
TV Azteca SA 10 1/2/2007 200 147,000
Total 2,212,506
=============
Building Materials 2.07% Euramax International plc 11 1/4/2006 (F) 200 209,000
Nortek Inc. 9 1/8/2007 250 253,750
Total 462,750
=============
Cable 9.69% Bresnan Communications Group Zero coupon due 2009+ + 500 332,500
Century Communications 8 3/8/2007 55 56,375
Charter Communications Holdings Zero coupon due 2011+ + 500 311,250
Frontiervision LP Zero coupon due 2007+ + 500 436,250
NTL Inc. Zero coupon due 2008+ + 500 333,750
NTL Inc. 10/2007 355 370,975
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
HIGH YIELD FUND May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
<S> <C> <C> <C>
Telewest plc Zero coupon due 2009* + (F) $500 $ 327,500
Total 2,168,600
============
Capital Goods 1.10% Scotsman Group Inc. 8 5/8/2007 250 246,250
============
Chemicals 3.36% Huntsman Corp. 9 1/2/2007 + 250 243,750
Lyondell Chemical Co. 9 5/82007 + 500 508,750
Total 752,500
============
Consumer Products 2.00% Chattem Inc. 8 7/8/2008 290 290,000
Riddell Sports Inc. 10 1/2/2007 175 158,375
Total 448,375
============
Container 1.64% Portola Packaging Inc. 10 3/4/2005 100 103,500
US Can Corp. 10 1/8/2006 250 263,750
Total 367,250
============
Energy 2.80% Metro Gas, S. A. 12/2000 (F) 100 101,750
Ocean Energy Inc. 9 3/4/2006 500 525,000
Total 626,750
============
Entertainment .71% Regal Cinemas Inc. 9 1/2/2008 165 157,987
============
Food/Beverage 2.18% Aurora Foods Inc. 10 3/4/2005 350 368,375
Purina Mills Inc. 9/2010 150 119,250
Total 487,625
============
Healthcare 1.52% Integrated Health Services Inc. 10 1/4/2006 150 108,750
Leiner Health Products Inc. 9 5/8/2007 225 231,406
Total 340,156
============
Homebuilders 1.20% D. R. Horton Inc. 10/2006 250 268,125
============
Hotel/Gaming 4.03% Aztar Corp. 8 7/8/2007 + 250 240,625
Host Marriott Travel Plazas Inc. 9 1/2/2005 235 245,575
Isle of Capri Casinos Inc. 8 3/4/2009 + 250 236,250
Trump Atlantic City Funding Inc. 11 1/4/2006 + 200 181,000
Total 903,450
============
Media/Diversified 2.28% Ackerly Group Inc. 9/2009 500 510,000
============
Miscellaneous 1.51% Prime Succession Inc. 10 3/4/2004 100 73,500
Republic of Argentina 11 3/8/2017 (F) 300 265,500
Total 339,000
============
Paper 4.26% Crown Paper Co. 11/2005 200 141,000
Packaging Corp. 9 5/8/2009 + 500 511,250
Tembec Industries Inc. 8 5/8/2009 300 302,250
Total 954,500
============
Printing and Publishing 1.26% R. H. Donnelly Inc. 9 1/8/2008 275 281,875
============
Services 2.82% Iron Mountain Inc. 10 1/8/2006 225 244,969
Pierce Leahy Corp. 9 1/8/2007 197 205,865
Unicco Service Co. 9 7/8/2007 185 180,375
Total 631,209
============
Specialty Retailing .79% Amazon. Com Inc. Zero coupon due 2008* 250 176,250
============
Steel 1.15% WCI Steel Inc. 10/2004 250 258,750
============
Technology 4.50% BE Aerospace Inc. 9 7/8/2006 + 250 258,750
Fisher Scientific International Inc. 9/2008 250 243,125
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
HIGH YIELD FUND May 31, 1999
Principal
Amount
Investments (000) Value
----------- ----- -----
<S> <C> <C> <C>
Level 3 Communications, Inc. 10 3/8/2007 $350 $ 372,750
Viasystems Inc. 9 3/4/2007 150 132,000
Total 1,006,625
==============
Telecommunications 21.65% Call-Net Enterprises Inc. Zero coupon due 2008* 200 112,000
Cencall Communications Corp. 10 1/8/2004* 220 227,700
Clearnet Communications Zero coupon due 2009* 500 266,250
Esprit Telecom Group plc 10 7/8/2008 (F) 300 322,500
GST USA Inc. Zero coupon due 2005* 230 185,150
Intermedia Communications Inc. Zero coupon due 2007* 250 181,875
Intermedia Communications Inc. Zero coupon due 2009 + 200 116,000
Iridium LLC 14/2005 150 36,000
ICG Holdings Inc. Zero coupon due 2005 595 533,477
Logix Communications Enterprises Inc. 12 1/4/2008 250 235,625
McLeod USA Inc. Zero coupon due 2007* 250 191,250
Nextel Communications Inc. Zero Coupon Due 2008* 500 337,500
Nextlink Communications Inc. Zero coupon due 2009* 400 222,000
Nextlink Communications Inc. 10 3/4/2008 + 300 301,500
Rogers Cantel Inc. 8.3/2007 (F) 250 256,875
RSL Communications plc 12/2008 (F) 300 316,500
SBA Communications Corp. Zero coupon due 2008* 250 156,250
Telefonica De Argentina 9 1/8/2008 + (F) 100 91,000
Viatel Inc. 11 1/4/2008 (F) 500 507,500
