Lord Abbett
Investment Trust
o U.S Government Securities Series
o Limited Duration U.S Government Securities Series
o Balanced Series
o High Yield Fund
1999 ANNUAL REPORT
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Four portfolios to help you meet your goals
[LOGO]
Visit our Web Site and get: up to date statistics and other useful information
at www.lordabbett.com
<PAGE>
Report to Shareholders
For the Fiscal Year Ended November 30, 1999
[PHOTO OMITTED]
Robert S. Dow
Chairman
December 10, 1999
Table of Contents
U.S. Government Securities Series
- ----------------------------------
About the Series 1
Statement of Net Assets 4
Limited Duration U.S. Government
Securities Series
- ----------------------------------
About the Series 3
Statement of Net Assets 8
Balanced Series
- ----------------------------------
About the Series 3
Statement of Net Assets 11
High Yield Fund
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Statement of Net Assets 11
Data On All Series
- ----------------------------------
Statements of Operations 15
Statements of Changes in
Net Assets 16
Financial Highlights 17
Notes to Financial Statements 21
Lord Abbett Investment Trust completed its fiscal year on November 30, 1999,
with combined net assets in excess of $1.7 billion. We are pleased to present
you with this performance overview.
<TABLE>
<CAPTION>
Balanced Series U.S. Government Securities Series
Fiscal Year Ended 11/30/99 Fiscal Year Ended 11/30/99
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Class A Class B Class C Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value $12.34 $12.32 $12.31 $2.45 $2.45 $2.45
Dividends $ .54 $ .44 $ .44 $ .16 $ .14 $ .14
Capital gains distributions $ 1.14 $ 1.14 $1.14 $ - $ - $ -
Total return* 10.0% 9.0% 9.0% -0.7% -1.4% -1.8%
<CAPTION>
Limited Duration
U.S. Government Securities Series High Yield
Fund
Fiscal Year Ended 11/30/99 Fiscal Year Ended
11/30/99
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Class A Class C Class A Class B Class C Class
Y**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value $4.34 $4.33 $9.72 $9.70 $9.70 $9.73
Dividends $ .24 $ .20 $ .92 $ .86 $ .86 $ -
Total return* 3.1% 1.3% 5.0% 4.2% 4.2%
</TABLE>
The U.S. Government Securities Series and the Limited Duration U.S. Government
Securities Series continued to emphasize a large concentration of non-Treasury
securities to take advantage of the significantly higher yields -- without
incurring a proportionate increase credit in risk. If market valuations remain
unchanged, we expect to continue with the strategy of emphasizing non-Treasury
investments. If the spread (the difference in yield between different types of
bonds of the same maturity) narrows, we expect to decrease our exposure to
non-Treasury securities accordingly. While the overall level of interest rates
has a short-term impact on our portfolio, it does not change our long-term
investment strategy, which is to seek out undervalued securities across various
maturities to maximize our total return (price appreciation plus coupon yield)
potential.
The Balanced Series utilizes a "fund of funds" format which currently divides
assets approximately 50%/50% between Lord Abbett Affiliated Fund (equity) and
Lord Abbett Bond-Debenture Fund (fixed income) respectively.+ Affiliated Fund's
performance was supported by its exposure to the technology sector. However, the
investment team is now beginning to scale back the portfolio's allocation to
technology stocks. The proceeds from those sales will most likely be used to
increase allocation to cyclical stocks such as paper, chemicals and electrical
equipment, as well as other industrial stocks that tend to reflect improving
global economies. They also began focusing some attention on the property and
casualty insurance sectors, and will seek out companies in this market segment
that display improving fundamentals. The Fund was generally underweighted in
financial companies, which worked to its advantage since many of these stocks
struggled as interest rates increased. The overall strategy of the
Bond-Debenture Fund is to identify good bond values while being careful about
credit selection. The investment team has tried to sidestep the risk of rising
interest rates by keeping their exposure to Treasuries to a minimum and slightly
increasing their allocation to convertible securities. Bond-Debenture Fund
maintained an allocation of over 65% in high-yield bonds as they continued to
see tremendous yield advantages over Treasuries.++
Lord Abbett High Yield Fund's strategy is to build a portfolio of high-yield
bonds from companies with strong earnings that are well managed and are
undervalued relative to their fundamentals. We continued to find value among
companies in the cable, media, technology and telecommunications industries.
With ongoing consolidation in these sectors, many companies exhibit strong
earnings potential due to the growth in data, video and voice services. We
increased our exposure to certain basic industries such as paper companies, and
increased our multinational technology manufacturing and semiconductor holdings,
which exhibited visible price improvements and have the potential to benefit
from global economic growth. We remained underweighted in financial companies
(e.g., banking, insurance), retail companies and other consumer-oriented
companies that were hurt by fierce competition in their respective industries.
Thank you for making Lord Abbett Investment Trust a part of your investment
portfolio. We value the trust that you place in us and remain committed to
helping you achieve your financial goals in the years ahead.
* Total return is the percent change in net asset value assuming the
reinvestment of all distributions.
** The inception date for High Yield Fund Class Y shares was 5/4/99.
*** Not annualized.
+ The portfolio is actively managed, and as a result, asset allocation may
change from time to time.
++ Unlike Treasury securities, an investment in the Series is neither insured
nor guaranteed by the U.S. Government.
<PAGE>
ABOUT THE U.S. GOVERNMENT SECURITIES SERIES
Total Return is Important to Fixed-Income Investors
Over the last 10 years, an investment in the Series provided relatively stable
dividend income and, assuming the reinvestment of all distributions, grew by
over 97%. The Series surpassed the increase in inflation (as measured by the
Consumer Price Index), and the Lipper General U.S. Government Average over the
same 10-year period.
Lord Abbett U.S. Government Securities Series Versus Inflation and the Lipper
General U.S. Government Average(1)(2) Growth of $100,000: 11/30/89 - 11/30/99
The U.S. Government Securities Series Distribution Rate on 11/30/99 was 6.34%(3)
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SEC Returns
Average annual compound returns for the periods ended December 31, 1999, at the
respective Class A share maximum sales charges(4) , with all distributions
reinvested:
<TABLE>
<CAPTION>
Limited Duration
U.S. Government U.S. Government
Securities Series(2) Securities Series(5) Balanced Series(5) High Yield
Fund(5)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year: -6.20% -0.60% 4.60% 1.50%
5 years: 5.34% 4.80% 12.31% --
10 years or Life of Series: 6.37% 3.36% 12.23% 1.50%
SEC yield for the 30 days
ended 12/31/99: 5.74% 5.42% 3.94% 9.11%
</TABLE>
The results quoted herein represent past performance which is no indication of
future results. The investment return and principal value of an investment in
any Series of the Trust will fluctuate so that shares, on any given day or when
redeemed, may be worth more or less than their original cost. Each Series issues
separate classes of shares, with distinct pricing options. For a full discussion
of the differences in pricing alternatives, see the Trust's current prospectus.
(1) Total return is the percent change in net asset value, assuming the
reinvestment of both dividends and capital gains distributions.
(2) Lord Abbett Investment Trust-U.S. Government Securities Series was
established 7/15/96. Its predecessor, Lord Abbett U.S. Government
Securities Fund, was established 9/19/32. Any performance relating to the
Series for periods prior to 7/15/96 reflects performance of the Series'
predecessor.
(3) Based on the Class A share maximum offering price.
(4) The Class A share maximum sales charge is 5.75% for the Balanced Series,
4.75% for the U.S. Government Securities Series and High Yield Fund, and
3.00% for the Limited Duration U.S. Government Securities Series.
