<PAGE>
<PAGE>
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]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 23 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
Amendment No. 23 [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
Lawrence H. Kaplan, Vice President & Assistant 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)
---------
X on April 1, 1999 pursuant to paragraph (b)
---------
60 days after filing pursuant to paragraph (a)(1)
---------
on (date) pursuant to paragraph (a)(1)
---------
75 days after filing pursuant to paragraph (a)(2)
---------
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.
<PAGE>
<PAGE>
LORD
ABBETT
INVESTMENT TRUST
Balanced Series
PROSPECTUS
April 1, 1999
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete, and
it has not judged this fund for its investment merit. It is a criminal offense
to state otherwise.
Class P shares of the fund are neither offered to the general public nor
available in all states. Please call 800-821-5129 for further information.
<PAGE>
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
The Fund
What you should know Goal/Approach 2
about the fund Main Risks 3
Past Performance 4
Fees and Expenses 4
Your Investment
Information for managing Purchases 6
your fund account Opening Your Account 8
Redemptions 9
Distributions and Taxes 9
Services For Fund Investors 10
Sales Charges and Service Fees 11
Management 11
For More Information
How to learn more Other Investment Techniques 12
about the fund Glossary of Shaded Terms 15
Recent Performance 16
Financial Information
Financial Highlights 17
Compensation For Your Dealer 19
How to learn more about Back Cover
the fund and other Lord
Abbett funds
</TABLE>
<PAGE>
<PAGE>
The Fund
GOAL / APPROACH
The Balanced Fund seeks current income and capital growth. To pursue its
objective, the fund invests in a portfolio of underlying funds managed by
Lord Abbett. At the date of this prospectus, the underlying funds are:
<TABLE>
<CAPTION>
AFFILIATED FUND BOND-DEBENTURE FUND MID-CAP VALUE FUND
<S> <C> <C>
Uses quantitative Invests in high yield Focuses on stocks of
research on a universe debt securities, mid-sized companies.
of large, seasoned sometimes called "junk
companies to identify bonds," which entail Attempts to identify
bargain stocks. greater risks than undervalued stocks
investments in with potential for
Uses fundamental higher-rated debt significant market
research to determine securities. appreciation from
a company's prospects growing recognition of
for exceeding the Seeks unusual values, substantial
earnings expectations particularly in improvement in
reflected in its stock lower-rated debt financial results.
price. securities, some of
which are convertible
into common stocks or
have warrants to
purchase common
stocks.
</TABLE>
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES FUND U.S. GOVERNMENT SECURITIES FUND
<S> <C>
Uses quantitative research on a Invests in U.S. Government
universe of mid-sized companies to Securities.
identify those with superior growth
possibilities. Seeks high current income
consistent with reasonable risk,
Uses fundamental research to verify which means that it, over time,
companies likely to produce will have a volatility
superior returns over a thirty-six approximating that of the Lehman
month time frame, by analyzing the Government Bond Index.
dynamics in each company within its
industry and within the economy.
</TABLE>
The fund will decide in which of the underlying funds it will invest at any
particular time, as well as the relative amounts invested in those funds.
The fund may change the amounts invested in any or all of the underlying
funds at any time, but will always have at least 65% of its assets in
Affiliated Fund and Bond-Debenture Fund, taken together. In addition, it
will always have at least 25% of its assets invested in fixed-income
securities through one or more of the underlying funds. As of the fund's
most recent fiscal year end, 54% of the fund's assets were in Affiliated
Fund, 45% in Bond-Debenture Fund, and 1% in other assets.
The fund and each underlying fund may take a temporary defensive position
by investing some of it's assets in short-time debt securities. This could
reduce the benefits from any upswing in the market and prevent the fund
from realizing its investment objective.
WE OR THE FUND refers to the Lord Abbett Balanced Series, ("Balanced Fund") a
portfolio of Lord Abbett Investment Trust (the "company") acting as a fund of
funds by investing in the underlying funds. The fund operates under the
supervision of the company's Board with the advice of Lord, Abbett & Co. ("Lord
Abbett"), its investment manager.
UNDERLYING FUNDS: currently consist of:
LORD ABBETT AFFILIATED FUND ("Affiliated Fund")
LORD ABBETT BOND-DEBENTURE FUND ("Bond-Debenture Fund")
LORD ABBETT MID-CAP VALUE FUND ("Mid-Cap Value Fund")
LORD ABBETT GROWTH OPPORTUNITIES FUND ("Growth Opportunities Fund")
U.S. GOVERNMENT SECURITIES SERIES OF LORD ABBETT INVESTMENT TRUST ("U.S.
Government Securities Fund")
ABOUT THE FUND. The fund is a professionally managed portfolio primarily holding
securities purchased with the pooled money of investors. It strives to reach its
stated goal, although as with all funds, it cannot guarantee results.
LARGE COMPANIES are established companies that are considered "known
quantities." Large companies often have the resources to weather economic
shifts, though they can be slower to innovate than small companies.
SEASONED COMPANIES are usually established companies whose securities have
gained a reputation for quality with the investing public and enjoy high
liquidity in the market.
BARGAIN STOCKS are stocks of companies that appear underpriced according to
certain financial measures of their intrinsic worth or business prospects.
2 The Fund
<PAGE>
<PAGE>
MAIN RISKS
STOCK MARKET RISKS. Three of the underlying funds, Affiliated Fund, Growth
Opportunities Fund and Mid-Cap Value Fund, are subject to stock market risk
- i.e., the possibility that stock prices will decline over short or even
extended periods. The stock market tends to be cyclical, with periods when
stock prices generally rise and periods when stock prices generally
decline.
FIXED-INCOME SECURITIES RISKS. Two of the underlying funds, Bond-Debenture
Fund and U.S. Government Securities Fund, invest primarily or exclusively
in fixed-income securities and thus face interest rate risk and credit
risk.
Interest Rate Risk. Generally, the prices of fixed-income securities rise
when interest rates fall and fall when interest rates rise. Longer-term
bonds are usually more sensitive to interest rate changes. Put another
way, the longer the maturity of a bond or other debt security, the
greater the effect a change in interest rates is likely to have on the
instrument's price.
Credit Risk. The lower-rated bonds in which the Bond-Debenture Fund
invests involve risks that the bonds' issuers may not make payments of
interest and principal payments when they are due. Some issuers may
default as to principal and/or interest payments after the fund purchases
their securities.
An investment in each fund is not a bank deposit. It is not FDIC-insured or
government endorsed. It is not a complete investment program. You could
lose money in each fund, but you also have the potential to make money.
MID-SIZED COMPANIES usually have market capitalizations of roughly $500 million
to $5 billion, but not less than $50 million.
HIGH YIELD DEBT SECURITIES OR "JUNK BONDS" are rated BB/Ba or lower or unrated,
and typically pay a higher yield than investment grade debt securities. These
bonds have a higher risk of default than investment grade bonds and their prices
can be much more volatile.
U.S. GOVERNMENT SECURITIES are obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
You should read this entire prospectus, including "Other Investment Techniques,"
which concisely describes the other investment strategies and their risks used
by the fund.
The Fund 3
<PAGE>
<PAGE>
Balanced Fund Symbols: Class A - LABFX
Class C - BFLAX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund, by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance.
[GRAPH]
Best Quarter: 11.37% Worst Quarter: -6.41%
================================================================================
The table below shows a comparison of the fund's class A, B and C average annual
total return to that of Merrill Lynch Wilshire Capital Market Index ("MLWCMI"),
Russell 3000 Index ("R3000I"), 60% Russell 3000 40% LB Agg ("60% R3000 40%
LBA") and Lipper Balanced Funds Average ("LBFA"). Fund returns assume
reinvestment of dividends and distributions and payment of the maximum
applicable front-end or deferred sales charge. All periods end on December 31,
1998.
<TABLE>
<CAPTION>
60% R3000
CLASS 1 YEAR INCEPTION(i) MLWCMI(ii) R3000I(ii) 40% LBA
<S> <C> <C> <C> <C> <C>
A 2.50% 12.55% 20.72%(iii)
C 6.70% 14.22% 22.25%(iv)
MLWCMI(ii) 18.48% -- --
R3000I(ii) 18.48% -- --
60% R3000 40% LBA(ii) 18.48% -- --
LBFA(ii) 18.48% -- --
- ------------------------------------------------------------------------------------------------------
</TABLE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
================================================================================
Fee table
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS P
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (Fees paid directly from your investment)
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% none none none
Maximum Deferred Sales Charge (See "Purchases") none 5.00%(3) 1.00% none
ANNUAL FUND OPERATING EXPENSES (Expenses deducted
from fund assets) (as a % of average net assets)(1)
Management Fees (See "Management") 0.75% 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(2) 0.35% 1.00% 1.00% 0.45%
Other Expenses (See "Management") 0.17% 0.17% 0.17% 0.17%
Total Operating Expenses 1.27% 1.92% 1.92% 1.37%
- --------------------------------------------------------------------------------------
</TABLE>
Past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
(i) The dates of inception for class: A -12/27/94; B -5/1/98; and C -7/15/96.
(ii) Performance for the unmanaged Merrill Lynch Wilshire Capital Market Index
does not reflect transaction costs or management fees.
(iii) Represents total returns for the period 12/31/94 to 12/31/98, to
correspond with class A inception date.
(iv) Represents total returns for the period 7/31/96 to 12/31/98, to correspond
with class C inception date.
MANAGEMENT FEES are payable to Lord Abbett for the fund's investment management.
LORD ABBETT IS CURRENTLY WAIVING THE MANAGEMENT FEE FOR THE FUND. LORD ABBETT
MAY STOP WAIVING THE MANAGEMENT FEE AT ANY TIME. THE FUND'S MOST RECENT FISCAL
YEAR TOTAL OPERATING EXPENSES WITH THE FEE WAIVER WERE 0.52% (CLASS A SHARES),
1.17% (CLASS B AND C SHARES), AND 0.62% (CLASS P SHARES).
12b-1 FEES refer to fees incurred for activities that are primarily intended to
result in the sale of fund shares and service fees for shareholder account
service and maintenance.
OTHER EXPENSES include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees. The fund has entered into a servicing
arrangement with the underlying funds under which the underlying funds may bear
certain of the fund's other expenses.
- --------------------------------------------------------------------------------
(1) The annual operating expenses have been restated from fiscal year amounts to
reflect current fees.
(2) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
(3) Class B shares will convert to class A shares on the eighth anniversary of
your original purchase of class B shares.
(4) The ratio shown above is an estimate for the current fiscal year. For its
most recent fiscal year, Growth Opportunities Fund's expense ratio after fee
waivers and reimbursements, and excluding any 12b-1 fees which would not be
applicable to Y shares, was 0%. Without waivers and reimbursements, it would
have been 1.58%.
4 The Fund
<PAGE>
<PAGE>
While each class of shares of the fund is expected to operate with the
direct total operating expenses shown under "Fees and Expenses" above,
shareholders in the fund bear indirectly the Class Y share expenses of the
underlying funds in which the fund invests. The following chart provides
the expense ratio for each of the underlying fund's class Y shares (based
on information as of each of their most recently completed fiscal years):
<TABLE>
<CAPTION>
UNDERLYING FUNDS'
EXPENSE RATIOS
<S> <C>
Lord Abbett Affiliated Fund 0.40%
Lord Abbett Bond-Debenture Fund 0.60%
Lord Abbett Mid-Cap Value Fund 0.92%
Lord Abbett Growth Opportunities Fund 1.09%(4)
Lord Abbett U.S. Government Securities Fund 0.66%
- --------------------------------------------------------------------------------
</TABLE>
Based on the expense ratios above and the percentage of the fund's assets
invested in the underlying funds as of November 30, 1998, the weighted
average Class Y share expense ratio for the underlying funds is 0.49% (the
"underlying expense ratio"). This amount is only an approximation of the
fund's underlying expense ratio, since its assets invested in each of the
underlying funds changes daily.
================================================================================
Expense example
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
<TABLE>
<CAPTION>
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A shares $697 $954 $1,232 $2,023
Class B shares $695 $903 $1,236 $2,076
Class C shares $295 $603 $1,036 $2,245
Class P shares $139 $434 $750 $1,649
- --------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses on the same investment, assuming you kept
your shares.
<TABLE>
<S> <C> <C> <C> <C>
Class A shares $697 $954 $1,232 $2,023
Class B shares $195 $603 $1,036 $2,076
Class C shares $195 $603 $1,036 $2,245
Class P shares $139 $434 $750 $1,649
- --------------------------------------------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
The Fund 5
<PAGE>
<PAGE>
Your Investment
PURCHASES
This prospectus offers four classes of shares, classes A, B, C and P (call
800-821-5129 to find out if P shares are available in your state). These
classes of shares represent investments in the same portfolio of securities
but are subject to different expenses. Our shares are continuously offered.
The offering price is based on the Net Asset Value ("NAV") per share next
determined after we receive your purchase order submitted in proper form. A
front-end sales charge is added to the NAV, in the case of the class A
shares. There is no front-end sales charge, although there is a Contingent
Deferred Sales Charge in the case of the class B and C shares, as described
below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more, or a purchase order for class C shares of $1,000,000 or
more. You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
We reserve the right to withdraw all or any part of the offering made by
this prospectus or to reject any purchase order. We also reserve the right
to waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
================================================================================
Front-End Sales Charges - Class A Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO COMPUTE
AS A AS A OFFERING
% OF % OF PRICE
OFFERING YOUR DIVIDE
YOUR INVESTMENT PRICE INVESTMENT NAV BY
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% .9425
$50,000 to $99,999 4.75% 4.99% .9525
$100,000 to $249,999 3.75% 3.90% .9625
$250,000 to $499,999 2.75% 2.83% .9725
$500,000 to $999,999 2.00% 2.04% .9800
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
</TABLE>
REDUCING YOUR CLASS A FRONT-END SALES CHARGES. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
RIGHTS OF ACCUMULATION -- A Purchaser can apply the value (at public
offering price) of the shares you already own to a new purchase of class
A shares of any Eligible Fund in order to reduce the sales charge.
STATEMENT OF INTENTION -- A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and receive
the same sales charge as if you had purchased all shares at once. Shares
purchased through reinvestment of dividends or distributions are not
included. A statement of intention can be backdated 90 days. Current
holdings under rights of accumulation can be included in a statement of
intention.
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
NAV per share for each class of fund shares is calculated each business day at
the close of regular trading on the New York Stock Exchange ("NYSE"). The fund
is open on those business days when the NYSE is open. Purchases and sales of
fund shares are executed at the NAV next determined after the fund receives your
order. In calculating NAV, securities for which market quotations are available
are valued at those quotations. Securities for which such quotations are not
available are valued at fair value under procedures approved by the Board.
Share classes
CLASS A
normally offered with a front-end sales charge
CLASS B
no front-end sales charge, however, a contingent deferred sales charge is
applied to shares sold prior to the sixth anniversary of purchase
higher annual expenses than class A shares
automatically convert to class A shares after eight years
CLASS C
no front-end sales charge
higher annual expenses than class A shares
a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
CLASS P
available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
6 Your Investment
<PAGE>
<PAGE>
CLASS A SHARE PURCHASES WITHOUT A FRONT-END SALES CHARGE. Class A shares
may be purchased without a front-end sales charge under any of the
following conditions:
purchases of $1 million or more*
purchases by Retirement Plans with at least 100 eligible employees*
purchases under a Special Retirement Wrap Program*
purchases made with dividends and distributions on class A shares of
another Eligible Fund
purchases representing repayment under the loan feature of the Lord
Abbett-sponsored prototype 403(b) Plan for class A shares
purchases by employees of any consenting securities dealer having a
sales agreement with Lord Abbett Distributor
purchases under a Mutual Fund Advisory Program
purchases by trustees or custodians of any pension or profit sharing
plan, or payroll deduction IRA for employees of any consenting
securities dealer having a sales agreement with Lord Abbett Distributor
See the Statement of Additional Information for a listing of other
categories of purchasers who qualify for class A share purchases without a
front-end sales charge.
* These categories may be subject to a Contingent Deferred Sales Charge
("CDSC").
CLASS A SHARE CDSC. If you buy class A shares under one of the starred (*)
categories listed above and you redeem any of them within 24 months after
the month in which you initially purchased them, the fund normally will
collect a CDSC of 1%.
The class A share CDSC generally will be waived for the following
conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required)
redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program
CLASS B SHARE CDSC. The CDSC for class B shares normally applies if you
redeem your shares before the sixth anniversary of their initial purchase.
The CDSC declines the longer you own your shares, according to the
following schedule:
================================================================================
Contingent Deferred Sales Charges - Class B Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNIVERSARY(1) OF CONTINGENT DEFERRED SALES CHARGE
THE DAY ON WHICH THE ON REDEMPTION (AS % OF AMOUNT
PURCHASE ORDER WAS ACCEPTED SUBJECT TO CHARGE)
On Before
- --------------------------------------------------------------------------------
<S> <C> <C>
1st 5.0%
1st 2nd 4.0%
2nd 3rd 3.0%
3rd 4th 3.0%
4th 5th 2.0%
5th 6th 1.0%
on or after the 6th(2) None
- --------------------------------------------------------------------------------
</TABLE>
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on the
original purchase cost or the current market value of the shares at the time
they are being sold, whichever is lower. In addition, repayment of loans under
Retirement Plans and 403(b) Plans will constitute new sales for purposes of
assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the following
order:
1. shares acquired by reinvestment of dividends and capital gains (always free
of a CDSC)
2. shares held for six years or more (class B) or two years or more after the
month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
RETIREMENT PLANS include employer-sponsored retirement plans under the Internal
Revenue Code, excluding Individual Retirement Accounts.
LORD ABBETT DISTRIBUTOR LLC ("Lord Abbett Distributor") acts as agent for the
funds to work with investment professionals that buy and/or sell shares of the
funds on behalf of their clients. Generally, Lord Abbett Distributor does not
sell fund shares directly to investors.
BENEFIT PAYMENT DOCUMENTATION. (class A only)
under $50,000 - no documentation necessary
over $50,000 - reason for benefit payment must be received in writing. Use
the address indicated under "Opening Your Account."
Your Investment 7
<PAGE>
<PAGE>
The class B share CDSC generally will be waived under any one of the
following conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans (documentation may
be required)
Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
death of the shareholder (natural person)
redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors --
Automatic Services" below for more information on CDSCs with respect to
class B shares.
CLASS C SHARE CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of such shares.
CLASS P SHARES. Class P shares have lower annual expenses than class B and
class C shares, no front-end sales charge, and no CDSC. Class P shares are
currently sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory
Program, or (b) to the trustees of, or employer-sponsors with respect to,
pension or retirement plans with at least 100 eligible employees (such as a
plan under Section 401(a), 401(k) or 457(b) of the Internal Revenue Code)
which engage an investment professional providing or participating in an
agreement to provide certain recordkeeping, administrative and/or
sub-transfer agency services to the fund on behalf of the class P
shareholders.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
Regular account $1,000
Individual Retirement Accounts and 403(b) Plans under the
Internal Revenue Code $250
Uniform Gifts to Minors Account $250
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund at the address stated below.
You should carefully read the paragraph below entitled "Proper Form" before
placing your order to assure your order will be accepted.
BALANCED FUND
P.O. Box 419100
Kansas City, MO 64141
PROPER FORM. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. For more information
regarding proper form of a purchase order, call the fund at 800-821-5129.
Payment must be credited in U.S. dollars to our custodian bank's account.
BY EXCHANGE. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
IMPORTANT INFORMATION. You may be subject to a $50 penalty under the Internal
Revenue Code if you do not provide a correct taxpayer identification number
(Social Security Number for individuals) or make certain required
certifications. In addition, we may be required to withhold from your account
and pay to the U.S. Treasury 31% of any redemption proceeds and any dividend or
distribution from your account.
8 Your Investment
<PAGE>
<PAGE>
REDEMPTIONS
BY BROKER. Call your investment professional for directions on how to
redeem your shares.
BY TELEPHONE. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
BY MAIL. Submit a written redemption request indicating, the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity the
signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding
proper documentation call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Redemption requests for shares
initially purchased by check will not be honored for up to 15 days, unless
we are assured that the check has cleared earlier.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,"
"Class B Share CDSC" or "Class C Share CDSC."
DISTRIBUTIONS AND TAXES
The fund pays its shareholders dividends from its net investment income,
and distributes any net capital gains that it has realized. The fund
expects to pay income dividends from investment income monthly. If a
capital gain distribution is declared, the fund expects to pay it annually.
Your distributions will be reinvested in your fund unless you instruct the
fund to pay them to you in cash. There are no sales charges on
reinvestments.
The tax status of any distribution is the same regardless of how long they
have been in the fund or whether distributions are reinvested or paid in
cash. In general, distributions are taxable as follows:
================================================================================
Federal Taxability Of Distributions
<TABLE>
<CAPTION>
Tax rate for
Type of Tax rate for taxpayer taxpayer subject
distribution subject to 15% bracket to 28% bracket or above
<S> <C> <C>
INCOME Ordinary Ordinary
DIVIDENDS income rate income rate
SHORT-TERM Ordinary Ordinary
CAPITAL GAINS income rate income rate
LONG-TERM
CAPITAL GAINS 10% 20%
- --------------------------------------------------------------------------------
</TABLE>
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
ANNUAL INFORMATION - Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. The fund
will also provide annually to its shareholders information regarding the
source of dividends and distributions of capital gains paid by the fund.
Because everyone's tax situation is unique, you should consult your tax
adviser regarding the treatment of those distributions under the federal,
state and local tax rules that apply to you as well as the tax consequences
of gains or losses from the redemption or exchange of your shares.
ELIGIBLE GUARANTOR is any broker or bank that is a member of the Medallion Stamp
Program. Most major securities firms and banks are members of this program. A
NOTARY PUBLIC IS NOT AN ELIGIBLE GUARANTOR.
SMALL ACCOUNTS. Our Board may authorize closing any account in which there are
fewer than 25 shares if it is in a fund's best interest to do so.
TAXES ON TRANSACTIONS. The chart at left also can provide a "rule of thumb"
guide for your potential U.S. federal tax liability when selling or exchanging
fund shares. The second row, "Short-term capital gains," applies to fund shares
sold within 12 months of purchase. The third row, "Long-term capital gains,"
applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years will
be taxed at special lower rates.
Your Investment 9
<PAGE>
<PAGE>
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
================================================================================
<TABLE>
<CAPTION>
For investing
<S> <C>
INVEST-A-MATIC You can make fixed, periodic investments ($50 minimum)
(Dollar-cost into your fund account by means of automatic money
averaging) transfers from your bank checking account. See the
attached application for instructions.
DIV-MOVE You can automatically reinvest the dividends and
distributions from your account into another account in
any Eligible Fund ($50 minimum).
<CAPTION>
For selling shares
<S> <C>
SYSTEMATIC You can make regular withdrawals from most Lord Abbett
WITHDRAWAL funds. Automatic cash withdrawals can be paid to you from
PLAN ("SWP") your account in fixed or variable amounts. To establish a
plan, the value of your shares must be at least $10,000,
except for Retirement Plans for which there is no minimum.
Your shares must be in non-certificate form.
CLASS B SHARES The CDSC will be waived on redemptions of up to 12% of the
current net asset value of your account at the time of
your SWP request. For class B share redemptions over 12%
per year, the CDSC will apply to the entire redemption.
Please contact the fund for assistance in minimizing the
CDSC in this situation.
CLASS B AND Redemption proceeds due to a SWP for class B and class C
C SHARES shares will be redeemed in the order described under
"Purchases."
- --------------------------------------------------------------------------------
</TABLE>
OTHER SERVICES
TELEPHONE INVESTING. After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
TELEPHONE EXCHANGES. You or your investment professional, with proper
identification, can instruct your fund by telephone to exchange shares of
any class for shares of the same class of any Eligible Fund by calling
800-821-5129. The fund must receive instructions for the exchange before
the close of the NYSE on the day of your call. If you meet this
requirement, you will get the NAV per share of the Eligible Fund determined
on that day. Exchanges will be treated as a sale for federal tax purposes.
Be sure to read the current prospectus for any fund into which you are
exchanging.
REINVESTMENT PRIVILEGE. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
ACCOUNT STATEMENTS. Every Lord Abbett investor automatically receives
quarterly account statements.
HOUSEHOLDING. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
ACCOUNT CHANGES. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
SYSTEMATIC EXCHANGE. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
Lord Abbett offers a variety of Retirement Plans. Call 800-253-7299 for
information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
Defined Contribution Plans
TELEPHONE TRANSACTIONS. You have this privilege unless you refuse it in writing.
For your security, telephone transaction requests are recorded. We will take
measures to verify the identity of the caller, such as asking for your name,
account number, social security or taxpayer identification number and other
relevant information. The fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchanges by telephone should not be used to take advantage of short-term swings
in the market. The fund reserves the right to limit or terminate this privilege
for any shareholder making frequent exchanges or abusing the privilege and may
revoke the privilege for all shareholders upon 60 days' written notice.
10 Your Investment
<PAGE>
<PAGE>
SALES CHARGES AND SERVICE FEES
SALES AND SERVICE COMPENSATION. As part of its plan for distributing
shares, the fund and Lord Abbett Distributor pay sales and service
compensation to Authorized Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of each fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 plan adopted by the fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Fees and Expenses" and "Purchases." The
portion of these expenses that is paid as sales and service compensation to
Authorized Institutions, such as your dealer, is shown in the chart at the
end of this prospectus. The portion of such sales and service compensation
paid to Lord Abbett Distributor is discussed under "Sales Activities" and
"Service Activities." Sometimes we do not pay sales and service
compensation where tracking data is not available for certain accounts or
where the Authorized Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
SALES ACTIVITIES. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to a fund's class A and class C shares for
activities which are primarily intended to result in the sale of such class
A and class C shares, respectively. These activities include, but are not
limited to, printing of prospectuses and statements of additional
information and reports for other than existing shareholders, preparation
and distribution of advertising and sales material, expenses of organizing
and conducting sales seminars, Additional Concessions to Authorized
Institutions, the cost necessary to provide distribution-related services
or personnel, travel, office expenses, equipment and other allocable
overhead.
SERVICE ACTIVITIES. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with approximately $28 billion in
more than 35 mutual fund portfolios and other advisory accounts. For more
information about the services Lord Abbett provides to the funds, see the
Statement of Additional Information.
The fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. For the fiscal year ended November 30, 1998, the fee paid
to Lord Abbett was at an annual rate of .50 of 1% for the four months ended
March 31, 1998. Lord Abbett waived its management fee subsequent to that
date. In addition, the fund pays all expenses not expressly assumed by Lord
Abbett.
Lord Abbett uses a team of portfolio managers and analysts acting together
to manage the fund's investments. Zane E. Brown, Partner and Director of
Fixed Income of Lord Abbett, heads the team, the other senior members of
which include Robert G. Morris and W. Thomas Hudson, Jr., each a Partner of
Lord Abbett, and Eli Salzman, Portfolio Manager. Mr. Brown has been with
Lord Abbett since 1992. Messrs. Hudson and Morris have been with Lord
Abbett since 1982 and 1991, respectively. Mr. Salzman joined Lord Abbett in
1997 and previously was a Vice President with Mutual of America Capital
Corp. during 1997 and a Vice President with Mitchell Hutchins Asset
Management, Inc. from 1986 to 1997.
12b-1 FEES ARE PAYABLE REGARDLESS OF EXPENSES. The amounts payable by a fund
need not be directly related to expenses. If Lord Abbett Distributor's actual
expenses exceed the fee payable to it, a fund will not have to pay more than
that fee. If Lord Abbett Distributor's expenses are less than the fee it
receives, Lord Abbett Distributor will keep the full amount of the fee.
Your Investment 11
<PAGE>
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by the fund and each underlying fund and their risks.
ADJUSTING INVESTMENT EXPOSURE. The fund and each underlying fund may, but
is not required to, use various strategies to change its investment
exposure to adjust to changing security prices, interest rates, currency
exchange rates, commodity prices and other factors. These strategies may
involve buying or selling options and futures contracts, and rights and
warrants. The fund may use these transactions to change the risk and return
characteristics of each fund's portfolio. If we judge market conditions
incorrectly or use a strategy that does not correlate well with the fund's
investments, it could result in a loss, even if we intended to lessen risk
or enhance returns. These transactions may involve a small investment of
cash compared to the magnitude of the risk assumed and could produce
disproportionate gains or losses. Also, these strategies could result in
losses if the counterparty to a transaction does not perform as promised.
AFFILIATED FUND. The investment objective of the Affiliated Fund is
long-term growth of capital and income without excessive fluctuations in
market value. The Affiliated Fund uses quantitative research to identify
those large, seasoned companies whose stocks it believes represent the best
bargains, fundamental research to assess a company's operating environment,
resources and strategic plans and to determine its prospects for exceeding
the earnings expectations reflected in its stock price, and business cycle
analysis to assess the economic and interest rate sensitivity of its
portfolio.
BOND-DEBENTURE FUND. The investment objective of the Bond-Debenture Fund is
high current income and the opportunity for capital appreciation to produce
a high total return. Although the Bond-Debenture Fund normally invests in
high yield debt securities, at least 20% of its assets must be invested in
any combination of investment grade debt securities, U.S. Government
securities and cash equivalents.
BORROWING. Each underlying fund may borrow from banks. If a fund borrows
money, its share price may be subject to greater fluctuation until the
borrowing is paid off. Each underlying fund may borrow only for temporary
or emergency purposes, and not more than 33 1/3% of its total assets.
CLOSED-END INVESTMENT COMPANIES. The Growth Opportunities Fund may invest
in shares of closed-end investment companies if bought in the primary or
secondary market with a fee or commission no greater than the customary
broker's commission.
DIVERSIFICATION. Each fund is a diversified fund, which means that with
respect to 75% of its total assets, it will not purchase a security if, as
a result, more than 5% of the fund's total assets would be invested in
securities of a single issuer or the fund would hold more than 10% of the
outstanding voting securities of the issuer.
FINANCIAL FUTURES TRANSACTIONS. Financial Futures are exchange-traded
contract to buy or sell a standard quantity and quality of a financial
instrument or index at a specific future date and price. The Growth
Opportunities Fund may purchase and sell futures contracts and options. The
Growth Opportunities Fund will not enter into any futures contracts or
options thereon, if the aggregate market value of the securities covered by
such contracts exceeds 50% of such fund's total assets.
12 For More Information
<PAGE>
<PAGE>
FOREIGN SECURITIES. These securities are not subject to the same degree of
regulation and may be more volatile and less liquid than securities traded
in major U.S. markets. Foreign portfolio securities may be traded on days
when an underlying fund does not value them. Fund share prices could be
affected on days when an investor cannot purchase or sell shares. Other
risks include less information on public companies, banks and governments;
political and social instability; expropriations; higher transaction costs;
currency fluctuations; nondeductible withholding taxes and different
accounting and settlement practices.
The Affiliated Fund may invest up to 10% of its assets, the Bond-Debenture
Fund up to 20% of its assets, the Growth Opportunities Fund up to 35% of
its assets and the Mid-Cap Value Fund up to 10% of its assets, measured at
the time of investment in foreign securities.
GROWTH OPPORTUNITIES FUND. The Growth Opportunities Fund seeks capital
appreciation, using a growth style of investing. This means that it favors
companies that show the potential for stronger than expected earnings or
growth.
ILLIQUID SECURITIES. These securities include those that are not traded on
the open market or that trade irregularly or in very low volume. They may
be difficult or impossible to sell at the time and price the fund would
like. Each underlying fund may invest up to 15% of its assets in illiquid
securities.
MID-CAP VALUE FUND. The Mid-Cap Value Fund seeks capital appreciation,
primarily by investing in common stocks of mid-sized companies, using a
value approach to investing. The fund selects stocks based on capital
appreciation potential, without regard to current income.
OPTIONS TRANSACTIONS. A put option on securities gives the purchaser, in
return for a premium, the right, for a specified period of time, to sell
the securities subject to the option of the writer (seller) of the put at
the specified exercise price. The writer of the put option, in return for
the premium, has the obligation, upon exercise of the option, to acquire
the securities underlying the option at the exercise price.
A call option on securities gives the purchaser, in return for a premium
paid, the right for a specified period of time to purchase the securities
subject to the option at a specified price (the "exercise price" or "strike
price"). The writer of a call option, in return for the premium, has the
obligation, upon exercise of the option, to deliver, depending upon the
terms of the option contract, the underlying securities to the purchaser
upon receipt of the exercise price.
Options on stock indices are similar to options on equity securities except
that, rather than the right to take or make delivery of stock at a
specified price, an option on a stock index gives the holder the right, in
return for a premium paid, to receive, upon exercise of the option, an
amount of cash if the closing level of the stock index upon which the
option is based is greater than, in the case of a call, or less than, in
the case of a put, the exercise price of the option. The writer of an index
option, in return for a premium, is obligated to pay the amount of cash due
upon exercise of the option.