Western Wireless Corp. 10 1/2/2006 230 249,550
Total 4,846,502
==============
Textile .83% GFSI, Inc. 9 5/8/2007 + 210 185,850
==============
Utility 1.11% AEI Holding Inc. 10 1/2/2005 250 248,750
==============
Waste Management 1.01% Allied Waste North America Inc. 7 7/8/2009 240 226,800
==============
Total Investments in High-Yield Corporate Debt (Cost $22, 132,255) 21,684,210
==============
Convertible Debt .59%
- ------------------------------------------------------------------------------------------------------------------------------------
Oil .59% Parker Drilling Co. Conv. 5 1/2/2004 (Cost $124, 126) 200 132,750
Total Investments in Securities (Cost $22, 256,381) 21,816,960
Other Assets, Less Liabilities 2.56%
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 89,718
==============
Receivable for: Securities sold 2,741,315
Capital stock sold 481,789
Interest 388,620
Other 15,564
Total Other Assets 3,717,006
==============
Payable for: Securities purchased 3,122,133
Capital stock reacquired 22,365
Total Liabilities 3,144,498
==============
Total Other Assets, Less Liabilities 572,508
==============
Net Assets 100.00% $22,389,468
==============
</TABLE>
12
<PAGE>
Statement of Net Assets
HIGH YIELD FUND May 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Class A Shares- Net asset value ($ 11,552,701/ 1,154,795 shares outstanding) $10.00
Maximum offering price (net asset value plus sales charge of 4.75% of the offering price) $10.50
Class B Shares- Net asset value ($ 5,733,790/ 574,594 shares outstanding) $9.98
Class C Shares- Net asset value ($ 5,102,004/ 510,894 shares outstanding) $9.99
Class Y Shares- Net asset value ($ 973/ 97. 278 shares outstanding) $10.00
</TABLE>
* Deferred interest debentures pay no interest for a stipulated number of
years, after which they pay a predetermined coupon rate.
+ Restricted security under Rule 144A.
(F) Foreign security. See Notes to Financial Statements.
Statements of Operations
<TABLE>
<CAPTION>
12/31/98*
through
Six Months Ended May 31, 1999 5/31/99
--------------------------------------------- -----------
Limited Duration
U. S. Government U. S. Government Balanced High Yield
Investment Income Securities Series Securities Series Series Fund
- ----------------- -------------------------------------------------- -----------
<S> <C> <C> <C> <C>
Income Dividends $ - $ - $1,633,708 $ -
Interest 53,495,323 429,294 2,780 498,704
Total income 53,495,323 429,294 1,636,488 498,704
-------------------------------------------------- -----------
Expenses Management fee 4,598,042 33,869 265,821 33,950
Management fee waived - (33,869) (265,821) (33,950)
12b-1 distribution plan- Class A 2,377,275 - 29,554 9,096
12b-1 distribution plan- Class B 155,397 - 39,156 13,169
12b-1 distribution plan- Class C 711,985 26,728 45,845 11,594
Shareholder servicing 1,259,113 9,870 62,907 3,220
Reports to shareholders 175,349 1,807 7,040 403
Professional 104,297 9,205 14,644 4,503
Trustees' fees 43,371 170 856 104
Registration 39,395 14,625 22,770 12,210
Organization - - 3,807 -
Other 82,652 2,213 1,971 472
Total expenses before reductions and reimbursements 9,546,876 64,618 228,550 54,771
-------------------------------------------------- -----------
Expenses assumed by Lord Abbett - (14,625) - (20,912)
Expenses assumed by other Underlying Funds - - (112,742) -
Expense reductions (197,799) (283) (1,253) -
-------------------------------------------------- -----------
Net expenses 9,349,077 49,710 114,555 33,859
Net investment income 44,146,246 379,584 1,521,933 464,845
-------------------------------------------------- -----------
Realized and Unrealized Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment transactions (783,274) (898) 11,816 79,880
-------- ---- ------ ------
Net change in unrealized appreciation of investments (61,664,923) (212,386) 3,721,163 (439,421)
----------- -------- --------- --------
Net realized and unrealized gain (loss) on investments (62,448,197) (213,284) 3,732,979 (359,541)
----------- -------- --------- --------
Net Increase (Decrease) in Net Assets Resulting from Operations $(18,301,951) $ 166,300 $5,254,912 $ 105,304
============ =========== ========== ===========
</TABLE>
*Commencement of operations.
See Notes to Financial Statements.