(5) Limited Duration U.S. Government Securities Series commenced operations
11/4/93; Balanced Series commenced operations 12/27/94; High Yield Fund
commenced operations 12/31/98.
1
<PAGE>
ABOUT THE U.S. GOVERNMENT SECURITIES SERIES
Annual Total Returns Based on Calendar Year(1)
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997
1998 1999
(Through
11/30)
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<C> <C>
Annual Total Return(1) +12.7% +9.3% +16.9% +7.1% +9.2% -4.3% +15.7% +1.7% +9.2%
+7.9% -0.9%
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</TABLE>
(1) Total return reflects the percent change in value with both dividends and
capital gains distributions reinvested. Results shown are at net asset
value for Class A shares. For performance at the maximum Class A share
sales charge, see page 1. See Important Information on page 4.
A Portfolio of High-Quality Securities
Conservative shareholders gain the comfort of owning U.S. Government securities,
which have the top investment grade and carry the least credit risk among
fixed-income securities.
Lord Abbett's Focus on Quality: Representative Structure as of 11/30/99(1)
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(1) The portfolio is actively managed and, as a result, its composition will
change from time to time.
(2) Each percentage amount shown is calculated based on the Fund's holdings of
Long-Term Investments only. A security subject to principal paydowns over
time (as is the case with most mortgage-related investments) is classified
as long-term if the expected average time until principal payments are
received, weighted by dollar amount, is greater than one year. All
short-term assets, including cash and cash equivalents, are excluded from
the calculation for purposes of this chart.
Who Owns the Series?
Investor Profile of Lord Abbett U.S. Government Securities Series
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Fiduciaries Pension, profit-sharing & 401(k) retirement accounts 3,338
Trusts 2,779
Custodians for minors 1,444
457 & 403(b) accounts 934
Estates 93
- --------------------------------------------------------------------------------
Institutions Broker-held accounts 15,717
Corporate organizations 253
Religious, charitable & welfare organizations 188
Banks, credit unions & insurance companies 129
Clubs & fraternal organizations 78
Cemeteries & hospitals 55
Government agencies 26
Colleges & universities 12
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Individuals Single & joint accounts & IRAs 29,367
Total Accounts in the Series on 11/30/99 54,413
2
<PAGE>
ABOUT THE LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES
The Series invests in intermediate-term U.S. Government securities. As of
November 30, 1999, the Series' distribution rate was competitive with the yield
for 10-year Treasuries, with less price volatility than the Treasuries.(1)
Lord Abbett Limited Duration U.S. Government Securities Series(2) Growth of
$100,000 (as of 11/30/99)
[GRAPHIC OMITTED]
Total return shown, above and below, reflects the percent change in value for
Class A shares with both dividends and capital gains reinvested.
ABOUT THE BALANCED SERIES
The Series allocates its assets between fixed-income securities and equity
holdings, based on our economic outlook. This strategy has provided investors
with strong total returns, while generating monthly income.
Lord Abbett Balanced Series(4) Growth of $100,000 (as of 11/30/99)
[GRAPHIC OMITTED]
(1) Unlike Treasury securities, an investment in the Series is neither insured
nor guaranteed by the U.S. government.
(2) The Limited Duration U.S. Government Securities Series commenced operations
on 11/4/93. Results reflect the deduction of the reduced 2.50% sales charge
applicable to Class A share investments of $100,000. (3) Based on the Class
A share maximum offering price. (4) The Balanced Series commenced
operations on 12/27/94. Results reflect the deduction of the reduced 4.75%
sales charge applicable to Class A share investments of $100,000. For
Series' performance at the respective maximum Class A share sales charges,
see page 1.
3
<PAGE>
Important Information
Each Series' respective SEC yield is calculated
on its maximum offering price on 12/31/99, using
a standard method which does not take into
account certain portfolio strategies. Series'
distribution rates may differ from SEC yields if
the Series purchases securities at a premium and
distributes to shareholders interest income that
has not been reduced for amortization of premiums
on those securities. This practice is consistent
with applicable tax elections made by each
Series, but may result in a decrease in the net
asset values of shares of the Series if the
market values of the premium securities decrease
over time. Dividends paid from this interest
income are taxable to shareholders as ordinary
income. Neither the U.S. Government Securities
Series nor the Limited Duration U.S. Government
Securities Series is insured or guaranteed by the
U.S. Government.
Results quoted herein represent past performance
based on the current sales charge schedules and
reflect appropriate Rule 12b-1 Plan expenses. Tax
consequences are not reflected. The U.S.
Government Securities Series' sales charge
structure has changed from the past. If interest
rates rise, the value of bonds purchased by the
Series would decrease, causing a decrease in the
Series' share values. If used as sales material
after 3/31/00, this report must be accompanied by
Lord Abbett's Performance Quarterly for the most
recently completed calendar quarter.
<TABLE>
<CAPTION>
Statement of Net Assets
U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Principal
Amount
Investments
(000) Value
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Long-Term Investments in Securities 120.75%
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<S> <C>
<C> <C>
U.S. Treasury
Obligations 9.54% U.S. Treasury Bond 83/4% due 5/15/2017+ $
19,883 $ 24,198,207
U.S. Treasury Note Inflation Indexed 37/8% due 1/15/2009
11,877 11,902,992
U.S. Treasury Note 65/8% due 5/15/2007+
15,081 15,373,119
U.S. Treasury Strip due 2/15/2010
63,370 32,630,480
U.S. Treasury Strip due 8/15/2020+
231,680 59,546,394
Total 143,651,192
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U.S. Government Agency Federal Home Loan Mortgage Corp. 5% due 1/15/2004
1,760 1,660,173
Debentures 15.83% Federal National Mortgage Association 51/4% due 1/15/2009
11,106 9,953,753
Federal National Mortgage Association 61/4% due 11/15/2002+
74,817 74,501,272
Student Loan Marketing Association 15% due 2/1/2000
150,000 152,231,400
Total 238,346,598
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Federal Home Loan 6% due 1/1/2000
96 95,399
Mortgage Corporation 6 1/2% due 2001 to 2029
140,595 134,217,434
Pass-Through Securities 40.14% 7% due on an announced basis
171,164 167,224,397
7 1/2% due on an announced basis
232,771 232,160,742
8% due on an announced basis
69,540 70,604,657
Total 604,302,629
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Federal National 5 1/2% due 11/1/2025
4,049 3,703,828
Mortgage Association 5.90% due 12/1/2008
7,468 6,932,120
Pass-Through Securities 25.66% 6% due 2001 to 2029
78,031 72,408,560