The writer of a put option might be obligated to purchase underlying
securities for more than their current market value.
When a fund writes a call option, it gives up the potential for gain on the
underlying securities in excess of the exercise price of the option during
the period that the option is open. The Growth Opportunities Fund may
purchase and write put and call options on equity securities or stock
indices that are traded on national securities exchanges.
The Growth Opportunities Fund may purchase foreign currency put options and
write foreign currency call options on national securities exchanges or
national over-the-
For More Information 13
<PAGE>
<PAGE>
counter ("OTC") markets. OTC options are generally less liquid and involve
issuer credit risk. The premiums paid for Growth Opportunities foreign
currency put options will not exceed 5% of the net assets of the fund.
Unlisted options, together with other illiquid securities, may comprise no
more than 15% of the Growth Opportunities Fund's net assets. The face value
of currency call option writing or cross-hedging may not exceed 90% of the
value of the securities denominated in such currency (a) invested in by the
Growth Opportunities Fund to cover such call writing or (b) to be crossed.
The Growth Opportunities Fund may only write covered put options to the
extent that cover for such options does not exceed 25% of the fund's net
assets. Each fund will not purchase an option if, as a result of such
purchase, more than 20% of its total assets would be invested in premiums
for such options. In addition, the Growth Opportunities Fund may write
covered call options on securities having an aggregate market value not to
exceed 5% of that fund's assets.
Each fund will write only "covered" options. The Affiliated, Bond-Debenture
and Growth Opportunities Funds will only write "covered" call options on
securities having an aggregate market value not to exceed 10% of the
Affiliated Fund's assets, 20% of the Bond-Debenture Fund's assets and 25%
of the Growth Opportunities Fund's assets.
PORTFOLIO SECURITIES LENDING. Each fund may lend securities to
broker-dealers and financial institutions as a means of earning income.
This practice could result in a loss or delay in recovering a fund's
securities, if the borrower defaults. Each fund will limit its securities
loans to 30% of its total assets, except the Growth Opportunities Fund is
5% of its total assets.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price from a broker-dealer or financial institution and simultaneously
agrees to sell the same security back to the same party at a higher price
in the future. If the other party to the agreement defaults or becomes
insolvent, the fund could lose money.
RIGHTS AND WARRANTS. The Growth Opportunities Fund may invest in rights and
warrants to purchase securities.
Rights represent a privilege offered to holders of record of issued
securities (usually on a pro-rata basis) for additional securities of the
same class, of a different class, or of a different issuer, as the case may
be. Warrants represent the privilege to purchase securities at a stipulated
price and are usually valid for several years. Rights and warrants
generally do not entitle a holder to dividends or voting rights with
respect to the underlying securities, nor do they represent any rights in
the assets of the issuing company.
The value of a right or warrant may not necessarily change with the value
of the underlying securities, and rights and warrants cease to have value
if they are not exercised prior to their expiration date.
RULE 144A SECURITIES. Each fund may invest in Rule 144A securities, which
are securities determined by the Board to be liquid pursuant to Securities
and Exchange Commission Rule 144A (the "Rule"). Under the Rule, a
qualifying unregistered security may be resold to a qualified institutional
buyer without registration and without regard to whether the seller
originally purchased the security for investment. A substantial part of the
lower-rated debt market consists of Rule 144A securities, many of which are
registered within a few months of their purchases. Investments in Rule 144A
securities initially determined to be liquid could have the effect of
diminishing the level of a fund's liquidity during periods of decreased
market interest in such securities.
14 For More Information
<PAGE>
<PAGE>
U.S. GOVERNMENT SECURITIES FUND. The investment objective of the U.S.
Government Securities Fund is high current income consistent with
reasonable risk. This means that the fund, over time, will have a
volatility approximating that of the Lehman Government Bond Index. The fund
does not seek growth of capital, but capital appreciation may result from
efforts to secure high current income.
WHEN-ISSUED OR DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or
sell securities with payment and delivery taking place as much as a month
or more later. The fund would do this in an effort to buy or sell the
securities at an advantageous price and yield. The securities involved are
subject to market fluctuation and no interest accrues to the purchaser
during the period between purchase and settlement. At the time of delivery
of the securities, their market value may be less than the purchase price.
Also, if a fund commits a significant amount of assets to when-issued or
delayed delivery transactions, it may increase the volatility of the fund's
net asset value.
GLOSSARY OF SHADED TERMS
ADDITIONAL CONCESSIONS. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional
pay-ments may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund and will be made in the form of cash
or, if permitted, non-cash payments. The non-cash payments will include
business seminars at Lord Abbett's headquarters or other locations,
including meals and entertainment, or the receipt of merchandise. The cash
payments may include payment of various business expenses of the dealer.
In selecting dealers to execute portfolio transactions for a fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
AUTHORIZED INSTITUTIONS. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 Plan are
"Authorized Institutions." Lord Abbett Distributor is an Authorized
Institution.
ELIGIBLE FUND. An Eligible Fund is any Lord Abbett-sponsored fund except
for (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such series is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; and (4)
Lord Abbett U.S. Government Securities Money Market Fund ("GSMMF") (except
for holdings in GSMMF which are attributable to any shares exchanged from
the Lord Abbett family of funds). An Eligible Fund also is any Authorized
Institution's affiliated money market fund satisfying Lord Abbett
Distributor as to certain omnibus account and other criteria.
ELIGIBLE MANDATORY DISTRIBUTIONS. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the
total investment.
LEGAL CAPACITY. This term refers to the authority of an individual to act
on behalf of an entity or other person(s). For example, if a redemption
request were to be made on behalf of the estate of a deceased shareholder,
John W. Doe, by a person (Robert A. Doe) who has the legal capacity to act
for the estate of the deceased shareholder because he is the executor of
the estate, then the request must be executed as follows: Robert A. Doe,
For More Information 15
<PAGE>
<PAGE>
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
To give another example, if a redemption request were to be made on behalf
of the ABC Corporation by a person (Mary B. Doe) who has the legal capacity
to act on behalf of the corporation, because she is the president of the
corporation, the request must be executed as follows: ABC Corporation by
Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
MUTUAL FUND ADVISORY PROGRAM. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions who
either (1) have an arrangement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares (and sometimes providing for
acceptance of orders for such shares on our behalf) in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions,
or (2) who charge an advisory, consulting or other fee for their services
and buy shares for their own accounts or the accounts of their clients.
PURCHASER. The term "purchaser" includes: (1) an individual, (2) an
individual and his or her spouse and children under the age of 21, and (3)
a trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account (including a pension, profit-sharing, or other
employee benefit trust qualified under Section 401 of the Internal Revenue
Code - more than one qualified employee benefit trust of a single employer,
including its consolidated subsidiaries, may be considered a single trust,
as may qualified plans of multiple employers registered in the name of a
single bank trustee as one account), although more than one beneficiary is
involved.
SPECIAL RETIREMENT WRAP PROGRAM. A program sponsored by an authorized
institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor, from a Mutual Fund Advisory Program.
Such characteristics include, among other things, the fact that an
authorized institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participant-directed Retirement Plans.
RECENT PERFORMANCE
The Balanced Fund adopted a "fund of funds" format on April 1, 1998 and
divided assets 60%/40% between shares of Lord Abbett Affiliated Fund
(equity) and Lord Abbett Bond-Debenture Fund (fixed-income) during the
third quarter of 1998. (i) In the fourth quarter of 1998, after significant
equity price increases, we changed the allocation to 55% equity and 45%
fixed-income. Earlier in the year, Affiliated Fund performance benefited
from an increased weighting in insurance stocks, which performed well. Fund
performance was also enhanced by an over-weighting in utility stocks,
particularly during the third quarter. The overall strategy of
Bond-Debenture Fund is to identify good bond values while being careful
about credit selection. Throughout the year, Lord Abbett reduced that
fund's corporate bond holdings in basic industries such as steel, paper and
chemicals because Lord Abbett believed there was little opportunity for
these companies to raise prices on their products. Lord Abbett emphasized
industries where cash flows are steady, such as telecommunications, media
and cable television providers. Lord Abbett expects that long-term returns
can be enhanced due to our selection of well-managed high-yield companies,
whose bonds represent particularly good value because they are currently
yielding more than 6% over Treasuries.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate -
Robert A. Doe
Executor of the Estate of
John W. Doe
[DATE]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
(NAME OF GUARANTOR)
/s/ David R. Levy
------------------------------------------------
AUTHORIZED SIGNATURE
(960) X9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'TM'
SR
In the case of the corporation -
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[DATE]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
(NAME OF GUARANTOR)
/s/ David R. Levy
------------------------------------------------
AUTHORIZED SIGNATURE
(960) X9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'TM'
SR
YEAR 2000 ISSUES. Each fund could be adversely affected if the computers used by
each fund and their service providers do not properly process and calculate
date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances from
each fund's service providers that they are taking similar steps. Of course, the
Year 2000 problem is unprecedented and, therefore, Lord Abbett cannot eliminate
altogether the possibility that it or the funds will be affected.
(i) The portfolio is actively managed and as a result, asset allocation may
change from time to time.
16 For More Information
<PAGE>
<PAGE>
Financial Information
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated. "Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the fiscal year ended November 30, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the fiscal year ended November 30, 1998 and are
incorporated by reference into the Statement of Additional Information,
which is available upon request. Certain information reflects financial
results for a single fund share.
<TABLE>
<CAPTION>
====================================================================================================================
CLASS A SHARES
-----------------------------------------------------------------
Period Ended November 30,
Per Share Operating Performance: 1998 1997 1996(d) 1996 1995(a)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.80 $11.81 $11.30 $10.71 $9.52
INCOME FROM INVESTMENT OPERATIONS
Net investment income .54(e) .47(e) .0312 .472 .365
Net realized and unrealized
gain on investments .40 1.15 .5208 .732 1.185
Total from investment operations .94 1.62 .552 1.204 1.55
DISTRIBUTIONS
Dividends from net investment income (.52) (.46) (.0420) (.462) (.36)
Distributions from net realized gain (.35) (.17) -- (.152) --
NET ASSET VALUE, END OF PERIOD $12.87 $12.80 $11.81 $11.30 $10.71
TOTAL RETURN(b) 7.69% 14.24% 4.89%(c) 11.55% 16.32%(c)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and reimbursement 0.27%(f) 1.10%(f) 0.07%(c) 0.93% 0.37%(c)
Expenses, excluding waiver and reimbursement 0.92% 1.53% 0.11%(c) 1.59% 1.26%(c)
Net investment income 4.28% 3.89% 0.26%(c) 4.18% 4.39%(c)
<CAPTION>
====================================================================================================================
CLASS B SHARES CLASS C SHARES
------------ ---------------------------------------------------
Period Ended Period Ended
November 30, November 30,
Per Share Operating Performance: 1998(a) 1998 1997 1996(d) 1996(a)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.14 $12.78 $11.79 $11.29 $10.73
INCOME FROM INVESTMENT OPERATIONS
Net investment income .25(e) .41(e) .35(e) .0067 .0349
Net realized and unrealized
gain (loss) on investments (.28) .40 1.15 .5298 .6346
Total from investment operations (.03) .81 1.50 .5365 .6695
DISTRIBUTIONS
Dividends from net investment income (.25) (.39) (.34) (.0365) (.0730)
Distributions from net realized gain -- (.35) (.17) -- (.0365)
NET ASSET VALUE, END OF PERIOD $12.86 $12.85 $12.78 $11.79 $11.29
TOTAL RETURN(b) (0.16)%(c) 6.62% 13.14% 4.76%(c) 7.78%(c)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and reimbursement 0.61%(c)(f) 1.26%(f) 2.08%(f) 0.16%(c) 0.62%(c)
Expenses, excluding waiver and reimbursement 1.26%(c) 1.91% 2.51% 0.20%(c) 0.77%(c)
Net investment income 1.98%(c) 3.24% 2.88% 0.17%(c) 0.70%(c)
<CAPTION>
====================================================================================================================
Period Ended November 30,
-----------------------------------------------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES: 1998 1997 1996(d) 1996 1995(a)
<S> <C> <C> <C> <C> <C>
NET ASSETS, END OF PERIOD (000) $57,675 $20,340 $11,406 $10,988 $5,713
PORTFOLIO TURNOVER RATE 131.36% 216.07% 10.05% 187.78% 131.80%
====================================================================================================================
</TABLE>
(a) Commencement of offering (class A shares: December 27, 1994; class B
shares: May 1, 1998 and class C shares: July 15, 1996) respective class
shares.
(b) Total return does not consider the effects of sales loads and assumes
reinvestment of all distributions.
(c) Not annualized.
(d) For the one month ended November 30, 1996.
(e) Calculated using average shares outstanding during the period.
(f) The ratios for 1998 and 1997 include expenses paid through an expense
offset arrangement.
See Notes to Financial Statements.
Financial Information 17
<PAGE>
<PAGE>
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in the Merrill Lynch Wilshire Capital Market Index,
assuming reinvestment of all dividends and distributions.
[GRAPH]
Fiscal Year-end 11/30
The fund (class A shares) at net asset value
The fund (class A shares) maximum offering price(1)
Merrill Lynch Wilshire Capital Market Index(2)
Russell 3000 Index(2)
60% Russel 300 40% LB Agg Index(2)
Lipper Balanced Funds Average(2)
================================================================================
<TABLE>
<CAPTION>
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
1 YEAR 10 YEARS (OR LIFE)
<S> <C> <C>
Class A(3) 1.60% 12.31%
Class C(4) 5.55% 13.86%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 5.75% applicable to class
A shares, with all dividends and distributions reinvested for the periods
shown ending November 30, 1998 using the SEC-required uniform method to
compute such return.
(2) Performance for the unmanaged Merrill Lynch Wilshire Capital Market Index
does not reflect transaction costs, management fees or sales charges.
(3) The class A shares were first offered on 12/27/94. Performance reflects the
deduction of a CDSC of 5.75%.
(4) The class C shares were first offered on 7/15/96. Performance is at net
asset value.
18 Financial Information
<PAGE>
<PAGE>
COMPENSATION FOR YOUR DEALER
<TABLE>
<CAPTION>
====================================================================================================================================
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 5.00% 0.25% 5.24%
$50,000 - $99,999 4.75% 4.00% 0.25% 4.24%
$100,000 - $249,999 3.75% 3.25% 0.25% 3.49%
$250,000 - $499,999 2.75% 2.25% 0.25% 2.49%
$500,000 - $999,999 2.00% 1.75% 0.25% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$1 million or more(3) or Retirement Plan - 100 or more eligible employees(3) or
Special Retirement Wrap Program(3)
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
Next $5 million
above that no front-end sales charge 0.55% 0.25% 0.80%
Next $40 million
above that no front-end sales charge 0.50% 0.25% 0.75%
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value)
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
All amounts no front-end sales charge 0.25% 0.20% 0.45%
====================================================================================================================================
<CAPTION>
ANNUAL COMPENSATION AFTER FIRST YEAR
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A investments
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets(4)
All amounts no front-end sales charge none 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Class C investments
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares are paid quarterly. The first
year's service fee on class B and C shares is paid at the time of sale.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may
be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the fund are
excluded.
(4) With respect to class B, C and P shares, 0.25%, 1.00% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions. These fees are paid quarterly in arrears.
Financial Information 19
<PAGE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
<PAGE>
More information on this fund is available free upon request, including the
following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the fund, lists portfolio holdings and contains a letter from the
fund's manager discussing recent market conditions and the fund's
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the fund and their policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this prospectus).
Lord Abbett Investment Trust -
Balanced Series
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
- ---------------------------
SEC file number: 811-7988
To obtain information:
BY TELEPHONE. Call the fund at:
800-426-1130
BY MAIL. Write to the fund at:
The Lord Abbett Family of Fund
767 Fifth Avenue
New York, NY 10153-0203
VIA THE INTERNET.
LORD, ABBETT & CO.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-6009.
LAIT-BAL-1-499
(4/99)
<PAGE>
<PAGE>
LORD
ABBETT
High Yield Fund
PROSPECTUS
April 1, 1999
LORD ABBETT & CO. [LOGO]
As with all mutual funds, the Securities and Exchange Commission does
not guarantee that the information in this prospectus is accurate
or complete, and it has not judged this fund for its investment
merit. It is a criminal offense to state otherwise.
Class P shares of the fund are neither offered to the general public
nor available in all states. Please call 800-821-5129 for further
information.
<PAGE>
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
PAGE
The Fund
<S> <C> <C>
What you should know Goal/Approach 2
about the fund Main Risks 2
Fees and Expenses 3
Your Investment
Information for managing Purchases 4
your fund account Opening Your Account 6
Redemptions 7
Distributions and Taxes 7
Services For Fund Investors 8
Sales Charges and Service Fees 9
Management 10
For More Information
How to learn more Other Investment Techniques 11
about the fund Glossary of Shaded Terms 12
Financial Information
Compensation For Your Dealer 14
How to learn more about the
fund and other Lord Abbett funds Back Cover
</TABLE>
<PAGE>
<PAGE>
The Fund
GOAL / APPROACH
The fund's investment objective is to seek high current income and the
opportunity for capital appreciation to produce a high total return.
Normally, we invest in lower-rated debt securities, sometimes called "junk
bonds," which entail greater risks than investments in higher-rated debt
securities.
We believe that a high total return (current income and capital
appreciation) may be derived from an actively managed, diversified security
portfolio. Under normal circumstances, we invest at least 65% of our total
assets in lower-rated debt securities, some of which are convertible into
common stock or have warrants to purchase common stock.
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, may generate higher yields.
While typically fully invested, we may take a temporary defensive position
by investing some of our assets in short-term debt securities. This could
reduce the benefit from any upswing in the market.
MAIN RISKS
The lower-rated bonds in which the fund invests involve risks that the
bond's issuers will not make payments of interest and principal payments
when due. Some issuers may default as to principal and/or interest payments
after we purchase their securities. Through portfolio diversification,
credit analysis and attention to current developments and trends in
interest rates and economic conditions, we attempt to reduce investment
risk, but losses may occur. In addition, the value of your investment will
change as interest rates fluctuate. When interest rates decline, share
value may rise. When interest rates rise, share value may decline. The fund
uses investment practices, such as investments in foreign securities,
illiquid securities and other securities, that could adversely affect
performance.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
government endorsed. It is not a complete investment program. You could
lose money in the fund, but you also have the potential to make money.
WE OR THE FUND refers to Lord Abbett High Yield Fund ("High Yield Fund").
The fund is a series of Lord Abbett Investment Trust (the "company"), which
operates under the supervision of the company's Board, with the advice of
Lord, Abbett & Co. ("Lord Abbett"), its investment manager.
ABOUT THE FUND. The fund is a professionally managed portfolio primarily
holding securities purchased with the pooled money of investors. It strives
to reach its stated goal, although as with all funds, it cannot guarantee
results.
HIGH YIELD DEBT SECURITIES. The fund may invest all of its assets in high
yield debt securities. High yield debt securities or "junk bonds" are rated
BB/Ba or lower and typically pay a higher yield than investment grade debt
securities. These bonds have a higher risk of default than investment grade
bonds and their prices can be much more volatile.
FOREIGN SECURITIES are securities primarily traded in countries outside the
United States. These securities are not subject to the same degree of
regulation and may be more volatile and less liquid than securities traded
in major U.S. markets. Other considerations include political and social
instability, expropriations, higher transaction costs, currency
fluctuations, nondeductable withholding taxes and different settlement
practices.
You should read this entire prospectus, including "Other Investment
Techniques," which concisely describes the other investment strategies and
their risks used by the fund.
2 The Funds
<PAGE>
<PAGE>
High Yield Fund
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
==============================================================================================
FEE TABLE
- ----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS P
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (Fees paid directly from your investment)
- ----------------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- ----------------------------------------------------------------------------------------------
(as a % of offering price) 4.75% none none none
- ----------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none 5.00%(1) 1.00% none
- ----------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (Expenses deducted from
fund assets) (as a % of average net assets)(2)
- ----------------------------------------------------------------------------------------------
Management Fees (See "Management") 0.60% 0.60% 0.60% 0.60%
- ----------------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees(3) 0.35% 1.00% 1.00% 0.45%
- ----------------------------------------------------------------------------------------------
Other Expenses (See "Management") 0.25% 0.25% 0.25% 0.25%
- ----------------------------------------------------------------------------------------------
Total Operating Expenses 1.20% 1.85% 1.85% 1.30%
- ----------------------------------------------------------------------------------------------
</TABLE>
================================================================================
EXPENSE EXAMPLE
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
<TABLE>
<CAPTION>
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A shares $591 $838 $1,103 $1,863
- --------------------------------------------------------------
Class B shares $688 $881 $1,200 $2,001
- --------------------------------------------------------------
Class C shares $288 $581 $1,000 $2,171
- --------------------------------------------------------------
Class P shares $132 $412 $ 713 $1,570
- --------------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $591 $838 $1,103 $1,863
- --------------------------------------------------------------
Class B shares $188 $581 $1,000 $2,001
- --------------------------------------------------------------
Class C shares $188 $581 $1,000 $2,171
- --------------------------------------------------------------
Class P shares $132 $412 $ 713 $1,570
- --------------------------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
MANAGEMENT FEES are payable to Lord Abbett for the fund's investment management.
12b-1 FEES refer to fees for activities that are primarily intended to result in
the sale of fund shares and service fees for shareholder account service and
maintenance.
OTHER EXPENSES include fees paid by the fund for miscellaneous items such as
transfer agency, legal and share registration fees.
- --------------------------------------------------------------------------------
(1) Class B shares will automatically convert to class A shares on the eighth
anniversary of your original purchase of class B shares.
(2) The annual operating expenses are based on estimated expenses for the
current fiscal year.
(3) Because 12b-1 distribution fees are paid out on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
The Funds 3
<PAGE>
<PAGE>
Your Investment
PURCHASES
This prospectus offers four classes of shares, classes A, B, C and P (call
800-821-5129 to find out if class P shares are available in your state).
Although a fund may have more than one class of shares, these different
classes represent investments in the same portfolio of securities but are
subject to different expenses. Our shares are continuously offered. The
offering price is based on the Net Asset Value ("NAV") per share next
determined after we receive your purchase order submitted in proper form. A
front-end sales charge is added to the NAV in the case of the class A
shares. There is no front-end sales charge although there is a Contingent
Deferred Sales Charge in the case of the class B and C shares, as described
below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more, or a purchase order for class C shares of $1,000,000 or
more. You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
We reserve the right to withdraw all or any part of the offering made by
this prospectus or to reject any purchase order. We also reserve the right
to waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
================================================================================
Front-End Sales Charges - Class A Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS A % OF AS A % OF TO COMPUTE OFFERING
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT PRICE DIVIDE NAV BY
================================================================================
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% .9525
- --------------------------------------------------------------------------------
$50,000 to $99,999 4.75% 4.99% .9525
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.75% 3.90% .9625
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% .9800
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
</TABLE>
REDUCING YOUR CLASS A FRONT-END SALES CHARGES. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
RIGHTS OF ACCUMULATION -- A Purchaser can apply the value (at public
offering price) of the shares you already own to a new purchase of class
A shares of any Eligible Fund in order to reduce the sales charge.
STATEMENT OF INTENTION -- A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and receive
the same sales charge as if you had purchased all shares at once. Shares
purchased through reinvestment of dividends and distributions are not
included. A statement of intention can be back-dated 90 days. Current
holding under rights of accumulation can be included in a statement of
intention.
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
NAV per share for each class of fund shares is calculated each business day
at the close of regular trading on the New York Stock Exchange ("NYSE").
The fund is open on those business days when the NYSE is open. Purchases
and sales of fund shares are executed at the NAV next determined after the
fund receives your order. In calculating NAV, securities for which market
quotations are available are valued at those quotations. Securities for
which such quotations are not available are valued at fair value under
procedures approved by the Board.
Share classes
CLASS A
normally offered with a front-end sales charge
CLASS B
no front-end sales charge, however, a contingent deferred sales charge
is applied to shares sold prior to the sixth anniversary of purchase
higher annual expenses than class A shares
automatically convert to class A shares after eight years
CLASS C
no front-end sales charge
higher annual expenses than class A shares
a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
CLASS P
available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
4 Your Investment
<PAGE>
<PAGE>
CLASS A SHARE PURCHASES WITHOUT A FRONT-END SALES CHARGE. Class A shares
may be purchased without a front-end sales charge under any of the
following conditions:
purchases of $1 million or more*
purchases by Retirement Plans with at least 100 eligible employees*
purchases under a Special Retirement Wrap Program*
purchases made with dividends and distributions on class A shares of
another Eligible Fund
purchases representing repayment under the loan feature of the Lord
Abbett-sponsored prototype 403(b) Plan for class A shares
purchases by employees of any consenting securities dealer having a sales
agreement with Lord Abbett Distributor
purchases under a Mutual Fund Advisory Program
purchases by trustees or custodians of any pension or profit sharing
plan, or payroll deduction IRA for employees of any consenting securities
dealer having a sales agreement with Lord Abbett Distributor
See the Statement of Additional Information for a listing of other
categories of purchasers who qualify for class A share purchases without a
front-end sales charge.
*These categories may be subject to a Contingent Deferred Sales Charge
("CDSC").
CLASS A SHARE CDSC. If you buy class A shares under one of the starred (O)
categories listed above and you redeem any of them within 24 months after
the month in which you initially purchased them, the fund normally will
collect a CDSC of 1%.
The class A share CDSC generally will be waived for the following
conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required)
redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program
CLASS B SHARE CDSC. The CDSC for class B shares normally applies if you
redeem your shares before the sixth anniversary of their initial purchase.
The CDSC declines the longer you own your shares, according to the
following schedule:
================================================================================
CONTINGENT DEFERRED SALES CHARGES - CLASS B SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNIVERSARY(1) OF CONTINGENT DEFERRED SALES CHARGE
THE DAY ON WHICH THE ON REDEMPTIONS (AS A % OF AMOUNT
PURCHASE ORDER WAS ACCEPTED SUBJECT TO CHARGE)
On Before
- --------------------------------------------------------------------------------
<S> <C> <C>
1st 5.0%
- --------------------------------------------------------------------------------
1st 2nd 4.0%
- --------------------------------------------------------------------------------
2nd 3rd 3.0%
- --------------------------------------------------------------------------------
3rd 4th 3.0%
- --------------------------------------------------------------------------------
4th 5th 2.0%
- --------------------------------------------------------------------------------
5th 6th 1.0%
- --------------------------------------------------------------------------------
on or after the 6th(2) None
- --------------------------------------------------------------------------------
</TABLE>
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on May
1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on
the original purchase cost or the current market value of the shares at the
time they are being sold, whichever is lower. In addition, repayment of
loans under Retirement Plans and 403(b) Plans will constitute new sales for
purposes of assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the
following order:
1. shares acquired by reinvestment of dividends and capital gains (always
free of a CDSC)
2. shares held for six years or more (class B) or two years or more after
the month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
RETIREMENT PLANS include employer-sponsored retirement plans under the
Internal Revenue Code, excluding Individual Retirement Accounts.
LORD ABBETT DISTRIBUTOR LLC ("Lord Abbett Distributor") acts as agent for
the funds to work with investment professionals that buy and/or sell shares
of the funds on behalf of their clients. Generally, Lord Abbett Distributor
does not sell fund shares directly to investors.
BENEFIT PAYMENT DOCUMENTATION. (class A only)
under $50,000 - no documentation necessary
over $50,000 - reason for benefit payment must be received in writing.
Use the address indicated under "Opening Your Account."
Your Investment 5
<PAGE>
<PAGE>
The class B share CDSC generally will be waived under any one of the
following conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans
Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
death of the shareholder (natural person)
redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors --
Automatic Services" below for more information on CDSCs with respect to
class B shares.
CLASS C SHARE CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of such shares.
CLASS P SHARES. Class P shares have lower annual expenses than class B and
class C shares, no front-end sales charge, and no CDSC. Class P shares are
currently sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory
Program, or (b) to the trustees of, or employer-sponsors with respect to,
pension or retirement plans with at least 100 eligible employees (such as a
plan under Section 401(a), 401(k) or 457(b) of the Internal Revenue Code)
which engage an investment professional providing or participating in an
agreement to provide, certain recordkeeping, administrative and/or
sub-transfer agency services to the fund on behalf of the class P
shareholders.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
<TABLE>
<S> <C>
Regular account $1,000
Individual Retirement Accounts and
403(b) Plans under the Internal Revenue Code $250
Uniform Gifts to Minors Account $250
</TABLE>
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the address stated below. You should
carefully read the paragraph below entitled "Proper Form" before placing
your order to assure your order will be accepted.
HIGH YIELD FUND
P.O. Box 419100
Kansas City, MO 64141
PROPER FORM. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. For more information
regarding proper form of a purchase order, call the fund at 800-821-5129.
Payment must be credited in U.S. dollars to our custodian bank's account.
BY EXCHANGE. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
IMPORTANT INFORMATION. You may be subject to a $50 penalty under the
Internal Revenue Code if you do not provide a correct taxpayer
identification number (Social Security Number for individuals) or make
certain required certifications. In addition, we may be required to
withhold from your account and pay to the U.S. Treasury 31% of any
redemption proceeds and of any dividend or distribution from your account.
6 Your Investment
<PAGE>
<PAGE>
REDEMPTIONS
BY BROKER. Call your investment professional for directions on how to
redeem your shares.
BY TELEPHONE. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
BY MAIL. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity, the
signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding
proper documentation call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Redemption requests for shares
initially purchased by check will not be honored for up to 15 days, unless
we are assured that the check has cleared earlier.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,"
"Class B Share CDSC" or "Class C Share CDSC."
DISTRIBUTIONS AND TAXES
The fund pays its shareholders dividends from its net investment income,
and distributes net capital gains that it has realized. The fund expects to
pay such income dividends to shareholders monthly. If a capital gain
distribution is declared, it is expected to be paid annually. Your
distributions will be reinvested in the fund unless you instruct the fund
to pay them to you in cash. There are no sales charges on reinvestments.
The tax status of distributions are the same for all shareholders
regardless of how long they have been in the fund or whether distributions
are reinvested or paid in cash. In general, distributions are taxable as
follows:
================================================================================
FEDERAL TAXABILITY OF DISTRIBUTIONS
<TABLE>
<CAPTION>
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to 15% bracket to 28% bracket or above
- --------------------------------------------------------------------------------
<S> <C> <C>
INCOME Ordinary Income Ordinary Income
DIVIDENDS Rate Rate
- --------------------------------------------------------------------------------
SHORT-TERM Ordinary Income Ordinary Income
CAPITAL GAINS Rate Rate
- --------------------------------------------------------------------------------
LONG-TERM
CAPITAL GAINS 10% 20%
- --------------------------------------------------------------------------------
</TABLE>
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
ANNUAL INFORMATION -- Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. The fund
will also provide annually to its shareholders information regarding the
source of dividends and distributions of capital gains by that fund.
Because everyone's tax situation is unique, you should
consult your tax adviser regarding the treatment of those distributions
under the federal, state and local tax rules that apply to you as well as
the tax consequences of gains or losses from the redemption or exchange of
your shares.
SMALL ACCOUNTS. Our Board may authorize closing any account in which there
are fewer than 25 shares if it is in a fund's best interest to do so.
ELIGIBLE GUARANTOR is any broker or bank that is a member of the Medallion
Stamp Program. Most major securities firms and banks are members of this
program. A NOTARY PUBLIC IS NOT AN ELIGIBLE GUARANTOR.
TAXES ON TRANSACTIONS. The chart at left also can provide a "rule of thumb"
guide for your potential U.S. federal tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies
to fund shares sold within 12 months of purchase. The third row, "Long-term
capital gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years
will be taxed at special lower rates.
Any gains realized on the fund's transactions in options and financial
futures will be treated as taxable long- or short-term capital gains.
Your Investment 7
<PAGE>
<PAGE>
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
================================================================================
For investing
<TABLE>
<S> <C>
INVEST-A-MATIC You can make fixed, periodic investments ($50 minimum) into
(Dollar-cost your fund account by means of automatic money transfers from
averaging) your bank checking account. See the attached application for
instructions.
DIV-MOVE You can automatically reinvest the dividends and
distributions from your account into another account in any
Eligible Fund ($50 minimum).
</TABLE>
For selling shares
<TABLE>
<S> <C>
SYSTEMATIC You can make regular withdrawals from most Lord Abbett
WITHDRAWAL funds. Automatic cash withdrawals can be paid to you from
PLAN ("SWP") your account in fixed or variable amounts. To establish a
plan, the value of your shares must be at least $10,000,
except for Retirement Plans for which there is no minimum.
Your shares must be in non-certificate form.
CLASS B SHARES The CDSC will be waived on redemptions of up to 12% of the
current net asset value of your account at the time of your
SWP request. For class B share redemptions over 12% per
year, the CDSC will apply to the entire redemption. Please
contact the fund for assistance in minimizing the CDSC in
this situation.