13
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
12/31/98*
through
Six Months Ended May 31, 1999 5/31/99 Year Ended November 30, 1998
------------------------------ ---------- --------------------------------------------
Limited Limited
U. S. Duration U. S. Duration
Government Government High Government Government
Increase (Decrease) Securities Securities Balanced Yield Securities Securities Balanced
in Net Assets Series Series Series Fund Series Series Series
- ------------- ------ ------ ------ ---- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 44,146,246 $379,584 $ 1,521,933 $464,845 $ 128,422,834 $ 523,900 $1,369,504
Capital gain received
from Underlying Funds -- -- -- -- -- -- 2,155,289
Net realized gain (loss)
from investment transactions (783,274) (898) 11,816 79,880 42,447,914 39,648 3,090,748
Net change in unrealized
appreciation of investments (61,664,923) (212,386) 3,721,163 (439,421) 4,102,771 60,289 (3,714,929)
Net increase (decrease)
in net assets resulting
from operations (18,301,951) 166,300 5,254,912 105,304 174,973,519 623,837 2,900,612
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Dividends to shareholders
from net investment income:
Class A (50,416,169) (212,068) (1,176,424) (244,671) (121,519,231) (292,470) (1,149,118)
Class B (852,444) -- (136,991) (112,165) (1,432,091) -- (35,604)
Class C (4,110,865) (117,091) (161,450) (102,793) (9,773,665) (192,017) (156,346)
Class Y -- -- -- (8) -- -- --
Total (55,379,478) (329,159) (1,474,865) (459,637) (132,724,987) (484,487) (1,341,068)
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Distributions to shareholders
from net realized gain from i
nvestment transactions:
Class A -- -- (4,050,955) -- -- -- (482,408)
Class B -- -- (489,279) -- -- -- --
Class C -- -- (712,936) -- -- -- (88,565)
Total -- -- (5,253,170) -- -- -- (570,973)
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Total dividends and
distributions (55,379,478) (329,159) (6,728,035) (459,637) (132,724,987) (484,487) (1,912,041)
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Capital share transactions:
Net proceeds from sales
of shares 92,325,214 8,132,849 25,634,515 24,423,834 122,718,704 9,901,812 40,507,038
Net asset value of shares
issued in reinvestments of
dividends and distributions 32,444,646 214,313 6,509,163 347,559 68,148,560 324,512 1,728,386
Total 124,769,860 8,347,162 32,143,678 24,771,393 190,867,264 10,226,324 42,235,424
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Cost of shares reacquired (245,045,814) (3,954,680) (5,604,861) (2,027,592) (617,123,489) (9,642,090) (5,889,716)
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Increase (decrease) in net
assets derived from capital
share transactions (120,275,954) 4,392,482 26,538,817 22,743,801 (426,256,225) 584,234 36,345,708
Increase (decrease) in
net assets (193,957,383) 4,229,623 25,065,694 22,389,468 (384,007,693) 723,584 37,334,279
- ------------------------------------------------------------------------- ----------- -------------------------------------------
Net Assets
Beginning of period 1,902,404,254 10,999,805 57,674,704 -- 2,286,411,947 10,276,221 20,340,425
- ------------------------------------------------------------------------- ----------- -------------------------------------------
End of period + $ 1,708,446,871 $15,229,428 $82,740,398 $22,389,468 $1,902,404,254 $10,999,805 $57,674,704
========================================================================= ============ ===========================================
</TABLE>
* Commencement of operations.
+ Including undistributed (overdistributed) net investment income of
$(13,625,152), $102,345, $87,123 and $5,208, respectively, as of May 31,
1999 and $(2,391,920), $51,920 and $40,055, respectively, as of November
30, 1998.
See Notes to Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
U. S. GOVERNMENT SECURITIES SERIES
Class A Shares
--------------
Six Months Ended
May 31, Year Ended November 30,
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $2.64 $2.59 $2.63 $2.73 $2.59 $3.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .06 (d) .17 (d) .20 (d) .215 .235 .247
Net realized and unrealized gain
(loss) on investments (.08) .05 (.03) (.105) .136 (.3685)
Total from investment operations (.02) .22 .17 .11 .371 (.1215)
----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.08) (.17) (.21) (.210) (.231) (.246)
Distribution from net realized gain - - - - - (.0425)
Total distributions (.08) (.17) (.21) (.210) (.231) (.2885)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.54 $2.64 $2.59 $2.63 $2.73 $2.59
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (b) (0.74)% (c) 8.86% 6.67% 4.41% 14.89% (4.24)%
====================================================================================================================================
Ratios to Average Net Assets:
Expenses 0.49%(c)(e) 0.96% (e) 0.92% (e) 0.88% 0.90% 0.90%
Net investment income 2.46%(c) 6.36% 7.82% 8.12% 8.85% 8.92%
==================================================================================================================================
Class B Shares Class C Shares
-------------- --------------
Six Months Year Six Months Year
Ended Ended Ended Ended
May 31, November 30, 8/1/96(a) May 31, November 30, 7/15/96(a)
Per Share Operating Performance: 1999 1998 1997 to 11/30/96 1999 1998 1997 to 11/30/96
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $2.64 $2.58 $2.63 $2.57 $2.65 $2.59 $2.63 $2.55
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .05(d) .14(d) .18(d) .063 .06(d) .15 (d) .18(d) .066
Net realized and unrealized gain
(loss) on investments (.08) .07 (.04) .060 (.10) .06 (.03) .085
Total from investment operations (.03) .21 .14 .123 (.04) .21 .15 .151
==================================================================================================================================
Distributions
Dividends from net investment income (.07) (.15) (.19) (.063) (.07) (.15) (.19) (.071)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.54 $2.64 $2.58 $2.63 $2.54 $2.65 $2.59 $2.63
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (b) (1.10)%(c) 8.49% 5.47% 5.45% (c) (1.47)%(c) 8.47% 5.86% 6.49%(c)
====================================================================================================================================
Ratios to Average Net Assets:
Expenses 0.84% (c)(e) 1.66% (e) 1.64% (e) 0.48% (c) 0.81% (c)(e) 1.62% (e) 1.55% (e) 0.60%(c)
Net investment income 2.10% (c) 5.36% 6.77% 2.21% (c) 2.13% (c) 5.69% 7.25% 2.60%(c)
==================================================================================================================================
Six Months
May 31, Year Ended November 30,
Supplemental Data for All Classes: 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $1,708,447 $1,902,404 $2,286,412 $2,907,291 $3,272,865 $3,232,012
Portfolio turnover rate 160.21% 399.64% 712.82% 820.59% 544.31% 790.57%
====================================================================================================================================
(a)Commencement of offering respective class shares.
(b)Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.
(c)Not annualized.
(d)Calculated using average shares outstanding during the period.
(e)The ratio includes expenses paid through an expense offset arrangement.
See Notes to Financial Statements.
