Lord Abbett
Investment Trust
Limited Duration U. S.
Government Securities Series
U. S. Government Securities 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 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>
Table of Contents
The Funds Page
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
<PAGE>
Limited Duration U.S. Government Securities Fund
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 mortgagebacked 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>
Limited Duration U. S. Government 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.
[GRAPHIC OMITTED]
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 Lehman Intermediate Government Bond
Index (" LIGBI"). 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 5 Years Inception (i) LIGBI (ii)
- --------------------------------------------------------------------------------
A 3.10% 3.49% 3.48% 6.43% (iii)
- --------------------------------------------------------------------------------
C 4.20% - 5.91% 8.29% (iv)
- --------------------------------------------------------------------------------
LIGBI 8.49% 6.45% - -
- --------------------------------------------------------------------------------
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 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.
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 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) 3.25% 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
- --------------------------------------------------------------------------------
</TABLE>
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 $461 $747 $1,056 $1,931
- --------------------------------------------------------------------------------
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 $461 $747 $1,056 $1,931
- --------------------------------------------------------------------------------
Class C shares $241 $742 $1,270 $2,718
- --------------------------------------------------------------------------------
Class P shares $186 $575 $ 990 $2,150
- --------------------------------------------------------------------------------
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 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.
<PAGE>
U.S. Governments 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
Securities 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.
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>
U.S. Governments Securities Fund Symbols: Class A -LAGVX
Class B -LAVBS
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.
[GRAPHIC OMITTED]
Best Quarter: 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 Lehman Government Bond Index (" LGBI") 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.
Class 1 Year 5 Years 10 Years Inception (i) LGBI (ii)
A 2.70% 4.76% 7.85% 10.24% 10.82% (iii)
- --------------------------------------------------------------------------------
B 2.15% - - 6.78% 10.41% (iv)
- --------------------------------------------------------------------------------
C 6.03% - - 8.39% 9.90% (v)
- --------------------------------------------------------------------------------
LGBI 9.85% 7.18% 9.17% - -
- --------------------------------------------------------------------------------
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 Lehman Government Bond Index does not reflect
transaction costs or management fees.
(iii) Represents total returns for the period 12/31/81 to 12/31/98, to
correspond with class A inception date.
(iv) Represents total returns for the period 8/31/96 to 12/31/98, to correspond
with class B inception date.
(v) 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>
- --------------------------------------------------------------------------------------
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%
- --------------------------------------------------------------------------------------
</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.
Share class 1 Year 3 Years 5 Years 10 Years
Class A shares $575 $787 $1,017 $1,677
- --------------------------------------------------------------------------------
Class B shares $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 $171 $529 $ 912 $1,816
- --------------------------------------------------------------------------------
Class C shares $171 $529 $ 912 $1,989
- --------------------------------------------------------------------------------
Class P shares $115 $359 $ 622 $1,377
- --------------------------------------------------------------------------------
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 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
Your Investment
<PAGE>
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.
- --------------------------------------------------------------------------------
Front-End Sales Charges -Class A Shares
(Limited Duration U. S. Government Securities Fund only)
- --------------------------------------------------------------------------------
As a % of As a % of To Compute Offering
Your Investment Offering Price Your Investment Price Divide NAV by
- --------------------------------------------------------------------------------
Less than $50,000 3.25% 3.36% .9675
- --------------------------------------------------------------------------------
$50,000 to $99,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$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 or more 1.00% 1.01% .9900
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Front-End Sales Charges -Class A Shares
(U. S. Government Securities Fund Only)
- --------------------------------------------------------------------------------
As a % of As a % of To Compute Offering
Your Investment Offering Price Your Investment Price Divide NAV by
- --------------------------------------------------------------------------------
Less than $100,000 4.75% 4.99% .9525
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.95% 4.11% .9605
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% .9725
- --------------------------------------------------------------------------------
$500,000 to $999,999 1.95% 1.99% .9805
- --------------------------------------------------------------------------------
$1,000,000 and over No Sales Charge 1.0000
- --------------------------------------------------------------------------------
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 frontend 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>
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
Abbettsponsored 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 employersponsored 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>
- --------------------------------------------------------------------------------
Contingent Deferred Sales Charges -Class B Shares
(U. S. Government Securities Fund only)
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
(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.
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.
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
<TABLE>
<CAPTION>
MINIMUM INITIAL INVESTMENT
<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>
8 Your Investment
<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.