CLASS B AND Redemption proceeds due to a SWP for class B and class C
C SHARES shares will be redeemed in the order described under
"Purchases."
================================================================================
</TABLE>
OTHER SERVICES
TELEPHONE INVESTING. After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
TELEPHONE EXCHANGES. You or your investment professional, with proper
identification, can instruct your fund by telephone to exchange shares of
any class for shares of the same class of any Eligible Fund by calling
800-821-5129. The fund must receive instructions for the exchange before
the close of the NYSE on the day of your call. If you meet this
requirement, you will get the NAV per share of the Eligible Fund determined
on that day. Exchanges will be treated as a sale for federal tax purposes.
Be sure to read the current prospectus for any fund into which you are
exchanging.
REINVESTMENT PRIVILEGE. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
Lord Abbett offers a variety of Retirement Plans.
Call 800-253-7299 for information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
Defined Contribution Plans
TELEPHONE TRANSACTIONS. You have this privilege unless you refuse it in
writing. For your security, telephone transaction requests are recorded. We
will take measures to verify the identity of the caller, such as asking for
your name, account number, social security or taxpayer identification
number and other relevant information. The fund will not be liable for
following instructions communicated by telephone that it reasonably
believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchanges by telephone should not be used to take advantage of short-term
swings in the market. The fund reserves the right to limit or terminate
this privilege for any shareholder making frequent exchanges or abusing the
privilege and may revoke the privilege for all shareholders upon 60 days'
written notice.
8 Your Investment
<PAGE>
<PAGE>
ACCOUNT STATEMENTS. Every Lord Abbett investor automatically receives
quarterly account statements.
HOUSEHOLDING. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
ACCOUNT CHANGES. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
SYSTEMATIC EXCHANGE. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
SALES CHARGES AND SERVICE FEES
SALES AND SERVICE COMPENSATION. As part of its plan for distributing
shares, the fund and Lord Abbett Distributor pay sales and service
compensation to Authorized Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of the fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 plan adopted by the fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Fees and Expenses" and "Purchases." The
portion of these expenses that is paid as sales and service compensation to
Authorized Institutions, such as your dealer, is shown in the chart at the
end of this prospectus. The portion of such sales and service compensation
paid to Lord Abbett Distributor is discussed under "Sales Activities" and
"Service Activities." Sometimes we do not pay sales and service
compensation where tracking data is not available for certain accounts or
where the Authorized Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
SALES ACTIVITIES. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to the fund's class A and class C shares for
activities that are primarily intended to result in the sale of such class
A and class C shares, respectively. These activities include, but are not
limited to, printing of prospectuses and statements of additional
information and reports for those other than existing shareholders,
preparation and distribution of advertising and sales material, expenses of
organizing and conducting sales seminars, Additional Concessions to
Authorized Institutions, the cost necessary to provide distribution-related
services or personnel, travel, office expenses, equipment and other
allocable overhead.
SERVICE ACTIVITIES. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
12b-1 FEES ARE PAYABLE REGARDLESS OF EXPENSES. The amounts payable by a
fund need not be directly related to expenses. If Lord Abbett
Distributor's actual expenses exceed the fee payable to it, a fund will
not have to pay more than that fee. If Lord Abbett Distributor's expenses
are less than the fee it receives, Lord Abbett Distributor will keep the
full amount of the fee.
Your Investment 9
<PAGE>
<PAGE>
MANAGEMENT
The fund's investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with approximately $28 billion in
more than 35 mutual fund portfolios and other advisory accounts. For more
information about the services Lord Abbett provides to the fund, see the
Statement of Additional Information.
The fund pays Lord Abbett a monthly fee based on the average daily net
assets for each month. In addition, the fund pays all expenses not
expressly assumed by Lord Abbett.
Lord Abbett uses a team of portfolio managers and analysts acting together
to manage the fund's investments. Christopher J. Towle, Partner of Lord
Abbett, heads the team, the other senior members of which include Richard
Szaro, Michael Goldstein and Thomas Baade. Messrs. Towle and Szaro have
been with Lord Abbett since 1988 and 1983, respectively. Mr. Goldstein has
been with Lord Abbett since 1997. Before joining Lord Abbett, Mr. Goldstein
was a bond trader for Credit Suisse BEA Associates from August 1992 through
April 1997. Mr. Baade joined Lord Abbett in 1998; prior to that he was a
credit analyst with Greenwich Street Advisors.
10 Your Investment
<PAGE>
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by the fund and their risks.
ADJUSTING INVESTMENT EXPOSURE. The fund may, but is not required to, use
various strategies to change its investment exposure to adjust to changing
security prices, interest rates, currency exchange rates, commodity prices
and other factors. These strategies may involve buying or selling
derivative instruments, such as options and futures contracts. The fund may
use these transactions to change the risk and return characteristics of its
portfolio. If we judge market conditions incorrectly or use a strategy that
does not correlate well with the fund's investments, it could result in a
loss, even if we intended to lessen risk or enhance returns. These
transactions may involve a small investment of cash compared to the
magnitude of the risk assumed and could produce disproportionate gains or
losses. Also, these strategies could result in losses if the counterparty
to a transaction does not perform as promised.
BORROWING. The fund may borrow from banks. If the fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. The fund may borrow only for temporary or emergency purposes, and
not in an amount exceeding 33 1/3% of its total assets.
EQUITY SECURITIES. The fund may also invest up to 20% of its total assets
in equity securities. These include common stocks, preferred stocks,
convertible securities, warrants, and similar instruments. Common stocks,
the most familiar type, represent an ownership interest in a corporation.
Although equity securities have a history of long-term growth in their
value, their prices fluctuate based on changes in a company's financial
condition and on market and economic conditions.
FOREIGN SECURITIES. The fund will limit its investments in foreign
securities to 20% of its total assets. These securities are not subject to
the same degree of regulation and may be more volatile and less liquid than
securities traded in major U.S. markets. Foreign portfolio securities may
trade on days when the fund does not value them. Fund share prices could be
affected on days an investor cannot purchase or sell shares. Other risks
include less information on public companies, banks and governments;
political and social instability; expropriations; higher transaction costs;
currency fluctuations; non-deductible withholding taxes and different
accounting and settlement practices.
ILLIQUID SECURITIES. These securities include those that are not traded on
the open market or that trade irregularly or in very low volume. These may
include illiquid Rule 144A securities. They may be difficult or impossible
to sell at the time and price the fund would like. The fund may invest up
to 15% of its assets in illiquid securities.
OPTIONS AND FINANCIAL FUTURES TRANSACTIONS. The fund may deal in options on
securities, and securities indices, and financial futures transactions,
including options on financial futures to increase or decrease its exposure
to changing securities prices or interest rates or for bona fide hedging
purposes. The fund may write (sell) covered call options and secured put
options on up to 25% of its net assets and may purchase put and call
options and purchase and sell futures contracts provided that no more than
5% of
For More Information 11
<PAGE>
<PAGE>
its net assets (at the time of purchase) may be invested in premiums on
such options and initial margin deposits on such futures contracts.
In addition, the use of options and financial futures transactions to
achieve the fund's investment objective could result in a loss due to
unanticipated market conditions and could increase the volatility of the
fund. These transactions may involve a small investment of cash relative to
the risks assumed.
PORTFOLIO SECURITIES LENDING. The fund may lend securities to
broker-dealers and financial institutions, as a means of earning income.
This practice could result in a loss or delay in recovering the fund's
securities if the borrower defaults. The fund will limit their securities
loans to 30% of its total assets, and all loans must be fully
collateralized with short-term liquid securities.
REPURCHASE AGREEMENTS. The fund may enter into Repurchase Agreements. In a
Repurchase Agreement, the fund buys a security at one price from a
broker-dealer or financial institution and simultaneously agrees to sell
the same security back to the same party at a higher price in the future.
If the other party to the agreement defaults or becomes insolvent, the fund
could lose money.
RULE 144A SECURITIES. The fund may invest in Rule 144A securities, which
are securities determined by the Board to be liquid pursuant to Securities
and Exchange Commission Rule 144A (the "Rule"). Under the Rule, a
qualifying unregistered security may be resold to a qualified institutional
buyer without registration and without regard to whether the seller
originally purchased the security for investment. A substantial part of the
lower-rated debt market consisted of Rule 144A securities, many of which
are registered within a few months of their purchases. Investments in Rule
144A securities initially determined to be liquid could have the effect of
diminishing the level of a fund's liquidity during periods of decreased
market interest in such securities.
GLOSSARY OF SHADED TERMS
ADDITIONAL CONCESSIONS. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional payments
may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund and will be made in the form of cash
or, if permitted, non-cash payments. The non-cash payments will include
business seminars at Lord Abbett's headquarters or other locations,
including meals and entertainment, or the receipt of merchandise. The cash
payments may include payment of various business expenses of the dealer.
In selecting dealers to execute portfolio transactions for the fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
AUTHORIZED INSTITUTIONS. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 plan are
"Authorized Institutions." Lord Abbett Distributor is an Authorized
Institution.
ELIGIBLE FUND. An Eligible Fund is any Lord Abbett-sponsored fund except
for (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such series is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord
12 For More Information
<PAGE>
<PAGE>
Abbett Series Fund; and (4) Lord Abbett U.S. Government Securities Money
Market Fund ("GSMMF") (except for holdings in GSMMF which are attributable
to any shares exchanged from the Lord Abbett family of funds). An Eligible
Fund also is any Authorized Institution's affiliated money market fund
satisfying Lord Abbett Distributor as to certain omnibus account and other
criteria.
ELIGIBLE MANDATORY DISTRIBUTIONS. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the
total investment.
LEGAL CAPACITY. This term refers to the authority of an individual to act
on behalf of an entity or other person(s). For example, if a redemption
request were to be made on behalf of the estate of a deceased shareholder,
John W. Doe, by a person (Robert A. Doe) who has the legal capacity to act
for the estate of the deceased shareholder because he is the executor of
the estate, then the request must be executed as follows: Robert A. Doe,
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
To give another example, if a redemption request were to be made on behalf
of the ABC Corporation by a person (Mary B. Doe) who has the legal capacity
to act on behalf of the Corporation, because she is the president of the
corporation, the request must be executed as follows: ABC Corporation by
Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
MUTUAL FUND ADVISORY PROGRAM. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions who
either (1) have an arrangement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares (and sometimes providing for
acceptance of orders for such shares on our behalf) in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions,
or (2) charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients.
PURCHASER. The term "purchaser" includes: (1) an individual, (2) an
individual and his or her spouse and children under the age of 21 and (3) a
trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account (including a pension, profit sharing, or other
employee benefit trust qualified under Section 401 of the Internal Revenue
Code -- more than one qualified employee benefit trust of a single
employer, including its consolidated subsidiaries, may be considered a
single trust, as may qualified plans of multiple employers registered in
the name of a single bank trustee as one account), although more than one
beneficiary is involved.
SPECIAL RETIREMENT WRAP PROGRAM. This is a program sponsored by an
Authorized Institution showing one or more characteristics distinguishing
it, in the opinion of Lord Abbett Distributor from a Mutual Fund Advisory
Program. Such characteristics include, among other things, the fact that an
Authorized Institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participant-directed Retirement Plans.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate -
Robert A. Doe
Executor of the Estate of
John W. Doe
[DATE]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
DAVID R. LEVY
- -------------------------------------
AUTHORIZED SIGNATURE
(960) X 9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM 'TM'
SR
In the case of the corporation -
ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[DATE]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
DAVID R. LEVY
- -------------------------------------
AUTHORIZED SIGNATURE
(960) X 9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM 'TM'
SR
YEAR 2000 ISSUES. Each fund could be adversely affected if the computers
used by each fund and their service providers do not properly process and
calculate date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances
from each fund's service providers that they are taking similar steps. Of
course, the Year 2000 problem is unprecedented and, therefore, Lord Abbett
cannot eliminate altogether the possibility that it or the fund will be
affected.
For More Information 13
<PAGE>
<PAGE>
Financial Information
COMPENSATION FOR YOUR DEALER
<TABLE>
<CAPTION>
==================================================================================================================================
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
==================================================================================================================================
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.00% 0.25% 4.24%
- ----------------------------------------------------------------------------------------------------------------------------------
$50,000 - $99,999 4.75% 4.25% 0.25% 4.49%
- ----------------------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 3.75% 3.25% 0.25% 3.49%
- ----------------------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.75% 2.50% 0.25% 2.74%
- ----------------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 1.75% 0.25% 2.00%
- ----------------------------------------------------------------------------------------------------------------------------------
$1 million or more(3) or Retirement Plan - 100 or more
eligible employees(3) or Special Retirement Wrap Program(3)
- ----------------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ----------------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ----------------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ----------------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
- ----------------------------------------------------------------------------------------------------------------------------------
Class B investments Paid at time of sale (% of net asset value)
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
- ----------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ----------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ----------------------------------------------------------------------------------------------------------------------------------
Class B investments Percentage of average net assets(4)
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
- ----------------------------------------------------------------------------------------------------------------------------------
Class C investments
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.65% 0.25% 0.90%
- ----------------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ----------------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A and P shares is paid quarterly. The first year's
service fee on class B and C shares is paid at the time of sale.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may be
paid to Authorized Institutions from time to time.
(3) With respect to class B, C and P shares, 0.25%, 0.90% and 0.45%,
respectively of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions. This fee is paid quarterly in arrears. In the case of class C
shares for fixed-income funds, such as High Yield Fund, 0.10% of the average
annual net asset value of such shares is retained by Lord Abbett
Distributor, thus reducing the dealer's concession from 0.75% to 0.65% after
the first year. Lord Abbett Distributor uses this 0.10% for expenses
primarily intended to result in the sale of such fund's shares.
14 Financial Information
<PAGE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
<PAGE>
More information on this fund is available free upon request, including the
following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the fund, lists portfolio holdings and contains a letter from the
fund's manager discussing recent market conditions and the fund's
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the fund and its policies. A current SAI is on
file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this prospectus).
LORD ABBETT HIGH YIELD FUND
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
---------------------------
SEC file number: 811-7988
To obtain information:
BY TELEPHONE. Call the fund at:
800-426-1130
BY MAIL. Write to the fund at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
VIA THE INTERNET.
LORD, ABBETT & CO.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded
from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
LAHYF-1-499
(4/99)
<PAGE>
<PAGE>
LORD Limited Duration U.S.
ABBETT Government Securities Series
INVESTMENT TRUST U.S. Government Securities Series
PROSPECTUS
APRIL 1, 1999
LORD ABBETT & CO [LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete,
and it has not judged these funds for investment merit. It is a criminal
offense to state otherwise.
Class P shares of each fund are neither offered to the general public nor
available in all states. Please call 800-821-5129 for further information.
<PAGE>
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
PAGE
The Funds
<S> <C>
Information about the goal/ Limited Duration U.S.
approach, main risks, past Government Securities Fund 2
performance, fees and expenses U.S. Government Securities Fund 4
Your Investment
Information for managing Purchases 6
your fund account Opening Your Account 8
Redemptions 9
Distributions and Taxes 9
Services For Fund Investors 10
Sales Charges and Service Fees 11
Management 12
For More Information
How to learn more Other Investment Techniques 13
about the funds Glossary of Shaded Terms 14
Recent Performance 15
Financial Information
Financial highlights Limited Duration U.S.
of each fund Government Securities Fund 16
U.S. Government Securities Fund 18
Compensation For Your Dealer 20
How to learn more about the Back Cover
fund and other Lord Abbett funds
</TABLE>
<PAGE>
<PAGE>
Limited Duration U.S. Government Securities Fund
The Funds
GOAL / APPROACH
The fund's investment objective is to seek a high level of income from a
portfolio consisting primarily of limited duration U.S. Government
securities.
To pursue its goal, the fund primarily invests in short- and intermediate-
duration U.S. Government securities which the fund expects will produce a
high level of income. Investments of the fund include direct obligations of
the U.S. Treasury (such as Treasury bills, notes and bonds) and certain
obligations issued by U.S. Government agencies and its instrumentalities.
These obligations issued by U.S. Government agencies include:
Federal Home Loan Banks
Federal Home Loan Mortgage Corporation ("FHLMC's")
Federal National Mortgage Association ("FNMA's")
Government National Mortgage Association ("GNMA's")
Mortgage-backed securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, including "component securities"
MAIN RISKS
The U.S. Government securities in which the fund invests are guaranteed
as to timely payments of interest and principal. However, the market
price for these securities are not guaranteed and will fluctuate. Such
securities will not protect investors against price changes due to
changing interest rates. The fund does not seek to maintain a stable net
asset value, and may not be able to return dollar-for-dollar the money
invested. The value of shares of the fund will change as the general
levels of interest rates fluctuate. When interest rates decline, share
value generally rises. Conversely, when rates rise, share value generally
declines. The fund may employ other investment practices, such as
investing in illiquid and other securities, which could adversely affect
performance.
An investment in the fund is not a bank deposit. It is not FDIC-insured
or government endorsed. It is not a complete investment program. You
could lose money in the fund, but you also have the potential to make
money.
WE OR THE FUND refers to Limited Duration U.S. Government Securities
Series ("Limited Duration U.S. Government Fund"), a series of Lord Abbett
Investment Trust (the "company"). The fund operates under the supervision
of the company's Board, with the advice of Lord, Abbett & Co. ("Lord
Abbett"), its investment manager.
ABOUT THE FUND. The fund is a professionally managed portfolio primarily
holding securities purchased with the pooled money of investors. It
strives to reach its stated goal, although as with all funds, it cannot
guarantee results.
MORTGAGE-BACKED SECURITIES directly or indirectly represent a
participation in, or are secured by and payable from, mortgage loans
secured by real property. The price of mortgage-backed securities may be
significantly affected by changes in interest rates. Some mortgage-backed
securities have structures that make their reaction to interest rates and
other factors difficult to predict, making their prices very volatile.
2 The Funds
<PAGE>
<PAGE>
Limited Duration U.S. Gov't Securities Fund Symbols: Class A - LALDX
Class C - LDLAX
PAST PERFORMANCE
The information below provides some indication of the risks of investing
in the fund by showing changes in the fund's class A shares' performance
from calendar year to calendar year and by showing how the fund's average
annual returns compare with those of a broad measure of market
performance.
[PERFORMANCE GRAPH]
"94" -3.5%
"95" 10.1%
"96" 1.3%
"97" 6.9%
"98" 6.6%
Best Quarter: 20.03% Worst Quarter: -7.20%
The table below shows a comparison of the fund's class A and C average annual
total return to that of the Lipper's Short U.S. Government Fund Index, Lipper's
Intermediate U.S. Government Fund Index, and the Lehman Intermediate Government
Bond Index. Fund returns assume reinvestment of dividends and distributions and
payment of the maximum applicable front-end or deferred sales charge. All
periods end on December 31, 1998.
<TABLE>
<CAPTION>
CLASS 1 YEAR 5 YEARS INCEPTION(i) LSUSGFI(ii) LIUSGFI(ii) LIGBI(ii)
<S> <C> <C> <C> <C> <C> <C>
A 3.30% 3.54% 3.48% 5.62% 6.11% 6.43%
- ------------------------------------------------------------------------------------------------------------
C 4.20% -- 5.91% 6.68% 8.65% 8.29%
- ------------------------------------------------------------------------------------------------------------
LSUSGF Index(ii) 6.56% 5.63% -- -- -- --
- ------------------------------------------------------------------------------------------------------------
LIUSGF Index(ii) 8.17% 6.12% -- -- -- --
- ------------------------------------------------------------------------------------------------------------
LIGB Index(ii) 8.49% 6.45% -- -- -- --
- ------------------------------------------------------------------------------------------------------------
</TABLE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
=====================================================================================
Fee Table
- -------------------------------------------------------------------------------------
CLASS A CLASS C CLASS P
<S> <C> <C> <C>
SHAREHOLDER FEES (Fees paid directly from your investment)
- -------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- -------------------------------------------------------------------------------------
(as a % of offering price) 3.00% none none
- -------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none 1.00% none
- -------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (Expenses deducted
from fund assets) (as a % of average net assets)(1)
- -------------------------------------------------------------------------------------
Management Fees (See "Management") 0.50% 0.50% 0.50%
- -------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees(2) 0.00% 1.00% 0.45%
- -------------------------------------------------------------------------------------
Other Expenses (See "Management") 0.88% 0.88% 0.88%
- -------------------------------------------------------------------------------------
Total Operating Expenses 1.38% 2.38% 1.83%
- -------------------------------------------------------------------------------------
=====================================================================================
Expense example
- -------------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
<CAPTION>
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A shares $436 $724 $1,032 $1,910
- -----------------------------------------------------------------
Class C shares $341 $742 $1,270 $2,718
- -----------------------------------------------------------------
Class P shares $186 $575 $ 990 $2,150
- -----------------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $436 $724 $1,032 $1,910
- -----------------------------------------------------------------
Class C shares $241 $742 $1,270 $2,718
- -----------------------------------------------------------------
Class P shares $186 $575 $ 990 $2,150
- -----------------------------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
(i) The date of inception for each class are as follows: A -11/4/93; and
C -7/15/96.
(ii) Performance for the unmanaged Lipper's Short U.S. Government Fund
Index, Lipper's Intermediate U.S. Government Fund Index, and the
Lehman Intermediate Government Bond Index does not reflect
transaction costs or management fees.
(iii) Represents total returns for the period 11/30/93 to 12/31/98, to
correspond with class A inception date.
(iv) Represents total returns for the period 7/31/96 to 12/31/98, to
correspond with class C inception date.
MANAGEMENT FEES are payable to Lord Abbett for the fund's investment
management.
12b-1 FEES refer to fees incurred for activities that are primarily
intended to result in the sale of fund shares and service fees for
shareholder account service and maintenance.
THE 12b-1 PLAN FOR THE FUND WILL NOT BECOME OPERATIVE FOR CLASS A SHARES
UNTIL THE CLASS A NET ASSETS REACH $100 MILLION.
OTHER EXPENSES include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees.
LORD ABBETT IS CURRENTLY WAIVING THE MANAGEMENT FEE AND SUBSIDIZING A
PORTION OF THE OTHER EXPENSES OF THE FUND. LORD ABBETT MAY STOP WAIVING THE
MANAGEMENT FEE AND SUBSIDIZING A PORTION OF THE OTHER EXPENSES AT ANY TIME.
TOTAL OPERATING EXPENSES WITH THE FEE WAIVER AND EXPENSE SUBSIDY ARE 0.47%,
1.47% AND 0.92% FOR CLASS A, C, AND P SHARES, RESPECTIVELY.
---------------------------------------------------------------------------
(1) The annual operating expenses have been restated from fiscal year
amounts to reflect current fees.
(2) Because 12b-1 distribution fees are paid out on an ongoing basis, over
time these fees will increase the cost of your investment and may cost
you more than paying other types of sales charges.
The Funds 3
<PAGE>
<PAGE>
U.S. Government Securities Fund
GOAL / APPROACH
The fund's investment objective is high current income consistent with
reasonable risk.
To pursue its goal, the fund invests in obligations issued by the U.S.
Treasury and certain obligations issued or guaranteed by U.S. Government
agencies or its instrumentalities. These obligations issued by U.S.
Government agencies include:
Federal Home Loan Banks
Federal Home Loan Mortgage Corporation ("FHLMC's")
Federal National Mortgage Association ("FNMA's")
Federal Farm Credit Bank
Government National Mortgage Association ("GNMA's")
Student Loan Marketing Association
Tennessee Valley Authority
Such investments provide substantial protection against credit risks. Some
of these securities are guaranteed as to timely payment of principal and
interest.
MAIN RISKS
The market price for U.S. Government securities is not guaranteed and will
fluctuate. Such securities will not protect investors against price changes
due to changing interest rates. The value of fund shares will change as the
general levels of interest rates fluctuate. When interest rates decline,
share value rises. When interest rates rise, share value can be expected to
decline. The fund may employ other investment practices, such as investment
in illiquid and other securities, that could adversely affect performance.
An investment in the fund is not a bank deposit. It is not FDIC-insured or
government endorsed. It is not a complete investment program. You could
lose money in the fund, but you also have the potential to make money.
WE OR THE FUND refers to U.S. Government Securities Series ("U.S.
Government Fund"), a series of Lord Abbett Investment Trust (the "company")
the company operates under the supervision of the company's Board, with the
advice of Lord, Abbett & Co. ("Lord Abbett"), its investment manager.
ABOUT THE FUND. The fund is a professionally managed portfolio primarily
holding securities purchased with the pooled money of investors. It strives
to reach its stated goal, although as with all funds, it cannot guarantee
results.
REASONABLE RISK is the volatility the fund will have over time which we
believe will approximate the Lehman Brothers Government Bond Index.
4 The Funds
<PAGE>
<PAGE>
U.S. Government Securities Fund Symbols: Class A - LAGVX
Class B - LAVBX
Class C - LAUSX
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund by showing changes in the fund's class A shares' performance from
calendar year to calendar year and by showing how the fund's average annual
returns compare with those of a broad measure of market performance.
[PERFORMANCE GRAPH]
"89" 12.7%
"90" 9.3%
"91" 16.9%
"92" 7.1%
"93" 9.2%
"94" -4.3%
"95" 15.7%
"96" 1.6%
"97" 9.2%
"98" 7.9%
Best Qarter: 18.56% Worst Quarter: -12.78%
The table below shows a comparison of the fund's class A, B and C average annual
total return to that of the Lipper's General U.S. Government Bond Fund Index,
and the Lehman Government Bond Index which has no sales charges. Fund returns
assume reinvestment of dividends and distributions and payment of the maximum
applicable front-end or deferred sales charge. All periods end on December 31,
1998.
<TABLE>
<CAPTION>
CLASS 1 YEAR INCEPTION(i)
<S> <C> <C>
A 2.70% 10.24%
- --------------------------------------------------------------------------
B 3.23% 6.78%
- --------------------------------------------------------------------------
C 7.10% 8.39%
- --------------------------------------------------------------------------
Lipper's General U.S. Gov't Bond Fund Index
Lehman Gov't Bond Index(ii) 0.00% 0.00%
- --------------------------------------------------------------------------
</TABLE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
=====================================================================================================
Fee Table
- -----------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS P
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (Fees paid directly from your investment)
- -----------------------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- -----------------------------------------------------------------------------------------------------
(as a % of offering price) 4.75% none none none
- -----------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none 5.00%(1) 1.00% none
- -----------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (Expenses deducted
from fund assets) (as a % of average net assets)(2)
- -----------------------------------------------------------------------------------------------------
Management Fees (See "Management") 0.50% 0.50% 0.50% 0.50%
- -----------------------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees(3) 0.35% 1.00% 1.00% 0.45%
- -----------------------------------------------------------------------------------------------------
Other Expenses (See "Management") 0.18% 0.18% 0.18% 0.18%
- -----------------------------------------------------------------------------------------------------
Total Operating Expenses 1.03% 1.68% 1.68% 1.13%
- -----------------------------------------------------------------------------------------------------
=====================================================================================================
Expense Example
- -----------------------------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment at maximum sales charge, if any, 5% total return each year and no
changes in expenses. You pay the following expenses over the course of each
period shown if you sell your shares at the end of the period, although your
actual cost may be higher or lower. The expenses include any applicable
contingent deferred sales charges.
<CAPTION>
SHARE CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A shares $575 $787 $1,017 $1,677
- -------------------------------------------------------
Class B shares(3) $671 $829 $1,112 $1,816
- -------------------------------------------------------
Class C shares $271 $529 $ 912 $1,989
- -------------------------------------------------------
Class P shares $115 $359 $ 622 $1,377
- -------------------------------------------------------
You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $575 $787 $1,017 $1,677
- -------------------------------------------------------
Class B shares(3) $171 $529 $ 912 $1,816
- -------------------------------------------------------
Class C shares $171 $529 $ 912 $1,989
- -------------------------------------------------------
Class P shares $115 $359 $ 622 $1,377
- -------------------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's
actual expenses or returns, either past or present.
Past performance is not a prediction of future results.
---------------------------------------------------------------------------
(i) The date of inception for each class are as follows: A -1/1/82; B
-8/1/96; and C -7/15/96.
(ii) Performance for the unmanaged Lipper's General U.S. Government Bond
Fund Index and the Lehman Government Bond Index do not reflect
transaction costs or management fees.
MANAGEMENT FEE are payable to Lord Abbett for the fund's investment
management.
12b-1 FEES refer to fees incurred for activities that are primarily
intended to result in the sale of fund shares and service fees for
shareholder account service and maintenance.
OTHER EXPENSES include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees.
---------------------------------------------------------------------------
(1) Class B shares will automatically convert to class A shares on the
eighth anniversary of your original purchase of class B shares.
(2) The annual operating expenses have been restated from fiscal year
amounts to reflect current fees.
(3) Because 12b-1 distribution fees are paid out on an ongoing basis, over
time they will increase the cost of your investment and may cost you
more than paying other types of sales charges.
The Funds 5
<PAGE>
<PAGE>
Your Investment
PURCHASES
This prospectus offers three classes of shares, classes A, C and P for the
Limited Duration U.S. Government Securities Fund, and four classes of
shares, classes A, B, C and P for the U.S. Government Securities Fund (call
800-821-5129 to find out if P shares are available in your state). Although
a fund may have more than one class of shares, these different classes
represent investments in the same portfolio of securities but are subject
to different expenses. Our shares are continuously offered. The offering
price is based on the Net Asset Value ("NAV") per share next determined
after we receive your purchase order submitted in proper form. A front-end
sales charge is added to the NAV in the case of the class A shares. There
is no front-end sales charge although there is a Contingent Deferred Sales
Charge in the case of the class B and C shares, as described below.
You should read this section carefully to determine which class of shares
represents the best investment option for your particular situation. It may
not be suitable for you to place a purchase order for class B shares of
$500,000 or more, or a purchase order for class C shares of $1,000,000 or
more. You should discuss pricing options with your investment professional.
For more information, see "Alternative Sales Arrangements" in the Statement
of Additional Information.
We reserve the right to withdraw all or any part of the offering made by
this prospectus or to reject any purchase order. We also reserve the right
to waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
<TABLE>
=========================================================================================
FRONT-END SALES CHARGES - CLASS A SHARES
(Limited Duration U.S. Government Fund only)
- -----------------------------------------------------------------------------------------
<CAPTION>
AS A % OF AS A % OF TO COMPUTE OFFERING
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT PRICE DIVIDE NAV BY
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Less than $100,000 3.00% 3.09% .9700
- -----------------------------------------------------------------------------------------
$100,000 to $249,999 2.50% 2.56% .9750
- -----------------------------------------------------------------------------------------
$250,000 to $499,999 2.00% 2.04% .9800
- -----------------------------------------------------------------------------------------
$500,000 to $999,999 1.50% 1.52% .9850
- -----------------------------------------------------------------------------------------
$1,000,000 to $2,999,999 1.00% 1.01% .9900
- -----------------------------------------------------------------------------------------
$3,000,000 to $9,999,999 0.50% 0.50% .9950
- -----------------------------------------------------------------------------------------
$10,000,000 or more 0.25% 0.25% .9975
- -----------------------------------------------------------------------------------------
=========================================================================================
FRONT-END SALES CHARGES - CLASS A SHARES
(U.S. Government Securities Fund Only)
- -----------------------------------------------------------------------------------------
<CAPTION>
AS A % OF AS A % OF TO COMPUTE OFFERING
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT PRICE DIVIDE NAV BY
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Less than $50,000 4.75% 4.99% .9525
- -----------------------------------------------------------------------------------------
$50,000 to $99,999 4.75% 4.99% .9525
- -----------------------------------------------------------------------------------------
$100,000 to $249,999 3.75% 3.90% .9625
- -----------------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- -----------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% .9800
- -----------------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge .9900
- -----------------------------------------------------------------------------------------
</TABLE>
NAV per share for each class of fund shares is calculated each business day
at the close of regular trading on the New York Stock Exchange ("NYSE").
Each fund is open on those business days when the NYSE is open. Purchases
and sales of fund shares are executed at the NAV next determined after the
fund receives your order. In calculating NAV, securities for which market
quotations are available are valued at those quotations. Securities for
which such quotations are not available are valued at fair value under
procedures approved by the Board.
Share classes
CLASS A
normally offered with a front-end sales charge
CLASS B
no front-end sales charge, however, a contingent deferred sales charge
is applied to shares sold prior to the sixth anniversary of purchase
higher annual expenses than class A shares
automatically convert to class A shares after eight years
CLASS C
no front-end sales charge
higher annual expenses than class A shares
a contingent deferred sales charge is applied to shares sold prior to the
first anniversary of purchase
CLASS P
available to certain pension or retirement plans and pursuant to a Mutual
Fund Advisory Program
6 Your Investment
<PAGE>
<PAGE>
REDUCING YOUR CLASS A FRONT-END SALES CHARGES. Class A shares may be
purchased at a discount if you qualify under either of the following
conditions:
RIGHTS OF ACCUMULATION -- A Purchaser can apply the value (at public
offering price) of the shares you already own to a new purchase of class
A shares of any Eligible Fund in order to reduce the sales charge.