</TABLE>
15
<PAGE>
Financial Highlights
LIMITED DURATION SERIES
<TABLE>
<CAPTION>
Class A Shares
Six Months Year One
Ended Ended Month
May 31, November 30, Ended Year Ended 11/4/93(a)
Per Share Operating Performance: 1999 1998 1997 11/30/96 10/31/96 10/31/95 to 10/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.46 $4.40 $4.42 $4.39 $4.53 $4.44 $4.85
Income from investment operations
Net investment income .13(e) .26(e) .25(e) .0174 .1912 .2316 .2650
Net realized and unrealized gain (loss) (.06) .04 (.02) .0333 (.0751) .1017 (.4123)
on investments
Total from investment operations .07 .30 .23 .0507 .1161 .3333 (.1473)
======= ======= ===== ======= ===== ===== ==========
Distributions
Dividends from net investment income (.12) (.24) (.25) (.0207) (.2561) (.2433) (.2627)
Net asset value, end of period $4.41 $4.46 $4.40 $4.42 $4.39 $4.53 $4.44
Total Return(b) 1.59%(c) 7.06%(c) 5.46% 1.15%(c) 2.67% 8.16% (3.09)%(c)
======= ======= ===== ======= ===== ===== ==========
Ratios to Average Net Assets:
Expenses, including waiver and 0.18%(c)(f) 0.47%(f) 0.51%(f) 0.11%(c) 1.81% 1.40% 0.89%(c)
reimbursement
Expenses, excluding waiver and 0.54%(c)(f) 1.38%(f) 1.40%(f) 0.13%(c) 2.73% 1.71% 0.89%(c)
reimbursement
Net investment income 2.99%(c) 5.86% 5.81% 0.41%(c) 4.58% 5.62% 5.61%(c)
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
Six Months Ended Year Ended One Month
May 31, November 30, Ended 7/15/96(d)
Per Share Operating Performance: 1999 1998 1997 11/30/96 to 10/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.47 $4.40 $4.42 $4.39 $4.34
Income from investment operations
Net investment income .11(e) .22(e) .21(e) .0138 .0667
Net realized and unrealized gain (loss) on investmen (.08) .05 (.02) .0342 .0515
Total from investment operations .03 .27 .19 .0480 .1182
======= ===== ===== ======= ========
Distributions
Dividends from net investment income (.10) (.20) (.21) (.0180) (.0682)
Net asset value, end of period $4.40 $4.47 $4.40 $4.42 $4.39
Total Return(b) 0.63%(c) 6.23% 4.45% 1.09%(c) 2.98%(c)
======= ===== ===== ======= ========
Ratios to Average Net Assets:
Expenses, including waiver and reimbursement 0.64%(c)(f) 1.35%(f) 1.44%(f) 0.19%(c) 0.69%(c)
Expenses, excluding waiver and reimbursement 1.00%(c)(f) 2.26%(f) 2.32%(f) 0.21%(c) 0.77%(c)
Net investment income 2.53%(c) 4.94% 4.84% 0.33%(c) 1.26%(c)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended One
May 31, November 30, Month Ended Year Ended Year Ended 11/4/93(a)
Supplemental Data for All Classes: 1999 1998 1997 11/30/96 10/31/96 10/31/95 to 10/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period(000) $15,229 $11,000 $10,276 $12,696 $12,735 $8,922 $10,256
Portfolio turnover rate 141.12% 266.46% 343.53% 175.98% 340.62% 222.00% 895.63%
</TABLE>
(a) Commencement of operations.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering respective class shares.
(e) Calculated using average shares outstanding during the period.
(f) The ratio includes expenses paid through an expense offset arrangement. See
Notes to Financial Statements.
16
<PAGE>
Financial Highlights
BALANCED SERIES
<TABLE>
<CAPTION>
Class A Shares
Six Months Ended Year Ended One Month
May 31, November 30, Ended Year Ended 12/27/94(a)
Per Share Operating Performance: 1999 1998 1997 11/30/96 10/31/96 to 10/31/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.87 $12.80 $11.81 $11.30 $10.71 $ 9.52
Income from investment operations
Net investment income .27(e) .54(e) .47(e) .0312 .472 .365
Net realized and unrealized gain on investments .66 .40 1.15 .5208 .732 1.185
Total from investment operations .93 .94 1.62 .552 1.204 1.55
======= ===== ====== ===== ====== =========
Distributions
Dividends from net investment income (.28) (.52) (.46) (.0420) (.462) (.36)
Distributions from net realized gain (1.14) (.35) (.17) - (.152) -
Total distributions (1.42) (.87) (.63) (.0420) (.614) (.36)
======= ===== ====== ===== ====== =========
Net asset value, end of period $12.38 $12.87 $12.80 $11.81 $11.30 $10.71
Total Return (b) 8.00%(c) 7.69% 14.24% 4.89%(c) 11.55% 16.32%(c)
======= ===== ====== ===== ====== =========
Ratios to Average Net Assets:
Expenses, including waiver and reimbursement 0.06%(c)(f) 0.27%(f) 1.10%(f) 0.07%(c) 0.93% 0.37%(c)
Expenses, excluding waiver and reimbursement
from Lord Abbett 0.44%(c(f) 0.92%(f) 1.53%(f) 0.11%(c) 1.59% 1.26%(c)
Net investment income 2.26%(c) 4.28% 3.89% 0.26%(c) 4.18% 4.39%(c)
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Class C Shares
Six Months Six Months Ended Year Ended One Month
Ended May 31, 5/1/98(d) May 31, November 30, Ended 7/15/96(d)
Per Share Operating Performance: 1999 to 11/30/98 1999 1998 1997 11/30/96 to 10/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.86 $13.14 $12.85 $12.78 $11.79 $11.29 $10.73
Income from investment operations
Net investment income .22(e) .25(e) .22(e) .41(e) .35(e) .0067 .0349
Net realized and unrealized gain (loss)
on investments .63 (.28) .64 .40 1.15 .5298 .6346
Total from investment operations .85 (.03) .86 .81 1.50 .5365 .6695
======= ========= ======= ===== ====== ======== ========
Distributions
Dividends from net investment income (.21) (.25) (.21) (.39) (.34) (.0365) (.0730)
Distributions from net realized gain (1.14) - (1.14) (.35) (.17) - (.0365)
Total distributions (1.35) (.25) (1.35) (.74) (.51) (.0365) (.1095)
======= ========= ======= ===== ====== ======== ========
Net asset value, end of period $12.36 $12.86 $12.36 $12.85 $12.78 $11.79 $11.29
Total Return (b) 7.39%(c) (0.16)%(c) 7.47%(c) 6.62% 13.14% 4.76%(c) 7.78%(c)
