Lord Abbett Investment Trust
Core Series -- Class Y
ANNUAL REPORT FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1998
[LOGO](R)
<PAGE>
A Note About Year 2000 Matters
As you probably know, the Trust depends on the proper functioning of computer
systems for most, if not all, aspects of its operations. Many computer systems
now in use cannot distinguish between the year 2000 (Y2K) and the year 1900, an
inability that could disrupt the services provided to the Trust.
Lord Abbett, Lord Abbett Distributor LLC, the Trust's transfer agent, the
Trust's custodian and other providers of services critical to the Trust all have
advised the Trust that they have been actively working on changes to their
computer systems to prepare for the Year 2000 and expect that their systems, and
those of their external service providers, will be adapted in time. Although the
Y2K issue is unprecedented and the process of Y2K preparedness evaluation and
systems remediation is an ongoing one, we presently believe that there will be
no material effect on the Trust and its financial statements.
Statement of Net Assets
INVESTMENT TRUST - CORE SERIES November 30, 1998
<TABLE>
<CAPTION>
Principal
Amount
Investments (in thousands) Value
================================================================================================================================
Investments in Securities 122.02%
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mortgage & Asset- Capita Equipment Receivables Trust 1996-1 Class A4 6.28% due 6/15/2000 $ 60 $ 60,281
Backed Securities Case Equipment Loan Trust 1995-B Class A3 6.15% due 9/15/2002 26 26,100
67.62% Case Equipment Loan Trust 1997-A Class A2 6% due 3/15/2004 1 1,020
Champion Home Equity Loan Trust 1996-4 Class A1 5.3094% due 1/25/2009 36 36,276
Countrywide Finance Corp. 1994-5 Class A4 6.5% due 3/25/2009 39 39,614
Equicon Loan Trust 1993-1 Class A 5.85% due 11/18/2012 45 45,266
Federal Home Loan Mortgage Corporation Pass-Through Certificates:
6.5% due on an announced basis 160 161,050
7% due on an announced basis 405 412,973
Federal National Mortgage Association G94-1 Guaranteed Variable Rate REMIC
5.5437% due 1/25/2024 53 53,921
Federal National Mortgage Association Pass-Through Certificates:
6% due 10/1/2028 41 40,142
6.5% due on an announced basis 737 746,346
GE Capital Mortgage Services 1995-10 Class B1 7% due 10/25/2010 86 86,594
Government National Mortgage Association 1996-6 Class F Guaranteed REMIC
5.81% due 5/16/2020 2 1,773
Government National Mortgage Association Pass-Through Certificates:
7% due 10/15/2028 44 45,022
7.5% due 2026 311 320,935
8% due 4/15/2028 80 82,931
Green Tree Financial Corp. 1995-5 Class A3 6.25% due 9/15/2026 79 79,511
Green Tree Financial Corp. 1995-8 Class A3 6.35% due 12/15/2026 93 93,721
Green Tree Financial Corp. 1995-F Class A4 6.15% due 1/15/2021 84 84,143
Harley Davidson Eaglemark Motorcycle Trust 1998-1 Class A1 5.81% due 5/15/2002 46 45,937
IMC Home Equity Loan Trust 1997-5 Class A4 6.53% due 6/20/2013 80 80,250
IMC Home Equity Loan Trust 1998-3 Class A2 6.27% due 11/20/2013 50 49,890
IMC Home Equity Loan Trust 1998-3 Class A3 6.16% due 5/20/2014 60 59,812
Key Auto Finance Trust 1997-1 Class A1 5.85% due 3/15/2003 33 33,256
Navistar Financial Owner Trust 1997-B Class A2 5.956% due 1/15/2000 10 10,266
Newcourt Receivables Asset Trust 1996-2 Class A 6.87% due 6/20/2004 15 14,848
Newcourt Receivables Asset Trust 1997-1 Class A2 6.04% due 6/20/2000 88 87,656
Olympic Auto Receivables Trust 1995-C Class A2 6.2% due 1/15/2002 25 24,892
Premier Auto Trust 1996-4 Class A3 6.2% due 11/6/2000 31 31,158
Prudential Home Mortgage Securities Co. 1994-15 Class A2 6% due 5/25/2024 8 7,522
Sears Credit Account Master Trust II 1996-1 Class A 6.2% due 2/16/2006 100 100,906
Toyota Auto Receivable Grantor Trust 1997-A Class A 6.45% due 4/15/2002 20 20,420
Union Acceptance Corp. 1997-A Class A1 6.13% due 7/10/2001 20 19,983
Western Financial Grantor Trust 1994-3 Class A1 6.65% due 12/1/1999 35 34,986
</TABLE>
<PAGE>
Statement of Net Assets
INVESTMENT TRUST - CORE SERIES November 30, 1998
<TABLE>
<CAPTION>
Principal
Amount
Investments (in thousands) Value
================================================================================================================================
<S> <C> <C> <C>
Western Financial Grantor Trust 1994-4 Class A1 7.1% due 1/1/2000 $ 131 $ 130,711
Western Financial Grantor Trust 1995-1 Class A1 8.05% due 4/1/2000 4 3,829
-----------------------------------------------------------------------------------------------------------
Total Mortgage & Asset-Backed Securities (Cost $3,170,389) 3,173,941