STATEMENT OF INTENTION -- A Purchaser of class A shares can purchase
additional shares of any Eligible Fund over a 13-month period and receive
the same sales charge as if all shares were purchased at once. Shares
purchased through reinvestment of dividends and distributions are not
included. A statement of intention can be backdated 90 days. Current
holding under rights of accumulation can be included in a statement of
intention.
For more information on eligibility for these privileges, read the
applicable sections in the attached application.
CLASS A SHARE PURCHASES WITHOUT A FRONT-END SALES CHARGE. Class A shares
may be purchased without a front-end sales charge under any of the
following conditions:
purchases of $1 million or more *
purchases by Retirement Plans with at least 100 eligible employees *
purchases under a Special Retirement Wrap Program *
purchases made with dividends and distributions on class A shares of
another Eligible Fund
purchases representing repayment under the loan feature of the Lord
Abbett-sponsored prototype 403(b) Plan for class A shares
purchases by employees of any consenting securities dealer having a sales
agreement with Lord Abbett Distributor
purchases under a Mutual Fund Advisory Program
purchases by trustees or custodians of any pension or profit sharing
plan, or payroll deduction IRA for employees of any consenting securities
dealer having a sales agreement with Lord Abbett Distributor
See the Statement of Additional Information for a listing of other
categories of purchasers who qualify for class A share purchases without a
front-end sales charge.
* These categories may be subject to a Contingent Deferred Sales Charge
("CDSC").
CLASS A SHARE CDSC. If you buy class A shares under one of the starred (*)
categories listed above and you redeem any of them within 24 months after
the month in which you initially purchased them, the fund normally will
collect a CDSC of 1%.
The class A share CDSC generally will be waived for the following
conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
distribution under Retirement Plans (documentation may be required)
redemptions continuing as investments in another fund participating in a
Special Retirement Wrap Program
CLASS B SHARE CDSC (U.S. GOVERNMENT SECURITIES FUND ONLY). The CDSC for
class B shares normally applies if you redeem your shares before the sixth
anniversary of their initial purchase. The CDSC declines the longer you own
your shares, according to the following schedule:
CDSC, regardless of class, is not charged on shares acquired through
reinvestment of dividends or capital gains distributions and is charged on
the original purchase cost or the current market value of the shares at the
time they are being sold, whichever is lower. In addition, repayment of
loans under Retirement Plans and 403(b) Plans will constitute new sales for
purposes of assessing the CDSC.
To minimize the amount of any CDSC, the fund redeems shares in the
following order:
1. shares acquired by reinvestment of dividends and capital gains (always
free of a CDSC)
2. shares held for six years or more (class B) or two years or more after
the month of purchase (class A) or one year or more (class C)
3. shares held the longest before the sixth anniversary of their purchase
(class B) or before the second anniversary after the month of purchase
(class A) or before the first anniversary of their purchase (class C)
RETIREMENT PLANS include employer-sponsored retirement plans under the
Internal Revenue Code, excluding Individual Retirement Accounts.
LORD ABBETT DISTRIBUTOR LLC ("Lord Abbett Distributor") acts as agent for
the funds to work with investment professionals that buy and/or sell shares
of the funds on behalf of their clients. Generally, Lord Abbett Distributor
does not sell fund shares directly to investors.
BENEFIT PAYMENT DOCUMENTATION. (class A only)
under $50,000 - no documentation necessary
over $50,000 - reason for benefit payment must be received in writing.
Use the address indicated under "Opening Your Account."
Your Investment 7
<PAGE>
<PAGE>
================================================================================
CONTINGENT DEFERRED SALES CHARGES - CLASS B SHARES
(U.S. Government Securities Fund only)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNIVERSARY(1) OF CONTINGENT DEFERRED SALES CHARGE
THE DAY ON WHICH THE ON REDEMPTIONS (AS A % OF AMOUNT
PURCHASE ORDER WAS ACCEPTED SUBJECT TO CHARGE)
On Before
- --------------------------------------------------------------------------------
<S> <C> <C>
1st 5.0%
- --------------------------------------------------------------------------------
1st 2nd 4.0%
- --------------------------------------------------------------------------------
2nd 3rd 3.0%
- --------------------------------------------------------------------------------
3rd 4th 3.0%
- --------------------------------------------------------------------------------
4th 5th 2.0%
- --------------------------------------------------------------------------------
5th 6th 1.0%
- --------------------------------------------------------------------------------
on or after the 6th(2) None
- --------------------------------------------------------------------------------
</TABLE>
(1) The anniversary is the same calendar day in each respective year after the
date of purchase. For example, the anniversaries for shares purchased on
May 1 will be May 1 of each succeeding year.
(2) Class B shares will automatically convert to class A shares on the eighth
anniversary of the purchase of class B shares.
The class B share CDSC generally will be waived under any one of the
following conditions:
benefit payments such as Retirement Plan loans, hardship withdrawals,
death, disability, retirement, separation from service or any excess
contribution or distribution under Retirement Plans
Eligible Mandatory Distributions under 403(b) Plans and individual
retirement accounts
death of the shareholder (natural person)
redemptions of shares in connection with Div-Move and Systematic
Withdrawal Plans (up to 12% per year)
See "Systematic Withdrawal Plan" under "Services For Fund Investors --
Automatic Services" below for more information on CDSCs with respect to
class B shares.
CLASS C SHARE CDSC. The 1% CDSC for class C shares normally applies if you
redeem your shares before the anniversary of the purchase of the shares.
CLASS P SHARES. Class P shares have lower annual expenses than class B and
class C shares, no front-end sales charge, and no CDSC. Class P shares are
currently sold and redeemed at NAV (a) pursuant to a Mutual Fund Advisory
Program, or (b) to the trustees of, or employer-sponsors with respect to,
pension or retirement plans with at least 100 eligible employees (such as a
plan under Section 401(a), 401(k) or 457(b) of the Internal Revenue Code)
which engage an investment professional providing or participating in an
agreement to provide certain recordkeeping, administrative and/or
sub-transfer agency services to the fund on behalf of the class P
shareholders.
OPENING YOUR ACCOUNT
MINIMUM INITIAL INVESTMENT
<TABLE>
<S> <C>
Regular account (Limited Duration U.S. Government Securities Fund) $1,000
(U.S. Government Securities Fund) $500
Individual Retirement Accounts and
403(b) Plans under the Internal Revenue Code $250
Uniform Gifts to Minors Account $250
</TABLE>
IMPORTANT INFORMATION. You may be subject to a $50 penalty under the
Internal Revenue Code if you do not provide a correct taxpayer
identification number (Social Security Number for individuals) or make
certain required certifications. In addition, we may be required to
withhold from your account and pay to the U.S. Treasury 31% of any
redemption proceeds and of any dividend or distribution from your account.
8 Your Investment
<PAGE>
<PAGE>
For Retirement Plans and Mutual Fund Advisory Programs, no minimum
investment is required, regardless of share class.
You may purchase shares through any independent securities dealer who has a
sales agreement with Lord Abbett Distributor or you can fill out the
attached application and send it to the fund you select at the address
stated below. You should carefully read the paragraph below entitled
"Proper Form" before placing your order to assure your order will be
accepted.
NAME OF FUND
P.O. Box 419100
Kansas City, MO 64141
PROPER FORM. An order submitted directly to the fund must contain: (1) a
completed application, and (2) payment by check. For more information
regarding proper form of a purchase order, call the fund at 800-821-5129.
Payment must be credited in U.S. dollars to our custodian bank's account.
BY EXCHANGE. Telephone the fund at 800-821-5129 to request an exchange from
any eligible Lord Abbett-sponsored fund.
REDEMPTIONS
BY BROKER. Call your investment professional for directions on how to
redeem your shares.
BY TELEPHONE. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
BY MAIL. Submit a written redemption request indicating the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity, the
signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding
proper documentation call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Redemption requests for shares
initially purchased by check will not be honored for up to 15 days, unless
we are assured that the check has cleared earlier.
To determine if a CDSC applies to a redemption, see "Class A Share CDSC,"
"Class B Share CDSC" or "Class C Share CDSC."
DISTRIBUTIONS AND TAXES
Each fund pays its shareholders dividends from its net investment income,
and distributes net capital gains that it has realized. Each fund expects
to pay such income dividends to shareholders monthly. If a capital gain
distribution is declared, it is expected to be paid annually. Your
distributions will be reinvested in your fund unless you instruct the fund
to pay them to you in cash. There are no sales charges on reinvestments.
SMALL ACCOUNTS. Our Board may authorize closing any account in which there
are fewer than 25 shares if it is in a fund's best interest to do so.
ELIGIBLE GUARANTOR is any broker or bank that is a member of the Medallion
Stamp Program. Most major securities firms and banks are members of this
program. A NOTARY PUBLIC IS NOT AN ELIGIBLE GUARANTOR.
Your Investment 9
<PAGE>
<PAGE>
The tax status of distributions are the same for all shareholders
regardless of how long they have been in the fund or whether distributions
are reinvested or paid in cash. In general, distributions are taxable as
follows:
================================================================================
FEDERAL TAXABILITY OF DISTRIBUTIONS
<TABLE>
<CAPTION>
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to 15% bracket to 28% bracket or above
- -------------------------------------------------------------------------------------
<S> <C> <C>
INCOME Ordinary Income Ordinary Income
DIVIDENDS Rate Rate
- -------------------------------------------------------------------------------------
SHORT-TERM Ordinary Income Ordinary Income
CAPITAL GAINS Rate Rate
- -------------------------------------------------------------------------------------
LONG-TERM
CAPITAL GAINS 10% 20%
</TABLE>
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
ANNUAL INFORMATION--Information concerning the tax treatment of dividends
and other distributions will be mailed to shareholders each year. Each fund
will also provide annually to its shareholders information regarding the
source of dividends and distributions of capital gains by that fund.
Because everyone's tax situation is unique, you should consult your tax
adviser regarding the treatment of those distributions under the federal,
state and local tax rules that apply to you as well as the tax consequences
of gains or losses from the redemption or exchange of your shares.
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and amount, subject to
certain restrictions. You can set up most of these services when filling
out your application or by calling 800-821-5129.
================================================================================
For investing
<TABLE>
<S> <C>
INVEST-A-MATIC You can make fixed, periodic investments ($50 minimum) into
(Dollar-cost your fund account by means of automatic money transfers from
averaging) your bank checking account. See the attached application for
instructions.
DIV-MOVE You can automatically reinvest the dividends and
distributions from your account into another account in any
Eligible Fund ($50 minimum).
For selling shares
SYSTEMATIC You can make regular withdrawals from most Lord Abbett
WITHDRAWAL funds. Automatic cash withdrawals can be paid to you from
PLAN ("SWP") your account in fixed or variable amounts. To establish a
plan, the value of your shares must be at least $10,000,
except for Retirement Plans for which there is no minimum.
Your shares must be in non-certificate form.
CLASS B SHARES The CDSC will be waived on redemptions of up to 12% of the
current net asset value of your account at the time of your
SWP request. For class B share redemptions over 12% per
year, the CDSC will apply to the entire redemption. Please
contact the fund for assistance in minimizing the CDSC in
this situation.
CLASS B AND Redemption proceeds due to a SWP for class B and class C
C SHARES shares will be redeemed in the order described under
"Purchases."
- -------------------------------------------------------------------------------
</TABLE>
TAXES ON TRANSACTIONS. The chart at left also can provide a "rule of thumb"
guide for your potential U.S. federal tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies
to fund shares sold within 12 months of purchase. The third row, "Long-term
capital gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years
will be taxed at special lower rates.
Any gains realized on a fund's transactions in options and financial
futures will be treated as taxable long- or short-term capital gains.
Lord Abbett offers a variety of Retirement Plans.
Call 800-253-7299 for information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs, 401(k) and 403(b) accounts
Defined Contribution Plans
10 Your Investment
<PAGE>
<PAGE>
<TABLE>
OTHER SERVICES
<S> <C>
TELEPHONE INVESTING. After we have received the attached application
(selecting "yes" under Section 7C and completing Section 7), you can
instruct us by phone to have money transferred from your bank account to
purchase shares of the fund for an existing account. The fund will purchase
the requested shares when it receives the money from your bank.
TELEPHONE EXCHANGES. You or your investment professional, with proper
identification, can instruct your fund by telephone to exchange shares of
any class for shares of the same class of any Eligible Fund by calling
800-821-5129. The fund must receive instructions for the exchange before
the close of the NYSE on the day of your call. If you meet this
requirement, you will get the NAV per share of the Eligible Fund determined
on that day. Exchanges will be treated as a sale for federal tax purposes.
Be sure to read the current prospectus for any fund into which you are
exchanging.
REINVESTMENT PRIVILEGE. If you sell shares of the fund, you have a one time
right to reinvest some or all of the proceeds in the same class of any
Eligible Fund within 60 days without a sales charge. If you paid a CDSC
when you sold your shares, you will be credited with the amount of the
CDSC. All accounts involved must have the same registration.
ACCOUNT STATEMENTS. Every Lord Abbett investor automatically receives
quarterly account statements.
HOUSEHOLDING. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the fund.
ACCOUNT CHANGES. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
SYSTEMATIC EXCHANGE. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
SALES CHARGES AND SERVICE FEES
SALES AND SERVICE COMPENSATION. As part of its plan for distributing
shares, each fund and Lord Abbett Distributor pay sales and service
compensation to Authorized Institutions that sell the fund's shares and
service its shareholder accounts.
Sales compensation originates from two sources: sales charges and 12b-1
distribution fees that are paid out of each fund's assets. Service
compensation originates from 12b-1 service fees. The 12b-1 fee rates vary
by share class, according to the Rule 12b-1 plan adopted by each fund. The
sales charges and 12b-1 fees paid by investors are shown in the
class-by-class information under "Fees and Expenses" and "Purchases." The
portion of these expenses that is paid as sales and service compensation to
Authorized Institutions, such as your dealer, is shown in the chart at the
end of this prospectus. The portion of such sales and service compensation
paid to Lord Abbett Distributor is discussed under "Sales Activities" and
"Service Activities." Sometimes we do not pay sales and service
compensation where tracking data is not available for certain accounts or
where the Authorized Institution waives part of the compensation.
We may pay Additional Concessions to Authorized Institutions from time to
time.
SALES ACTIVITIES. We may use 12b-1 distribution fees to pay Authorized
Institutions to finance any activity which is primarily intended to result
in the sale of shares. Lord Abbett Distributor uses its portion of the
distribution fees attributable to a fund's class A and
<CAPTION>
<S> <C>
TELEPHONE TRANSACTIONS. You have this privilege unless you refuse it in
writing. For your security, telephone transaction requests are recorded. We
will take measures to verify the identity of the caller, such as asking for
your name, account number, social security or taxpayer identification
number and other relevant information. Each fund will not be liable for
following instructions communicated by telephone that it reasonably
believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchanges by telephone should not be used to take advantage of short-term
swings in the market. Each fund reserves the right to limit or terminate
this privilege for any shareholder making frequent exchanges or abusing the
privilege and may revoke the privilege for all shareholders upon 60 days'
written notice.
12b-1 FEES ARE PAYABLE REGARDLESS OF EXPENSES. The amounts payable by a
fund need not be directly related to expenses. If Lord Abbett
Distributor's actual expenses exceed the fee payable to it, a fund will
not have to pay more than that fee. If Lord Abbett Distributor's expenses
are less than the fee it receives, Lord Abbett Distributor will keep the
full amount of the fee.
</TABLE>
Your Investment 11
<PAGE>
<PAGE>
class C shares for activities that are primarily intended to result in the
sale of such class A and class C shares, respectively. These activities
include, but are not limited to, printing of prospectuses and statements of
additional information and reports for other than existing shareholders,
preparation and distribution of advertising and sales material, expenses of
organizing and conducting sales seminars, Additional Concessions to
Authorized Institutions, the cost necessary to provide distribution-related
services or personnel, travel, office expenses, equipment and other
allocable overhead.
SERVICE ACTIVITIES. We may pay Rule 12b-1 service fees to Authorized
Institutions for any activity which is primarily intended to result in
personal service and/or the maintenance of shareholder accounts. Any
portion of the service fees paid to Lord Abbett Distributor will be used to
service and maintain shareholder accounts.
MANAGEMENT
The funds' investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with approximately $28 billion in
more than 35 mutual fund portfolios and other advisory accounts. For more
information about the services Lord Abbett provides to the funds, see the
Statement of Additional Information.
The fund pays Lord Abbett a monthly fee based on the average daily net
assets for each month. For the fiscal year ended November 30, 1998, the fee
paid to Lord Abbett was at an annual rate of .50 of 1% for the U.S.
Government Securities Fund. Lord Abbett waived its management fee for
Limited Duration U.S. Government Securities Fund. In addition, the fund
pays all expenses not expressly assumed by Lord Abbett.
LIMITED DURATION U.S. GOVERNMENT SECURITIES FUND AND U.S. GOVERNMENT
SECURITIES FUND. Lord Abbett uses a team of portfolio managers and analysts
acting together to manage each fund's investments. Robert Gerber, Partner,
of Lord Abbett and Portfolio Manager of each fund heads the team, the other
senior members of which include Walter H. Prahl and Robert A Lee. Mr Gerber
joined Lord Abbett in July 1997 as Director of Taxable Fixed Income. Before
joining Lord Abbett, Mr. Gerber served as a Senior Portfolio Manager at
Sanford C. Bernstein & Co., Inc. since 1992. Mr. Prahl joined Lord Abbett
in 1997 as Director of Quantitative Research, Taxable Fixed Income. Before
joining Lord Abbett, Mr. Prahl served as a Fixed Income Research Analyst at
Sanford C. Bernstein & Co. since 1994. Mr. Lee joined Lord Abbett in 1997
as a Fixed Income Portfolio Manager; prior to that he served as a Portfolio
Manager at ARM Capital Advisors since 1995.
12 Your Investment
<PAGE>
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
This section describes some of the investment techniques that might be used
by each fund and their risks.
ADJUSTING INVESTMENT EXPOSURE. Each fund may, but is not required to, use
various strategies to change its investment exposure to adjust to changing
security prices, interest rates, currency exchange rates, commodity prices
and other factors. These strategies may involve buying or selling
derivative instruments, such as options and futures contracts, stripped
securities, currency exchange contracts, swap agreements, short sales of
securities, indexed securities and rights and warrants. The fund may use
these transactions to change the risk and return characteristics of each
fund's portfolio. If we judge market conditions incorrectly or use a
strategy that does not correlate well with the fund's investments, it could
result in a loss, even if we intended to lessen risk or enhance returns.
These transactions may involve a small investment of cash compared to the
magnitude of the risk assumed and could produce disproportionate gains or
losses. Also, these strategies could result in losses if the counterparty
to a transaction does not perform as promised.
BORROWING. Each fund may borrow from banks. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. Each fund may borrow only for temporary or emergency purposes,
and not in an amount exceeding 33 1/3% of its total assets.
ILLIQUID SECURITIES. These securities include those that are not traded on
the open market or that trade irregularly or in very low volume. These may
include illiquid Rule 144A securities. They may be difficult or impossible
to sell at the time and price the fund would like. Each fund may invest up
to 15% of its assets in illiquid securities.
OPTIONS AND FINANCIAL FUTURES TRANSACTIONS. Each fund may deal in options
on securities, securities indices, and financial futures transactions,
including options on financial futures to increase or decrease its exposure
to changing securities prices or interest rates or for bona fide hedging
purposes. Each fund may write (sell) covered call options and secured put
options on up to 25% of its net assets and may purchase put and call
options and purchase and sell futures contracts provided that no more than
5% of its net assets (at the time of purchase) may be invested in premiums
on such options and initial margin deposits on such futures contracts.
In addition, the use of options and financial futures transactions to
achieve a fund's investment objective could result in a loss due to
unanticipated market conditions and could increase the volatility of the
fund. These transactions may involve a small investment of cash relative to
the risks assumed.
PORTFOLIO SECURITIES LENDING. Each fund may lend securities to
broker-dealers and financial institutions as a means of earning income.
This practice could result in a loss or delay in recovering a fund's
securities, if the borrower defaults. The funds will limit their securities
loans to 30% of their total assets.
REPURCHASE AGREEMENTS. Each fund may enter into Repurchase Agreements. In a
Repurchase Agreement, a fund buys a security at one price from a
broker-dealer or financial institution and simultaneously agrees to sell
the same security back to the same party at a higher price in the future.
If the other party to the agreement defaults or becomes insolvent, a fund
could lose money.
For More Information 13
<PAGE>
<PAGE>
REVERSE REPURCHASE AGREEMENTS. Each fund may enter into reverse repurchase
agreements. In a reverse repurchase agreement, a fund sells a U.S.
government security to a securities dealer or bank for cash and also agrees
to repurchase the same security at a set price later. Reverse repurchase
agreements expose a fund to credit risk (that is, the risk that the
counterparty will fail to resell the security to the fund), but this risk
is greatly reduced because the fund receives cash equal to 100% of the
price of the security sold. Engaging in reverse repurchase agreements also
involves the use of leverage, in that the fund may reinvest the cash it
receives in additional securities. Each fund will attempt to minimize this
risk by managing its duration. A fund's reverse repurchase agreements will
not exceed 20% of the fund's net assets.
GLOSSARY OF SHADED TERMS
ADDITIONAL CONCESSIONS. Lord Abbett Distributor may, for specified periods,
allow dealers to retain the full sales charge for sales of shares or may
pay an additional concession to a dealer who sells a minimum dollar amount
of our shares and/or shares of other Lord Abbett-sponsored funds. In some
instances, such additional concessions will be offered only to certain
dealers expected to sell significant amounts of shares. Additional
payments may be paid from Lord Abbett Distributor's own resources or from
distribution fees received from a fund and will be made in the form of cash
or, if permitted, non-cash payments. The non-cash payments will include
business seminars at Lord Abbett's headquarters or other locations,
including meals and entertainment, or the receipt of merchandise. The cash
payments may include payment of various business expenses of the dealer.
In selecting dealers to execute portfolio transactions for a fund's
portfolio, if two or more dealers are considered capable of obtaining best
execution, we may prefer the dealer who has sold our shares and/or shares
of other Lord Abbett-sponsored funds.
AUTHORIZED INSTITUTIONS. Institutions and persons permitted by law to
receive service and/or distribution fees under a Rule 12b-1 Plan are
"Authorized Institutions." Lord Abbett Distributor is an Authorized
Institution.
ELIGIBLE FUND. An Eligible Fund is any Lord Abbett-sponsored fund except
for (1) certain tax-free, single-state funds where the exchanging
shareholder is a resident of a state in which such series is not offered
for sale; (2) Lord Abbett Equity Fund; (3) Lord Abbett Series Fund; and (4)
Lord Abbett U.S. Government Securities Money Market Fund ("GSMMF") (except
for holdings in GSMMF which are attributable to any shares exchanged from
the Lord Abbett family of funds). An Eligible Fund also is any Authorized
Institution's affiliated money market fund satisfying Lord Abbett
Distributor as to certain omnibus account and other criteria.
ELIGIBLE MANDATORY DISTRIBUTIONS. If class B shares represent a part of an
individual's total IRA or 403(b) investment, the CDSC will be waived only
for that part of a mandatory distribution which bears the same relation to
the entire mandatory distribution as the B share investment bears to the
total investment.
LEGAL CAPACITY. This term refers to the authority of an individual to act
on behalf of an entity or other person(s). For example, if a redemption
request were to be made on behalf of the estate of a deceased shareholder,
John W. Doe, by a person (Robert A. Doe) who has the legal capacity to act
for the estate of the deceased shareholder because he is the executor of
the estate, then the request must be executed as follows: Robert A. Doe,
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
14 For More Information
<PAGE>
<PAGE>
To give another example, if a redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) who has the legal capacity to act on
behalf of this corporation, because she is the president of the
Corporation, then the request must be executed as follows: ABC Corporation
by Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor (see example in right column).
MUTUAL FUND ADVISORY PROGRAM. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions who
either (1) have an arrangement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares (and sometimes providing for
acceptance of orders for such shares on our behalf) in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions,
or (2) charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients.
PURCHASER. The term "purchaser" includes: (1) an individual, (2) an
individual and his or her spouse and children under the age of 21 and (3) a
trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account (including a pension, profit-sharing, or other
employee benefit trust qualified under Section 401 of the Internal Revenue
Code -- more than one qualified employee benefit trust of a single
employer, including its consolidated subsidiaries, may be considered a
single trust, as may qualified plans of multiple employers registered in
the name of a single bank trustee as one account), although more than one
beneficiary is involved.
SPECIAL RETIREMENT WRAP PROGRAM. A program sponsored by an authorized
institution showing one or more characteristics distinguishing it, in the
opinion of Lord Abbett Distributor from a Mutual Fund Advisory Program.
Such characteristics include, among other things, the fact that an
authorized institution does not charge its clients any fee of a consulting
or advisory nature that is economically equivalent to the distribution fee
under the class A 12b-1 Plan and the fact that the program relates to
participant-directed Retirement Plans.
RECENT PERFORMANCE
Global political and economic uncertainties triggered a worldwide "flight
to quality" that pushed U.S. Treasury bond yields significantly lower
during the fall months. Within this environment, high-quality alternatives
to U.S. Treasuries, such as mortgaged-backed agency securities, became
extremely attractive because they provided superior relative yields without
a significant increase in market risk. Both the U.S. Government Securities
Fund and Limited Duration U.S. Government Securities Fund emphasized
mortgage-backed securities, such as FNMAs, FHLMCs, collateralized mortgage
obligations (CMOs) and commercial-backed securities (CMBS). We believe that
because mortgage-backed security prices have significantly lagged the
Treasury market rally, they represent good value for investors. Because we
expect that current bond market volatility is likely to continue in the
months ahead, we will take the opportunity during periods of low relative
prices to add to our overweighting of mortgage-backed securities.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate -
Robert A. Doe
Executor of the Estate of
John W. Doe
[DATE]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ David R. Levy
------------------------
AUTHORIZED SIGNATURE
(960) X9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'TM'
SR
In the case of the corporation - ABC Corporation
Mary B. Doe
By Mary B. Doe, President
[DATE]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ David R. Levy
------------------------
AUTHORIZED SIGNATURE
(960) X9003470
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'TM'
SR
YEAR 2000 ISSUES. Each fund could be adversely affected if the computers
used by each fund and their service providers do not properly process and
calculate date-related information from and after January 1, 2000.
Lord Abbett is working to avoid such problems and has received assurances
from each fund's service providers that they are taking similar steps. Of
course, the Year 2000 problem is unprecedented and therefore Lord Abbett
cannot eliminate altogether the possibility that it or the funds will be
affected.
For More Information 15
<PAGE>
<PAGE>
Limited Duration U.S. Government Securities Fund
Financial Information
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated. "Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the fiscal year ended November 30, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the fiscal year ended November 30, 1998 and are
incorporated by reference into the Statement of Additional Information,
which is available upon request. Certain information reflects financial
results for a single fund share.
===================================================================
<TABLE>
<CAPTION>
CLASS A SHARES
---------------------------------------------------------------
Period Ended November 30, Period Ended October 31,
------------------------------- -----------------------------
Per Share Operating Performance: 1998 1997 1996(d) 1996 1995 1994(a)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $4.40 $4.42 $4.39 $4.53 $4.44 $4.85
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net investment income .26(e) .25(e) .0174 .1912 .2316 .2650
- ----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
- ----------------------------------------------------------------------------------------------------------------
gain (loss) on investments .04 (.02) .0333 (.0751) .1017 (.4123)
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations .30 .23 .0507 .1161 .3333 (.1473)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------
Dividends from net investment income (.24) (.25) (.0207) (.2561) (.2433) (.2627)
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $4.46 $4.40 $4.42 $4.39 $4.53 $4.44
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(b) 7.06% 5.46% 1.15%(c) 2.67% 8.16% (3.09)%(c)
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ----------------------------------------------------------------------------------------------------------------
Expenses, including waiver and reimbursement 0.47%(f) 0.51%(f) 0.11%(c) 1.81% 1.40% 0.89%(c)
- ----------------------------------------------------------------------------------------------------------------
Expenses, excluding waiver and reimbursement 1.38% 1.40% 0.13%(c) 2.73% 1.71% 0.89%(c)
- ----------------------------------------------------------------------------------------------------------------
Net investment income 5.86% 5.81% 0.41%(c) 4.58% 5.62% 5.61%(c)
================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES
-----------------------------------
Period Ended November 30,
Per Share Operating Performance: 1998 1997 1996(d) 1996(a)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $4.40 $4.42 $4.39 $4.34
- ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------
Net investment income .22(e) .21(e) .0138 .0667
- ------------------------------------------------------------------------------------
Net realized and unrealized
- ------------------------------------------------------------------------------------
gain (loss) on investments .05 (.02) .0342 .0515
- ------------------------------------------------------------------------------------
Total from investment operations .27 .19 .0480 .1182
- ------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------
Dividends from net investment income (.20) (.21) (.0180) (.0682)
- ------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $4.47 $4.40 $4.42 $4.39
- ------------------------------------------------------------------------------------
TOTAL RETURN(b) 6.23% 4.45% 1.09%(c) 2.98%(c)
- ------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ------------------------------------------------------------------------------------
Expenses, including waiver and reimbursement 1.35%(f) 1.44%(f) 0.19%(c) 0.69%(c)
- ------------------------------------------------------------------------------------
Expenses, excluding waiver and reimbursement 2.26% 2.32% 0.21%(c) 0.77%(c)
- ------------------------------------------------------------------------------------
Net investment income 4.94% 4.84% 0.33%(c) 1.26%(c)
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Period Ended November 30, Period Ended October 31,
---------------------------- -----------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES: 1998 1997 1996(d) 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS, END OF PERIOD (000) $11,000 $10,276 $12,696 $12,735 $8,922 $10,256
- -------------------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 346.67% 343.53% 175.98% 340.62% 222.00% 895.63%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of offering respective class shares (class A - November 4, 1993
and; class C - July 15, 1996).
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) For the month ended November 30, 1996.
(e) Calculated using average shares outstanding during the period.
(f) The ratios for 1998 and 1997 include expenses paid through an expense offset
arrangement.
See Notes to Financial Statements.
16 Financial Information
<PAGE>
<PAGE>
Limited Duration U.S. Government Securities Fund
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in Lipper's Short U.S. Government Fund Index,
Lipper's Intermediate U.S. Government Fund Index, and Lehman Intermediate
Government Bond Index, assuming reinvestment of all dividends and
distributions.
[GRAPH]
Fiscal Year-end 11/30
The fund (class A shares) at net asset value
The fund (class A shares) maximum offering price(1)
Lehman Intermediate Government Bond Index(2)
========================================================================
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
<TABLE>
<CAPTION>
1 YEAR 10 YEARS (OR LIFE)
- ------------------------------------------------------------------------
<S> <C> <C>
Class A(3) 3.70% 7.76%
- ------------------------------------------------------------------------
Class C(1) 8.47% 8.82%
- ------------------------------------------------------------------------
</TABLE>
(1) This shows total return applicable to class C shares, with all
dividends and distributions reinvested for the periods shown ending
November 30, 1998, using the SEC-required uniform method to compute
such return.
(2) Performance for the unmanaged Lipper's U.S. Government Fund Index,
Lipper's Intermediate U.S. Government Fund Index, and Lehman
Intermediate Government Bond Index does not reflect transaction costs,
management fees or sales charges.
(3) The class A and C shares were first offered on 11/4/93 and 7/15/96,
respectively. For class A shares, performance is at net asset value.
Financial Information 17
<PAGE>
<PAGE>
U.S. Government Securities Fund
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods indicated.
"Total return" shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These Financial Highlights have been audited by Deloitte & Touche
LLP, the fund's independent auditors, in conjunction with their annual audit of
the fund's financial statements. Financial statements for the fiscal year ended
November 30, 1998 and the Independent Auditors' Report thereon appear in the
Annual Report to Shareholders for the fiscal year ended November 30, 1998 and
are incorporated by reference into the Statement of Additional Information,
which is available upon request. Certain information reflects financial results
for a single fund share.