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.
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."
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.
DISTRIBUTIONS AND TAXES
Eachfund 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.
Your Investment 9
<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
Type of Tax rate for taxpayer Tax rate for taxpayer subject
distribution subject to15% bracket to 28% bracket or above
- --------------------------------------------------------------------------------
Income Ordinary Income Ordinary Income
dividends Rate Rate
- --------------------------------------------------------------------------------
Short-term Ordinary Income Ordinary Income
capital gains Rate Rate
- --------------------------------------------------------------------------------
Long-term
capital gains 10% 20%
- --------------------------------------------------------------------------------
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.
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.
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>
- --------------------------------------------------------------------------------------------------
<S> <C>
For investing
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."
- -----------------------------------------------------------------------------------------------------
</TABLE>
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>
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.
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.
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 funds. Accordingly, the funds reserve the right to limit or terminate this
privilege for any shareholder making frequent exchanges or abusing the
privilege. The funds also may revoke the privilege for all shareholders upon 60
days' written notice.
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 Authori zed 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
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>
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.
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., Inc. 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 and an Assistant Portfolio
Manager at Kidder Peabody Asset Management from 1993.
12 Your Investment
<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. 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>
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 later at a set price. 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 Authori zed 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>
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 byLord 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.
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
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
mortgagebacked 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.
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>
Limited Duration 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
---------------------------------------------------------------------
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>
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.
[GRAPHIC OMITTED]
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
1 Year 5 Years 10 Years (or Life)
Class A (3) 3.50% 3.59% 3.49%
- --------------------------------------------------------------------------------
Class C (3) 5.17% - 6.25%
- --------------------------------------------------------------------------------
(1) This shows total return which is the percent change in value, after
deduction of the maximum initial sales charge of 3.25% 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 Lipper's Short U. S. Government Fund Index
and Lipper's Intermediate U. S. Government Fund Index reflects transaction
costs, management fees and sales charges. Performance for the unmanaged
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. Performance reflects the deduction of the maximum initial
sales charge of 3.25% for class A shares; 1% for one year for class C
shares and 0% for the life of class C shares.
Financial Information 17
<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>
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.
[GRAPHIC OMITTED]
Average Annual Total Return At Maximum Applicable
Sales Charge For The Periods Ending November 30, 1998
1 Year 5 Years 10 Years Life (3)
- --------------------------------------------------------------------------------
Class A (1) 3.70% 4.90% 7.76% 10.28%
- --------------------------------------------------------------------------------
Class B 3.07% - - 6.98%
- --------------------------------------------------------------------------------
Class C 7.38% - - 8.82%
- --------------------------------------------------------------------------------
(1) 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 November 30, 1998, using the SECrequired uniform method to
compute such return.
(2) Performance for the unmanaged Lipper's General U. S. Government Bond Fund
Index does reflect transaction costs, management fees or sales charges.
Whereas, performance for the unmanaged Lehman Government Bond Index does
not reflect transaction costs, management fees or sales charges.
(3) The class A, B and C shares were first offered on 1/1/82, 8/1/96 and
7/15/96, respectively. Performance for class B shares reflects the
deduction of a CDSC of 5% for one year and 3% for the life of such shares.
Performance for class C shares reflects the deduction of a CDSC of 1% for
one year and 0% for the life of such shares.
Financial Information 19
<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> <C>
Less than $50,000 3.25% 2.75% 0.00% 2.75%
- ------------------------------------------------------------------------------------------------------------------------------------
$50,000 -$99,999 2.75% 2.25% 0.00% 2.25%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 2.50% 2.00% 0.00% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.00% 1.70% 0.00% 1.70%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 -$999,999 1.50% 1.25% 0.00% 1.25%
- ------------------------------------------------------------------------------------------------------------------------------------
$1,000,000 1.00% 1.00% 0.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
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%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AFTER FIRST YEAR
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
All amounts no front-end sales charge none 0.00% 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>
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 $100,000 4.75% 4.00% 0.25% 4.25%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 -$249,999 3.95% 3.25% 0.25% 3.50%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 -$499,999 2.75% 2.25% 0.25% 2.50%
- ------------------------------------------------------------------------------------------------------------------------------------
$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 0.65% 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) 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%, 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>
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 funds' manager discussing recent market conditions and the funds'
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).
To obtain information:
By telephone. Call the funds at:
888-222-2388
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.
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
LAIT-1-499
(4/99)