- ------------------------------------------------------------------------------------------------------------------==============
Commercial Federal National Mortgage Association Commercial Mortgage-Backed Securities:
Mortgage-Backed 6.58% due 11/1/2004 40 41,510
Securities 6.812% due 10/1/2007 153 162,735
26.57% 6.907% due 6/1/2007 148 158,122
7.033% due 6/1/2007 85 90,959
7.04% due 12/1/2006 104 113,330
7.043% due 7/1/2006 49 51,883
7.06% due 11/1/2003 88 93,966
7.28% due 10/1/2006 88 96,288
7.31% due 7/1/2003 83 89,041
First Boston Mortgage Securities 1997-C2 Class A2 6.52% due 7/17/2007 130 134,103
First Union-Lehman Brothers Comm. Mortgage Trust 1997-C2 Class C 7.02%
due 9/18/2012 40 40,775
First Union-Lehman Brothers Comm. Mortgage Trust 1998-C2 Class C 6.73%
due 9/18/2012 30 31,312
General Motors Acceptance Corp. 1997-C2 Class A3 6.566% due 11/15/2007 90 92,840
Morgan Stanley 1998-WF2 Class B 6.63% due 6/15/2008 50 50,453
-----------------------------------------------------------------------------------------------------------
Total Commercial Mortgage-Backed Securities (Cost $1,222,978) 1,247,317
- ------------------------------------------------------------------------------------------------------------------==============
U.S. Treasury & Federal National Mortgage Association Debenture 5.75% due 6/15/2005 105 108,789
Agency Issues Federal National Mortgage Association Debenture 7.4% due 7/1/2004 129 142,625
22.49% U.S. Treasury Bonds Zero Coupon Strips due 8/15/2020 901 276,072
U.S. Treasury Bonds 8.75% due 5/15/2017 31 43,477
U.S. Treasury Inflation Index Notes 3.625% due 7/15/2002 135 137,594
U.S. Treasury Notes 6.25% due 4/30/2001 335 347,144
-----------------------------------------------------------------------------------------------------------
Total U.S. Treasury & Agency Issues (Cost $1,028,135) 1,055,701
- ------------------------------------------------------------------------------------------------------------------==============
Corporate Notes Banc One Corp. Sub. Notes 8% due 4/29/2027 75 91,043
5.34% Dayton Hudson Corp. 6.75% due 1/1/2028 45 47,003
Fleet Financial Group, Inc. 6.7% due 7/15/2028 67 69,010
Texas Utilities Electric Co. 7.17% due 8/1/2007 40 43,550
-----------------------------------------------------------------------------------------------------------
Total Corporate Notes (Cost $240,782) 250,606
---------------------------------------------------------------------------------------------==============
Total Investments in Securities (Cost $5,662,284) 5,727,565
================================================================================================================================
Other Assets, Less Liabilities (22.02%)
================================================================================================================================
Short-Term Baker Hughes Inc. Discount Notes 5.42% due 12/1/98 150 149,978
Investments Capita Equipment Receivables Trust 1996-1 Class A3 6.11% due 7/15/99 57 57,506
Federal Home Loan Bank Discount Notes 5.22% due 12/1/98 118 117,983
-----------------------------------------------------------------------------------------------------------
Total (Cost $325,396) 325,467
- ------------------------------------------------------------------------------------------------------------------==============
Cash 10,673
- ------------------------------------------------------------------------------------------------------------------==============
Receivable for: Securities Sold 1,715,226
Interest 32,434
Total Other Assets 2,083,800
- ------------------------------------------------------------------------------------------------------------------==============
Payable for: Securities Purchased 3,111,623
Other 5,601
Total Liabilities 3,117,224
- ------------------------------------------------------------------------------------------------------------------==============
Total Other Assets, Less Liabilities (1,033,424)
================================================================================================================================
Net Assets 100.00% (equivalent to $10.97 a share on 427,854 shares of beneficial interest) $ 4,694,141
================================================================================================================================
</TABLE>
See Notes to Financial Statements.
<PAGE>
Statement of Operations
12/10/97
(Commencement
of Operations)
Investment Income to 11/30/98
===============================================================================
Income Interest $264,058
- -------------------------------------------------------------------------------
Expenses Management Fee 21,264
---------------------------------------------------------------