<TABLE>
<CAPTION>
====================================================================================================
CLASS A SHARES
-----------------------------------------------------------
Year Ended November 30,
Per Share Operating Performance: 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $2.59 $2.63 $2.73 $2.59 $3.00
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------
Net investment income .17(d) .20(d) .215 .235 .247
- ----------------------------------------------------------------------------------------------------
Net realized and unrealized
- ----------------------------------------------------------------------------------------------------
gain (loss) on investments .05 (.03) (.105) .136 (.3685)
- ----------------------------------------------------------------------------------------------------
Total from investment operations .22 .17 .11 .371 (.1215)
- ----------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------
Dividends from net investment income (.17) (.21) (.21) (.231) (.246)
- ----------------------------------------------------------------------------------------------------
Distribution from net realized gain -- -- -- -- (.0425)
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $2.64 $2.59 $2.63 $2.73 $2.59
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN(b) 8.86% 6.67% 4.41% 14.89% (4.24)%
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ----------------------------------------------------------------------------------------------------
Expenses 0.96%(e) 0.92%(e) 0.88% 0.90% 0.90%
- ----------------------------------------------------------------------------------------------------
Net investment income 6.36% 7.82% 8.12% 8.85% 8.92%
- ----------------------------------------------------------------------------------------------------
====================================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================
CLASS B SHARES CLASS C SHARES
------------------------------- ------------------------------
Year Ended November 30, Year Ended November 30,
Per Share Operating Performance: 1998 1997 1996(a) 1998 1997 1996(a)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $2.58 $2.63 $2.57 $2.59 $2.63 $2.55
- --------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------
Net investment income .14(d) .18(d) .063 .15(d) .18(d) .066
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized
- --------------------------------------------------------------------------------------------------------
gain (loss) on investments .07 (.04) .060 .06 (.03) .085
- --------------------------------------------------------------------------------------------------------
Total from investment operations .21 .14 .123 .21 .15 .151
- --------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------
Dividends from net investment income (.15) (.19) (.063) (.15) (.19) (.071)
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $2.64 $2.58 $2.63 $2.65 $2.59 $2.63
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN(b) 8.49% 5.47% 5.45%(c) 8.47% 5.86% 6.49%(c)
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- --------------------------------------------------------------------------------------------------------
Expenses 1.66%(e) 1.64%(e) 0.48%(c) 1.62%(e) 1.55%(e) 0.60%(c)
- --------------------------------------------------------------------------------------------------------
Net investment income 5.36% 6.77% 2.21%(c) 5.69% 7.25% 2.60%(c)
- --------------------------------------------------------------------------------------------------------
========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===============================================================================================================
Year Ended November 30,
--------------------------------------------------------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES: 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
NET ASSETS, END OF YEAR (000) $1,902,404 $2,286,412 $2,907,291 $3,272,865 $3,232,012
- ---------------------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 440.49% 712.82% 820.59% 544.31% 790.57%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of offering respective class shares (class B - August 1, 1996
and; class C - July 15, 1996).
(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 ratios for 1998 and 1997 include expenses paid through an expense
offset arrangement.
See Notes to Financial Statements.
18 Financial Information
<PAGE>
<PAGE>
U.S. Government Securities Fund
LINE GRAPH COMPARISON - U.S. Government Securities Fund
Immediately below is a comparison of a $10,000 investment in class A shares
to the same investment in both the Lipper's General U.S. Government Bond
Fund Index and the Lehman Government Bond Index, assuming reinvestment of
all dividends and distributions.
- -------------------------------------------------------------------------------
[GRAPH]
Fiscal Year-end 11/30
The fund (class A shares) at net asset value
The fund (class A shares) maximum offering price(1)
Lipper's General U.S. Government Bond Fund Index(2)
===============================================================================
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
<TABLE>
<CAPTION>
1 YEAR 10 YEARS (OR LIFE)
- --------------------------------------------------------------------------
<S> <C> <C>
Class A(1) 3.70% 7.76%
- --------------------------------------------------------------------------
Class B(2) 4.15% 6.98%
- --------------------------------------------------------------------------
Class C(3) 8.47% 8.82%
- --------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(1) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 5.75% applicable to
class A shares, with all dividends and distributions reinvested for
the periods shown ending November 30, 1998, using the SEC-required
uniform method to compute such return.
(2) The class B shares were first offered on 8/1/96. Performance reflects
the deduction of a CDSC of 4% (for 1 year) and 3% (life of the class).
(3) The class C shares were first offered on 7/15/96. Performance is at
net asset value.
Financial Information 19
<PAGE>
<PAGE>
COMPENSATION FOR YOUR DEALER - Limited Duration U.S. Government Securities Fund
<TABLE>
<CAPTION>
===========================================================================================================================
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
===========================================================================================================================
<S> <C> <C> <C> <C>
Less than $100,000 3.00% 2.50% 0.00% 2.50%
- ---------------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 2.50% 2.25% 0.00% 2.25%
- ---------------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.00% 1.75% 0.00% 1.75%
- ---------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 1.50% 1.25% 0.00% 1.25%
- ---------------------------------------------------------------------------------------------------------------------------
$1,000,000 - $2,999,999 1.00% 1.00% 0.00% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------
$3,000,000 - $9,999,999 0.50% 0.50% 0.00% 0.50%
- ---------------------------------------------------------------------------------------------------------------------------
Over $10 million 0.25% 0.25% 0.00% 0.25%
===========================================================================================================================
Class C investments Paid at time of sale (% of net asset value)
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
===========================================================================================================================
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.00% 0.00%
- ---------------------------------------------------------------------------------------------------------------------------
Class C investments Percentage of average net assets(3)
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.65% 0.25% 0.90%
- ---------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The class A share 12b-1 Plan for the Limited Duration U.S. Government
Securities Fund will go into effect on the first day of the calendar
quarter subsequent to the fund's net assets reaching $100 million at which
time for the following categories: over $1 million, or a retirement plan --
100 or more eligible employees, or a special retirement wrap program,
authorized institutions will receive concessions as set forth on the U.S.
Government Securities Fund chart on the next page for such categories.
(2) Dealer's concession percentages and service fee percentages are calculated
from different amounts, and therefore may not equal total compensation
percentages if combined using simple addition. Additional Concessions may
be paid to Authorized Institutions from time to time.
(3) With respect to class C and P shares, 0.90% and 0.45%, respectively, of the
average annual net asset value of such shares outstanding during the
quarter (including distribution reinvestment shares after the first
anniversary of their issuance) is paid to Authorized Institutions. This fee
is paid quarterly in arrears. In the case of C shares for fixed-income
funds, such as Limited Duration U.S. Government Securities Fund, 0.10% of
the average annual net asset value of such shares is retained by Lord
Abbett Distributor, thus reducing the dealer's concession from 0.75% to
0.65% after the first year. Lord Abbett Distributor uses this 0.10% for
expenses primarily intended to result in the sale of such fund's shares.
20 Financial Information
<PAGE>
<PAGE>
COMPENSATION FOR YOUR DEALER - U.S. Government Securities Fund
<TABLE>
<CAPTION>
===========================================================================================================================
FIRST YEAR COMPENSATION
Front-end
sales charge Dealer's
paid by investors concession Service fee(1) Total compensation(2)
Class A investments (% of offering price) (% of offering price) (% of net investment) (% of offering price)
===========================================================================================================================
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.00% 0.25% 4.25%
- ---------------------------------------------------------------------------------------------------------------------------
$50,000 - $99,999 4.75% 4.25% 0.25% 4.50%
- ---------------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 3.75% 3.25% 0.25% 3.50%
- ---------------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.75% 2.50% 0.25% 2.75%
- ---------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 1.75% 0.25% 2.00%
- ---------------------------------------------------------------------------------------------------------------------------
$1 million or more(3) or Retirement Plan - 100 or more
eligible employees(3) or Special Retirement Wrap Program(3)
- ---------------------------------------------------------------------------------------------------------------------------
First $5 million no front-end sales charge 1.00% 0.25% 1.25%
- ---------------------------------------------------------------------------------------------------------------------------
Next $5 million above that no front-end sales charge 0.55% 0.25% 0.80%
- ---------------------------------------------------------------------------------------------------------------------------
Next $40 million above that no front-end sales charge 0.50% 0.25% 0.75%
- ---------------------------------------------------------------------------------------------------------------------------
Over $50 million no front-end sales charge 0.25% 0.25% 0.50%
===========================================================================================================================
Class B investments Paid at time of sale (% of net asset value)
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 3.75% 0.25% 4.00%
===========================================================================================================================
Class C investments
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.75% 0.25% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ---------------------------------------------------------------------------------------------------------------------------
===========================================================================================================================
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
===========================================================================================================================
Class B investments Percentage of average net assets(4)
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge none 0.25% 0.25%
===========================================================================================================================
Class C investments
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.65% 0.25% 0.90%
- ---------------------------------------------------------------------------------------------------------------------------
Class P investments Percentage of average net assets
- ---------------------------------------------------------------------------------------------------------------------------
All amounts no front-end sales charge 0.25% 0.20% 0.45%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The service fee for class A shares is paid quarterly and for class A shares
may not exceed 0.15% if sold prior to September 1, 1985. The first year's
service fee on class B and C shares is paid at the time of sale.
(2) Reallowance/concession percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition. Additional
Concessions may be paid to Authorized Institutions from time to time.
(3) Concessions are paid at the time of sale on all class A shares sold during
any 12-month period starting from the day of the first net asset value
sale. With respect to (a) class A share purchases at $1 million or more,
sales qualifying at such level under rights of accumulation and statement
of intention privileges are included and (b) for Special Retirement Wrap
Programs, only new sales are eligible and exchanges into the fund are
excluded.
(4) With respect to class B, C and P shares, 0.25%, 0.90% and 0.45%,
respectively, of the average annual net asset value of such shares
outstanding during the quarter (including distribution reinvestment shares
after the first anniversary of their issuance) is paid to Authorized
Institutions. These fees are paid quarterly in arrears. In the case of
class C shares for fixed-income funds, such as U.S. Government Securities
Fund, 0.10% of the average net asset value of such shares is retained by
Lord Abbett Distributor, thus reducing from 0.75% to 0.65% after the first
year. Lord, Abbett & Co. uses 0.10% for expenses primarily intended to
result in the sale of such funds' shares.
Financial Information 21
<PAGE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
<PAGE>
More information on these funds is available free upon request, including
the following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the funds, lists portfolio holdings and contains a letter from
the fund's manager discussing recent market conditions and each fund's
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the funds and their policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this prospectus).
Lord Abbett Investment Trust -
Limited Duration U.S. Government Securities Series
U.S. Government Securities Series
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
--------------------------
SEC file number: 811-7988
To obtain information:
BY TELEPHONE. Call the funds at:
800-426-1130
BY MAIL. Write to the funds at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
VIA THE INTERNET.
LORD, ABBETT & CO.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded
from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
LAIT-1-499
(4/99)
<PAGE>
<PAGE>
===============================================================================
Lord Abbett
Core Fixed Income Fund
Strategic Core Fixed Income Fund
Class Y Shares
Prospectus
April 1, 1999
[LOGO]
As with all mutual funds, the Securities and Exchange Commission does not
guarantee that the information in this prospectus is accurate or complete, and
it has not judged these funds for investment merit. It is a criminal offense to
state otherwise.
Class Y shares of each fund are neither offered to the general public nor
available in all states through the Mutual Fund Advisory Program. Please call
800-821-5129 for further information.
<PAGE>
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
The Funds Page
<S> <C> <C>
Goal/Approach 2
Main Risks 3
Information about past Core Fixed Income Fund 4
performance, fees and expenses Strategic Core Fixed Income Fund 5
Your Investment
Information for managing Purchases 6
your fund account Redemptions 7
Distributions and Taxes 7
Services For Fund Investors 8
Management 8
For More Information
How to learn more Other Investment Techniques 9
about the funds Glossary of Shaded Terms 10
Recent Performance 10
Financial Information
Financial highlights Core Fixed Income Fund 11
and line graph comparison
How to learn more about the Back Cover
funds and other Lord Abbett funds
</TABLE>
<PAGE>
<PAGE>
Core Fixed Income Fund
Strategic Core Fixed Income Fund
The Funds
GOAL/APPROACH
Each fund seeks income and capital appreciation to produce a high total
return. In doing this, each fund will attempt to keep its exposure to
interest rate changes generally in line with that of the bond market
generally. it will do that by managing its duration. Duration is a
statistical concept that measures a portfolio's exposure to interest rate
changes. The higher a fund's duration, the more sensitive it is to interest
rate risk.
Both funds attempt to manage, but not eliminate, interest rate risk by
maintaining the average duration of the securities they hold within two
years of the duration of the Lehman Brothers Aggregate Bond Index
(currently _ years). Thus, each fund expects to have exposure to interest
rate risk (or volatility) approximating an average duration falling within
a range of _ and _ years. Using the average duration of the Lehman Brothers
Aggregate Bond Index (currently _ years) as the center, the funds will
establish their average duration range periodically by extending two years
above and below the center.
The Core Fixed Income Fund will invest in three sectors of the fixed-income
securities markets: U.S. government securities, mortgage-backed securities,
and investment grade debt securities. Lord Abbett will allocate the fund's
assets among these three sectors seeking incremental yield advantages.
There are no limits on allocations among these sectors.
The Strategic Core Fixed Income Fund will invest in five sectors of the
fixed-income securities markets: U.S. government securities,
mortgage-backed securities, investment grade debt securities, high yield
debt securities, and foreign debt securities. Lord Abbett will allocate the
fund's assets among these five sectors seeking incremental yield
advantages. The fund will not invest more than 20% of its net assets in
high yield debt securities. Also, it will not invest more than 20% of its
assets in foreign debt securities.
Each fund may engage in active and frequent trading of its portfolio
securities to achieve its principal investment strategies and can be
expected to have portfolio turnover rates substantially in excess of 100%.
The funds do not expect these strategies to have significant transaction
costs or adverse tax consequences.
WE OR THE FUND refers to Lord Abbott Core Fixed Income Fund ("Core Fixed
Income Fund") or Lord Abbott Strategic Core Fixed Income Fund ("Strategic
Core Fixed Income Fund"), each a portfolio of Lord Abbott Investment Trust
(the "company"). The funds operate under the supervision of the company's
Board, with the advice of Lord, Abbott & Co. ("Lord Abbett"), their
investment manager.
ABOUT EACH FUND. Each fund is a professionally managed portfolio primarily
holding securities purchased with the pooled money of investors. They
strive to reach their stated goals, although as with all funds, they cannot
guarantee results.
U.S. GOVERNMENT SECURITIES are obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
MORTGAGE-BACKED SECURITIES directly or indirectly represent a participation
in, or are secured by and payable from, mortgage loans secured by real
property. The price of a mortgage-backed security may be significantly
affected by changes in interest rates. Some mortgage-backed securities have
structures that make their reaction to interest rates and other factors
difficult to predict, making their prices very volatile.
FOREIGN DEBT SECURITIES include obligations of foreign governments, their
agencies and instrumentalities, and fixed-income securities of other
issuers denominated in foreign-currency. Foreign securities are not subject
to the same degree of regulation and may be more volatile and less liquid
than securities traded in major U.S. markets. This affects block trading.
Foreign securities may trade on days when a fund does not value them so
that fund share prices could be affected on days an investor can-
not purchase or sell shares. Other risks include less information on public
companies, banks and governments; political and social instability;
expropriations; higher transaction costs; currency fluctuations;
nondeductable withholding taxes, credit risk and different accounting and
settlement practices.
2 The Funds
<PAGE>
<PAGE>
MAIN RISKS
Both funds face interest rate risk, credit risk, and prepayment risk. In
addition, the Strategic Core Fixed Income Fund faces currency risk.
INTEREST RATE RISK -- Generally, the prices of fixed-income securities
rise when interest rates fall and fall when interest rates rise.
Longer-term bonds are usually more sensitive to interest rate changes.
Put another way, the longer the maturity of a bond or other debt
security, the greater the effect a change in interest rates is likely to
have on the instrument's price. Both funds expect to have exposures to
interest rate changes approximating that of the overall bond market.
CREDIT RISK -- The lower-rated bonds, including high yield and foreign
debt securities, in which the Strategic Core Fixed Income Fund invests
involve risks that the interest and principal payments may not be made.
Some issuers may default as to principal and/or interest payments after
the fund purchases their securities.
PREPAYMENT RISK -- If interest rate movements cause either fund's
mortgage-backed securities and callable securities to be paid off
substantially earlier than expected, the fund's share price or yield
could be hurt.
CURRENCY RISK -- Because it invests in foreign securities, the Strategic
Core Fixed Income Fund faces the risk that unfavorable changes in
currency exchange rates could reduce the fund's share price.
An investment in each fund is not a bank deposit. It is not FDIC-insured or
government-endorsed. It is not a complete investment program. You could
lose money in each fund, but you also have the potential to make money.
INVESTMENT GRADE DEBT SECURITIES are, at the time of purchase, rated in one
of the four highest grades determined either by Moody's Investors Service,
Inc. or Standard & Poor's Ratings Services, or determined by Lord Abbett to
be equivalent in quality.
HIGH YIELD DEBT SECURITIES or "junk bonds" are rated BB/Ba or lower or
unrated and typically pay a higher yield than investment grade debt
securities. These bonds have a higher risk of default than investment grade
bonds and their prices can be much more volatile.
You should read this entire prospectus, including "Other Investment
Techniques," which concisely describes the other investment strategies and
their risks used by the fund.
The Funds 3
<PAGE>
<PAGE>
Core Fixed Income Fund
PAST PERFORMANCE
The information below provides some indication of the risks of investing in
the fund by showing changes in the fund's performance from calendar year to
calendar year and by showing how the fund's average annual returns compare
with those of a broad measure of market performance.
AWAITING DATA
================================================================================
The table below shows a comparison of the fund's class Y average annual total
return to that of the Lehman Brothers Aggregate Bond Index. Fund returns assume
reinvestment of dividends and distributions at net asset value. All periods end
on December 31, 1998.
<TABLE>
<CAPTION>
CLASS 1 YEAR INCEPTION(i)
<S> <C> <C>
Y 0.00.% 0.00.%
- -------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond lndex(ii) 0.00.% 0.00.%
- -------------------------------------------------------------------------------
</TABLE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Fee table
- -----------------------------------------------------------------------------------------------------
<S> <C>
CLASS Y
SHAREHOLDER FEES (Fees paid directly from your investment)
- -----------------------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- -----------------------------------------------------------------------------------------------------
(as a % of offering price) none
- -----------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none
- -----------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (Expenses deducted from fund assets) (as a % of average net assets)(1)
- -----------------------------------------------------------------------------------------------------
Management Fees (See "Management") 0.50%
- -----------------------------------------------------------------------------------------------------
Other Expenses (See "Management") 0.30%
- -----------------------------------------------------------------------------------------------------
Total Operating Expenses 0.80%
- -----------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------
This example, like that in other funds' prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses. You pay the
following expenses over the course of each period shown if you sell your shares
at the end of the period, although your actual cost may be higher or lower. You
would pay the same expenses, assuming you kept your shares.
<TABLE>
<CAPTION>
SHARE CLASS 1 YEAR 3 YEARS
<S> <C> <C>
Class Y shares $80 $0
- --------------------------------------------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
Past performance is not a prediction of future results.
------------------------------------------
(i) The date of inception of class Y is 12/10/97.
(ii) Performance for the unmanaged Lehman Brothers Aggregate Bond Index
does not reflect transaction costs or management fees.
MANAGEMENT FEES are payable to Lord Abbett for the fund's investment
management.
OTHER EXPENSES include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees.
------------------------------------------
(1) The annual operating expenses are based on estimated amounts for the
current fiscal year.
4 The Funds
<PAGE>
<PAGE>
Strategic Core Fixed Income Fund
PAST PERFORMANCE
Because the fund is new, information regarding past performance is not
available.
FEES AND EXPENSES
This table describes the fees and expenses that you may Pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Fee table
- --------------------------------------------------------------------------------------------------------
CLASS Y
<S> <C>
SHAREHOLDER FEES (Fees paid directly from your investment)
- --------------------------------------------------------------------------------------------------------
Maximum Sales Charge on Purchases
- --------------------------------------------------------------------------------------------------------
(as a % of offering price) none
- --------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (See "Purchases") none
- --------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (Expenses deducted from fund assets) (as a % of average not assets)(1)
- --------------------------------------------------------------------------------------------------------
Management Fees (see "Management") 0.50%
- --------------------------------------------------------------------------------------------------------
Other Expenses (See "Management") 0.26%
- --------------------------------------------------------------------------------------------------------
Total Operating Expenses 0.76%
- --------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
Expense example
- -------------------------------------------------------------------------------
This example, like that in other fund's prospectuses, assumes a $10,000 initial
investment, 5% total return each year and no changes in expenses. You pay the
following expenses over the course of each period shown if you sell your shares
at the end of the period, although your actual cost may be higher or lower. You
would pay the same expenses, assuming you kept your shares.
<TABLE>
<CAPTION>
SHARE CLASS 1 YEAR
<S> <C>
Class Y Shares $76
- -----------------------------------------------
</TABLE>
This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
MANAGEMENT FEES are payable to Lord Abbett for the fund's investment
management.
OTHER EXPENSES include fees paid for miscellaneous items such as transfer
agency, legal and share registration fees.
------------------------------------------
(1) The annual operating expenses are based on estimated amounts for the
current fiscal year
The Funds 5
<PAGE>
<PAGE>
Your Investment
PURCHASES
CLASS Y SHARES. Class Y shares are purchased at net asset value ("NAV")
with no sales charge of any kind. The NAV of our shares is calculated every
business day as of the close of the New York Stock Exchange. Our shares are
continuously offered. The offering price is based on NAV per share next
determined after we receive your order submitted in proper form. We reserve
the right to withdraw all or any part of the offering made by this
Prospectus, or to reject any purchase order. We also reserve the right to
waive or change minimum investment requirements. All purchase orders are
subject to our acceptance and are not binding until confirmed or accepted
in writing.
WHO MAY INVEST? Eligible purchasers of Class Y shares include: (i) certain
authorized brokers, dealers, registered investment advisers or other
financial institutions who either (a) have an arrangement with Lord Abbett
Distributor in accordance with certain standards approved by Lord Abbett
Distributor, providing specifically for the use of our Class Y shares in
particular investment products made available for a fee to clients of such
brokers, dealers, registered investment advisers or other financial
institutions, or (b) charge an advisory consulting or other fee for their
services and buy shares for their own accounts or the accounts of their
clients ("Mutual Fund Advisory Programs"), (ii) the trustee or custodian
under any deferred compensation or pension or profit-sharing plan or
payroll deduction IRA established for the benefit of the employees of any
company with an account(s) in excess of $10 million managed by Lord Abbett
or its sub-advisors on a private-advisory-account basis, and (iii)
institutional investors, including retirement plans, companies,
foundations, trusts, endowments and other entities where the total amount
of potential investable assets exceeds $20 million that were not introduced
to Lord Abbett by persons associated with a broker or dealer primarily
involved in the retail security business. Additional payments may be made
by Lord Abbett out of its own resources with respect to certain of these
sales.
HOW MUCH MUST YOU INVEST? You may buy our shares through any independent
securities dealer having a sales agreement with Lord Abbett Distributor,
our exclusive selling agent. Place your order with your investment dealer
or send the funds to the fund you selected (P.O. Box 419100, Kansas City,
Missouri 64141). The minimum initial investment is $1 million except for
Mutual Fund Advisory Programs which have no minimum. This offering may be
suspended, changed or withdrawn by Lord Abbett Distributor which reserves
the right to reject any order.
BUYING SHARES THROUGH YOUR DEALER. Orders for shares received by a fund
prior to the close of the NYSE, or received by dealers prior to such close
and received by Lord Abbett Distributor prior to the close of its business
day, will be confirmed at NAV effective at such NYSE close. Orders received
by dealers after the NYSE closes and received by Lord Abbett Distributor in
proper form prior to the close of its next business day are executed at the
NAV effective as of the close of the NYSE on that next business day. The
dealer is responsible for the timely transmission of orders to Lord Abbett
Distributor. A business day is a day on which the NYSE is open for trading.
BUYING SHARES BY WIRE. To open an account, call 800-821-5129 Ext. 34028,
Institutional Trade Dept., to set up your account and to arrange a wire
transaction. Wire to: United Missouri Bank of Kansas City, N.A., Routing
number - 101000695, bank account number: 9878002611, FBO: (account name)
and (your Lord Abbett account number). Specify
the complete name of the fund of your choice, note Class Y shares and
include your new account number and your name. To add to an existing
account, wire to: United Missouri Bank of Kansas City, N.A., routing number
- 101000695, bank account number: 9878002611, FBO: (account name) and (your
Lord Abbett account number). Specify the complete name of the fund of your
choice, note Class Y shares and include your account number and your name.
NAV per share is calculated each business day at the close of regular
trading on the New York Stock Exchange ("NYSE"). Each fund is open on those
business days when the NYSE is open. Purchases and sales of fund shares are
executed at the NAV next determined after the fund receives your order. In
calculating NAV, securities for which market quotations are available are
valued at those quotations. Securities for which such quotations are not
available are valued at fair value under procedures approved by the Board.
LORD ABBETT DISTRIBUTOR LLC ("Lord Abbett Distributor") acts as agent for
the funds to work with investment professionals that buy and/or sell shares
of the funds on behalf of their clients. Generally, Lord Abbett Distributor
does not sell fund shares directly to investors.
6 Your Investment
<PAGE>
<PAGE>
REDEMPTIONS
BY BROKER. Call your investment professional for directions on how to
redeem your shares.
BY TELEPHONE. To obtain the proceeds of a redemption of $50,000 or less
from your account, you or your representative can call the fund at
800-821-5129.
BY MAIL. Submit a written redemption request indicating, the name(s) in
which the account is registered, the fund's name, the class of shares, your
account number, and the dollar value or number of shares you wish to sell.
Include all necessary signatures. If the signer has any Legal Capacity, the
signature and capacity must be guaranteed by an Eligible Guarantor. Certain
other legal documentation may be required. For more information regarding
proper documentation call 800-821-5129.
Normally a check will be mailed to the name and address in which the
account is registered (or otherwise according to your instruction) within
three business days after receipt of your redemption request. Your account
balance must be sufficient to cover the amount being redeemed or your
redemption order will not be processed. Redemption requests for shares
initially purchased by check will not be honored for up to 15 days, unless
we are assured that the check has cleared earlier.
DISTRIBUTIONS AND TAXES
Each fund pays its shareholders dividends from its net investment income,
and distributes any net capital gains that it has realized. Each fund
expects to pay income dividends and capital gain distributions, if any,
once a year, usually in December. Your distributions will be reinvested in
your fund unless you instruct the fund to pay them to you in cash.
The tax status of distributions is the same regardless of how long they
have been in the fund or whether distributions are reinvested or paid in
cash. In general, distributions are taxable as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Federal Taxability Of Distributions
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to 15% bracket to 28% bracket and above
- -------------------------------------------------------------------------------
<S> <C> <C>
INCOME Ordinary
DIVIDENDS 15% income rate
- -------------------------------------------------------------------------------
SHORT-TERM Ordinary
CAPITAL GAINS 15% income rate
- -------------------------------------------------------------------------------
LONG-TERM
CAPITAL GAINS 10% 20%
- -------------------------------------------------------------------------------
</TABLE>
Except in tax-advantaged accounts, any sale or exchange of fund shares may
be a taxable event.
SMALL ACCOUNTS. Our Board may authorize closing any account in which there
are fewer than 25 shares if it is in a fund's best interest to do so.
IMPORTANT INFORMATION. You may be subject to a $50 penalty under the
Internal Revenue Code if you do not provide a correct taxpayer identifica-
tion number (Social Security Number for individuals) or make certain
required certifications. In addition, we may be required to withhold from
your account and pay to the U.S. Treasury 31% of any redemption proceeds
and any dividend or distribution from your account.
ELIGIBLE GUARANTOR is any broker or bank that is a member of the Medallion
Stamp Program. Most major securities firms and banks are members of this
program. A NOTARY PUBLIC IS NOT AN ELIGIBLE GUARANTOR.
TAXES ON TRANSACTIONS. The chart at left also can provide a "rule of thumb"
guide for your potential U.S. federal tax liability when selling or
exchanging fund shares. The second row, "Short-term capital gains," applies
to fund shares sold within 12 months of purchase. The third row, "Long-term
capital gains," applies to shares held for more than 12 months.
Starting January 1, 2001, sales of securities held for more than five years
will be taxed at special lower rates.
Your Investment 7
<PAGE>
<PAGE>
ANNUAL INFORMATION - Information concerning the tax treatment of dividends
and other distributions will be mailed annually to shareholders. Each fund
will also provide annually to its shareholders information regarding the
source of dividends and distributions of capital gains paid by that fund.
Because everyone's tax situation is unique, you should consult your tax
adviser regarding the treatment of those distributions under the federal,
state and local tax rules that apply to you, as well as the tax
consequences of gains or losses from the redemption or exchange of your
shares.
SERVICES FOR FUND INVESTORS
AUTOMATIC SERVICES
We offer the following shareholder services:
TELEPHONE EXCHANGE PRIVILEGE. Class Y shares may be exchanged without a
service charge for Class Y shares of any Eligible Fund among the Lord
Abbett-sponsored funds.
ACCOUNT STATEMENTS. Shareholders with the same last name and address will
receive quarterly account statements.
HOUSEHOLDING. Shareholders with the same last name and address will receive
a single copy of a prospectus and an annual or semi-annual report, unless
additional reports are specifically requested in writing to the funds.
ACCOUNT CHANGES. For any changes you need to make to your account, consult
your investment professional or call the fund at 800-821-5129.
SYSTEMATIC EXCHANGE. You or your investment professional can establish a
schedule of exchanges between the same classes of any Eligible Fund.
MANAGEMENT
The funds' investment adviser is Lord, Abbett & Co., 767 Fifth Avenue, New
York, NY 10153-0203. Founded in 1929, Lord Abbett manages one of the
nation's oldest mutual fund complexes, with approximately $28 billion in
more than 35 mutual fund portfolios and other advisory accounts. For more
information about the services Lord Abbett provides to the funds, see the
Statement of Additional Information.
The fund pays Lord Abbett a monthly fee based on average daily net assets
for each month. For the fiscal year ended November 30,1998, the fee paid to
Lord Abbett was at an annual rate of .50 of 1% for both the Core Fixed
Income Fund and the Strategic Core Fixed Income Fund. The fee payable to
Lord Abbett by each fund will being the year subsequent to commencement of
operations.
Lord Abbett uses a team of portfolio managers and analysts acting to manage
the company's investments. Robert Gerber, Partner of Lord Abbett, Executive
Vice President of the company and Portfolio Manager of each fund, heads the
team, the senior members of which include Walter Prahl and Robert Lee. Mr.
Gerber joined Lord Abbett in 1997 as Director of High Grade Fixed Income.
Before joining Lord Abbett, Mr. Gerber was a Senior Portfolio Manager of
Sanford C. Bernstein & Co. for five years. Messrs. Prahl and Lee joined
Lord Abbett in _ and _, respectively. Before joining Lord Abbett, Mr Prahl
was ___, since _. Before joining Lord Abbett, Mr. Lee was _, since _.
Lord Abbett offers a variety of Retirement Plans. Call 800-253-7299 for
information about:
Traditional, Rollover, Roth and Education IRAs
Simple IRAs, SEP-IRAs,401(k) and 403(b) accounts
Defined Contribution Plans
TELEPHONE TRANSACTIONS. You have this privilege unless you refuse it in
writing. For your security, telephone transaction requests are recorded. We
will take measures to verify the identity of the caller, such as asking for
your name, account number, social security or taxpayer identification
number and other relevant information. Each fund will not be liable for
following instructions communicated by telephone that it reasonably
believes to be genuine.
Transactions by telephone may be difficult to implement in times of drastic
economic or market change.
Exchanges by telephone should not be used to take advantage of short-term
swings in the market. Each fund reserves the right to limit or terminate
this privilege for any shareholder making frequent exchanges or abusing the
privilege and may revoke the privilege for all shareholders upon 60
days' written notice.
8 Your Investment
<PAGE>
<PAGE>
For More Information
OTHER INVESTMENT TECHNIQUES
ADJUSTING INVESTMENT EXPOSURE. Each fund may, but is not required to, use
various strategies to change its investment exposure to adjust to changing
security prices, interest rates, currency exchange rates, commodity prices
and other factors. These strategies may involve buying or selling
derivative instruments, such as options and futures contracts, stripped
securities, currency exchange contracts, swap agreements, short sales of
securities, indexed securities and rights and warrants. The fund may use
these transactions to change the risk and return characteristics of each
fund's portfolio. If we judge market conditions incorrectly or use a
strategy that does not correlate well with the fund's investments, it could
result in a loss, even if we intended to lessen risk or enhance returns.
These transactions may involve a small investment of cash compared to the
magnitude of the risk assumed and could produce disproportionate gains or
losses. Also, these strategies could result in losses if the counterparty
to a transaction does not perform as promised.
DIVERSIFICATION. Each fund is a diversified fund, which means that with
respect to 3/4 of its total assets, it will not purchase a security if, as
a result, more than 5% of the fund's total assets would be invested in
securities of a single issuer or the fund would hold more than 10% of the
outstanding voting securities of the issuer.