6.05% due 4/1/2009
6,007 5,619,771
6.08% due 10/1/2008
25,998 24,453,841
6.09% due 7/1/2008
3,949 3,721,294
6.29% due 6/1/2008
4,760 4,520,060
6.31% due 6/1/2008
6,300 5,972,671
6.32% due 6/1/2008
9,014 8,576,273
6.46% due 4/1/2006
12,481 12,126,961
6 1/2% due 2008 to 2013
50,996 49,792,102
6.55% due 11/1/2007
5,743 5,558,496
6 5/8% due 10/1/2007
9,597 9,324,772
4
<PAGE>
Statement of Net Assets
U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Principal
Amount
Investments
(000) Value
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6.68% due 10/1/2007 $
9,648 $ 9,404,557
6.69% due 9/1/2007
7,829 7,637,684
6.72% due 10/1/2005
2,782 2,740,081
6 3/4% due 2007
12,170 11,913,752
6.77% due 5/1/2007
4,883 4,787,293
6.78% due 10/1/2007
6,902 6,765,211
6.79% due 11/1/2007
8,043 7,894,135
6.80% due 3/1/2007
5,775 5,674,871
6.80% due 10/1/2007
6,272 6,156,230
6.80% due 10/1/2007
8,423 8,268,772
6.81% due 3/1/2007
4,878 4,794,677
6.81% due 10/1/2007
1,050 1,031,704
6.83% due 11/1/2007
4,217 4,144,846
6.84% due 10/1/2007
2,670 2,627,202
6.90% due 6/1/2007
18,141 18,012,199
6.91% due 3/1/2007
4,879 4,822,885
6.99% due 7/1/2009
4,900 4,853,989
7% due 2007 to 2013
21,657 21,587,542
7.01% due 12/1/2006
11,219 11,200,569
7.20% due 7/1/2006
2,262 2,279,490
7.21% due 6/1/2006
15,030 15,153,989
7.31% due 7/1/2003
360 363,243
7.43% due 6/1/2007
5,391 5,482,937
7 1/2% due 11/1/2023
6,095 6,069,444
Total 386,378,051
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Government National 7% due 2023 to 2028
34,482 33,716,096
Mortgage Association 7 1/2% due 2026 to 2028
79,350 79,277,279
Pass-Through Securities 11.23% 8% due 4/15/2028
15,926 16,203,848
8% due on an announced basis
33,125 33,663,281
9% due 2018 to 2020
2,957 3,124,211
10% due 2018 to 2019
2,788 3,015,522
Total 169,000,237
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Collateralized Mortgage Federal Home Loan Mortgage Corp. 1702-A PL 5% due 10/15/2016
2,262 2,246,578
Obligations 18.35% Federal Home Loan Mortgage Corp. 1605 A 5 1/8% due 8/15/2006
621 616,304
Federal Home Loan Mortgage Corp. 1488 CA 5.20% due 5/15/2005
355 353,351
Federal Home Loan Mortgage Corp. 1638 A 5 1/4% due 1/15/2019
2,991 2,971,008
Federal Home Loan Mortgage Corp. 1628 E 5 1/2% due 1/15/2017
229 227,435
Federal Home Loan Mortgage Corp. 1611 E 5 1/2% due 12/15/2018
123 121,870
Federal Home Loan Mortgage Corp. 1709 B 5 1/2% due 4/15/2019
157 155,797
Federal Home Loan Mortgage Corp. 1678 PE 5.60% due 7/15/2007
827 822,337
Federal Home Loan Mortgage Corp. 1617 PE 5.70% due 6/15/2018
3,300 3,283,603
Federal Home Loan Mortgage Corp. 1693 E 5 3/4% due 2/15/2006
519 516,047
Federal Home Loan Mortgage Corp. 1612 PD 5 3/4% due 5/15/2006
1,966 1,958,119
Federal Home Loan Mortgage Corp. 1625 EA 5 3/4% due 3/15/2007
610 609,071
Federal Home Loan Mortgage Corp. 1688 E 5 3/4% due 4/15/2011
316 314,968
Federal Home Loan Mortgage Corp. 1526 E 5 3/4% due 3/15/2016
1,258 1,253,782
Federal Home Loan Mortgage Corp. 1507 EA 5 3/4% due 8/15/2016
1,496 1,491,519
Federal Home Loan Mortgage Corp. 1546 D 5 3/4% due 10/15/2016
236 235,345
Federal Home Loan Mortgage Corp. 1609 E 5 3/4% due 12/15/2016
4,146 4,129,601
Federal Home Loan Mortgage Corp. 1637 E 5 3/4% due 2/15/2019
2,660 2,648,092
5
<PAGE>
Statement of Net Assets
U.S. GOVERNMENT SECURITIES SERIES November 30,
1999
Principal
Amount
Investments
(000) Value
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 1521 C 5.80% due 7/15/2000 $
113 $ 112,355
Federal Home Loan Mortgage Corp. 1488 PH 5.84% due 4/15/2008
506 502,251
Federal Home Loan Mortgage Corp. 1558 F 5.84% due 5/15/2022
5,757 5,802,280
Federal Home Loan Mortgage Corp. 1675 E 5.85% due 9/15/2017
5,915 5,891,287
Federal Home Loan Mortgage Corp. 1708 B 6% due 4/15/2006
930 926,865
Federal Home Loan Mortgage Corp. 1561 ZB 6% due 8/15/2006
4,102 4,088,802
Federal Home Loan Mortgage Corp. 1561 M 6% due 3/15/2007
694 691,934
Federal Home Loan Mortgage Corp. 1704 PE 6% due 7/15/2007
952 948,506
Federal Home Loan Mortgage Corp. 1991 PA 6% due 3/15/2014
5,216 5,199,702
Federal Home Loan Mortgage Corp. 16 PE 6% due 8/25/2015
2,305 2,294,641
Federal Home Loan Mortgage Corp. 1523 PE 6% due 10/15/2015
252 251,745
Federal Home Loan Mortgage Corp. 13 PG 6% due 7/25/2016
2,200 2,189,000
Federal Home Loan Mortgage Corp. 1547 PE 6% due 3/15/2017
198 197,661
Federal Home Loan Mortgage Corp. 1578 E 6% due 11/15/2017
546 544,613
Federal Home Loan Mortgage Corp. 1737 E 6% due 12/15/2017
10,408 10,369,168
Federal Home Loan Mortgage Corp. 1484 G 6% due 6/15/2019
294 293,391
Federal Home Loan Mortgage Corp. 2155 A 6% due 5/15/2029
12,883 12,814,736
Federal Home Loan Mortgage Corp. 1540 C 6.05% due 2/15/2011
135 134,949
Federal Home Loan Mortgage Corp. 1513 H 6.10% due 12/15/2004
1,005 1,001,958
Federal Home Loan Mortgage Corp. 1703 E 6.10% due 11/15/2006
1,368 1,364,963
Federal Home Loan Mortgage Corp. 1710 C 6.10% due 2/15/2024
928 924,755
Federal Home Loan Mortgage Corp. 1544 E 6 1/4% due 6/15/2008
245 244,331
Federal Home Loan Mortgage Corp. 29 D 6 1/4% due 2/25/2018
1,289 1,283,779
Federal Home Loan Mortgage Corp. 2132 JD 6 1/2% due 3/15/2001
1,019 1,017,570
Federal Home Loan Mortgage Corp. 1417 G 6 1/2% due 7/15/2006
7,217 7,212,683
Federal Home Loan Mortgage Corp. 1871 A 7% due 6/15/2016
1,234 1,233,073
Federal Home Loan Mortgage Corp. 1560 PW 7% due 11/15/2016
706 706,505
Federal Home Loan Mortgage Corp. 29 P 7% due 2/25/2018
5,480 5,481,769
Federal Home Loan Mortgage Corp. 1095 A PO due 6/15/2021
711 525,180
Federal Home Loan Mortgage Corp. 1148 F PO due 10/15/2021
1,821 1,379,721
Federal Home Loan Mortgage Corp. 1363 B PO due 8/15/2022
2,129 1,609,404
Federal Home Loan Mortgage Corp. 1372 C PO due 9/15/2022
1,346 1,027,636
Federal Home Loan Mortgage Corp. 204 PO due 5/15/2029
14,620 8,762,859
Federal Home Loan Mortgage Corp. 1059 U IO 409% due 4/15/2021
12 139,287
Federal Home Loan Mortgage Corp. 1020 S IO 900.95% due 12/15/2020
7 147,950
Federal Home Loan Mortgage Corp. 1241 X IO 982.65% due 4/15/2022
3 84,186
Federal Home Loan Mortgage Corp. 1200 IB IO 1,007% due 2/15/2022
1 34,738
Federal Home Loan Mortgage Corp. 1082 D IO 1,007.80% due 5/15/2021
27 651,466
Federal Home Loan Mortgage Corp. 1180 G IO 1,008.40% due 11/15/2021
4 108,735
Federal Home Loan Mortgage Corp. 1058 I IO 1,0081/2% due 4/15/2021
4 115,830
Federal Home Loan Mortgage Corp. 1046 I IO 1,009% due 2/15/2021
5 120,229
Federal Home Loan Mortgage Corp. 1049 N IO 1,0101/2% due 2/15/2021
18 462,063
Federal Home Loan Mortgage Corp. 73 G IO 1,095.35% due 10/15/2020
7 194,457
Federal Home Loan Mortgage Corp. 1137 M IO 1,185.50% due 9/15/2021
7 221,590
Federal Home Loan Mortgage Corp. 1066 S IO 1,195.60% due 4/15/2021
18 587,768
Federal National Mortgage Association 1994-22 A 5% due 3/25/2022
1,583 1,563,330
Federal National Mortgage Association 1994-19 A 5% due 1/25/2024
10,800 10,668,237
Federal National Mortgage Association 94-23 PT 51/8% due 7/25/2017
452 447,192
Federal National Mortgage Association 94-28 A 51/4% due 8/25/2018
1,474 1,458,837
Federal National Mortgage Association 1993-221 B 51/2% due 11/25/2006
403 399,621
Federal National Mortgage Association 1993-196 E 51/2% due 2/25/2007
2,515 2,496,038
6
<PAGE>
Statement of Net Assets