======= ========= ======= ===== ====== ======== ========
Ratios to Average Net Assets:
Expenses, including waiver and reimbursement 0.50%(c)(f) 0.61%(c)(f) 0.50%(c)(f) 1.26%(f) 2.08%(f) 0.16%(c) 0.62%(c)
Expenses, excluding waiver and reimbursement
from Lord Abbett 0.88%(c)(f) 1.26%(c)(f) 0.88%(c)(f) 1.91%(f) 2.51%(f) 0.20%(c) 0.77%(c)
Net investment income 1.81%(c) 1.98%(c) 1.82%(c) 3.24% 2.88% 0.17%(c) 0.70%(c)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended One
May 31, November 30, Month Ended Year Ended 12/27/94(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Supplemental Data for All Classes: 1999 1998 1997 11/30/96 10/31/96 to 10/31/95
Net assets, end of period (000) $82,740 $57,675 $20,340 $11,406 $10,988 $5,713
Portfolio turnover rate 0.43% 131.36% 216.07% 10.05% 187.78% 131.80%
</TABLE>
(a)Commencement of operations.
(b)Total return does not consider the effects of sales loads and assumes
the reinvestment of all distributions.
(c)Not annualized.
(d)Commencement of offering respective class shares.
(e)Calculated using average shares outstanding during the period.
(f)The ratio includes expenses paid through an expense offset arrangement. See
Notes to Financial Statements.
17
<PAGE>
Financial Highlights
HIGH YIELD FUND
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Class Y Shares
-------------- -------------- -------------- --------------
12/31/98 (a) 12/31/98 (a) 12/31/98 (a) 5/4/99 (d)
Per Share Operating Performance: to 5/31/99 to 5/31/99 to 5/31/99 to 5/31/99
- ----------------------------------------------------------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.08 $10.08 $10.08 $10.36
- ----------------------------------------------------------------------- ------------------ ------------------- ------------------
Income from investment operations
Net investment income (e) .43 .40 .40 .06
Net realized and unrealized loss on investments (.12) (.14) (.13) (.42)
Total from investment operations .31 .26 .27 (.36)
----------------------------------------------------------------- ------------------ ------------------- ------------------
Distributions
Dividends from net investment income (.39) (.36) (.36) -
----------------------------------------------------------------- ------------------ ------------------- ------------------
Net asset value, end of period $10.00 $9.98 $ 9.99 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (b) (c) 3.04% 2.58% 2.58% (3.47)%
====================================================================================================================================
Ratios to Average Net Assets (c) :
Expenses, including waiver and reimbursement 0.15%(c) 0.46% (c) 0.46%(c) 0.00%(c)
Expenses, excluding waiver and reimbursement 0.63%(c) 0.94% (c) 0.94%(c) 0.07%
Net investment income 4.25% 3.92% 3.98% .56%(c)
------------------------------------------------------------------------------------------------------------------------------
12/31/98(a)
Supplemental Data for All Classes: to 5/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $22,389
Portfolio turnover rate 94.92%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a)Commencement of operations.
(b)Total return does not consider the effects of sales loads and assumes
the reinvestment of all distributions.
(c)Not annualized.
(d)Commencement of offering respective class shares.
(e)Calculated using average shares outstanding during the period.
See Notes to Financial Statements.
18
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Investment Trust (the "Trust") is an open-end management investment
company organized as a Delaware business trust on August 16, 1993. The Trust
consists of six separate portfolios. This report covers four of the portfolios
(" Series") -Lord Abbett U. S. Government Securities Series (" U. S. Government
Series"), Lord Abbett Limited Duration U. S. Government Securities Series ("
Limited Duration Series"), Lord Abbett Balanced Series (" Balanced Series") and
Lord Abbett High Yield Fund (" High Yield Fund"). Effective March 31, 1998, the
Balanced Series structure was changed from investing directly in portfolio
securities to investing in other funds managed by Lord Abbett (" Underlying
Funds"). Effective December 1, 1998, the High Yield Fund was added and the Trust
received a capital contribution of $1,000,000 and issued 100,000 shares to Lord,
Abbett & Co. (" Lord Abbett"). Each Series is diversified as defined under the
Investment Company Act of 1940. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Trust:
(a) Securities are valued as follows: Portfolio securities listed or admitted to
trading privileges on any securities exchange are valued at the last sales price
on the exchange on which such securities are traded as of the close of business
on the day the securities are being valued or, lacking any sales, at the latest
price on the basis of current quotations from dealers (as in the case of bonds),
from valuations furnished by an independent pricing service or, in their
absence, fair value as determined under procedures approved by the Board of
Trustees. 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
if it is determined that such price more accurately reflects the value of such
securities. Investments in the Underlying Funds are valued at the closing net
asset value per share of each Underlying Fund on the day of valuation. Shortterm
securities maturing in 60 days or less are valued at amortized cost which
approximates market value.