FOREIGN SECURITIES. These securities are not subject to the same degree of
regulation and may be more volatile and less liquid than securities traded
in major U.S. markets. This affects block trading. Foreign portfolio
securities may trade on days when a fund does not value them. Fund share
prices could be affected on days an investor cannot purchase or sell
shares. Other risks include less information on public companies, banks and
governments; political and social instability; expropriations; higher
transaction costs; currency fluctuations; nondeductable withholding taxes
and different accounting and settlement practices.
ILLIQUID SECURITIES. These securities include those that are not traded on
the open market or that trade irregularly or in very low volume. They may
be difficult or impossible to sell at the time and price the fund would
like. Each underlying fund may invest up to 15% of its assets in illiquid
securities.
In addition the use of options and financial futures transactions to
achieve a funds' investment objective could result in a loss due to
unanticipated market conditions and could increase the volatility of the
fund. These transactions may involve a small investment of cash relative to
the risks assumed.
PORTFOLIO SECURITIES LENDING. Each fund may lend securities to
broker-dealers and financial institutions, as a means of earning income.
This practice could result in a loss or delay in recovering a fund's
securities, if the borrower defaults. Each fund will limit its securities
loans to 33 1/3% of its total assets.
REPURCHASE AGREEMENTS. In a Repurchase Agreement, a fund buys a security at
one price from a broker-dealer or financial institution and simultaneously
agrees to sell the same security back to the same party at a higher price
in the future. If the other party to the agreement defaults or becomes
insolvent, a fund could lose money.
WHEN-ISSUED OR DELAYED DELIVERY SECURITIES. Each fund may purchase or sell
securities with payment and delivery taking place as much as a month or
more later. A fund
For More Information 9
<PAGE>
<PAGE>
would do this in an effort to buy or sell the securities at an advantageous
price and yield. The securities involved are subject to market fluctuation
and no interest accrues to the purchaser during the period between purchase
and settlement. At the time of delivery of the securities, their market
value may be less than the purchase price. Also, if a fund commits a
significant amount of assets to when-issued or delayed delivery
transactions, it may increase the volatility of the fund's net asset value.
YANKEES. Each fund may invest in the securities of foreign issuers payable
in U.S. dollars issued inside the U.S. that are included the Lehman
Brothers Aggregate Bond Index.
GLOSSARY OF SHADED TERMS
ELIGIBLE FUND. An Eligible Fund is any Lord Abbett-sponsored fund offering
class Y shares.
LEGAL CAPACITY. With respect to a redemption request, if (for example) the
request is on behalf of the estate of a deceased shareholder, John W. Doe,
by a person (Robert A. Doe) who has the legal capacity to act for the
estate of the deceased shareholder because he is the executor of the
estate, then the request must be executed as follows: Robert A. Doe,
Executor of the Estate of John W. Doe. That signature using that capacity
must be guaranteed by an Eligible Guarantor.
Similarly, if (for example) the redemption request is on behalf of the ABC
Corporation by a person (Mary B. Doe) that has the legal capacity to act on
behalf of this corporation, because she is the President of the
corporation, then the request must be executed as follows: ABC Corporation
by Mary B. Doe, President. That signature using that capacity must be
guaranteed by an Eligible Guarantor.
MUTUAL FUND ADVISORY PROGRAM. Certain unaffiliated authorized brokers,
dealers, registered investment advisers or other financial institutions who
either (a) have an arrangement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares (and sometimes providing for
acceptance of orders for such shares on our behalf) in particular
investment products made available for a fee to clients of such brokers,
dealers, registered investment advisers and other financial institutions,
or (b) charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients.
RECENT PERFORMANCE
Because Core Fixed Income Fund and Strategic Core Fixed Income Fund are
new, information regarding recent performance is not available.
GUARANTEED SIGNATURE. An acceptable form of guarantee would be as follows:
In the case of the estate -
Robert A. Doe
Executor of the Estate of
John W. Doe
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ David R. Levy
--------------------------
AUTHORIZED SIGNATURE
(960) X9003470
Securities Transfer Agents Medallion Program'TM'
SR
In the case of the corporation ABC Corporation
/s/ Mary B. Doe
By Mary B. Doe, President
[Date]
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
NAME OF GUARANTOR
/s/ David R. Levy
--------------------------
AUTHORIZED SIGNATURE
(960) X9003470
Securities Transfer Agents Medallion Program'TM'
SR
YEAR 2000 ISSUES. Each fund could be adversely affected if the computers
used by each fund and their service providers do not properly process and
calculate date-related information from and after January 1, 2000.
While year 2000-related computer problems could have a negative effect on
each fund, Lord Abbett is working to avoid such problems and has assurances
from each fund's service providers that they are taking similar steps.
However, because the problem is unprecedented and efforts to identify and
fix it are on-going, we don't know whether these efforts will be
successful. Accordingly, each fund may be adversely affected.
10 Financial Information
<PAGE>
<PAGE>
Financial Information
Core Fixed Income Fund
FINANCIAL HIGHLIGHTS
This table describes the fund's performance for the fiscal periods
indicated. "Total return" shows how much your investment in the fund would
have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These Financial Highlights have
been audited by Deloitte & Touche LLP, the fund's independent auditors, in
conjunction with their annual audit of the fund's financial statements.
Financial statements for the fiscal year ended November 30, 1998 and the
Independent Auditors' Report thereon appear in the Annual Report to
Shareholders for the fiscal year ended November 30, 1998 and are
incorporated by reference into the Statement of Additional Information,
which is available upon request. Certain information reflects financial
results for a single fund share.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
CLASS Y SHARES
-------------------------------
Year Ended November 30,
<S> <C> <C>
Per Share Operating Performance: 1998 1997(a)
NET ASSET VALUE, BEGINNING OF YEAR $0.00 $0.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------
Net investment income 0.00 0.00
- -------------------------------------------------------------------------------
Net realized and unrealized
- -------------------------------------------------------------------------------
gain (loss) on investments 0.00 0.00
- -------------------------------------------------------------------------------
Total from investment operations 0.00 0.00
- -------------------------------------------------------------------------------
DISTRIBUTIONS
- -------------------------------------------------------------------------------
Dividends from net investment income (0.00) (0.00)
- -------------------------------------------------------------------------------
Distributions from net realized gain -- --
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $0.00 $0.00
- -------------------------------------------------------------------------------
TOTAL RETURN(b) 0.00% 0.00%
- -------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -------------------------------------------------------------------------------
Expenses excluding waiver 0.00% 0.00%
- -------------------------------------------------------------------------------
Net investment income 0.00% 0.00%
===============================================================================
<CAPTION>
Year Ended November 30,
-------------------------------
<S> <C> <C>
SUPPLEMENTAL DATA FOR ALL CLASSES: 1998 1997
NET ASSETS, END OF YEAR (000) $0,000 $0,000
- -------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 0.00% 0.00%
- -------------------------------------------------------------------------------
</TABLE>
(a) From December 10, 1997 commencement of operations.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Amount less than 0.01%.
(d) Not annualized.
See Notes to Financial Statements.
Financial Information 11
<PAGE>
<PAGE>
LINE GRAPH COMPARISON
Immediately below is a comparison of a $10,000 investment in class Y shares
to the same investment in the Lehman Brothers Aggregate Bond Index,
assuming reinvestment of all dividends and distributions.
- -------------------------------------------------------------------------------
Awaiting Data
- -------------------------------------------------------------------------------
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS (OR LIFE)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A(4) 4.40% 4.66% 7.65%
- -------------------------------------------------------------------------------
Class B(5) 4.49% -- 7.25%
- -------------------------------------------------------------------------------
Class C(6) 8.80% -- 9.15%
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------
(1) Reflects the deduction of the maximum initial sales charge of 4.75%
(2) Performance for the unmanaged Lehman Municipal Bond Index does not
reflect transaction costs, management fees or sales charges.
(3) Source: Lipper Analytical Services.
(4) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 4.75% applicable to
class A shares, with all dividends and distributions reinvested for the
periods shown ending September 30, 1998 using the SEC-required uniform
method to compute total return. The class Y share inception date is
12/10/97.
12 Financial Information
<PAGE>
<PAGE>
===============================================================================
More information on these funds is available free upon request, including
the following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the funds, lists portfolio holdings and contains a letter from
the fund's manager discussing recent market conditions and each fund's
investment strategies.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
Provides more details about the funds and their policies. A current SAI is
on file with the Securities and Exchange Commission ("SEC") and is
incorporated by reference (is legally considered part of this prospectus).
Core Fixed Income Fund
Strategic Core Fixed Income Fund
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
--------------------------
SEC file number: 811-7988
To obtain information:
BY TELEPHONE. Call the funds at:
800-426-1130
BY MAIL. Write to the funds at:
The Lord Abbett Family of Funds
767 Fifth Avenue
New York, NY 10153-0203
VIA THE INTERNET
LORD ABBETT & CO.
http://www.lordabbett.com
Text only versions of fund documents can be viewed online or downloaded
from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
LAPROSP-Y-1-499
(4/99)
===============================================================================
<PAGE>
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION APRIL 1, 1999
LORD ABBETT INVESTMENT TRUST
U.S. GOVERNMENT SECURITIES SERIES
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES
BALANCED SERIES
HIGH YIELD FUND
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 April 1, 1999.
Lord Abbett Investment Trust (referred to as the "Company") was organized as a
Delaware business trust on August 16, 1993. The Company's trustees have
authority to create separate classes and funds of shares of beneficial interest,
without further action by shareholders. The Company includes six funds, four of
which are discussed in this Statement of Additional Information: U.S. Government
Securities Fund, Limited Duration U.S. Government Securities Fund, Balanced Fund
and High Yield Fund. The U.S. Government Securities Fund, Balanced Fund and High
Yield Fund each offers four classes of shares: Classes A, Class B, C and P;
Limited Duration U.S.Government Securities Fund offers three : Classes A, C and
P . 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 funds may be added in the
future. The Investment Company Act of 1940, as amended (the "Act") requires that
where more than one class or fund exists, each class or fund must be preferred
over all other classes or funds in respect of assets specifically allocated to
such class or fund.
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
Company 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 fund
affected by such matter. Rule 18f-2 further provides that a class or fund shall
be deemed to be affected by a matter unless the interests of each class or fund
in the matter are substantially identical or the matter does not affect any
interest of such class or fund. 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 Company or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C> <C>
1. Investment Policies........................................ 2
2. Trustees and Officers...................................... 5
3. Investment Advisory and Other Services .................... 8
4. Portfolio Transactions..................................... 9
5. Purchases, Redemptions and Shareholder Services.......... 10
6. Past Performance........................................... 18
7. Taxes...................................................... 19
8. Information About the Company.............................. 20
9. Financial Statements....................................... 20
10. Appendix................................................... 21
</TABLE>
<PAGE>
<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. Each fund may not: (1)
borrow money, except that (i) each fund 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) each fund may borrow up to an additional 5% of its total assets
for temporary purposes, (iii) each fund may obtain such short-term credit as may
be necessary for the clearance of purchases and sales of portfolio securities
and (iv) each fund 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 fund's 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 each fund 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 each fund 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 each fund 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, and for the Balanced
Fund, securities issued by an investment company 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); (8)
issue senior securities to the extent such issuance would violate applicable law
or (9) (with respect to the U.S. Government Securities Fund only) invest in
securities other than U.S. government securities, as described in the
Prospectus.
Compliance with these restrictions will be determined at the time of purchase or
sale of such securities and will not be affected by changes in the market value
of portfolio securities
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
Each fund also is 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. Each fund may not: (1) borrow in excess of 33 1/3
% of its total assets (including the amount borrowed), 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) invest in securities of issuers
which, with their predecessors, have a record of less than three years'
continuous operations, if more than 5% of the fund's' total assets would be
invested in such securities (this restriction shall not apply to mortgage-backed
securities, asset-backed securities or obligations issued or guaranteed by the
U.S. government, its agencies or instrumentalities); (6) 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 fund or by one or more
partners or members of the Company's underwriter or investment adviser if these
owners in the aggregate own beneficially more than 5% of the securities of such
issuer; (7) 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'fund's total assets (included within such limitation, but not to
exceed 2% of the funds' total assets, are warrants which are not listed on the
New York or American Stock Exchange or a major foreign exchange); (8) invest in
real estate limited partnership interests or interests in oil, gas or other
mineral leases, or exploration or other development programs, except that each
fund may invest in securities issued by companies that engage in oil, gas or
other mineral exploration or other development activities; (9) 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 (10) buy from or sell
to any of its officers,
2
<PAGE>
<PAGE>
trustees, employees, or its investment adviser or any of its officers, trustees,
partners or employees, any securities other than shares of beneficial interest
in such fund.
Although there is no current intention to do so, each fund may invest in
financial futures and options on financial futures.
INVESTMENT TECHNIQUES
LENDING PORTFOLIO SECURITIES
Each fund may lend portfolio securities to registered brokers-dealers. These
loans, if and when made, may not exceed 30% of the fund's total assets. The
fund's 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, each fund 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
Company.
By lending portfolio securities, each fund 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. Each fund will comply with the following conditions whenever it loans
securities: (i) the fund 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 fund must be able to terminate the loan at any time; (iv) the fund must
receive reasonable compensation with respect to the loan, as well as any
dividends, interest or other distributions on the loaned securities; (v) the
fund 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
Each fund (except, High Yield Fund) may enter into repurchase agreements with
respect to a security. A repurchase agreement is a transaction by which the fund
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 fund have a total
value in excess of the value of the repurchase agreement.) Each fund 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 fund 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 fund 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 fund 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 management acknowledges these risks, it is
expected that they can be controlled through stringent selection criteria and
careful monitoring procedures. Mmanagement intends to limit repurchase
agreements for each fund to transactions with dealers and financial institutions
believed by management to present minimal credit risks. Management will monitor
creditworthiness of the repurchase agreement sellers on an ongoing basis.
Each fund 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 fund otherwise may invest.
3
<PAGE>
<PAGE>
WHEN-ISSUED TRANSACTIONS (applicable to High Yield?)
As stated in the Prospectus, each fund may purchase portfolio securities on a
when-issued basis. When-issued transactions involve a commitment by the fund 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 each fund 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. Each fund, 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 Limited Duration Government fund limits its average dollar weighted
portfolio duration to a range of one to four years. However, many of the
securities in which the fund invests will have remaining durations in excess of
four years.
Some of the securities in the Limited Duration Government Funds' 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 Limited Duration
Government Fund 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 Limited Duration Government fund's 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
For the fiscal year ended November 30, 1998, the portfolio turnover rate for the
U.S. Government Securities Fund was % as compared to 712.82% for the
previous year; % for the Limited Duration Government Fund compared to
343.53% for the year ended November 30, 1997 %; % for the Balanced
Fund as compared to 216.07% for the year ended ended November 30, 1997.
As discussed above, each fund may purchase U.S. government securities on a
when-issued basis with settlement taking place after the purchase date (without
amortizing any premiums). This investment technique is expected to contribute
significantly to portfolio turnover rates. However, it will have little or no
transaction cost or adverse tax consequences. Transaction costs normally will
exclude brokerage because each fund's 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.
4
<PAGE>
<PAGE>
2.
TRUSTEES AND OFFICERS
The following Trustee is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. He has
been associated with Lord Abbett for over five years and is also an officer,
director or trustee of the other Lord Abbett-sponsored funds. He is an
"interested person" 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 54, Chairman and President
The following outside trustees are also directors or trustees of the other Lord
Abbett-sponsored funds.
E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York
Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer of
Courtroom Television Network (1997-1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991-1997). Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 57.
William H.T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri
Co-founder and Chairman of the Board of the financial advisory firm of
Bush-O'Donnell & Company. Age 60.
Robert B. Calhoun, Jr.
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners and President of the Clipper Group
L.P., both private equity investment funds. 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 68.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.
C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
5
<PAGE>
<PAGE>
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994-1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992-1994). His career spans 36 years at Stouffers and
Nestle with eighteen of the years as Chief Executive Officer. Currently serves
as Director of DenAmerica Corp., J. B. Williams Company, Inc., Fountainhead
Water Company and Exigent Diagnostics. Age 65.
Hansel B. Millican, Jr.
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York
President and Chief Executive Officer of Rochester Button Company. Age 70.
Thomas J. Neff
Spencer Stuart
277 Park Avenue
New York, New York
Chairman of Spencer Stuart, an executive search consulting firm. Currently
serves as Director of Ace, Ltd. (NYSE). Age 61.
The second column of the following table sets forth the compensation accrued for
the fund's outside trustees. The third and fourth columns set forth information
with respect to the equity-based benefits accrued for outside directors/trustees
maintained by the Lord Abbett-sponsored funds. The fourth column sets forth the
total compensation payable by such funds to the outside trustees. No trustees 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, 1998
-------------------------------------------
(1) (2) (3) (4)
Pension or For Year Ended
Retirement Benefits December 31, 1998
Accrued by the Total Compensation
Aggregate Company and Accrued by the Company and
Compensation All Other Lord All Other Lord
Accrued by Abbett-sponsored Abbett-sponsored
Name of Board Member the Companies(1) Companies(2) Companies(3)
- ------------------------- ---------------- ------------ ------------
<S> <C> <C> <C>
E. Thayer Bigelow $ $17,068 $56,000
William H. T. Bush* $ $none $none
Robert B. Calhoun, Jr.** $ $none $none
Stewart S. Dixon $ $32,190 $55,000
John C. Jansing $ $45,085(4) $55,000
C. Alan MacDonald $ $30,703 $57,400
Hansel B. Millican, Jr. $ $37,747 $55,000
Thomas J. Neff $ $19,853 $56,000
</TABLE>
*Elected as of August 13, 1998.
**Elected as of June 17, 1998.
1. Outside trustees' fees, including attendance fees for board and committee
meetings, are allocated among all Lord Abbett-sponsored funds based on the
net assets of each fund. A portion of the fees payable by the fund to its
outside directors/trustees is being deferred under a plan that deems the
deferred amounts to be invested in shares of the fund for later distribution
to the directors/trustees.
6
<PAGE>
<PAGE>
2. The amounts in Column 3 were accrued by the Lord Abbett-Sponsored funds for
the twelve months ended November 30, 1998 with respect to the equity based
plans established for independent directors in 1996. This plan supercedes a
previously approved retirement plan for all future directors. Current
directors had the option to convert their accrued benefits under the
retirement plan. All of the outside directors except one made such an
election.
3. This column shows aggregate compensation, including directors 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, 1998 The amounts of the aggregate compensation payable by
the fund as of November 30, 1998 deemed invested in fund shares, including
dividends reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, $ ; Mr. Dixon, $ ; Mr. Jansing,
$ ; Mr. MacDonald, $ ; Mr. Millican, $ and Mr. Neff, .
If the amounts deemed invested in fund shares were added to each director's
actual holdings of fund shares as of November 30, 1998, each would own, the
following: Mr. Bigelow, shares; Mr. Dixon, shares; Mr.
Jansing, shares; Mr. McDonald, shares; Mr. Millican,
shares; and Mr. Neff, shares.
4. Mr. Jansing chose to continue to receive benefits under the retirement plan
which provides that outside directors (Trustees) may receive annual
retirement benefits for life equal to their final annual retainer following
retirement at or after age 72 with at least ten years of service. Thus, if
Mr. Jansing were to retire and the annual retainer payable by the funds were
the same as it is today, he would receive annual retirement benefits of
$50,000.
Except where indicated, the following executive officers of the Company have
been associated with Lord Abbett for over five years. Of the following, Messrs.
Brown, Carper, Gerber, Hilstad, Hudson , Morris and Towle are partners of Lord
Abbett; the others are employees.
EXECUTIVE VICE PRESIDENTS:
Christopher J. Towle, age 41 (with Lord Abbett since 1988 and has over 17 years
of investment experience)
Robert Gerber, age 44 (with Lord Abbett since 1997, formerly Senior Portfolio
manager at Sanford C. Bernstein & Co. from 1992-1997)
Robert G. Morris, age 54
VICE PRESIDENTS:
Paul A. Hilstad, age 56, Vice President and Secretary (with Lord Abbett since
1995; formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.)
Zane E. Brown, age 47
Daniel E. Carper, age 47
W. Thomas Hudson, age 57
Lawrence H. Kaplan, age 42 (with Lord Abbett since 1997 formerly Vice President
and Chief Counsel of Salomon Brothers Asset Management Inc from 1995 to 1997,
prior thereto Senior Vice President, Director and General Counsel of Kidder
Peabody Asset Management, Inc.)
Thomas F. Konop, age 56
Robert A. Lee, age 29 (with Lord Abbett since 1997, formerly Portfolio Manager
at Arm Capital Advisors from 1995-1997; prior thereto Assistant Portfolio
Manager at Kidder Peabody Asset Management from 1993-1995)
A.Edward Oberhaus III, age 39
Keith F. O'Connor, age 43
7
<PAGE>
<PAGE>
Walter H. Prahl, age 40 (with Lord Abbett since 1997, formerly Quantitative
Analyst at Sanford C. Bernstein & Co. from 1994-1997)
TREASURER:
Donna M. McManus, age 38 (with Lord Abbett since 1996, formerly a Senior Manager
at Deloitte & Touche LLP).
The Company 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
Company's Declaration of Trust, shareholder meetings may be called at any time
by certain officers of the Company or by a majority of the trustees (I) for the
purpose of taking action upon any matter requiring the vote or authority of the
Company'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 fund outstanding and entitled to vote at the meeting.
As of , 1999 our officers and directors, as a group, owned less than
1% of our outstanding shares. As of , 1999 there were no record holders
of 5% or more of the fund's outstanding shares.
3.
INVESTMENT ADVISORY AND OTHER SERVICES
The services performed by Lord Abbett are described under "Management" in the
Prospectus. Under each 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% (in the case of the U.S. Government Securities Fund and the
Limited Duration U.S. Government Securities Fund), .75 of 1% (in the case of the
Balanced Fund) and .60 of 1% (in the case of the High Yield Fund). These fees
are allocated among the classes of each fund based on the class' proportionate
share of each fund's average daily net assets.
Each fund 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.
LIMITED DURATION U.S. GOVERNMENT SECURITIES FUND
The management fees paid to Lord Abbett by the Limited Duration U.S. Government
Fund for the fiscal years ended October 31, 1996, November 30, 1997, and
November 30, 1998 amounted to $9,897,$2,770, and $ , respectively. For
the one month period ended November 30, 1996 the management fee paid to Lord
Abbett by the Limited Duration U.S. Government Fund was $2,770. For the fiscal
year ended October 31, 1996, the one month period ended November 30, 1996, the
fiscal years ended November 30, 1997 and November 30, 1998, Lord Abbett waived
$28,804, $2,657, $54,884, and $ in management fees for the Limited
Duration U.S. Government Fund.
BALANCED FUND
The management fees paid to Lord Abbett by the Balanced Fund for the
fiscal years ended October 31, 1996, November 30, 1997, and November 30, 1998
were $8,607, $48,151, and $-------- respectively. For the one month period ended
November 30, 1996, the management fee paid to Lord Abbett by the Balanced Fund
was $2,240. With respect to the Balanced Fund, for the fiscal year ended October
31, 1996, the one month period ended November 30, 1996, the fiscal years ended
November 30, 1997 and November 30, 1998, Lord Abbett waived $53,375, $4,638,
$65,087, and $ in management fees.
U.S. GOVERNMENT SECURITIES FUND
The management fees paid to Lord Abbett by the U.S. Government Securities Fund
for the fiscal years ended October 31, 1996, November 30, 1997 and November 30,
1998 were $15,053,629, $12,500,454, and $ , respectively. For the one
month period ended November 30, 1996, the management fee paid to Lord Abbett by
the U.S. Government Securities Fund was $ .
8
<PAGE>
<PAGE>
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281, are
the independent auditors of each fund and must be approved at least annually by
our trustees to continue in such capacity. Deloitte & Touche LLP perform audit
services for each 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 Company's
custodian.
4.
PORTFOLIO TRANSACTIONS
Each fund expects that purchases and sales of 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, each fund usually will pay no brokerage commissions for
such purchases. Purchases from underwriters of portfolio 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.
Each fund's 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 Company 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 a
fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
a 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.
9
<PAGE>
<PAGE>
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.
During the fiscal year ended November 30, 1998, the Limited Duration U.S.
Government Securities Fund, U.S. Government Securities Fund and the High Yield
Fund paid no commissions to independent brokers. For the fiscal year ended
November 30, 1998, the Balanced Fund paid total commissions to independent
brokers of $ .
5.
PURCHASES, REDEMPTIONS
AND SHAREHOLDER SERVICES
Securities in each fund's portfolio are valued at their market values as of the
close of the New York Stock Exchange ("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
Company'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
Balanced Fund, 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 Company. The Board of Trustees will monitor, on an ongoing basis, the
Company'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."
As disclosed in the Prospectus, we calculate our net asset value and are
otherwise open for business on each day that the NYSE is open for trading. The
NYSE is closed on Saturdays and Sundays and the following holidays -New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
The net asset value per share for the Class B and Class C shares will be
determined in the same manner as for the Class A shares (net assets divided by
shares outstanding). Our Class B and Class C shares will be sold at net asset
value.
The offering price of Class A shares of the U. S. Government Securities Fund,
the Limited Duration U.S. Government Fund, the Balanced Fund and the High Yield
Fund on November 30, 1998 were computed as follows:
<TABLE>
<CAPTION>
U.S.
Limited Duration Government
Government Balanced Securities
Fund Fund Fund
---------------- -------- ----------
<S> <C> <C> <C>
Net asset value per share (net assets divided
by shares outstanding)........ $4.40 $12.80 $2.59
Maximum offering price per share - net asset
</TABLE>
10
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
value divided by (.9700 for Limited
Duration Government Fund
and U. S. Government Securities Fund)
and (.9525 for Balanced Fund and High
Yield Fund) $4.54 $13.44 $2.72
</TABLE>
The Company has entered into a distribution agreement with Lord Abbett
Distributor LLC, a New York limited liability company ("Lord Abbett
Distributor"), under which Lord Abbett Distributor is obligated to use its best
efforts to find purchasers for the shares of the fund, and to make reasonable
efforts to sell fund shares so long as, in Lord Abbett Distributor's judgment, a
substantial distribution can be obtained by reasonable efforts.
Since commencement of operations, Lord Abbett as our principal underwriter
received net commissions after allowance of a portion of the sales charge to
independent dealers with respect to Class A shares of the Limited Duration U.S.
Government Securities Fund and the Balanced Fund as follows:
<TABLE>
<CAPTION>
Yr Ended Month Ended Yr Ended Yr Ended
10/31/96 11/30/96 11/30/97 11/30/98
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Gross sales charge $140,941 $8,059 $269,184 $
Amount allowed
to dealers $123,303 $7,068 $233,663 $
-------- --------- --------
Net Commissions received
by Lord Abbett $ 17,638 $ 991 $ 35,521 $
======== ======== ========
</TABLE>
For the fiscal years ended , 1996 , 1997, and 1998, Lord Abbett as principal
underwriter received net commissions after allowance of a portion of the sales
charge to independent dealers with respect to Class A shares of the Acquired
Fund (and subsequent to July 12, 1996, the U.S. Government Securities Fund) as
follows:
<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C>
Gross sales charge $4,248,800 $1,469,770
Amount allowed
to dealers $3,623,071 $1,259,215
---------- ----------
Net Commissions received
by Lord Abbett $625,729 $210,555
======== ========
</TABLE>
CONVERSION OF CLASS B SHARES. The conversion of Class B shares of the U.S.
Government Securities Fund and the High Yield Fund on the eighth anniversary of
their purchase 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 of Class B shares does not constitute a taxable event for
the holder 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. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the holder.
ALTERNATIVE SALES ARRANGEMENTS
CLASSES OF SHARES. This Prospectus offers four classes designed Class A, B, C
and P. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will likely
have different share prices. Investors should read this section carefully to
determine which class represents the best investment option for their particular
situation.
CLASS A SHARES. If you buy Class A shares, you pay an initial sales charge on
investments of less than $1 million (or on investments for employer-sponsored
retirement plans under the Internal Revenue Code (hereinafter referred to as
11
<PAGE>
<PAGE>
"Retirement Plans") with less than 100 eligible employees or on investments that
do not qualify to be under a "special retirement wrap program" as a program
sponsored by an authorized institution showing one or more characteristics
distinguishing it, in the opinion of Lord Abbett Distributor from a mutual fund
wrap fee program). If you purchase Class A shares as part of an investment of at
least $1 million (or for Retirement Plans with at least 100 eligible employees
or under a special retirement wrap program) in shares of one or more Lord
Abbett-sponsored funds, you will not pay an initial sales charge, but if you
redeem any of those shares within 24 months after the month in which you buy
them, you may pay to the Company a contingent deferred sales charge ("CDSC") of
1% except for redemptions under a special retirement wrap program. Class A
shares are subject to service and distribution fees that are currently estimated
to total annually approximately 0.23 of 1% of the annual net asset value of the
Class A shares. The initial sales charge rates, the CDSC and the Rule 12b-1 plan
applicable to the Class A shares are described in "Buying Class A Shares" below.
CLASS B SHARES. If you buy Class B shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the sixth anniversary of
buying them, you will normally pay a CDSC to Lord Abbett Distributor LLC ("Lord
Abbett Distributor"). That CDSC varies depending on how long you own shares.
Class B shares are subject to service and distribution fees at an annual rate of
1% of the annual net asset value of the Class B shares. The CDSC and the Rule
12b-1 plan applicable to the Class B shares are described in "Buying Class B
Shares" below.
CLASS C SHARES. If you buy Class C shares, you pay no sales charge at the time
of purchase, but if you redeem your shares before the first anniversary of
buying them, you will normally pay the Company a CDSC of 1%. Class C shares are
subject to service and distribution fees at an annual rate of 1% of the annual
net asset value of the Class C shares. The CDSC and the Rule 12b-1 plan
applicable to the C shares are described in "Buying Class C Shares" below.
CLASS P SHARES. If you buy Class P shares, you pay no sales charge at the time
of purchase, and if you redeem your shares you pay no CDSC. Class P shares are
subject to service and distribution fees at an annual rate of .45 of 1% of the
average daily net asset value of the Class P shares. The Rule 12b-1 plan
applicable to the Class P shares is described in "Class P Rule 12b-1 Plan."
Class P shares are available to a limited number of investors.
WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that thea fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial adviser. The fund's class-specific expenses and the
effect of the different types of sales charges on your investment will affect
your investment results over time. The most important factors are how much you
plan to invest and how long you plan to hold your investment. If your goals and
objectives change over time and you plan to purchase additional shares, you
should re-evaluate those factors to see if you should consider another class of
shares.
In the following discussion, to help provide you and your financial adviser with
a framework in which to choose a class, we have made some assumptions using a
hypothetical investment in the fund. We used the sales charge rates that apply
to Class A, Class B and Class C, and considered the effect of the higher
distribution fees on Class B and Class C expenses (which will affect your
investment return). Of course, the actual performance of your investment cannot
be predicted and will vary, based on the fund's actual investment returns, the
operating expenses borne by each class of shares, and the class of shares you
purchase. The factors briefly discussed below are not intended to be investment
advice, guidelines or recommendations, because each investor's financial
considerations are different. The discussion below of the factors to consider in
purchasing a particular class of shares assumes that you will purchase only one
class of shares and not a combination of shares of different classes.
HOW LONG DO YOU EXPECT TO HOLD YOUR INVESTMENT? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares. For
example, over time, the reduced sales charges available for larger purchases of
Class A shares may offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-specific expenses
on Class B or Class C shares for which no initial sales charge is paid. Because
of the effect of class-based expenses, your choice should also depend on how
much you plan to invest.
Investing for the Short Term. If you have a short-term investment horizon (that
is, you plan to hold your shares for not more than six years), you should
probably consider purchasing Class A or Class C shares rather than Class B
12
<PAGE>
<PAGE>
shares. This is because of the effect of the Class B CDSC if you redeem before
the sixth anniversary of your purchase, as well as the effect of the Class B
distribution fee on the investment return for that class in the short term.
Class C shares might be the appropriate choice (especially for investments of
less than $100,000), because there is no initial sales charge on Class C shares,
and the CDSC does not apply to amounts you redeem after holding them one year.
However, if you plan to invest more than $100,000 for the short term, then the
more you invest and the more your investment horizon increases toward six years,
the more attractive the Class A share option may become. This is because the
annual distribution fee on Class C shares will have a greater impact on your
account over the longer term than the reduced front-end sales charge available
for larger purchases of Class A shares. For example, Class A might be more
appropriate than Class C for investments of more than $100,000 expected to be
held for 5 or 6 years (or more). For investments over $250,000 expected to be
held 4 to 6 years (or more), Class A shares may become more appropriate than
Class C. If you are investing $500,000 or more, Class A may become more
desirable as your investment horizon approaches 3 years or more.