U.S. GOVERNMENT SECURITIES SERIES November 30,
1999
Principal
Amount
Investments
(000) Value
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 93-214 E 5 1/2% due 3/25/2007 $
301 $ 298,173
Federal National Mortgage Association 1993-229 PD 5.60% due 7/25/2006
530 526,342
Federal National Mortgage Association 93-194 PG 5.65% due 4/25/2005
127 126,759
Federal National Mortgage Association 93-206 5.65% due 5/25/2017
2,794 2,775,070
Federal National Mortgage Association 1993-223 PD 5.65% due 7/25/2019
709 704,361
Federal National Mortgage Association 1993-59 E 5 3/4% due 4/25/2006
705 701,355
Federal National Mortgage Association 93-192 Z 5 3/4% due 8/25/2006
3,109 3,091,090
Federal National Mortgage Association 1994-32 PD 5 3/4% due 1/25/2007
218 216,290
Federal National Mortgage Association 1994-12 PE 5 3/4% due 4/25/2007
512 508,770
Federal National Mortgage Association 1993-141 PE 5 3/4% due 5/25/2017
308 306,280
Federal National Mortgage Association 1994-30 E 5 3/4% due 11/25/2017
517 513,505
Federal National Mortgage Association 93-208 E 5 3/4% due 4/25/2018
6,316 6,276,183
Federal National Mortgage Association 1994-42 E 5 3/4% due 9/25/2018
375 372,206
Federal National Mortgage Association 1993-191 PE 5.80% due 9/25/2006
404 401,587
Federal National Mortgage Association 1994-13 PE 5.80% due 12/25/2006
750 744,856
Federal National Mortgage Association 1993-225 OE 5.80% due 11/25/2017
9,843 9,787,254
Federal National Mortgage Association 1993-139 E 5.85% due 1/25/2017
405 402,645
Federal National Mortgage Association 1994-36 E 5.85% due 3/25/2018
4,988 4,958,254
Federal National Mortgage Association 1993-119 E 5.85% due 5/25/2019
686 682,633
Federal National Mortgage Association 93-134 D 5.90% due 11/25/2005
111 110,337
Federal National Mortgage Association 1993-89 A 5.90% due 4/25/2019
161 160,242
Federal National Mortgage Association 96-53 FA 5.94% due 12/25/2003
11,059 11,093,723
Federal National Mortgage Association 93-212 C 6% due 11/25/2000
1,973 1,961,915
Federal National Mortgage Association 1993-173 E 6% due 2/25/2005
2,846 2,832,855
Federal National Mortgage Association 1993-174 Z 6% due 7/25/2006
392 389,691
Federal National Mortgage Association 1993-221 A 6% due 11/25/2006
139 138,206
Federal National Mortgage Association 1994-85 E 6% due 11/25/2006
4,124 4,101,812
Federal National Mortgage Association 1994-17 E 6% due 2/25/2007
11,101 11,045,115
Federal National Mortgage Association 98-13 PA 6% due 4/18/2008
4,952 4,936,021
Federal National Mortgage Association 98-19 PA 6% due 6/18/2008
3,632 3,620,580
Federal National Mortgage Association 1998-24 QA 6% due 2/18/2009
19,686 19,618,345
Federal National Mortgage Association 1998-6 PB 6% due 3/18/2013
4,705 4,685,851
Federal National Mortgage Association 1993-160 PE 6% due 5/25/2016
3,407 3,391,462
Federal National Mortgage Association 1993-145 A 6% due 8/25/2017
602 595,724
Federal National Mortgage Association 93-94 E 6% due 3/25/2019
526 523,126
Federal National Mortgage Association 1993-29 PE 6% due 11/25/2019
480 477,901
Federal National Mortgage Association 1994-43 PE 6% due 12/25/2019
1,873 1,863,480
Federal National Mortgage Association G94-1 F 6.04% due 1/25/2024
6,735 6,741,622
Federal National Mortgage Association 1993-129 D 6.10% due 6/25/2005
1,147 1,141,536
Federal National Mortgage Association 1994-61 C 6.10% due 2/25/2024
862 857,630
Federal National Mortgage Association 1993-147 FG 6.14% due 8/25/2023
2,455 2,445,395
Federal National Mortgage Association 1994-56 E 6 1/4% due 4/25/2017
6,583 6,558,492
Federal National Mortgage Association 1994-36 EB 6 1/4% due 3/25/2018
1,559 1,553,351
Federal National Mortgage Association 1993-10 PE 6 1/2% due 10/25/2004
534 531,530
Federal National Mortgage Association 98-27 PA 6 1/2% due 3/18/2008
9,291 9,270,767
Federal National Mortgage Association 1997-32 PA 6 1/2% due 4/25/2009
940 936,696
Federal National Mortgage Association 1993-66 A 6 1/2% due 11/25/2019
511 509,379
Federal National Mortgage Association 1994-39 A 6 1/2% due 3/25/2024
353 352,083
Federal National Mortgage Association 1993-187 SE 6.58% due 11/25/2016
3,970 3,839,406
Federal National Mortgage Association 1994-75 E 6.60% due 9/25/2018
1,649 1,646,574
Federal National Mortgage Association G94-5 PE 7% due 10/17/2015
3,806 3,818,354
7
<PAGE>
Statement of Net Assets
U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Principal
Amount
Investments
(000) Value
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association G92-44 D 8% due 12/25/2020 $
72 $ 72,212
Federal National Mortgage Association 1991-158 E IO 1,008% due 12/25/2021
7 219,410
Total 276,320,889
- ----------------------------------------------------------------------------------------------------------------------=============
Total Long-Term Investments in Securities (Cost
$1,860,173,377) 1,817,999,596
- ----------------------------------------------------------------------------------------------------------------------=============
\Short-Term
Investment 7.08% Federal Home Loan Mortgage Corp. Discount Note 5.61% due 12/1/1999
(Cost $106,620,000)
106,620 106,620,000
- ----------------------------------------------------------------------------------------------------------------------=============
Total Investments 127.83% (Cost
$1,966,793,377) 1,924,619,596
====================================================================================================================================
Other Assets, Less Liabilities (27.83)%
====================================================================================================================================
Other (See Note
5)
115,042,981
- ----------------------------------------------------------------------------------------------------------------------==============
Cash
17,095
- ----------------------------------------------------------------------------------------------------------------------=============
Receivables for: Securities
sold 147,572,783
Interest 10,043,353
Capital shares
sold 554,085
Total Other
Assets 273,230,297
- ----------------------------------------------------------------------------------------------------------------------=============
Payables for: Securities
purchased 564,174,280
Collateral on securities
loaned 115,042,981
Dividends 7,129,224
Capital shares
reacquired 3,402,975
Other 2,510,361
Total
Liabilities 692,259,821
- ----------------------------------------------------------------------------------------------------------------------==============
Total Other Assets, Less
Liabilities (419,029,524)
====================================================================================================================================
Net Assets
100.00%
$1,505,590,072
====================================================================================================================================
Class A Shares-Net asset value ($1,354,029,741 / 552,850,389 shares
outstanding) $2.45
Maximum offering price (net asset value plus sales charge of 4.75% of the offering
price) $2.57
Class B Shares-Net asset value ($33,181,077 / 13,531,794 shares
outstanding) $2.45
Class C Shares-Net asset value ($118,379,254 / 48,238,869 shares
outstanding) $2.45
+Securities (or a portion of securities) on loan. See Note 5.