Management Fee waived (21,264)
---------------------------------------------------------------
Shareholders Servicing 1,000
---------------------------------------------------------------
Professional 9,500
---------------------------------------------------------------
Other 1,500
---------------------------------------------------------------
Expenses assumed by Lord Abbett (12,000)
---------------------------------------------------------------
Net expenses 0
---------------------------------------------------------------
Net Investment Income 264,058
---------------------------------------------------------------
Realized and Unrealized Gain on Investments
---------------------------------------------------------------
Realized gain from investment transactions
---------------------------------------------------------------
Proceeds from sales 20,921,664
---------------------------------------------------------------
Cost of investments sold 20,841,818
---------------------------------------------------------------
Net realized gain 79,846
- -------------------------------------------------------------------------------
Unrealized appreciation of investments 65,352
- -------------------------------------------------------------------------------
Net realized and unrealized gain on investments 145,198
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $409,256
===============================================================================
See Notes to Financial Statements.
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
12/10/97
(Commencement
of Operations)
Increase in Net Assets to 11/30/98
==========================================================================================
<S> <C> <C>
Operations Net investment income $264,058
Net realized gain from investment transactions 79,846
Net unrealized appreciation of investments 65,352
------------------------------------------------------------------------
Net increase in net assets resulting from operations 409,256
------------------------------------------------------------------------
Capital share transactions:
- ------------------------------------------------------------------------------------------
Net proceeds from sale of 427,854 shares 4,284,885
------------------------------------------------------------------------
Increase in Net Assets 4,694,141
==========================================================================================
Net Assets
==========================================================================================
Beginning of period 0
------------------------------------------------------------------------
End of period+ $4,694,141
==========================================================================================
</TABLE>
See Notes to Financial Statements.
+ Including undistributed net investment income of $264,058 as of November 30,
1998.
Financial Highlights
Class Y
12/10/97
(Commencement
of Operations)
Per Share Operating Performance: to 11/30/98
================================================================================
Net asset value, beginning of period $10.00
- --------------------------------------------------------------------------------
Income from investment operations
-----------------------------------------------------------------------
Net investment income 0.62
-----------------------------------------------------------------------
Net realized and unrealized gain on investments 0.35
-----------------------------------------------------------------------
Total from investment operations 0.97
-----------------------------------------------------------------------
Net asset value, end of period $10.97
- --------------------------------------------------------------------------------
Total Return(a) 9.70%
================================================================================
Ratios to Average Net Assets:(a)
=======================================================================
Expenses, including waiver and reimbursement 0.00%
-----------------------------------------------------------------------
Expenses, excluding waiver and reimbursement 0.75%
-----------------------------------------------------------------------
Net investment income 5.98%
-----------------------------------------------------------------------
Supplemental Data:
================================================================================
Net assets, end of period (000) $4,694
-----------------------------------------------------------------------
Portfolio turnover rate 411.03%
=======================================================================
(a) Not annualized.