For most investors who invest $1 million or more or for Retirement Plans with at
least 100 eligible employees or for investments pursuant to a special retirement
wrap program, in most cases Class A shares will be the most advantageous choice,
no matter how long you intend to hold your shares. For that reason, it may not
be suitable for you to place a purchase order for Class B shares of $500,000 or
more or a purchase order for Class C shares of $1,000,000 or more. In addition,
it may not be suitable for you to place an order for Class B or C shares for a
Retirement Plan with at least 100 eligible employees or for a special retirement
wrap program. You should discuss this with your financial advisor.
Investing for the Longer Term. If you are investing for the longer term (for
example, to provide for future college expenses for your child) and do not
expect to need access to your money for seven years or more, Class B shares may
be an appropriate investment option, if you plan to invest less than $100,000.
If you plan to invest more than $100,000 over the long term, Class A shares will
likely be more advantageous than Class B shares or Class C shares, as discussed
above, because of the effect of the expected lower expenses for Class A shares
and the reduced initial sales charges available for larger investments in Class
A shares under the fund's Rights of Accumulation. Of course, these examples are
based on approximations of the effect of current sales charges and expenses on a
hypothetical investment over time, and should not be relied on as rigid
guidelines.
ARE THERE DIFFERENCES IN ACCOUNT FEATURES THAT MATTER TO YOU? Some account
features are available in whole or in part to Class A, Class B and Class C
shareholders. Other features (such as Systematic Withdrawal Plans) might not be
advisable in non-Retirement Plan accounts for Class B shareholders (because of
the effect of the CDSC on the entire amount of a withdrawal if it exceeds 12%
annually) and in any account for Class C shareholders during the first year of
share ownership (due to the CDSC on withdrawals during that year). See
"Systematic Withdrawal Plan" under "Shareholder Services" in the Prospectus for
more information about the 12% annual waiver of the CDSC. You should carefully
review how you plan to use your investment account before deciding which class
of shares you buy. For example, the dividends payable to Class B and Class C
shareholders will be reduced by the expenses borne solely by each of these
classes, such as the higher distribution fee to which Class B and Class C shares
are subject, as described below.
HOW DOES IT AFFECT PAYMENTS TO MY BROKER? A salesperson, such as a broker, or
any other person who is entitled to receive compensation for selling fund shares
may receive different compensation for selling one class than for selling
another class. As discussed in more detail below, such compensation is primarily
paid at the time of sale in the case of Class A and B shares and is paid over
time, so long as shares remain outstanding, in the case of Class C shares. It is
important that investors understand that the primary purpose of the CDSC for the
Class B shares and the distribution fee for Class B and Class C shares is the
same as the purpose of the front-end sales charge on sales of Class A shares: to
compensate brokers and other persons selling such shares. The CDSC, if payable,
supplements the Class B distribution fee and reduces the Class C distribution
fee expenses for the nd and Class C shareholders.
CLASS A, B, C AND P RULE 12b-1 PLANS. As described in the Prospectus, the
Company has adopted a Distribution Plan and Agreement pursuant to Rule 12b-1 of
the Act for each of the four Classes: the "A Plan," the "B Plan" the "C Plan,"
and the "P Plan," respectively. In adopting each Plan and in approving its
continuance, the Board of Directors has concluded that there is a reasonable
likelihood that each Plan will benefit its respective Class and such Class's
13
<PAGE>
<PAGE>
shareholders. The expected benefits include greater sales and lower redemptions
of Class shares, which should allow each Class to maintain a consistent cash
flow, and a higher quality of service to shareholders by authorized institutions
than would otherwise be the case. Lord Abbett uses all amounts received under
each Plan as described in the Prospectus and for payments to dealers for (i)
providing continuous services to the shareholders, such as answering shareholder
inquiries, maintaining records, and assisting shareholders in making
redemptions, transfers, additional purchases and exchanges and (ii) their
assistance in distributing shares of the Company.
During the last fiscal year, the Company accrued or paid through Lord Abbett to
authorized institutions $6,368,420 under the A Plan, $93,175 under the B Plan
and $1,929,168 under the C Plan. Both the B Plan and the C Plans were adopted by
the FundCompany subsequent to its last fiscal year.
Each Plan requires the trustees to review, on a quarterly basis, written reports
of all amounts expended pursuant to the Plan and the purpose for which such
expenditures were made. Each Plan shall continue in effect only if its
continuance is specifically approved at least annually by vote of the Company's
Board of Trustees and of the Company trustees who are not interested persons of
the Fundcompany and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related to the Plan ("outside
trustees"), cast in person at a meeting called for the purpose of voting on such
Plan and agreements. No Plan may be amended to increase materially the amount
spent for distribution expenses without approval by a majority of the
outstanding voting securities of the appropriate class and the approval of a
majority of the trustees including a majority of the Company's outside trustees.
Each Plan may be terminated at any time by vote of a majority of the 's outside
trustees or by vote of a majority of its Class's outstanding voting securities.
CONTINGENT DEFERRED SALES CHARGES. A Contingent Deferred Sales Charge ("CDSC"),
applies upon early redemption of shares regardless of class, and (i) will be
assessed on the lesser of the net asset value of the shares at the time of
redemption or the original purchase price and (ii) is not imposed on the amount
of your account value represented by the increase in net asset value over the
initial purchase price (including increases due to the reinvestment of dividends
and capital gains distributions).
CLASS A SHARES (ALL FUNDS). As stated in the Prospectus, a CDSC is imposed with
respect to those Class A shares (or Class A shares of another Lord
Abbett-sponsored fund or series acquired through exchange of such shares) on
which a fund has paid the one-time 1% distribution fee if such shares are
redeemed out of the Lord Abbett-sponsored family of funds within a period of 24
months from the end of the month in which the original sale occurred.
CLASS B SHARES (U.S. GOVERNMENT SECURITIES FUND, BALANCED FUND, AND HIGH YIELD
FUND). As stated in the Prospectus, if Class B shares (or Class B shares of
another Lord Abbett-sponsored fund or series acquired through exchange of such
shares) are redeemed out of the Lord Abbett-sponsored family of funds for cash
before the sixth anniversary of their purchase, a CDSC will be deducted from the
redemption proceeds. The Class B CDSC is paid to Lord Abbett Distributor to
reimburse its expenses, in whole or in part, of providing distribution-related
service to the fund in connection with the sale of Class B shares.
To determine whether the CDSC applies to a redemption, the fund redeems
shares in the following order: (1) shares acquired by reinvestment of dividends
and capital gains distributions, (2) shares held on or after the sixth
anniversary of their purchase, and (3) shares held the longest before such sixth
anniversary.
The amount of the contingent deferred sales charge will depend on the number of
years since you invested and the dollar amount being redeemed, according to the
following schedule:
14
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Anniversary of Contingent Deferred Sales Charge
Purchase on Redemptions (As % of Amount Subject to Charge)
<S> <C>
Before the 1st.........................5.0%
On the 1st, before the 2nd.............4.0%
On the 2nd, before the 3rd.............3.0%
On the 3rd, before the 4th.............3.0%
On the 4th, before the 5th.............2.0%
On the 5th, before the 6th ............1.0%
On or after the 6th anniversary........None
</TABLE>
In the table, an "anniversary" is the 365th day subsequent to the acceptance of
a purchase order or a prior anniversary. All purchases are considered to have
been made on the business day on which the purchase order was accepted.
CLASS C SHARES (ALL FUNDS). As stated in the Prospectus, if Class C shares are
redeemed for cash before the first anniversary of their purchase, the redeeming
shareholder will be required to pay to the fund on behalf of Class C shares a
CDSC of 1% of the lower of cost or the then net asset value of Class C shares
redeemed. If such shares are exchanged into the same class of another Lord
Abbett-sponsored fund and subsequently redeemed before the first anniversary of
their original purchase, the charge will be collected by the other fund on
behalf of this fund's Class C shares.
GENERAL. Each percentage (1% in the case of Class A and C shares and 5% through
1% in the case of Class B shares) used to calculate CDSCs described above for
the Class A, Class B and Class C shares is sometimes hereinafter referred to as
the "Applicable Percentage."
With respect to Class A and Class B shares, no CDSC is payable on redemptions by
participants or beneficiaries from employer-sponsored retirement plans under the
Internal Revenue Code for benefit payments due to plan loans, hardship
withdrawals, death, retirement or separation from service and for returns of
excess contributions to retirement plan sponsors With respect to Class A shares
purchased pursuant to a special retirement wrap program, no CDSC is payable on
redemptions which continue or investments in another fund participating in the
program. In the case of Class A and Class C shares, the CDSC is received by the
fund and is intended to reimburse all or a portion of the amount paid by the
fund if the shares are redeemed before the fund has had an opportunity to
realize the anticipated benefits of having a long-term shareholder account in
the fund. In the case of Class B shares, the CDSC is received by Lord Abbett
Distributor and is intended to reimburse its expenses of providing
distribution-related service to the fund (including recoupment of the commission
payments made) in connection with the sale of Class B shares before Lord Abbett
Distributor has had an opportunity to realize its anticipated reimbursement by
having such a long-term shareholder account subject to the B Plan distribution
fee.
The other funds and series which participate in the Telephone Exchange Privilege
(except (a) Lord Abbett U.S. Government Securities Money Market Fund, Inc.
("GSMMF"), (b) certain series of Lord Abbett Tax-Free Income Fund and Lord
Abbett Tax-Free Income Trust for which a Rule 12b-1 Plan is not yet in effect,
and (c) any authorized institution's affiliated money market fund satisfying
Lord Abbett Distributor as to certain omnibus account and other criteria,
hereinafter referred to as an "authorized money market fund" or "AMMF"
(collectively, the "Non-12b-1 funds") have instituted a CDSC for each class on
the same terms and conditions. No CDSC will be charged on an exchange of shares
of the same class between Lord Abbett funds or between such funds and AMMF. Upon
redemption of shares out of the Lord Abbett family of funds or out of AMMF, the
CDSC will be charged on behalf of and paid: (i) to the fund in which the
original purchase (subject to a CDSC) occurred, in the case of the Class A and
Class C shares and (ii) to Lord Abbett Distributor if the original purchase was
subject to a CDSC, in the case of the Class B shares. Thus, if shares of a Lord
Abbett fund are exchanged for shares of the same class of another such fund and
the shares of the same class tendered ("Exchanged Shares") are subject to a
CDSC, the CDSC will carry over to the shares of the same class being acquired,
including GSMMF and AMMF ("Acquired Shares"). Any CDSC that is carried over to
Acquired Shares is calculated as if the holder of the Acquired Shares had held
those shares from the date on which he or she became the holder of the Exchanged
Shares. Although the Non-12b-1 funds will not pay a distribution fee on their
own shares, and will, therefore, not impose their own CDSC, the Non-12b-1 funds
will collect the CDSC (a) on behalf of other Lord Abbett funds, in the case of
the Class A and Class C shares and (b) on behalf of Lord Abbett Distributor, in
the case of the Class B shares. Acquired Shares held in GSMMF and AMMF which are
subject to a CDSC will be credited with the time such shares are held in GSMMF
but will not be credited with the time such shares are held in AMMF. Therefore,
if your Acquired Shares held in AMMF qualified for no CDSC or a lower Applicable
Percentage at the time
15
<PAGE>
<PAGE>
of exchange into AMMF, that Applicable Percentage will apply to redemptions for
cash from AMMF, regardless of the time you have held Acquired Shares in AMMF.
In no event will the amount of the CDSC exceed the Applicable Percentage of the
lesser of (i) the net asset value of the shares redeemed or (ii) the original
cost of such shares (or of the Exchanged Shares for which such shares were
acquired). No CDSC will be imposed when the investor redeems (i) amounts derived
from increases in the value of the account above the total cost of shares being
redeemed due to increases in net asset value, (ii) shares with respect to which
no Lord Abbett fund or fund paid a 12b-1 fee and, in the case of Class B shares,
Lord Abbett Distributor paid no sales charge or service fee (including shares
acquired through reinvestment of dividend income and capital gains
distributions) or (iii) shares which, together with Exchanged Shares, have been
held continuously for 24 months from the end of the month in which the original
sale occurred (in the case of Class A shares); for six years or more (in the
case of Class B shares) or for one year or more (in the case of Class C shares).
In determining whether a CDSC is payable, (a) shares not subject to the CDSC
will be redeemed before shares subject to the CDSC and (b) of the shares subject
to a CDSC, those held the longest will be the first to be redeemed.
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), (ii) GSMMF or (iii) AMMF, to the extent offers
and sales may be made in your state. You should read the prospectus of the other
fund before exchanging. In establishing a new account by exchange, shares of the
und 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 funds' shares.
Exchanges are based on relative net asset values on the day instructions are
received by the Fundfund 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 or AMMF (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 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 AMMF 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 and Lord
Abbett Equity Fund ("LAEF") which is not issuing shares.
STATEMENT OF INTENTION. Under the terms of the Statement of Intention to invest
$50,000 or more over a 13-month period as described in the Prospectus, shares of
Lord Abbett-sponsored funds (other than shares of LAEF, LASF, LARF, and GSMMF,
unless holdings in GSMMF are attributable to shares exchanged from a Lord
Abbett-sponsored fund offered with a front-end, back-end or level sales charge)
currently owned by you are credited as purchases (at their current offering
prices on the date the Statement is signed) toward achieving the stated
investment and reduced initial sales charges for Class A shares. Class A shares
valued at 5% of the amount of intended purchases are escrowed and may be
redeemed to cover the additional sales charge payable if the Statement is not
completed. The Statement of Intention is neither a binding obligation on you to
buy, nor on the fund to sell, the full amount indicated.
RIGHTS OF ACCUMULATION. As stated in the Prospectus, purchasers (as defined in
the Prospectus) may accumulate their investment in Lord Abbett-sponsored funds
(other than LAEF, LARF, LASF, and GSMMF, unless holdings in GSMMF are
attributable to shares exchanged from a Lord Abbett-sponsored fund offered with
a front-end, back-end or level sales charge) so that a current investment, plus
the purchaser's holdings valued at the current maximum offering price, reach a
level eligible for a discounted sales charge for Class A shares.
16
<PAGE>
<PAGE>
NET ASSET VALUE PURCHASES OF CLASS A SHARES. As stated in the Prospectus, our
Class A shares may be purchased at net asset value by our trustees, employees of
Lord Abbett, employees of our shareholder servicing agent and employees of any
securities dealer having a sales agreement with Lord Abbett who consents to such
purchases or by the trustee or custodian under any pension or profit-sharing
plan or Payroll Deduction IRA established for the benefit of such persons or for
the benefit of employees of any national securities trade organization to which
Lord Abbett belongs or any company with an account(s) in excess of $10 million
managed by Lord Abbett on a private-advisory-account basis. For purposes of this
paragraph, the terms "trustees" and "employees" include a trustee's or
employee's spouse (including the surviving spouse of a deceased director or
employee). The terms "directors" and "employees of Lord Abbett" also include
other family members and retired trustees and employees.
Our Class A shares also may be purchased at net asset value (a) at $1 million or
more, (b) with dividends and distributions from Class A shares of other Lord
Abbett-sponsored funds, except for LARF, LAEF and LASF, (c) under the loan
feature of the Lord Abbett-sponsored prototype 403(b) plan for share purchases
representing the repayment of principal and interest, (d) by certain authorized
brokers, dealers, registered investment advisers or other financial institutions
who have entered into an agreement with Lord Abbett Distributor in accordance
with certain standards approved by Lord Abbett Distributor, providing
specifically for the use of our shares in particular investment products made
available for a fee to clients of such brokers, dealers, registered investment
advisers and other financial institutions, ("mutual fund wrap fee program"), (e)
by employees, partners and owners of unaffiliated consultants and advisors to
Lord Abbett, Lord Abbett Distributor or Lord Abbett-sponsored funds who consent
to such purchase if such persons provide service to Lord Abbett, Lord Abbett
Distributor or such funds on a continuing basis and are familiar with such
funds, (f) through Retirement Plans with at least 100 eligible employees, (g)
our Class A shares also may be purchased at net asset value, subject to
appropriate documentation, through a securities dealer where the amount invested
represents redemption proceeds from shares ("Redeemed Shares") of a registered
open-end management investment company not distributed or managed by Lord Abbett
(other than a money market fund), if such redemption has occurred no more than
60 days prior to the purchase of our shares, the Redeemed Shares were held for
at least six months prior to redemption and the proceeds of redemption were
maintained in cash or a money market fund prior to purchase. Purchasers should
consider the impact, if any, of contingent deferred sales charges in determining
whether to redeem shares for subsequent investment in our Class A shares. Lord
Abbett may suspend, change or terminate this purchase option referred to in (g)
above at any time, we plan that on June 1, 1997 the net asset value transfer
privilege will be terminated, and (h) through a "special retirement wrap
program" sponsored by an authorized institution showing one or more
characteristics distinguishing it, in the opinion of Lord Abbett Distributor
from a mutual fund wrap program. Such characteristics include, among other
things, the fact that an authorized institution does not charge its clients any
fee of a consulting or advisory nature that is economically equivalent to the
distribution fee under Class A 12b-1 Plan and the fact that the program relates
to participant-directed Retirement Plan with respect to the U.S. Government
Securities Fund only,. Shares are offered at net asset value to these investors
for the purpose of promoting goodwill with employees and others with whom Lord
Abbett Distributor and/or the fund has business relationships.
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 Company 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.
DIV-MOVE. Under the Div-Move service described in the Prospectus, you can invest
the dividends paid on your account into an existing account in any other
Eligible Fund. The account must be either your account, a joint account for you
and your spouse, a single account for your spouse, or a custodial account for
your minor child under the age of 21. You should read the prospectus of the
other fund before investing.
17
<PAGE>
<PAGE>
INVEST-A-MATIC. The Invest-A-Matic method of investing in the Fund and/or any
other Eligible Fund is described in the Prospectus. To avail yourself of this
method you must complete the application form, selecting the time and amount of
your bank checking account withdrawals and the funds for investment, include a
voided, unsigned check and complete the bank authorization.
SYSTEMATIC WITHDRAWAL PLANS. The Systematic Withdrawal Plan (the "SWP") also is
described in the Prospectus. You may establish a SWP if you own or purchase
uncertificated shares having a current offering price value of at least $10,000.
Lord Abbett prototype retirement plans have no such minimum. With respect to a
SWP for Class B shares, on redemptions over 12% per year, the CDSC will apply to
the entire redemption. Therefore, please contact the fund for assistance in
minimizing the CDSC in this situation. With respect to Class C shares, the CDSC
will be waived on and after the first anniversary of their purchase. The SWP
involves the planned redemption of shares on a periodic basis by receiving
either fixed or variable amounts at periodic intervals. Since the value of
shares redeemed may be more or less than their cost, gain or loss may be
recognized for income tax purposes on each periodic payment. Normally, you may
not make regular investments at the same time you are receiving systematic
withdrawal payments because it is not in your interest to pay a sales charge on
new investments when in effect a portion of that new investment is soon
withdrawn. The minimum investment accepted while a withdrawal plan is in effect
is $1,000. The SWP may be terminated by you or by us at any time by written
notice.
RETIREMENT PLANS. The Prospectus indicates the types of retirement plans for
which Lord Abbett provides forms and explanations. Lord Abbett makes available
the retirement plan forms and custodial agreements for IRAs (Individual
Retirement Accounts including Simple IRAs and Simplified Employee Pensions),
403(b) plans and qualified pension and profit-sharing plans, including 401(k)
plans. The forms name Investors Fiduciary Trust Company as custodian and contain
specific information about the plans. Explanations of the eligibility
requirements, annual custodial fees and allowable tax advantages and penalties
are set forth in the relevant plan documents. Adoption of any of these plans
should be on the advice of your legal counsel or qualified tax adviser.
6.
PERFORMANCE
Each fund computes the average annual compounded rate of total return for each
Class 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 the maximum 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, the current maximum sales
charge of 3.0% with respect to the Balanced Fund and 4.75% with respect to
the Limited Duration Government Fund, U.S. Government Securities Fund and High
Yield Fund (as a percentage of the offering price) is deducted from the initial
investment (unless the return is shown at net asset value). For Class B shares
of the U.S. Government Securities Fund and the High Yield Fund, the payment of
the applicable CDSC (5.0% prior to the first anniversary of purchase, 4.0% prior
to the second anniversary of purchase, 3.0% prior to the third and fourth
anniversaries of purchase, 2.0% prior to the fifth anniversary of purchase, 1.0%
prior to the sixth anniversary of purchase and no CDSC on and after the sixth
anniversary of purchase) is applied to the fund's investment result for that
class for the time period shown (unless the total return is shown at net asset
value). For Class C shares, the 1.0% CDSC is applied to the applicable
Series'fund's investment result for that class for the time period shown prior
to the first anniversary of purchase (unless the total return is shown at net
asset value). 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.
Using the method to compute average annual compounded total return described
above, the total annual return for the U.S. Government Securities Fund for the
fiscal year ended October 31, 1996, the one-month period ended November 30,
1996, the fiscal years ended November 30, 1997 and November 30, 1998 were %,
%, % and % for the Class A shares. The total return for the Limited
Duration U.S. Government Securities Fund for the fiscal year ended October 31,
1996, the one-month period ended November 30, 1996 and fiscal years ended
November 30, 1997 and
18
<PAGE>
<PAGE>
November 30, 1998 were %, %, % and % for the Class A shares. The
total return for the Balanced Fund for the fiscal year ended October 31, 1996,
the one-month period ended November 30, 1996 and fiscal years ended November 30,
1997 and November 30, 1998 were %, %, % and % for the Class A
shares.
The total return for Class B shares of the U.S. Government Securities Fund for
the period August 1, 1996 to November 30, 1996, and the fiscal years ended
November 30, 1997 and November 30, 1998 were %, %, %, respectively.
The total return for Class B shares of the Balanced Fund for the period May 1,
1998 to November 30, 1998 was %.
The total return for Class C shares of the Limited Duration U.S. Government
Securities Fund for the period July 15, 1996 to October 31, 1996, the one month
period ended November 30, 1996 and fiscal years ended November 30, 1997 and
November 30, 1998 were 1.97%, 0.09$, 4.40% and %, respectively. The total
return for Class C shares of the Balanced Fund for the same periods were 6.72%,
3.65%, 13.10% and %, respectively. The total return for Class C shares of
the U.S. Government Securities Fund for same periods were 5.34%, 5.90% and
%, respectively.
Each fund's 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 maximum offering price per share on the last day of the period.
This is determined by finding the following quotient: take the fund's 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 fund shares
outstanding during the period that were entitled to receive dividends and (ii)
the fund's at maximum offering price 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 reflects the deduction of the
maximum initial sales charge, but may also be shown based on the fund's net
asset value per share. Yields for Class B and C shares do not reflect the
deduction of the CDSC. For the 30-day period ended November 30, 1998, the
Limited Duration Government Fund and Balanced Fund yields were % and %,
respectively.
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 a fund's 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.
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 fund
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 capital
gains distributions which you received with respect to such shares. Losses on
the sale of fund 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.
Each fund 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. Each fund intends
to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax. Dividends paid by the fund will qualify for the
dividends-received deduction for corporations to the extent that they are
derived from dividends paid by domestic corporations.
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
each fund, 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 fund shares.
19
<PAGE>
<PAGE>
8.
INFORMATION ABOUT THE COMPANY
SHAREHOLDER LIABILITY. Delaware law provides that Company 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 Company's Declaration of
Trust contains an express disclaimer of shareholder liability for the acts,
obligations, or affairs of the Company or any fund and requires that a
disclaimer be given in each contract entered into or executed by the Company.
The Declaration provides for indemnification out of the Company's property of
any shareholder or former shareholder held personally liable for the obligations
of the Company. 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.
GENERAL. The assets of the Company received for the issue or sale of the shares
of each fund and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to each fund,
and constitute the underlying assets of such fund. The underlying assets
of each fund are recorded on the books of account of the fund, and are to be
charged with the liabilities with respect to such fund 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 Company, the holders of the shares of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
Under the Company's Declaration of Trust, the trustees may, upon shareholder
vote, cause the Company to merge or consolidate into, or sell and convey all or
substantially all of, the assets of the Company or any fund 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
Company's registration statement. In addition, the trustees may, without
shareholder vote, cause the Company to be incorporated under Delaware law.
Derivative actions on behalf of the Company or any fund may be brought only by
shareholders owning not less than 50% of the then outstanding shares of the
Company or any fund, 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, 19978 and the report
of Deloitte & Touche LLP, independent auditors, on such annual financial
statements contained in the 1998 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.
20
<PAGE>
<PAGE>
10.
APPENDIX
CORPORATE BOND RATINGS (HIGH YIELD FUND ONLY)
Moody's Investors Service, Inc.'s Corporate Bond Ratings
Aaa - Bonds which are rated Aaa are judged to be of the best quality and carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds which are rated Aa are judged to be of high-quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.
Caa - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Standard & Poor's Corporation's Corporate Bond Ratings
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong and in the majority of instances they
differ from AAA issues only in small degree.
21
<PAGE>
<PAGE>
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB-B-CCC-CC-C - Debt rated BB, B, CCC, CC and C is regarded as having
predominately speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' in the least degree of speculation and 'CCC'
the highest. such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
D - Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes such payments will
be made during such grace period. The 'D' rating also will be us the filing of a
bankruptcy petition if debt service payments are jeopardized.
22
<PAGE>
<PAGE>
LORD ABBETT
STATEMENT OF ADDITIONAL INFORMATION APRIL 1, 1999
LORD ABBETT INVESTMENT TRUST
CORE FIXED INCOME SERIES
STRATEGIC CORE FIXED INCOME 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 April 1, 1999.
Lord Abbett Investment Trust (referred to as the "Company") was organized as a
Delaware business trust on August 16, 1993. The Company's trustees have
authority to create separate classes of shares of beneficial interest and
separate funds without further action by shareholders. The Company has six
funds, two of which are discussed in this Statement of Additional Information:
Core Fixed Income Series ("Core Fixed Income Fund") and Strategic Core Fixed
Income Series ("Strategic Core Fixed Income Fund"), both of which offer only one
class of shares: Class Y. 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 funds may
be added in the future. The Investment Company Act of 1940, as amended (the
"Act") requires that where more than one class or fund exists, each class or
fund must be preferred over all other classes or funds in respect of assets
specifically allocated to such class or fund.
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
Company 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 fund
affected by such matter. Rule 18f-2 further provides that a class or fund shall
be deemed to be affected by a matter unless the interests of each class or fund
in the matter are substantially identical or the matter does not affect any
interest of such class or fund.
Shareholder inquiries should be made by writing directly to the Company or by
calling 800-821-5129. In addition, you can make inquiries through your dealer.
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C>
1. Investment Policies 2
2. Trustees and Officers 5
3. Investment Advisory and Other Services 8
4. Portfolio Transactions 9
5. Purchases, Redemptions and Shareholder Services 10
6. Past Performance 11
7. Taxes 11
8. Information About the Company 12
9. Financial Statements 13
</TABLE>
1
<PAGE>
<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. Each fund may not: (1)
borrow money, except that (i) each fund 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) each fund may borrow up to an additional 5% of its total assets
for temporary purposes, (iii) each fund may obtain such short-term credit as may
be necessary for the clearance of purchases and sales of portfolio securities
and (iv) each fund 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 fund's 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 each fund 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 each fund 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 each fund 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 (i) securities of the U.S. government, its agencies and
instrumentalities and (ii) mortgage-backed securities); and (8) issue senior
securities to the extent such issuance would violate applicable law.
Compliance with these restrictions will be determined at the time of purchase or
sale of such securities and will not be affected by changes in the market value
of portfolio 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. Each fund 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 fund 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 fund's total assets
(included within such limitation, but not to exceed 2% of the fund's 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 each 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 investment adviser or any of its officers,
trustees, partners or employees, any securities other than shares of beneficial
interest in such fund.
Although there is no current intention to do so, each fund may invest in
financial futures and options on financial futures.
2
<PAGE>
<PAGE>
INVESTMENT TECHNIQUES
FOREIGN CURRENCY HEDGING TECHNIQUES. Strategic Core Fixed Income Fund may use
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. Strategic Core Fixed Income Fund expects to enter
into forward foreign currency contracts in primarily two circumstances. First,
when the fund 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 fund 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 fund may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of the fund's portfolio securities denominated in such foreign
currency or, in the alternative, the fund may use a cross-hedging technique
whereby it sells another currency which the fund 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 fund does not intend to enter into such forward contracts
under this second circumstance on a continuous basis.
FOREIGN CURRENCY PUT AND CALL OPTIONS. The fund 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 fund, 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 fund's
net assets.
A call option written by the fund gives the purchaser, upon payment of a
premium, the right to purchase from the fund a currency at the exercise price
until the expiration of the option. The fund 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.
LENDING PORTFOLIO SECURITIES. Each fund may lend portfolio securities to
registered brokers-dealers. These loans, if and when made, may not exceed 30% of
the fund's total assets. The funds' 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, each fund 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 a fund.
By lending portfolio securities, each fund may 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. Each fund will comply with the following
conditions whenever it loans securities: (i) the fund 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 fund must be able to terminate the loan at any time; (iv)
the fund must receive reasonable compensation with respect to the loan, as well
as any dividends, interest or other distributions on the loaned securities; (v)
the fund 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
3
<PAGE>
<PAGE>
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. Each fund may enter into repurchase agreements with
respect to a security. A repurchase agreement is a transaction by which the fund
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 fund must have a total
value in excess of the value of the repurchase agreement.) Each fund 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 funds to keep all of their
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 fund 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 fund 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 management acknowledges these risks, it is
expected that they can be controlled through stringent selection criteria and
careful monitoring procedures. Management intends to limit repurchase agreements
for the funds to transactions with dealers and financial institutions believed
to present minimal credit risks. Management will monitor creditworthiness of the
repurchase agreement sellers on an ongoing basis.
Each fund 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 a
fund otherwise may invest.
WHEN-ISSUED TRANSACTIONS. As stated in the Prospectus, each fund may purchase
portfolio securities on a when-issued basis. When-issued transactions involve a
commitment by a fund 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 a fund
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. Each fund 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. Each fund limits its average dollar weighted portfolio
duration to a range of between two years more than and two years less than the
Lehman Brothers Aggregate Bond Index. Since this index currently has a duration
of ___ years, this range currently is between ___ years and ___ years. However,
many of the securities in which each fund invests will have remaining durations
in excess of ___ years.
Some of the securities in each fund's 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, each fund 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 each fund's average maturity, the maturities of such securities will
be calculated based upon the issuing agency's payment factors using
industry-accepted valuation models.
4
<PAGE>
<PAGE>
PORTFOLIO TURNOVER. For the fiscal year ended November 30, 1998, the Core Fixed
Income Fund's portfolio turnover rate was __%. The portfolio turnover rate for
the Strategic Core Fixed Income Fund's first year of operation is expected to be
within a range of 100% - 1,000%. As discussed above, each fund may purchase
securities on a when-issued basis with settlement taking place after the
purchase date (without amortizing any premiums). If the funds use this
investment technique, 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 each fund's 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.
2.
TRUSTEES AND OFFICERS
The following trustee is a partner of Lord, Abbett & Co. ("Lord Abbett"), The
General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203. He has
been associated with Lord Abbett for over five years and also is an officer
and/or director or trustee of the twelve other Lord Abbett-sponsored funds. He
is a "interested person" 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 54, Chairman and President
The following outside trustees are also directors or trustees of the twelve
other Lord Abbett-sponsored funds.
E. Thayer Bigelow
Time Warner Inc.
1271 Avenue of the Americas
New York, New York
Senior Adviser, Time Warner Inc. Formerly, Acting Chief Executive Officer of
Courtroom Television Network (1997-1998). Formerly, President and Chief
Executive Officer of Time Warner Cable Programming, Inc. (1991-1997). Prior to
that, President and Chief Operating Officer of Home Box Office, Inc. Age 57.
William H. T. Bush
Bush-O'Donnell & Co., Inc.
101 South Hanley Road, Suite 1025
St. Louis, Missouri
Co-founder and Chairman of the Board of the financial advisory firm of
Bush-O'Donnell & Company. Age 60.
Robert B. Calhoun
Monitor Clipper Partners
650 Madison Avenue, 9th Floor
New York, New York
Managing Director of Monitor Clipper Partners and President of the Clipper Group
L.P., both private equity investment funds. 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 68.
5
<PAGE>
<PAGE>
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 73.
C. Alan MacDonald
Directorship Inc.
8 Sound Shore Drive
Greenwich, Connecticut
Managing Director of Directorship Inc., a consultancy in board management and
corporate governance. Formerly General Partner of The Marketing Partnership,
Inc., a full service marketing consulting firm (1994-1997). Prior to that,
Chairman and Chief Executive Officer of Lincoln Snacks, Inc., manufacturer of
branded snack foods (1992-1994). His career spans 36 years at Stouffers and
Nestle with 18 of the years as Chief Executive Officer. Currently serves as
Director of DenAmerica Corp., J. B. Williams Company, Inc., Fountainhead Water
Company and Exigent Diagnostics. Age 65.