See Notes to Financial Statements.
Statement of Net Assets
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Principal
Amount
Investments
(000) Value
- -----------------------------------------------------------------------------------------------------------------------------------
Long-Term Investments in Securities 115.45%
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations
2.79% U.S. Treasury Note Inflation Indexed 3 7/8% due 1/15/2009 $
68 $ 68,149
U.S. Treasury Note 71/4% due 5/15/2004
370 385,203
Total 453,352
- ------------------------------------------------------------------------------------------------------------------------===========
U.S. Government Agency Federal National Mortgage Association 5 5/8% due 5/14/2004
778 749,673
Debentures 5.46% Federal National Mortgage Association 6 1/4% due 11/15/2002
138 137,418
Total 887,091
- ------------------------------------------------------------------------------------------------------------------------===========
Federal Home Loan 6 1/2% due 2000 to 2001
259 259,152
Mortgage Corporation 7% due 11/1/2000
39 38,961
Pass-Through Securities 27.44% 7% due on an announced basis
1,038 1,014,001
7 1/2% due on an announced basis
2,275 2,268,607
8% due on an announced basis
865 878,243
Total 4,458,964
- ------------------------------------------------------------------------------------------------------------------------===========
8
<PAGE>
Statement of Net Assets
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Principal
Amount
Investments
(000) Value
- -----------------------------------------------------------------------------------------------------------------------------------
Federal National 5% due 2000 to 2001 $
307 $ 295,034
Mortgage Association 5 1/2% due 2000 to 2001
1,086 1,075,926
Pass-Through Securities 23.85% 6% due 2000 to 2028
1,304 1,282,885
6 1/2% due 2000 to 2011
929 918,923
6.77% due 12/1/2003
97 96,414
7.25% due 9/1/2003
33 33,687
7.28% due 10/1/2003
57 57,954
7.31% due 7/1/2003
68 68,536
7 1/2% due 2/1/2000
46 45,923
Total 3,875,282
- ------------------------------------------------------------------------------------------------------------------------===========
Government National 7% due 2028
731 714,416
Mortgage Association 8% due 2027 to 2028
402 409,119
Pass-Through Securities 8.66% 10% due 6/15/2019
47 50,291
10 1/2% due 2016 to 2020
214 233,565
Total 1,407,391
- ------------------------------------------------------------------------------------------------------------------------===========
Collateralized Mortgage Federal Home Loan Mortgage Corp. 1702-A PL 5% due 10/15/2016
57 56,164
Obligations 47.25% Federal Home Loan Mortgage Corp. 1638 A 51/4% due 1/15/2019
75 74,586
Federal Home Loan Mortgage Corp. 1489 F 51/2% due 7/15/2005
80 79,614
Federal Home Loan Mortgage Corp. 1618 E 51/2% due 8/15/2005
195 194,036
Federal Home Loan Mortgage Corp. 1604 E 51/2% due 3/15/2007
188 186,733
Federal Home Loan Mortgage Corp. 1591 PE 51/2% due 11/15/2016
172 170,788
Federal Home Loan Mortgage Corp. 1506 PE 5.65% due 7/15/2005
72 71,295
Federal Home Loan Mortgage Corp. 1506 E 5.70% due 4/15/2005
100 99,967
Federal Home Loan Mortgage Corp. 1659 PE 5 3/4% due 5/15/2007
131 129,951
Federal Home Loan Mortgage Corp. 1584 E 5 3/4% due 10/15/2016
398 395,950
Federal Home Loan Mortgage Corp. 1633 PW 5 3/4% due 10/15/2017
18 17,752
Federal Home Loan Mortgage Corp. 1521 C 5.80% due 7/15/2000
138 137,322
Federal Home Loan Mortgage Corp. 1614 G 5.80% due 2/15/2019
48 47,303
Federal Home Loan Mortgage Corp. 1488 PH 5.84% due 4/15/2008
17 17,319
Federal Home Loan Mortgage Corp. 1558 F 5.84% due 5/15/2022
101 102,097
Federal Home Loan Mortgage Corp. 1693 K 6% due 3/15/2001
315 313,674
Federal Home Loan Mortgage Corp. 1538 E 6% due 3/15/2005
284 282,823
Federal Home Loan Mortgage Corp. 1697 PR 6% due 4/15/2006
46 46,070
Federal Home Loan Mortgage Corp. 1561 ZB 6% due 8/15/2006
243 242,043
Federal Home Loan Mortgage Corp. 16 PE 6% due 8/25/2015
181 179,663
Federal Home Loan Mortgage Corp. 1658 AC 6% due 10/15/2019
24 24,213
Federal Home Loan Mortgage Corp. 1540 C 6.05% due 2/15/2011
63 62,767
Federal Home Loan Mortgage Corp. 1714 E 61/4% due 9/15/2018
175 174,937
Federal Home Loan Mortgage Corp. 1995 EM 63/8% due 8/15/2011
79 79,268
Federal Home Loan Mortgage Corp. 1404 C 6.40% due 2/15/2005
30 29,733
Federal Home Loan Mortgage Corp. 1417 G 6 1/2% due 7/15/2006
300 299,811
Federal Home Loan Mortgage Corp. 1533 A 6 1/2% due 4/15/2020
95 94,609
Federal Home Loan Mortgage Corp. 1460 E 6.70% due 1/15/2005
104 103,992
Federal National Mortgage Association 1993-248 PA 4 1/2% due 4/25/2023
128 126,022
Federal National Mortgage Association 1993-97 E 5% due 5/25/2023
58 57,471
Federal National Mortgage Association G93-32 PE 5% due 9/25/2023
158 151,932
Federal National Mortgage Association 94-23 PT 5 1/8% due 7/25/2017
119 117,579
Federal National Mortgage Association 1993-87 N 5 1/4% due 11/25/2016
47 46,226
Federal National Mortgage Association 94-28 A 5 1/4% due 8/25/2018
43 42,907
Federal National Mortgage Association 1993-227 E 5 1/2% due 12/25/2000
247 245,104
9
<PAGE>
Statement of Net Assets
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Principal
Amount
Investments
(000) Value
- -----------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 1993-221 B 5 1/2% due 11/25/2006 $
101 $ 99,905
Federal National Mortgage Association 93-214 E 5 1/2% due 3/25/2007
49 48,881
Federal National Mortgage Association 93-32 EB 5 1/2% due 12/25/2018
0 196
Federal National Mortgage Association 93-206 5.65% due 5/25/2017
332 329,246
Federal National Mortgage Association 1993-59 E 5 3/4% due 4/25/2006
68 67,456
Federal National Mortgage Association 1993-170 E 5 3/4% due 8/25/2006
61 60,133