(b) It is the policy of the Trust to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income. Therefore, no federal income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are determined on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Net investment income (other than
distribution and service fees) and realized and unrealized gains or losses are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day. Discounts on strips are accrued to maturity
using the constant yield method. The Trust has elected not to amortize premiums
on U. S. Government bonds, which is consistent with the treatment for federal
income tax purposes.
(d) The organization expenses of Balanced Series are amortized evenly over a
period of five years from its respective commencement date of operations.
2. Management Fee and Other Transactions with Affiliates
The Trust has a management agreement with Lord Abbett pursuant to which Lord
Abbett supplies the Trust with investment management, research, statistical and
advisory services and pays officers' remuneration and certain other expenses of
the Trust. The management fee is based on average daily net assets for each
month at the annual rate of 0.50% for U. S. Government Series and Limited
Duration Series, 0.75% for Balanced Series and 0.60% for High Yield Fund. The
management fee for U. S. Government Series is reduced to 0.45% for average daily
net assets in excess of $3 billion. Lord Abbett waived its management fee for
Limited Duration Series, Balanced Series and High Yield Fund during the six
months ended May 31, 1999.
Each Series of the Trust has Rule 12b-1 plans and agreements with respect to one
or more classes of shares as described below (the "Class A, Class B and Class C
Plans") with Lord Abbett Distributor LLC (" Distributor"), an affiliate of Lord
Abbett. Each Series makes payments to Distributor which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, the Series
pay Distributor (1) an annual service fee of (a) 0.15% of the average daily net
asset value of shares sold prior to September 1, 1985 and 0.25% of the average
daily net asset value of shares sold on or after that date for U. S. Government
Series and (b) 0.25% of the average daily net asset value of Class A shares of
Limited Duration Series, Balanced Series and High Yield Fund, (2) a one-time
distribution fee of up to 1% on certain qualifying purchases and (3) an annual
distribution fee of 0.10% of the average daily net asset value of Class A
shares. The Class A Plan of Limited Duration Series will not become operative
until the first day of the calendar quarter subsequent to the Series' net assets
reaching $100 million. Pursuant to the Class B Plan of U. S. Government Series,
Balanced Series and High Yield Fund and the Class C Plan of High Yield Fund,
each Series pays Distributor an annual service and distribution fee of 0.25% and
0.75%, respectively, of the average daily net asset value of the shares
outstanding for the class. Pursuant to the Class C Plan of U. S. Government,
Limited Duration and Balanced Series, each Series pays Distributor (1) a service
fee and a distribution fee, at the time such shares are sold, not to exceed
0.25% and 0.75%, respectively, of the net asset value of such shares sold and
(2) at each quarter-end after the first anniversary of the sale of such shares,
a service fee and a distribution fee at an annual rate not to exceed 0.25% and
0.75%, respectively, of the average annual net asset value of such shares
outstanding. Class Y does not have a Rule 12b-1 Plan.
The Balanced Series has entered into a Servicing Arrangement with each
Underlying Fund pursuant to which each Underlying Fund will pay a portion of the
expenses (excluding management fee, distribution and service fees) of the
Balanced Series in proportion to the average daily value of shares owned by the
Balanced Series to the extent each Underlying Fund benefits.
Distributor received the following commissions on sales of shares of the Trust
after concessions were paid to authorized dealers:
Distributor Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
U. S. Government Series- Class A $58,103 $403,975
- --------------------------------------------------------------------------------
Limited Duration Series- Class A $ 6,496 $ 46,582
- --------------------------------------------------------------------------------
Balanced Series- Class A $64,847 $410,892
- --------------------------------------------------------------------------------
High Yield Fund- Class A $31,594 $235,669
- --------------------------------------------------------------------------------
3. Distributions
Dividends from net investment income are declared daily and paid monthly with
respect to U. S. Government Series and Limited Duration Series and declared
quarterly and paid monthly with respect to Balanced Series and High Yield Fund.
Taxable net realized gains from investment transactions
19
<PAGE>
Notes to Financial Statements
in excess of any capital loss carryforward are distributed to shareholders
annually. At May 31, 1999, accumulated net realized gain (loss) for financial
reporting purposes aggregated $(573,403,249), $(1,691,159), $(7,710) and $79,880
for U. S. Government Series, Limited Duration Series, Balanced Series, and High
Yield Fund, respectively. The capital loss carryforwards for U. S. Government
Series and Limited Duration Series (which are substantially the same as the
accumulated net realized loss) expire in 2001, 2002, 2003, 2004 and 2005.
Income and capital gains distributions are determined in accordance with income
tax regulations which may differ from methods used to determine the
corresponding income and capital gain amounts in accordance with generally
accepted accounting principles.