Hansel B. Millican, Jr.
Rochester Button Company
1328 Broadway (Suite 816)
New York, New York
President and Chief Executive Officer of Rochester Button Company. Age 70.
Thomas J. Neff
Spencer Stuart
277 Park Avenue
New York, New York
Chairman of Spencer Stuart, an executive search consulting firm. Currently
serves as Director of Ace, Ltd. (NYSE). Age 61.
The second column of the following table sets forth the compensation accrued for
the Company's outside trustees. The third column sets forth information with
respect to the equity-based benefits accrued for outside trustees/directors
maintained by the Lord Abbett-sponsored funds. The fourth column sets forth the
total compensation payable by such funds to the outside trustees/directors. No
trustee of the Company associated with Lord Abbett and no officer of the Company
received any compensation from the Company for acting as a trustee or officer.
<TABLE>
<CAPTION>
For the Fiscal Year Ended November 30, 1998
-------------------------------------------
Pension or For Year Ended
Retirement Benefits December 31, 1998
Accrued by the Total Compensation
Aggregate Company and Accrued by the Company and
Compensation Twelve Other Lord Twelve Other Lord
Accrued by Abbett-sposored Abbett-sponsored
Name of Trustee the Fund(1) Companies(2) Companies(3)
- ---------------- ----------- ------------ ------------
<S> <C> <C> <C>
E. Thayer Bigelow $ $17,068 $56,000
William H. T. Bush* $ $none None
Robert B. Calhoun** $ $none None
Stewart S. Dixon $ $32,190 $55,000
John C. Jansing $ $45,085(4) $55,000
C. Alan MacDonald $ $30,703 $57,400
Hansel B. Millican, $ $37,747 $55,000
</TABLE>
6
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Thomas J. Neff $ $19,853 $56,000
</TABLE>
*Elected trustee as of August 13, 1998.
**Elected trustee as of June 17, 1998.
1.Outside trustee/directors' fees, including attendance fees for board and
committee meetings, are allocated among all Lord Abbett sponsored funds based
on the net assets of each fund. A portion of the fees payable by the Company
to its outside trustees is being deferred under a plan that deems the deferred
amounts to be invested in shares of the Company for later distribution to the
trustees.
2.The amounts in Column 3 were accrued by the Lord Abbett-sponsored Funds for
the twelve months ended November 30, 1998 with respect to the equity based
plans established for independent trustees/directors directors in 1996. This
plan supercedes a previously approved retirement plan for all future
directors. Current directors had the option to convert their accrued benefits
under the retirement plan. All of the outside directors except one made such
an election. Each plan also provides for a pre-retirement death benefit and
actuarially reduced joint-and-survivor spousal benefits.
3.This column shows aggregate compensation, including directors 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, 1998. The amounts of the aggregate compensation payable by the
Company as of December 31, 1998 deemed invested in Company shares, including
dividends reinvested and changes in net asset value applicable to such deemed
investments, were: Mr. Bigelow, $ ; Mr. Bush, $ ; Mr. Calhoun,
$ ; Mr. Dixon, $ ; Mr. Jansing, $ ; Mr. MacDonald,
$ ; Mr. Millican, $ and Mr. Neff, $ . If the amounts
deemed invested in Company shares were added to each director's actual
holdings of Company shares as of December 31, 1998, each would own the
following: Mr. Bigelow, shares; Mr. Bush, shares; Mr.
Calhoun, shares; Mr. Dixon, shares; Mr. Jansing,
shares; Mr. McDonald, shares; Mr. Millican, shares; and Mr.
Neff, shares.
4.Mr. Jansing chose to continue to receive benefits under the retirement plan,
which provides that outside directors/trustees may receive annual retirement
benefits for life equal to their final annual retainer following retirement at
or after age 72 with at least ten years of service. Thus, if Mr. Jansing were
to retire and the annual retainer payable by the funds were the same as it is
today, he would receive annual retirement benefits of $50,000.
EXECUTIVE VICE PRESIDENTS:
Christopher J. Towle, age 41 (with Lord Abbett since 1988 and has over 17 years
of investment experience)
Robert Gerber, age 44 (with Lord Abbett since 1997, formerly Senior Portfolio
manager at Sanford C. Bernstein & Co. from 1992-1997)
Robert G. Morris, age 54
VICE PRESIDENTS:
Paul A. Hilstad, age 56, Vice President and Secretary (with Lord Abbett since
1995; formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.)
Zane E. Brown, age 47
Daniel E. Carper, age 47
W. Thomas Hudson, age 57
Lawrence H. Kaplan, age 42 (with Lord Abbett since 1997--formerly Vice President
and Chief Counsel of Salomon Brothers Asset Management Inc from 1995 to 1997,
prior thereto Senior Vice President, Director and General Counsel of Kidder
Peabody Asset Management, Inc.)
Thomas F. Konop, age 56
7
<PAGE>
<PAGE>
Robert A. Lee, age 29 (with Lord Abbett since 1997, formerly Portfolio Manager
at Arm Capital Advisors from 1995-1997; prior thereto Assistant Portfolio
Manager at Kidder Peabody Asset Management from 1993-1995)
A.Edward Oberhaus III, age 39
Keith F. O'Connor, age 43
Walter H. Prahl, age 40 (wirh Lord Abbett since 1997, formerly Quantitative
Analyst at Sanford C. Bernstein & Co. from 1994-1997)
TREASURER:
Donna M. McManus, age 38 (with Lord Abbett since 1996, formerly a Senior Manager
at Deloitte & Touche LLP).
The Company 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
Company's Declaration of Trust, shareholder meetings may be called at any time
by certain officers of the Company or by a majority of the trustees (i) for the
purpose of taking action upon any matter requiring the vote or authority of the
Company'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.
As of ,1999, our officers and trustees, as a group, owned less than 1%
of the outstanding shares of Core Fixed Income Fund and less than 1% of
Strategic Core Fixed Income Fund. As of 1999, there were no record
holders of 5% or more of the fund's outstanding shares.
3.
INVESTMENT ADVISORY AND OTHER SERVICES
The services performed by Lord Abbett are described under "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% for each the Core Fixed Income Fund and Strategic Core Fixed
Income Fund. These fees are allocated among the classes of each fund based on
the class' proportionate share of each fund's average daily net assets.
Each fund 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.
The management fee paid to Lord Abbett by the Core Fixed Income Fund for the
fiscal year ended November 30, 1998 amounted to $ . For the Strategic Core
Fixed Income Fund for the same period, the management fee paid to Lord Abbett
amounted to $ .
Although not obligated to do so, Lord Abbett may waive all or part of its
management fees and or may assume other expenses of each fund.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281, are
the independent public accountants of the Company and must be approved at least
annually by our trustees to continue in such capacity. Deloitte & Touche LLP
perform audit services for the Company, 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 Company's
custodian.
8
<PAGE>
<PAGE>
4.
PORTFOLIO TRANSACTIONS
The funds expect that purchases and sales of their 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 funds usually will pay no brokerage commissions for
such purchases. Purchases from underwriters of portfolio 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.
Each fund's 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 Company 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
funds, 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 funds, 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 each 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.
9
<PAGE>
<PAGE>
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.
During the fiscal year ended November 30, 1998, the Core Fixed Income Fund and
Strategic Core Fixed Income Fund paid no commissions to independent brokers.
5.
PURCHASES, REDEMPTIONS AND SHAREHOLDER SERVICES
With respect to the foreign assets of the Strategic Core Fixed Income Fund, all
assets and liabilities expressed in foreign currencies will be converted into
U.S. dollars at the mean between the buying and selling rates of such currencies
against U.S. 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 Company. The Board of Trustees will
monitor, on an ongoing basis, each fund's method of valuation.
Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases."
As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day that the NYSE is open for
trading by dividing our total net assets by the number of shares outstanding at
the time of calculation. The NYSE is closed on Saturdays and Sundays and the
following holidays -- New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
Each Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the New York or American Stock Exchange or on the
NASDAQ National Market System are valued at the last sales price, or, if there
is no sale on that day, at the mean between the last bid and asked prices, 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. Over-the-counter securities not traded on the NASDAQ National Market
System are valued at the mean between the last bid and asked prices. Securities
for which market quotations are not available are valued at fair market value
under procedures approved by the Board of Directors (Trustees).
The net asset value per share for the Class Y shares will be determined by
taking Class Y shares net assets and dividing by shares outstanding. Our Class Y
shares will be offered at net asset value.
The offering price of Class Y shares of the funds for the period indicated below
were computed as follows:
<TABLE>
<CAPTION>
November 30, 1998
Core Fixed Income Fund Strategic Core
---------------------- Fixed Income Fund
-----------------
<S> <C> <C>
Net asset value per share (net assets divided
by shares outstanding).......... $xx.xx $xx.xx
</TABLE>
Each Fund has entered into a distribution agreement with Lord Abbett Distributor
LLC, a New York limited liability company ("Lord Abbett Distributor") and
subsidiary of Lord Abbett under which Lord Abbett Distributor is obligated to
use its best efforts to find purchasers for the shares of each Fund, and to make
reasonable efforts to sell Fund shares so long as, in Lord Abbett Distributor's
judgment, a substantial distribution can be obtained by reasonable efforts.
CLASS Y SHARE EXCHANGES. The Prospectus describes the Telephone Exchange
Privilege. You may exchange some or all of your Y shares for Y shares of any
Lord Abbett-sponsored funds currently offering Class Y shares to the public.
Currently those other funds consist of
10
<PAGE>
<PAGE>
Lord Abbett Investment Trust - Core Fixed Income Fund, Strategic Core Fixed
Income Fund, Bond-Debenture Fund, Developing Growth Fund, and Mid-Cap Value
Fund.
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 each Prospectus for expedited redemption procedures.
The right to redeem and receive payment, as described in each 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 (Affiliated Fund, Small-Cap
Fund, Growth Opportunities Fund, and High Yield Fund), and 60 shares
(International Fund). 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 6 month's 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
Each Fund computes the annual compounded rate of total return for Class Y 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 one thousand dollars,
which represents a hypothetical initial investment. The calculation assumes
deduction of no sales charge from the initial amount invested and reinvestment
of all income dividends and capital gains distributions on the reinvestment
dates at prices calculated as stated in each Prospectus. The ending redeemable
value is determined by assuming a complete redemption at the end of the
period(s) covered by the annual total return computation.
In calculating total returns for Class Y shares no sales charge is deducted from
the initial investment and the return is shown at net asset value. 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.
CLASS Y SHARE PERFORMANCE. Using the computation method described above, Core
Fixed Income Fund's total return for Class Y shares for the period from
inception ( ) to November 30, 1998 was %. For the period from
inception ( ) to November 30, 1998, the total return for the Strategic
Core Fixed Income Fund was %.
Our yield quotation for Class Y shares is based on a 30-day period ended on a
specified date, computed by dividing the net investment income per share earned
during the period by the net asset value per share of such class on the last day
of the period. This is determined by finding the following quotient: take the
dividends and interest earned during the period for the class minus its expenses
accrued for the period and divide by the product of (i) the average daily number
of Class shares outstanding during the period that were entitled to receive
dividends and (ii) the net asset value per share of such class 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 this multiplication and the
remainder is multiplied by two. Yields for Class Y shares do not reflect the
deduction of any sales charge.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund's 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.
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
11
<PAGE>
<PAGE>
realized on the sale, redemption or repurchase of fund 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 a fund as
a "capital gains distribution" which you received with respect to such shares.
Losses on the sale of fund 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.
Each fund 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. Each fund intends
to distribute to shareholders each year an amount adequate to avoid the
imposition of such excise tax. Dividends paid by each fund will qualify for the
dividends-received deduction for corporations to the extent that they are
derived from dividends paid by domestic corporations.
The Strategic Core Fixed Income Fund 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 fund 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 fund.
Gains and losses realized by the fund 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 U.S. persons (U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts and estates). Each shareholder who is not a
U.S. person should consult his tax adviser regarding the U.S. and foreign tax
consequences of the ownership of shares of the fund, including a 30% (or lower
treaty rate) U.S. withholding tax on dividends representing ordinary income and
net short-term capital gains and the applicability of U.S. gift and estate taxes
to non-U.S. persons who own fund shares.
8.
INFORMATION ABOUT THE COMPANY
SHAREHOLDER LIABILITY. Delaware law provides that Company 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 Company's Declaration of Trust
contains an express disclaimer of shareholder liability for the acts,
obligations, or affairs of the Company or any series (or fund) and requires that
a disclaimer be given in each contract entered into or executed by the Company.
The Declaration provides for indemnification out of the Company's property of
any shareholder or former shareholder held personally liable for the obligations
of the Company. 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.
GENERAL. The assets of the Company received for the issue or sale of the shares
of each fund and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to each fund, and
constitute the underlying assets of such fund. The underlying assets of each
fund are recorded on the books of account of the Company, and are to be charged
with the liabilities with respect to such fund and with a share of the general
expenses of the Company. Expenses with respect to the Company 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 Company, the holders of the shares of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
Under the Company's Declaration of Trust, the trustees may, upon shareholder
vote, cause the Company to merge or consolidate into, or sell and convey all or
substantially all of, the assets of the Company or any fund 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
Company's
12
<PAGE>
<PAGE>
registration statement. In addition, the trustees may, without shareholder vote,
cause the Company to be incorporated under Delaware law.
Derivative actions on behalf of the Company or any fund may be brought only by
shareholders owning not less than 50% of the then outstanding shares of the
Company or any fund, 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 Company'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 Company to the extent
contemplated by the recommendations of such Advisory Group.
9.
FINANCIAL STATEMENTS
The financial statements for fiscal year ended November 30, 1998 and the report
of Deloitte & Touche LLP, independent auditors, on such annual financial
statements contained in the 1998 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
<PAGE>
<PAGE>
PART C OTHER INFORMATION
Item 23 Exhibits
(a) Articles of Incorporation. Incorporated by reference.
(b) By-Laws. Incorporated by reference to Post-Effective Amendment No. 19
to the Registration Statement filed on Form N-1A on December 30, 1998.
(c) Instruments Defining Rights of Security Holders. Incorporated by
reference.
(d) Investment Advisory Contracts. Incorporated by reference.
(e) Underwriting Contracts. Incorporated by reference.
(f) Bonus or Profit Sharing Contracts. Incorporated by reference.
(g) Custodian Agreements. Incorporated by reference.
(h) Other Material Contracts. Incorporated by reference.
(i) Legal Opinion. Incorporated by reference.
(j) Other Opinions. Consent of Independent Auditors.
(k) Omitted Financial Statements. Incorporated by reference.
(l) Initial Capital Agreements. Incorporated by reference.
(m) Rule 12b-1 Plan. Incorporated by reference.
(n) Financial Data Schedule.
(o) Rule 18f-3 Plan. Incorporated by reference.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. 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
1
<PAGE>
<PAGE>
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 26. 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 of
September 30, 1998, as investment adviser to approximately 8,330
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.
2
<PAGE>
<PAGE>
Item 27. 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 Advisor
American Skandia Trust (Lord Abbett Growth and Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Registrant
---------------- ---------------
<S> <C>
Robert S. Dow Chairman and President
Robert I. Gerber Executive Vice President
Robert G. Morris Executive Vice President
Paul A. Hilstad Vice President & Secretary
Zane E. Brown Vice President
Daniel E. Carper Vice President
W. Thomas Hudson, Jr. Vice President
</TABLE>
The other general partners of Lord Abbett & Co. who are neither
officers nor directors of the Registrant are Stephen Allen, John E.
Erard, Robert P. Fetch, Daria L. Foster, Stephen J. McGruder, Michael
McLaughlin, Robert J. Noelke, R. Mark Pennington, Christopher Towle and
John J. Walsh.
Each of the above has a principal business address at 767 Fifth Avenue,
New York, NY 10153
(c) Not applicable
Item 28. 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 29. Management Services
None.
3
<PAGE>
<PAGE>
Item 30. Undertakings
(a) 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.
(b) 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).
4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant had duly caused this Registration
Statement 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 31th day of
March, 1999.
BY: /s/ Lawrence H. Kaplan
------------------------
Lawrence H. Kaplan
Vice President
LORD ABBETT INVESTMENT TRUST
5
<PAGE>
<PAGE>
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.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Chairman, President
/s/ Robert S. Dow* and Director/Trustee March 31, 1999
________________________ ____________________________ ______________
Robert S. Dow
/s/ E. Thayer Bigelow* Director/Trustee March 31, 1999
________________________ ____________________________ ______________
E. Thayer Bigelow
/s/ William H. T. Bush* Director/Trustee March 31, 1999
________________________ ____________________________ ______________
William H. T. Bush
/s/ Robert B. Calhoun, Jr*. Director/Trustee March 31, 1999
________________________ ____________________________ ______________
Robert B. Calhoun, Jr.
/s/ Stewart S. Dixon* Director/Trustee March 31, 1999
________________________ ____________________________ ______________
Stewart S. Dixon
/s/ John C. Jansing* Director/Trustee March 31, 1999
________________________ ____________________________ ______________
John C. Jansing
/s/ C. Alan MacDonald* Director/Trustee March 31, 1999
________________________ ____________________________ ______________
C. Alan MacDonald
/s/ Hansel B. Millican, Jr*. Director/Trustee March 31, 1999
________________________ ____________________________ ______________
Hansel B. Millican, Jr.
/s/ Thomas J. Neff* Director/Trustee March 31, 1999
________________________ ____________________________ ______________
Thomas J. Neff
</TABLE>
*BY: /s/ Lawrence H. Kaplan
______________________
Lawrence H. Kaplan
Attorney-in-Fact
6
STATEMENT OF DIFFERENCES
------------------------
The trademark symbol shall be expressed as............................. 'TM'
<PAGE>
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
Lord Abbett Investment Trust:
We consent to the incorporation by reference in Post-Effective Amendment No. 23
to Registration Statement No. 33-68090 of our reports dated January 8, 1999 for
Lord Abbett U.S. Government Securities Series, Lord Abbett Limited Duration U.S.
Government Securities Series, Lord Abbett Balanced Series and Lord Abbett Core
Fixed Income Series appearing in the Annual Reports to Shareholders for the year
ended November 30, 1998, and to the references to us under the caption
'Financial Highlights' in the Prospectus and under the captions 'Investment
Advisory and Other Services' and 'Financial Statements' appearing in the
Statement of Additional Information, both of which are part of such Registration
Statement.
DELOITTE & TOUCHE LLP
New York, New York
March 26, 1999
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 031
<NAME> BALANCED SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 58,675,664
<INVESTMENTS-AT-VALUE> 57,098,108
<RECEIVABLES> 446,530
<ASSETS-OTHER> 128,385
<OTHER-ITEMS-ASSETS> 145,870
<TOTAL-ASSETS> 57,818,893
<PAYABLE-FOR-SECURITIES> 121,360
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,828
<TOTAL-LIABILITIES> 144,188
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,955,843
<SHARES-COMMON-STOCK> 3,471,843
<SHARES-COMMON-PRIOR> 1,340,258
<ACCUMULATED-NII-CURRENT> 50,780
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,090,225
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,577,556)
<NET-ASSETS> 57,674,705
<DIVIDEND-INCOME> 1,048,447
<INTEREST-INCOME> 218,042
<OTHER-INCOME> 0
<EXPENSES-NET> 72,834
<NET-INVESTMENT-INCOME> 1,193,655
<REALIZED-GAINS-CURRENT> 3,090,748
<APPREC-INCREASE-CURRENT> (3,714,929)
<NET-CHANGE-FROM-OPS> 2,900,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,149,118
<DISTRIBUTIONS-OF-GAINS> 482,400
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,402,438
<NUMBER-OF-SHARES-REDEEMED> 388,736
<SHARES-REINVESTED> 117,883
<NET-CHANGE-IN-ASSETS> 37,334,278
<ACCUMULATED-NII-PRIOR> 28,799
<ACCUMULATED-GAINS-PRIOR> 570,450
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 139,407
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 210,903
<AVERAGE-NET-ASSETS> 27,881,363
<PER-SHARE-NAV-BEGIN> 12.80
<PER-SHARE-NII> .54
<PER-SHARE-GAIN-APPREC> .40
<PER-SHARE-DIVIDEND> .52
<PER-SHARE-DISTRIBUTIONS> .35
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.87
<EXPENSE-RATIO> .26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 032
<NAME> BALANCED SERIES - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> MAY-01-1998
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 58,675,664
<INVESTMENTS-AT-VALUE> 57,098,108
<RECEIVABLES> 446,530
<ASSETS-OTHER> 128,385
<OTHER-ITEMS-ASSETS> 145,870
<TOTAL-ASSETS> 57,818,893
<PAYABLE-FOR-SECURITIES> 121,360
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,828
<TOTAL-LIABILITIES> 144,188
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,955,843
<SHARES-COMMON-STOCK> 396,867
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 3,822
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,090,225
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,577,556)
<NET-ASSETS> 57,674,705
<DIVIDEND-INCOME> 51,043
<INTEREST-INCOME> 226
<OTHER-INCOME> 0
<EXPENSES-NET> 11,847
<NET-INVESTMENT-INCOME> 39,422
<REALIZED-GAINS-CURRENT> 3,090,748
<APPREC-INCREASE-CURRENT> (3,714,929)
<NET-CHANGE-FROM-OPS> 2,900,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 35,604
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 410,635
<NUMBER-OF-SHARES-REDEEMED> 16,357
<SHARES-REINVESTED> 2,589
<NET-CHANGE-IN-ASSETS> 37,334,278
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,823
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 20,102
<AVERAGE-NET-ASSETS> 1,995,654
<PER-SHARE-NAV-BEGIN> 13.14
<PER-SHARE-NII> .25
<PER-SHARE-GAIN-APPREC> .28
<PER-SHARE-DIVIDEND> .25
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.86
<EXPENSE-RATIO> .59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 033
<NAME> BALANCED SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 58,675,664
<INVESTMENTS-AT-VALUE> 57,098,108
<RECEIVABLES> 446,530
<ASSETS-OTHER> 128,385
<OTHER-ITEMS-ASSETS> 145,870
<TOTAL-ASSETS> 57,818,893
<PAYABLE-FOR-SECURITIES> 121,360
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,828
<TOTAL-LIABILITIES> 144,188
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,955,843
<SHARES-COMMON-STOCK> 614,958
<SHARES-COMMON-PRIOR> 249,784
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 9,445
<ACCUMULATED-NET-GAINS> 3,090,225
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,577,556)
<NET-ASSETS> 57,674,705
<DIVIDEND-INCOME> 198,814
<INTEREST-INCOME> 43,089
<OTHER-INCOME> 0
<EXPENSES-NET> 67,454
<NET-INVESTMENT-INCOME> 174,449
<REALIZED-GAINS-CURRENT> 3,090,748
<APPREC-INCREASE-CURRENT> (3,714,929)
<NET-CHANGE-FROM-OPS> 2,900,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 156,346
<DISTRIBUTIONS-OF-GAINS> 88,565
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 417,362
<NUMBER-OF-SHARES-REDEEMED> 70,625
<SHARES-REINVESTED> 18,437
<NET-CHANGE-IN-ASSETS> 37,334,278
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 570,450
<OVERDISTRIB-NII-PRIOR> 12,076
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,906
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 110,354
<AVERAGE-NET-ASSETS> 5,381,129
<PER-SHARE-NAV-BEGIN> 12.78
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> .40
<PER-SHARE-DIVIDEND> .39
<PER-SHARE-DISTRIBUTIONS> .35
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.85
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 021
<NAME> LIMITED DURATION US GOVERNMENT SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 11,038,890
<INVESTMENTS-AT-VALUE> 11,318,039
<RECEIVABLES> 3,242,216
<ASSETS-OTHER> 1,899,728
<OTHER-ITEMS-ASSETS> 185,330
<TOTAL-ASSETS> 16,645,313
<PAYABLE-FOR-SECURITIES> 5,593,035
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,472
<TOTAL-LIABILITIES> 5,645,507
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,674,972
<SHARES-COMMON-STOCK> 1,078,737
<SHARES-COMMON-PRIOR> 1,098,742
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 74,415
<ACCUMULATED-NET-GAINS> (1,744,811)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 279,148
<NET-ASSETS> 10,999,806
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 337,782
<OTHER-INCOME> 0
<EXPENSES-NET> 24,353
<NET-INVESTMENT-INCOME> 313,429
<REALIZED-GAINS-CURRENT> 39,648
<APPREC-INCREASE-CURRENT> 60,289
<NET-CHANGE-FROM-OPS> 623,837
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 292,470
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,524,406
<NUMBER-OF-SHARES-REDEEMED> 1,392,054
<SHARES-REINVESTED> 47,643
<NET-CHANGE-IN-ASSETS> 723,585
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,784,459)
<OVERDISTRIB-NII-PRIOR> 94,187
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,735
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 51,450
<AVERAGE-NET-ASSETS> 5,347,032
<PER-SHARE-NAV-BEGIN> 4.40
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .04
<PER-SHARE-DIVIDEND> .24
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.46
<EXPENSE-RATIO> .46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 023
<NAME> LIMITED DURATION US GOVERNMENT SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 11,038,890
<INVESTMENTS-AT-VALUE> 11,318,039
<RECEIVABLES> 3,242,216
<ASSETS-OTHER> 1,899,728
<OTHER-ITEMS-ASSETS> 185,330
<TOTAL-ASSETS> 16,645,313
<PAYABLE-FOR-SECURITIES> 5,593,035
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,472
<TOTAL-LIABILITIES> 5,645,507
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,674,972
<SHARES-COMMON-STOCK> 1,185,415
<SHARES-COMMON-PRIOR> 1,235,919
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 125,960
<ACCUMULATED-NET-GAINS> (1,744,811)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 279,148
<NET-ASSETS> 10,999,806
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 267,669
<OTHER-INCOME> 0
<EXPENSES-NET> 57,167
<NET-INVESTMENT-INCOME> 210,502
<REALIZED-GAINS-CURRENT> 39,648
<APPREC-INCREASE-CURRENT> 60,289
<NET-CHANGE-FROM-OPS> 623,837
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 192,017
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 709,733
<NUMBER-OF-SHARES-REDEEMED> 785,920
<SHARES-REINVESTED> 25,683
<NET-CHANGE-IN-ASSETS> 723,585
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,784,459)
<OVERDISTRIB-NII-PRIOR> 145,555
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21,295
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 78,962
<AVERAGE-NET-ASSETS> 4,258,808
<PER-SHARE-NAV-BEGIN> 4.40
<PER-SHARE-NII> .22
<PER-SHARE-GAIN-APPREC> .05
<PER-SHARE-DIVIDEND> .20
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.47
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 011
<NAME> US GOVERNMENT SECURITIES SERIES - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 2,183,428,139
<INVESTMENTS-AT-VALUE> 2,224,340,799
<RECEIVABLES> 495,015,832
<ASSETS-OTHER> 168,136,567
<OTHER-ITEMS-ASSETS> 13,935
<TOTAL-ASSETS> 2,887,507,133
<PAYABLE-FOR-SECURITIES> 971,076,125
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,026,753
<TOTAL-LIABILITIES> 985,102,878
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,425,978,692
<SHARES-COMMON-STOCK> 648,149,209
<SHARES-COMMON-PRIOR> 804,678,136
<ACCUMULATED-NII-CURRENT> 13,097,755
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (572,619,975)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 40,912,660
<NET-ASSETS> 1,902,404,255
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 133,910,370
<OTHER-INCOME> 0
<EXPENSES-NET> 17,211,567
<NET-INVESTMENT-INCOME> 116,698,803
<REALIZED-GAINS-CURRENT> 42,447,914
<APPREC-INCREASE-CURRENT> 4,102,771
<NET-CHANGE-FROM-OPS> 174,973,519
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 121,519,231
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 31,799,161
<NUMBER-OF-SHARES-REDEEMED> 212,324,614
<SHARES-REINVESTED> 23,996,526
<NET-CHANGE-IN-ASSETS> (384,007,693)
<ACCUMULATED-NII-PRIOR> 17,080,469
<ACCUMULATED-GAINS-PRIOR> (615,067,889)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9,173,347
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 17,555,806
<AVERAGE-NET-ASSETS> 1,834,669,495
<PER-SHARE-NAV-BEGIN> 2.59
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> .05
<PER-SHARE-DIVIDEND> .17
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.64
<EXPENSE-RATIO> .94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 012
<NAME> U.S. GOVERNMENT SECURITIES SERIES - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 2,183,428,139
<INVESTMENTS-AT-VALUE> 2,224,340,799
<RECEIVABLES> 495,015,832
<ASSETS-OTHER> 168,136,567
<OTHER-ITEMS-ASSETS> 13,935
<TOTAL-ASSETS> 2,887,507,133
<PAYABLE-FOR-SECURITIES> 971,076,125
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,026,753
<TOTAL-LIABILITIES> 985,102,878
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,425,978,692
<SHARES-COMMON-STOCK> 11,100,263
<SHARES-COMMON-PRIOR> 5,496,872
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 113,265
<ACCUMULATED-NET-GAINS> (572,619,975)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 40,912,660
<NET-ASSETS> 1,902,404,255
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,309,064
<OTHER-INCOME> 0
<EXPENSES-NET> 307,596
<NET-INVESTMENT-INCOME> 1,001,468
<REALIZED-GAINS-CURRENT> 42,447,914
<APPREC-INCREASE-CURRENT> 4,102,771
<NET-CHANGE-FROM-OPS> 174,973,519
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,432,091
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,509,963
<NUMBER-OF-SHARES-REDEEMED> 2,095,473
<SHARES-REINVESTED> 188,901
<NET-CHANGE-IN-ASSETS> (384,007,693)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (615,067,889)
<OVERDISTRIB-NII-PRIOR> 36,856
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 93,429
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 308,272
<AVERAGE-NET-ASSETS> 18,685,855
<PER-SHARE-NAV-BEGIN> 2.58
<PER-SHARE-NII> .14
<PER-SHARE-GAIN-APPREC> .08
<PER-SHARE-DIVIDEND> .16
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.64
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 013
<NAME> U.S. GOVERNMENT SECURITIES SERIES - CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 2,183,428,139
<INVESTMENTS-AT-VALUE> 2,224,340,799
<RECEIVABLES> 495,015,832
<ASSETS-OTHER> 168,136,567
<OTHER-ITEMS-ASSETS> 13,935
<TOTAL-ASSETS> 2,887,507,133
<PAYABLE-FOR-SECURITIES> 971,076,125
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,026,753
<TOTAL-LIABILITIES> 985,102,878
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,425,978,692
<SHARES-COMMON-STOCK> 60,767,078
<SHARES-COMMON-PRIOR> 73,646,340
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 502,344
<ACCUMULATED-NET-GAINS> (572,619,975)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 40,912,660
<NET-ASSETS> 1,902,404,255
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12,381,835
<OTHER-INCOME> 0
<EXPENSES-NET> 2,726,794
<NET-INVESTMENT-INCOME> 9,655,041
<REALIZED-GAINS-CURRENT> 42,447,914
<APPREC-INCREASE-CURRENT> 4,102,771
<NET-CHANGE-FROM-OPS> 74,973,519
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 9,773,665
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,523,887
<NUMBER-OF-SHARES-REDEEMED> 22,360,867
<SHARES-REINVESTED> 1,957,718
<NET-CHANGE-IN-ASSETS> (384,007,693)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (615,067,889)
<OVERDISTRIB-NII-PRIOR> 259,315
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 848,486
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,734,864
<AVERAGE-NET-ASSETS> 169,697,111
<PER-SHARE-NAV-BEGIN> 2.59
<PER-SHARE-NII> .15
<PER-SHARE-GAIN-APPREC> .06
<PER-SHARE-DIVIDEND> .15
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.65
<EXPENSE-RATIO> 1.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000911507
<NAME> LORD ABBETT INVESTMENT TRUST
<SERIES>
<NUMBER> 045
<NAME> CORE SERIES - CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-10-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 5,719,719
<INVESTMENTS-AT-VALUE> 5,785,071
<RECEIVABLES> 1,747,660
<ASSETS-OTHER> 278,634
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,811,365
<PAYABLE-FOR-SECURITIES> 3,111,623
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,601
<TOTAL-LIABILITIES> 3,117,224
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,284,885
<SHARES-COMMON-STOCK> 427,854
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 264,059
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 79,846
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 65,352
<NET-ASSETS> 4,694,141
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 264,059
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 264,059
<REALIZED-GAINS-CURRENT> 79,846
<APPREC-INCREASE-CURRENT> 65,352
<NET-CHANGE-FROM-OPS> 409,257
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 427,854
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,694,151
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21,264
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 31,090
<AVERAGE-NET-ASSETS> 4,302,386
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .62
<PER-SHARE-GAIN-APPREC> .35
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.97
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