Federal National Mortgage Association 1994-32 PD 5 3/4% due 1/25/2007
73 72,097
Federal National Mortgage Association 1993-147 E 5 3/4% due 11/25/2016
56 55,320
Federal National Mortgage Association 1993-167 EA 5 3/4% due 2/25/2017
96 95,592
Federal National Mortgage Association 1993-141 PE 5 3/4% due 5/25/2017
171 170,155
Federal National Mortgage Association 93-41 PE 5 3/4% due 4/25/2019
35 34,380
Federal National Mortgage Association 1994-13 PE 5.80% due 12/25/2006
228 226,322
Federal National Mortgage Association 1994-120 PD 5.85% due 12/25/2006
213 211,913
Federal National Mortgage Association 93-134 D 5.90% due 11/25/2005
55 55,169
Federal National Mortgage Association G 93-22 E 5.95% due 6/25/2016
30 29,435
Federal National Mortgage Association 93-212 C 6% due 11/25/2000
85 84,082
Federal National Mortgage Association X-109 A G 6% due 8/25/2005
49 48,683
Federal National Mortgage Association G-93-11 C 6% due 1/25/2007
71 70,990
Federal National Mortgage Association 98-13 PA 6% due 4/18/2008
33 33,224
Federal National Mortgage Association 1998-24 QA 6% due 2/18/2009
74 73,921
Federal National Mortgage Association 1993-61 E 6% due 8/25/2016
46 45,515
Federal National Mortgage Association 1993-120 E 6% due 11/25/2016
95 94,695
Federal National Mortgage Association 1993-145 A 6% due 8/25/2017
123 122,123
Federal National Mortgage Association 1993-60 A 6% due 2/25/2018
71 71,087
Federal National Mortgage Association 1993-29 PE 6% due 11/25/2019
274 273,086
Federal National Mortgage Association 93-118 E 6.10% due 12/25/2004
36 35,752
Federal National Mortgage Association 1993-129 D 6.10% due 6/25/2005
52 52,066
Federal National Mortgage Association 1994-56 E 6 1/4% due 4/25/2017
253 252,250
Federal National Mortgage Association 1993-187 SE 6.58% due 11/25/2016
65 62,429
Federal National Mortgage Association 1993-10 PE 6 1/2% due 10/25/2004
41 40,963
Federal National Mortgage Association 96-53 FA 5.94% due 12/25/2003
67 66,964
Federal National Mortgage Association G94-1 F 6.04% due 1/25/2024
101 100,964
Federal National Mortgage Association 1993-147 FG 6.14% due 8/25/2023
42 41,447
Federal National Mortgage Association 1992-131 H 71/2% due 6/25/2021
49 49,132
Total 7,677,294
- --------------------------------------------------------------------------------------------------------------------------=========
Total Long-Term Investments in Securities (Cost
$18,953,609) 18,759,374
===================================================================================================================================
Short-Term Investment 6.38% Federal National Mortgage Association Discount Note 5.69% due 12/1/1999
(Cost $1,037,000)
1,037 1,037,000
- --------------------------------------------------------------------------------------------------------------------------=========
Total Investments 121.83% (Cost
$19,990,609) 19,796,374
===================================================================================================================================
Other Assets, Less Liabilities (21.83)%
===================================================================================================================================
Receivable for: Securities
sold 1,007,987
Interest 149,667
Capital shares
sold 15,240
Total Other
Assets 1,172,894
- --------------------------------------------------------------------------------------------------------------------------=========
Payable for: Securities
purchased 4,431,615
Capital shares
reacquired 220,232
Dividends 62,420
Other 5,974
Total
Liabilities 4,720,241
- --------------------------------------------------------------------------------------------------------------------------=========
Total Other Assets, Less
Liabilities (3,547,347)
===================================================================================================================================
Net Assets
100.00%
$16,249,027
===================================================================================================================================
10
<PAGE>
Statement of Net Assets
LIMITED DURATION U.S. GOVERNMENT SECURITIES SERIES November 30, 1999
Class A Shares-Net asset value ($10,319,968 / 2,376,194 shares
outstanding) $4.34
Maximum offering price (net asset value plus sales charge of 3.00% of the offering
price) $4.47
Class C Shares-Net asset value ($5,929,059 / 1,369,343 shares
outstanding) $4.33
See Notes to Financial Statements.
Statement of Net Assets
BALANCED SERIES November 30, 1999
Investments
Shares Value
===================================================================================================================================
Investments in Securities 99.61%
===================================================================================================================================
Lord Abbett Affiliated Fund, Inc.-Class Y
3,404,414 $ 50,112,967
Lord Abbett Bond-Debenture Fund, Inc.-Class Y
5,550,664 49,622,932
Total (Cost
$103,619,650) 99,735,899
- -----------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities
.39% 394,568
===================================================================================================================================
Net Assets
100.00%
$100,130,467
===================================================================================================================================
Class A Shares-Net asset value ($72,073,680 / 5,840,499 shares
outstanding) $12.34
Maximum offering price (net asset value plus sales charge of 5.75% of the offering
price) $13.09
Class B Shares-Net asset value ($13,148,916 / 1,067,624 shares
outstanding) $12.32
Class C Shares-Net asset value ($14,907,871 / 1,211,384 shares
outstanding) $12.31
See Notes to Financial Statements.
