Lord Abbett
Investment Trust
Balanced Series
Prospectus
April 1, 1999
(As Revised August 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.
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Table of Contents
The Fund Page
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 the Back Cover
fund and other Lord Abbett funds
<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:
Affiliated Fund
Uses quantitative research on a universe of large, seasoned companies
to identify bargain stocks.
Uses fundamental research to determine a company's prospects for
exceeding the earnings expectations reflected in its stock price.
Bond-Debenture Fund
Invests in high yield debt securities, sometimes called "junk bonds,"
which entail greater risks than investments in higher-rated debt
securities.
Seeks unusual values, particularly in lower-rated debt securities,
some of which are convertible into common stocks or have warrants to
purchase common stocks.
Mid-Cap Value Fund
Focuses on stocks of mid-sized companies.
Attempts to identify undervalued stocks with potential for significant
market appreciation from growing recognition of substantial
improvement in financial results.
Growth Opportunities Fund
Uses quantitative research on a universe of mid-sized companies to
identify those with superior growth possibilities.
Uses fundamental research to verify companies likely to produce
superior returns over a thirty-six month time frame, by analyzing the
dynamics in each company within its industry and within the economy.
U. S. Government Securities Fund
Invests in U. S. Government Securities.
Seeks high current income consistent with reasonable risk, which means
that it, over time, will have a volatility approximating that of the
Lehman Government Bond Index.
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 its assets in short-term 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>
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 invest-ment 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 de-scribes the other investment strategies and their risks used
by the fund.
3 The Fund
<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.
[GRAPHIC OMITTED]
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 (" MLWCM")
and Russell 3000 Index (" R3000"). 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.
Class 1 Year Inception (i) MLWCM (ii) R3000 (ii)
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A 2.50% 12.55% 20.72% (iii) 28.50% (iii)
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C 6.70% 14.22% 22.25% (iv) 30.78% (iv)
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MLWCM 18.45% - - -
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R3000 24.14% - - -
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Past performance is not a prediction of future results.
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(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 MLWCM and R3000 do 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.
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>
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Fee table
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Class A Class B Class C Class P
<S> <C> <C> <C> <C>
Shareholder Fees (Fees paid directly from your investment)
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Maximum Sales Charge on Purchases
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(as a % of offering price) 5.75% none none none
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Maximum Deferred Sales Charge (See "Purchases") none 5.00% (3) 1.00% none
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Annual Fund Operating Expenses (Expenses deducted from fund assets) (as a % of
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average net assets) (1)
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Management Fees (See "Management") 0.75% 0.75% 0.75% 0.75%
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Distribution and Service (12b-1) Fees (2) 0.35% 1.00% 1.00% 0.45%
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Other Expenses (See "Management") 0.17% 0.17% 0.17% 0.17%
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Total Operating Expenses 1.27% 1.92% 1.92% 1.37%
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</TABLE>
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):
Underlying Funds'
expense ratios
Lord Abbett Affiliated Fund 0.40%
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Lord Abbett Bond-Debenture Fund 0.60%
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Lord Abbett Mid-Cap Value Fund 0.92%
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Lord Abbett Growth Opportunities Fund 1.09% (4)
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Lord Abbett U. S. Government Securities Fund 0.66%
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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.
Management fees are payable to Lord Abbett for the fund's invest-ment
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.
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(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>
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.
Share class 1 Year 3 Years 5 Years 10 Years
Class A shares $697 $954 $1,232 $2,023
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Class B shares $695 $903 $1,236 $2,076
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Class C shares $295 $603 $1,036 $2,245
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Class P shares $139 $434 $ 750 $1,649
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You would pay the following expenses on the same investment, assuming you kept
your shares.
Class A shares $697 $954 $1,232 $2,023
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Class B shares $195 $603 $1,036 $2,076
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Class C shares $195 $603 $1,036 $2,245
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Class P shares $139 $434 $ 750 $1,649
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This example is for comparison and is not a representation of the fund's actual
expenses or returns, either past or present.