Dividends declared on June 23, 1999 and payable on July 14, 1999 to shareholders
of record as of July 6, 1999 were as follows:
Rate Aggregate
Dividends Per Share Amount
- --------------------------------------------------------------------------------
Balanced Series- Class A $. 0430 $223,605
- --------------------------------------------------------------------------------
Balanced Series- Class B $. 0365 $ 32,194
- --------------------------------------------------------------------------------
Balanced Series- Class C $. 0365 $ 35,658
- --------------------------------------------------------------------------------
High Yield Fund- Class A $ .077 $ 99,778
- --------------------------------------------------------------------------------
High Yield Fund- Class B $ .072 $ 47,133
- --------------------------------------------------------------------------------
High Yield Fund- Class C $ .072 $ 39,260
- --------------------------------------------------------------------------------
High Yield Fund- Class Y $ .080 $ 9
- --------------------------------------------------------------------------------
4. Capital
Transactions in shares of beneficial interest (both shares and dollar amounts)
were as follows:
<TABLE>
<CAPTION>
December 31, 1998*
Six Months Ended May 31, 1999 to May 31, 1999
----------------------------- ---------------
U. S. Government Series Limited Duration Series Balanced Series High Yield Fund
Class A Shares Amount Shares Amount Shares Amount Shares Amount
- --------------------------------------------------------- -------------------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 29,771,335 $ 77,347,324 1,312,872 $5,840,407 1,392,244 $16,946,924 1,259,229 $12,796,482
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 11,359,201 29,598,171 31,435 139,490 433,222 5,084,893 21,138 214,621
Total 41,130,536 106,945,495 1,344,307 5,979,897 1,825,466 22,031,817 1,280,367 13,011,103
- --------------------------------------------------------- -------------------------- --------------------- ----------------------
Shares reacquired (83,152,054) (215,594,265) (632,554) (2,808,320) (337,301) (4,098,425) (125,572) (1,270,468)
Increase (decrease) (42,021,518)$(108,648,770) 711,753 $3,171,577)1,488,165 $17,933,392) 1,154,795 $11,740,635
- --------------------------------------------------------- -------------------------- --------------------- ----------------------
Year Ended November 30, 1998
----------------------------
U. S. Government Series Limited Duration Series Balanced Series
Class A Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------ ----------------------
Sales of shares 31,799,161$ 83,299,155 1,524,406 $ 6,744,941 2,402,438 $30,136,303
Shares issued to shareholders in
reinvestment of dividends and distributions 23,996,526 62,543,335 47,643 210,812 117,883 1,467,499
Total 55,795,687 145,842,490 1,572,049 6,955,753 2,520,321 31,603,802
- ------------------------------------------------------------------------------------------------------------ ----------------------
Shares reacquired (212,324,614) (553,290,364) (1,392,054) (6,158,851) (388,736) (4,812,834)
Increase (decrease) (156,528,927)$(407,447,874) 179,995 $ 796,902) 2,131,585 $26,790,968
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1998*
Six Months Ended May 31, 1999 to May 31, 1999
----------------------------- ---------------
U. S. Government Series Balanced Series High Yield Fund
Class B Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------ ----------------------
Sales of shares 3,393,082 $ 8,845,517 430,456 $5,212,689 639,637 $6,484,625
Shares issued to shareholders in
reinvestment of dividends and distributions 184,775 480,886 49,875 585,156 7,188 73,029
Total 3,577,857 9,326,403 480,331 5,797,845 646,825 6,557,654
- ------------------------------------------------------------------------------------------------------------ ----------------------
Shares reacquired (2,283,715) (5,875,665) (40,084) (495,517) (72,231) (736,360)
Increase 1,294,142 $ 3,450,738) 440,247 $5,302,328) 574,594 $5,821,294
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended May 1, 1998**
November 30, 1998 to November 30, 1998
----------------- --------------------
U. S. Government Series Balanced Series
Class B Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------ ----------------------
Sales of shares 7,509,963 $ 19,690,555 410,635 $5,100,065
Shares issued to shareholders in
reinvestment of dividends 188,901 492,870 2,589 31,378
Total 7,698,864 20,183,425 413,224 5,131,443
- ------------------------------------------------------------------------------------------------------------ ----------------------
Shares reacquired (2,095,473) (5,468,912) (16,357) (192,344)
Increase 5,603,391 $14,714,513) 396,867 $4,939,099
- ------------------------------------------------------------------------------------------------------------ ----------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Notes to Financial Statements
December 31, 1998*
Six Months Ended May 31, 1999 to May 31, 1999
----------------------------- ---------------
U. S. Government Series Limited Duration Series Balanced Series High Yield Fund
Class C Shares Amount Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------- --------------------------- -------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares 2,352,186 $ 6,132,373 523,302 $ 2,292,442 286,609 $3,474,902 507,043 $5,141,727
Shares issued to
shareholders in
reinvestment of
dividends and
distributions 907,763 2,365,589 16,894 74,823 71,631 839,114 5,899 59,901
Total 3,259,949 8,497,962 540,196 2,367,265 358,240 4,314,016 512,942 5,201,628
- ----------------------------------------------------- --------------------------- -------------------------- --------------------
Shares reacquired (9,066,387) (23,575,884) (259,170) (1,146,360) (83,648) (1,010,919) (2,048) (20,764)
Increase (decrease) (5,806,438) $(15,077,922) 281,026 $ 1,220,905) 274,592 $3,303,097) 510,894 $5,180,864
- ----------------------------------------------------- --------------------------- -------------------------- --------------------
Year Ended November 30, 1998
----------------------------
U. S. Government Series Limited Duration Series Balanced Series
Class C Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------- ------------------------ -------------------------------
Sales of shares 7,523,887 $ 19,728,994 709,733 $ 3,156,871 417,362 $5,270,670
Shares issued to shareholders in
reinvestment of dividends and distributions 1,957,718 5,112,355 25,683 113,700 18,437 229,509
Total 9,481,605 24,841,349 735,416 3,270,571 435,799 5,500,179
- ------------------------------------------------------------------------- ------------------------- ------------------------------
Shares reacquired (22,360,867) (58,364,213) (785,920) (3,483,239) (70,625) (884,538)
Increase (decrease) (12,879,262) $(33,522,864) (50,504) $ (212,668) 365,174 $4,615,641
- ------------------------------------------------------------------------ -------------------------- ------------------------------
May 4, 1999**
to May 31, 1999
---------------
High Yield Fund
Class Y Shares Amount
- -------------------------------------------------------------------------------------------------------------- --------------------
Sales of shares 96 $1,000
Shares issued to shareholders in
reinvestment of dividends and distributions 1 8
Increase 97 $1,008
- -------------------------------------------------------------------------------------------------------------- --------------------
</TABLE>
There was issued no capital to shareholders stock activity in for Class P shares
during the period. *Commencement of operations. ** Commencement of offering
respective class shares.