Statement of Net Assets
HIGH YIELD FUND November 30, 1999
Principal
Amount
Investments
(000) Value
===================================================================================================================================
Long-Term Investments in Securities 93.92%
===================================================================================================================================
Investment Grade Corporate Bonds 1.73%
===================================================================================================================================
Broadcasters 1.35% Fox/Liberty Networks LLC Zero Coupon due 2007*
$485 $ 386,787
- -------------------------------------------------------------------------------------------------------------------------==========
Cable TV .38% Fundy Cable Ltd. 11/2005 (F)
100 108,125
- -------------------------------------------------------------------------------------------------------------------------==========
Total Investments in Investment Grade Corporate Bonds (Cost
$488,670) 494,912
===================================================================================================================================
High-Yield Corporate Debt 90.36%
===================================================================================================================================
Airlines 1.58% America West Airlines Inc. 103/4/2005
450 452,250
- -------------------------------------------------------------------------------------------------------------------------==========
Automotive 6.44% Accuride Corp. 9 1/4/2008
500 452,500
Collins & Aikman Products Co. 11 1/2/2006
500 492,500
Dura Operating Corp. 9/2009
350 332,500
Oshkosh Truck Corp. 8 3/4/2008
325 316,875
Tenneco Inc. 11 5/8/2009+
250 252,500
Total 1,846,875
- --------------------------------------------------------------------------------------------------------------------------=========
Broadcasters 8.53% Albritton Communications Co. 9 3/4/2007
500 506,250
Chancellor Media AMFM Inc. 10 1/2/2007
250 273,750
Chancellor Radio Broadcasting AMFM Inc. 9 3/8/2004
250 259,375
Grupo Televisa, SA 11 7/8/2006 (F)
275 294,250
Interep National Radio Sales Inc. 10/2008
250 249,375
11
<PAGE>
Statement of Net Assets
HIGH YIELD FUND November 30, 1999
Principal
Amount
Investments
(000) Value
===================================================================================================================================
Sinclair Broadcasting Group Inc. 10/2005
$700 $ 698,250
TV Azteca SA de CV 10 1/2/2007 (F)
200 166,500
Total 2,447,750
- -------------------------------------------------------------------------------------------------------------------------==========
Building Materials 1.56% Euramax International plc 11 1/4/2006 (F)
200 203,000
Nortek Inc. 91/8/2007
250 245,000
Total 448,000
- -------------------------------------------------------------------------------------------------------------------------==========
Cable TV 10.06% Bresnan Communications Group Zero Coupon due 2009*
500 343,750
Century Communications Corp. 8 3/8/2007
55 52,112
Charter Communication Holdings Zero Coupon due 2011*
500 303,750
Frontiervision Holdings Capital Zero Coupon due 2007*
500 441,250
NTL Communications Corp. 10/2007
355 367,425
NTL Communications Corp. Zero Coupon due 2008*
500 350,000
Telewest Communications plc Zero Coupon due 2009*+ (F)
500 312,500
United Pan - Europe Comm 11 1/4/2009+ (F)
300 313,500
United Pan - Europe Comm Zero Coupon due 2009*+ (F)
700 402,500
Total 2,886,787
- -------------------------------------------------------------------------------------------------------------------------==========
Capital Goods .81% BE Aerospace Inc. 9 7/8/2006
250 231,875
- -------------------------------------------------------------------------------------------------------------------------==========
Chemicals 2.45% Huntsman Corp. 9 1/2/2007+
250 233,750
Huntsman ICI Chemicals 10 1/8/2009+
100 102,750
Lyondell Chemical Co. 9 5/8/2007
250 260,625
Sterling Chemical Inc. 11 3/4/2006
150 105,750
Total 702,875
- -------------------------------------------------------------------------------------------------------------------------==========
Consumer Products 1.71% Chattem Inc. 8 7/8/2008
250 226,250
Rayovac Corp. 10 1/4/2006
107 113,153
Riddell Sports Inc. 10 1/2/2007
175 151,375
Total 490,778
- -------------------------------------------------------------------------------------------------------------------------==========
Containers 2.87% Portola Packaging Inc. 10 3/4/2005
100 102,000
Stone Container Corp. 10 3/4/2002
250 258,438
US Can Corp. 10 1/8/2006
450 461,250
Total 821,688
- -------------------------------------------------------------------------------------------------------------------------==========
Diversified Media 2.43% Ackerly Group Inc. 9/2009
500 491,250
Lamar Media Corp. 9 5/8/2006
200 207,000
Total 698,250
- -------------------------------------------------------------------------------------------------------------------------==========
Electric Utilities .70% AEI Holding Inc. 10 1/2/2005+
250 201,250
- -------------------------------------------------------------------------------------------------------------------------==========
Energy 3.28% Chesapeake Energy Corp. 9 5/8/2005
150 144,750
Flores & Rucks 9 3/4/2006
500 545,625
Gulf Canada Resources Ltd. 9 1/4/2004 (F)
10 10,135
HS Resources Inc. 9 7/8/2003
50 50,187
Plains Resources Inc. 10 1/4/2006+
200 191,000
Total 941,697
- -------------------------------------------------------------------------------------------------------------------------==========
Entertainment .81% Loews Cineplex 8 7/8/2008
250 232,500
- -------------------------------------------------------------------------------------------------------------------------==========
Food 3.78% Aurora Foods Inc. 9 7/8/2007
250 255,625
Del Monte Foods Co. Zero Coupon due 2007*
500 385,000
Doane Pet Care Co. 9 3/4/2007
245 236,731
Leiner Health Products Inc. 9 5/8/2007
225 206,342
Total 1,083,698
- -------------------------------------------------------------------------------------------------------------------------==========
12
<PAGE>
Statement of Net Assets
HIGH YIELD FUND November 30, 1999
Principal
Amount
Investments
(000) Value
===================================================================================================================================
Gaming 2.29% Aztar Corp. 8 7/8/2007
$250 $ 244,375
Mohegan Tribal Gaming Authority 83/4/2009
250 247,500
Trump Atlantic City Associates Funding Inc. 111/4/2006
200 164,000
Total 655,875
- -------------------------------------------------------------------------------------------------------------------------==========
Homebuilders .89% D. R. Horton, Inc. 10/2006
250 256,250
- -------------------------------------------------------------------------------------------------------------------------==========
Hotels .86% Host Marriott Travel Plazas Inc. 91/2/2005
235 246,254
- -------------------------------------------------------------------------------------------------------------------------==========
Miscellaneous .84% Republic Of Argentina 11 3/8/2017 (F)
250 240,313
- -------------------------------------------------------------------------------------------------------------------------==========
Paper 3.36% Crown Paper Co. 11/2005
200 141,000
Packaging Corp. 9 5/8/2009
500 518,750
Tembec Industries Inc. 8 5/8/2009 (F)
300 303,750
Total 963,500
- -------------------------------------------------------------------------------------------------------------------------==========
Publishing/Printing .94% R.H. Donnelly Inc. 9 1/8/2008
275 270,875
- -------------------------------------------------------------------------------------------------------------------------==========
Retail .58% Amazon.Com Inc. Zero Coupon due 2008*
250 165,000
- -------------------------------------------------------------------------------------------------------------------------==========
Services 3.30% Avis Rent A Car Inc. 11/2009
250 263,125
Budget Group Inc. 9 1/8/2006
200 178,000
Iron Mountain Inc. 10 1/8/2006
250 256,875
Pierce Leahy Corp. 9 1/8/2007
250 248,750
Total 946,750
- -------------------------------------------------------------------------------------------------------------------------==========
Steel/Metals 2.27% AK Steel Corp. 9 1/8/2006
250 256,250
Republic Technology 13 3/4/2009+
200 141,000
WCI Steel Inc. 10/2004
250 255,000
Total 652,250
- -------------------------------------------------------------------------------------------------------------------------==========
Technology 4.38% Fisher Scientific International Inc. 9/2008
250 240,000
L-3 Communications Corp. 10 3/8/2007
350 362,250
Verio Inc. 11 1/4/2008
350 366,625
Verio Inc. 10 5/8/2009+
200 204,000
Viasystems Inc. 9 3/4/2007
150 84,750
Total 1,257,625
- -------------------------------------------------------------------------------------------------------------------------==========
Telecommunications 23.43% Call-Net Enterprises Inc. Zero Coupon due 2008* (F)
200 105,000
Cencall Communications Corp. 10 1/8/2004*
500 516,250
Clearnet Communications Zero Coupon due 2009* (F)
500 310,000
Esprit Telecom Group plc 10 7/8/2008 (F)
300 297,000
GST USA Inc. Zero Coupon due 2005*
245 180,075
Global Crossing Holdings Ltd. 9 1/8/2006+
200 198,250
ICG Holdings Inc. Zero Coupon due 2005*
595 516,103
Intermedia Communications Inc. Zero Coupon due 2007*
250 183,750
Intermedia Communications Inc. Zero Coupon due 2009*
200 117,000
Logix Communications Enterprises, Inc. 12 1/4/2008
250 195,625