5 The Fund
<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
To Compute
As a % of As a % of Offering Price
Your Investment Offering Price Your Investment Divide NAV by
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Less than $50,000 5.75% 6.10% .9425
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$50,000 to $99,999 4.75% 4.99% .9525
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$100,000 to $249,999 3.95% 4.11% .9605
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$250,000 to $499,999 2.75% 2.83% .9725
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$500,000 to $999,999 1.95% 1.99% .9805
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$1,000,000 and over No Sales Charge 1.0000
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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, how-ever, 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>
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:
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Contingent Deferred Sales Charges -Class B Shares
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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
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1st 5.0%
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1st 2nd 4.0%
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2nd 3rd 3.0%
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3rd 4th 3.0%
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4th 5th 2.0%
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5th 6th 1.0%
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on or after the 6th (2) None
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(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."
7 Your Investment
<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 a ccount $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>
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
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to 15% bracket to 28% bracket or above
- --------------------------------------------------------------------------------
Income Ordinary Ordinary
dividends income rate income rate
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Short-term Ordinary Ordinary
capital gains income rate income rate
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Long-term
capital gains 10% 20%
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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.
9 Your Investment
<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>
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For investing
<S> <C>
Invest-A-Matic You can make fixed, periodic investments ($50 minimum) into your fund
(Dollar-cost account by means of automatic money transfers from your bank checking
averaging) 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 funds. Automatic
Withdrawal cash withdrawals can be paid to you from your account in fixed or variable
Plan ("SWP") 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 shares will be
C shares redeemed in the order described under "Purchases."
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</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.
Exchanges. You or your investment professional can instruct your fund to
exchange shares of any class for shares of the same class of any Eligible
Fund. Instruction may be provided in writing or by telephone, with proper
identification, 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.
Exchange Limitations. Exchanges should not be used to try to take advantage
of short-term swings in the market. Frequent exchanges create higher
expenses for the fund. Accordingly, the fund reserves the right to limit or
terminate this privilege for any shareholder making frequent exchanges or
abusing the privilege. The fund also may revoke the privilege for all
shareholders upon 60 days' written notice.
10 Your Investment
<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 Authori zed Inst itut ions 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 Dis-tributor'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.
11 Your Investment
<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>
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-
13 For More Information
<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>
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 manda-tory 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,
15 For More Information
<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
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
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
[SIGNATURE ILLEGIBLE]
- --------------------------------------------------
AUTHORIZED SIGNATURE
(960) X 9 6 0 3 4 7 0
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM'sm'
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>
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)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------------------- ---------------------------------------------
Period Ended November 30, Period Ended 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)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<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.
17 Financial Information
<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 ("MLWCM
Index"), Russell 3000 Index, 60% Russell 3000 40% Lehman Brothers Aggregate Bond
Index and Lipper Balanced Funds Average assuming reinvestment of all dividends
and distributions. The fund has changed the securities market index against
which it compares its performance from the MLWCM Index to the Russell 3000
Index. The reason for the change is that the Russell 3000 better reflects the
broader market capitalization of the stocks in which the underlying funds are
permitted to invest.
[GRAPHIC OMITTED]
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
1 Year 10 Years (or Life)
Class A (3) 1.60% 12.31%
- --------------------------------------------------------------------------------
Class C (4) 5.55% 13.86%
- --------------------------------------------------------------------------------
(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,
Russell 3000 Index and 60% Russell 3000 40% Lehman Brothers Aggregate Bond
Index does not reflect transaction costs, management fees or sales charges.
Lipper Balanced Funds Average does reflect transaction costs, management
fees and 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 reflects the
deduction of a CDSC of 1% for one year and 0% for the life of class C
shares.
18 Financial Information
<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 3.95% 3.25% 0.25% 3.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.49%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.95% 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%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 atthe 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.
19 Financial Information
<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).
To obtain information:
By telephone. Call the fund at:
888-222-2388
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.
Lord Abbett Investment Trust-
Balanced Series
The General Motors Building
767 Fifth Avenue
New York, NY 10153-0203
- -----------------------
SEC file number: 811-7988
LAIT-BAL-1-499
(4/99)