At May 31, 1999, paid in capital aggregated $2,316,227,535 for U. S. Government
Series, $16,935,764 for Limited Duration Series, $80,517,379 for Balanced Series
and $22,743,801 for High Yield Fund.
5. Portfolio Securities
Purchases and sales of investment securities (other than short-term investments)
were as follows:
Series Purchases Sales
- --------------------------------------------------------------------------------
U. S. Government Series $3,582,397,944 $3,701,266,958
- --------------------------------------------------------------------------------
Limited Duration Series $ 29,007,148 $ 22,195,028
- --------------------------------------------------------------------------------
Balanced Series $ 21,680,207 $ 300,000
- --------------------------------------------------------------------------------
High Yield Fund $ 32,492,738 $ 10,397,192
- --------------------------------------------------------------------------------
As of May 31, 1999, net unrealized appreciation, unrealized appreciation and
unrealized depreciation of investments based on cost for federal income tax
purposes were as follows:
Net Unrealized
Appreciation Unrealized Unrealized
Series (Depreciation) Appreciation Depreciation
- --------------------------------------------------------------------------------
U. S. Government Series $(20,752,263) $3,496,121 $(24,248,384)
- --------------------------------------------------------------------------------
Limited Duration Series $ (117,522) $ 15,975 $ (133,497)
- --------------------------------------------------------------------------------
Balanced Series $ 2,143,606 $3,491,143 $ (1,347,537)
- --------------------------------------------------------------------------------
High Yield Fund $ (439,421) $ 126,616 $ (566,037)
- --------------------------------------------------------------------------------
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
The Trust may lend its securities to member banks of the Federal Reserve System
and to registered broker-dealers approved by the Trust. The loans are
collateralized at all times by cash and/or U. S. Treasury securities in an
amount at least equal to the market value of the securities loaned.
As of May 31, 1999, the value of securities loaned for U. S. Government Series
was $65,029,188. These loans were collateralized by cash of $66,189,407. Income
from securities lending of $50,969 is included in interest income on the
Statement of Operations. The dividend and interest income earned on the
securities loaned is accounted for in the same manner as other dividend and
interest income.
6. Trustees' Remuneration
The Trustees of the Trust associated with Lord Abbett and all officers o f the
Trust receive no compensation from the Trust for acting as such. Outside
Trustees' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on the net assets of each fund. Trustees' fees payable at May
31, 1999 under a deferred compensation plan, were $795,656.
7. Expense Reduction
The Trust has entered into an arrangement with its transfer agent whereby
credits realized as a result of uninvested cash balances were used to reduce a
portion of each Series' expenses.
Copyright (C) 1999 by Lord Abbett Investment Trust, 767 Fifth Avenue, New York,
NY 10153-0203
This publication, when not used for the general information of
shareholders of Lord Abbett Investment Trust, is to be distributed only if
preceded or accompanied by a current prospectus which includes information
concerning each Series' investment objective and policies, sales charges and
other matters. There is no guarantee that the forecasts contained within this
publication will come to pass.
All rights reserved. Printed in the U. S. A.
21
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
GROWTH
INCOME
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Developing Research Fund- Research Fund- Balanced Series** World Bond - National U.S. Government
Growth Fund Small-Cap Value Large-Cap Debenture Series California Securities Money
Series Series Global Fund- Connecticut Market Fund+ ++
Alpha Series* Growth & Income Series Florida
International Income Series High Yield Fund Georgia
Series Affiliated Fund Bond-Debenture Hawaii
Mid-Cap Fund Michigan
Value Fund Limited Duration Minnesota
Growth U.S. Government Missouri
Opportunities Securities Series+ New Jersey
Fund U.S. Government New York
Global Fund - Securities Series+ Pennsylvania
Equity Series Texas
Washington
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your investment professional provides value in helping you identify
and understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only
if preceded or accompanied by a current prospectus for the fund(s) covered
by this report.
For more complete information about any Lord Abbett fund, including risks,
charges and ongoing expenses, call your investment professional or Lord
Abbett Distributor LLC at 800-874-3733 for a prospectus. Read it carefully
before investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios
designed to meet a variety of investment needs.
Diversification. You and your investment professional can diversify your
investments between equity and income funds.
Flexibility. As your investment goals change, your investment professional
can help you reallocate your portfolio.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder Service Line: 800-865-7582
Visit Our Web Site: http://www.lordabbett.com
*Lord Abbett Securities Trust - Alpha Series is a fund of funds investing
in shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund
- SmallCap Value Series and Lord Abbett Securities Trust - International
Series.
** Lord Abbett Balanced Series is a fund of funds investing in shares of
certain other Lord Abbett funds.
+An investment in this Fund is neither insured nor guaranteed by the U. S.
Government.
++An investment in this Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed to
maintain and has maintained its stable $1.00 price per share.
[LOGO OMITTED]
Lord Abbett mutual fund shares are distributed by:
LORD ABBETT DISTRIBUTOR LLC
----------------------------------------------------------
The GM Building 767 Fifth Avenue New York, NY 10153-0203
LAIT-3-599
(7/99)