See Notes to Financial Statements.
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Investment Trust (the "Trust") is an open-end management investment
company organized as a Delaware business trust on August 16, 1993. The Trust
consists of five separate portfolios. This report covers one of the portfolios -
Core Series ("Series"). The Series is diversified as defined under the
Investment Company Act of 1940. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Series:
(a) Securities are valued as follows: Portfolio securities listed or admitted to
trading privileges on any securities exchange are valued at the last sales price
on the exchange on which such securities are traded as of the close of business
on the day the securities are being valued, or, lacking any sales, at the latest
price on the basis of current quotations from dealers (as in the case of bonds),
from valuations furnished by an independent pricing service or, in their
absence, fair value as determined under procedures approved by the Board of
Trustees. Short-term securities are valued at amortized cost which approximates
market value.
(b) It is the policy of the Series to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income. Therefore, no federal income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are determined on the identified cost basis. Distributions to
shareholders are recorded on the ex-dividend date. Interest income is accrued on
a daily basis.
2. Management Fee and Other Transactions with Affiliates
The Series has a management agreement with Lord, Abbett & Co. ("Lord Abbett")
pursuant to which Lord Abbett provides the Series with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research, statistical work and the supervision of the
Series' investment portfolio. The management fee is based on average daily net
assets for each month at the annual rate of .50 of 1%. Lord Abbett waived its
management fee for the year ended November 30, 1998.
All outstanding capital shares are held by directors and officers of the Series
and by partners and employees of Lord Abbett.
3. Distributions
Distributions from net investment income and net realized gain from investment
transactions are declared annually. At November 30, 1998, the accumulated
undistributed net realized gain for financial reporting purposes aggregated
$79,846. Income and capital gains distributions are determined in accordance
with income tax regulations which may differ from methods used to determine the
corresponding income and capital gain amounts in accordance with generally
accepted accounting principles.
A net investment income dividend of $0.41 a share aggregating $277,388 and a
capital gain distribution of $0.12 a share aggregating $81,187 were declared on
December 23,1998 and paid on December 24, 1998 to shareholders of record on
December 23, 1998.
4. Capital
At November 30, 1998, paid in capital aggregated $4,284,885.
5. Purchases and Sales of Securities
Purchases and sales of investment securities (other than short-term investments)
aggregated $25,889,353 and $20,253,343, respectively.
As of November 30, 1998, net unrealized appreciation for federal income tax
purposes aggregated $65,352 of which $68,848 related to appreciated securities
and $3,496 related to depreciated securities.
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes.
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders,
Lord Abbett Investment Trust - Core Series:
We have audited the accompanying statement of net assets of Lord Abbett
Investment Trust - Core Series as of November 30, 1998, the related statements
of operations and of changes in net assets and the financial highlights for the
period from December 10, 1997, commencement of operations, to November 30, 1998.
These financial statements and the financial highlights are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at November 30, 1998 by cor
res pondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Lord Abbett
Investment Trust - Core Series at November 30, 1998, the results of its
operations, the changes in its net assets and its financial highlights for the
period from December 10, 1997, commencement of operations, to November 30, 1998
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
January 8, 1999
Copyright (C) 1999 by Lord Abbett Investment Trust - Core Series (Class Y)
767 Fifth Avenue, New York, NY 10153-0203
This publication, when not used for the general information of shareholders of
Lord Abbett Investment Trust - Core Series (Class Y), is to be distributed only
if preceded or accompanied by a current prospectus which includes information
concerning the Series' investment objective and policies, sales charges and
other matters. There is no guarantee that the forecasts contained within this
publication will come to pass.
All rights reserved. Printed in the U.S.A.