McLeod USA Inc. Zero Coupon due 2007*
250 201,250
Metromedia Fiber Network 10/2009
200 203,000
Nextel Communications Inc. Zero Coupon due 2008*
500 362,500
Nextlink Communications Inc. 10 3/4/2008
300 307,500
Nextlink Communications Inc. Zero Coupon due 2009*
300 181,500
Price Communications Wireless 9 1/8/2006
250 256,563
RSL Communications plc 12/2008 (F)
300 304,500
Rogers Cantel Inc. 8.30/2007 (F)
250 253,125
SBA Communications Corp. Zero Coupon due 2008*
250 148,750
13
<PAGE>
Statement of Net Assets
HIGH YIELD FUND November 30, 1999
Principal
Amount
Investments
(000)
or
Shares Value
===================================================================================================================================
Versatel Telecommunications 11 7/8/2009 (F)
$250 $ 252,500
Viatel Inc. 11 1/4/2008
500 497,500
Voicestream Wire Co. 10 3/8/2009+
300 314,250
Western Wireless Corp. 10 1/2/2006
430 453,650
Williams Communications Group Inc. 10 7/8/2009
350 366,625
Total 6,722,266
- -------------------------------------------------------------------------------------------------------------------------==========
Textiles .21% GFSI, Inc. 9 5/8/2007
100 60,500
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments in High-Yield Corporate Debt (Cost
$26,814,771) 25,923,731
===================================================================================================================================
Convertible Debt .83%
===================================================================================================================================
Energy .39% Parker Drilling Co. 5 1/2/2004
150 111,000
- -------------------------------------------------------------------------------------------------------------------------==========
Technology .44% Lattice Semiconductor Co. 4 3/4/2006+
100 128,062
- -------------------------------------------------------------------------------------------------------------------------==========
Total Investments in Convertible Debt (Cost
$208,815) 239,062
===================================================================================================================================
Convertible-Preferred Stocks 1.00%
===================================================================================================================================
Cable TV .60% Unitedglobalcom 7%
2,500 shs. 172,812
- -------------------------------------------------------------------------------------------------------------------------==========
Telecommunications .40% DECS Trust VI 6.25% due 2002
3,000 shs. 113,438
- -------------------------------------------------------------------------------------------------------------------------==========
Total Investments in Convertible-Preferred Stocks (Cost
$243,313) 286,250
- -------------------------------------------------------------------------------------------------------------------------==========
Total Long-Term Investments (Cost
$27,755,569) 26,943,955
- -------------------------------------------------------------------------------------------------------------------------==========
Short-Term Investment 4.09% Associates Corp. 5.68% due 12/1/1999 (Cost $1,175,000)
1,175 1,175,000
- -------------------------------------------------------------------------------------------------------------------------==========
Total Investments 98.01% (Cost
$28,930,569) 28,118,955
- -------------------------------------------------------------------------------------------------------------------------==========
Cash and Receivables, Net of Liabilities
1.99% 570,016
===================================================================================================================================
Net Assets
100.00%
$28,688,971
===================================================================================================================================
Class A Shares-Net asset value ($14,133,125 / 1,454,162 shares
outstanding) $ 9.72
Maximum offering price (net asset value plus sales charge of 4.75% of the offering
price) $10.20
Class B Shares-Net asset value ($8,609,577 / 887,440 shares
outstanding) $ 9.70
Class C Shares-Net asset value ($5,945,149 / 612,638 shares
outstanding) $ 9.70
Class Y Shares-Net asset value ($1,120 / 115.112 shares
outstanding) $ 9.73
*Deferred interest debentures pay no interest for a stipulated number of years,
after which they pay a
predetermined coupon rate.
+Restricted security under Rule 144A.
(F)Foreign security.
See Notes to Financial Statements.
</TABLE>
14
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
12/31/98*
through
Year Ended November 30,
1999 11/30/99
- ----------------------------------------------------------------------------------------------------------------------------------
Limited Duration
U.S. Government U.S. Government
Balanced High Yield
Investment Income Securities Series Securities Series
Series Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C> <C>
Income Interest $ 120,525,227 $ 943,808 $
13,139 $1,818,026
Dividends - -
3,923,604 8,594
Total income 120,525,227 943,808
3,936,743 1,826,620
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses Management fee 8,529,176 72,512
613,069 113,526
Management fee waived - (72,512)
(613,069) (113,526)
12b-1 distribution plan-Class A 5,042,830 -
149,991 48,267
12b-1 distribution plan-Class B 322,559 -
99,891 49,952
12b-1 distribution plan-Class C 1,326,857 54,823
112,293 40,115
Shareholder servicing 2,392,832 24,234
161,242 18,132
Reports to shareholders 276,740 2,644
17,971 2,859
Professional 195,512 12,256
16,645 9,142
Trustees' fees 88,031 844
1,956 235
Registration 69,476 25,740
40,768 21,455
Organization - -
7,615 -
Other 183,227 8,596
1,629 3,230
Total expenses before reductions and reimbursements 18,427,240 129,137
610,001 193,387
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses assumed by Lord Abbett -
(25,740) - (55,053)
Expenses assumed by Underlying Funds - -
(243,817) -
Expense reductions (323,280) (6,824)
(4,009) -
- ----------------------------------------------------------------------------------------------------------------------------------
Net expenses 18,103,960 96,573
362,175 138,334
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 102,421,267 847,235
3,574,568 1,688,286
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- ----------------------------------------------------------------------------------------------------------------------------------
Capital gain received from Underlying Funds - -
5,313,805 -
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment transactions (42,249,816) (240,747)
302,422 (301,197)
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments (83,086,441) (289,099)
(2,306,194) (811,614)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (125,336,257) (529,846)
3,310,033 (1,112,811)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)in Net Assets Resulting from Operations $ (22,914,990) $ 317,389
$6,884,601 $ 575,475
- ----------------------------------------------------------------------------------------------------------------------------------
*Commencement of operations.
See Notes to Financial Statements.
</TABLE>
15
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
12/31/98*
through
Year Ended November 30, 1999 11/30/99
- -----------------------------------------------------------------------------------------------
Limited Duration
Increase (Decrease) U.S. Government U.S. Government Balanced High Yield
in Net Assets Securities Series Securities Series Series Fund
- -----------------------------------------------------------------------------------------------
Operations
<S> <C> <C> <C> <C>
Net investment income $ 102,421,267 $ 847,235 $ 3,574,568 $ 1,688,286
Capital gain received
from Underlying Funds - - 5,313,805 -
Net realized gain (loss) from
investment transactions (42,249,816) (240,747) 302,422 (301,197)
Net change in unrealized
appreciation (depreciation)
of investments (83,086,441) (289,099) (2,306,194) (811,614)
Net increase (decrease)
in net assets resulting
from operations (22,914,990) 317,389 6,884,601 575,475
- -----------------------------------------------------------------------------------------------
Distributions to shareholders
from net investment income:
Class A (97,345,650) (472,868) (2,628,685) (876,233)
Class B (1,803,475) - (356,628) (430,430)
Class C (7,819,153) (260,051) (401,107) (348,682)
Class Y - - - (61)
Total (106,968,278) (732,919) (3,386,420) (1,655,406)
- -----------------------------------------------------------------------------------------------
Distributions to shareholders
from net realized gain from
investment transactions:
Class A - - (4,050,949) -
Class B - - (489,278) -
Class C - - (712,935) -
Class Y - - - -
Total - - (5,253,162) -
- -----------------------------------------------------------------------------------------------
Total distributions (106,968,278) (732,919) (8,639,582) (1,655,406)
- -----------------------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales
of shares 172,166,389 17,365,011 48,045,051 34,490,372
Net asset value of shares
issued in reinvestments of
dividends and distributions 60,370,240 408,519 8,333,627 1,171,760
Total 232,536,629 17,773,530 56,378,678 35,662,132
- -----------------------------------------------------------------------------------------------
Cost of shares reacquired (499,467,543) (12,108,778) (12,167,934) (5,893,230)
- -----------------------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from capital
share transactions (266,930,914) 5,664,752 44,210,744 29,768,902
- -----------------------------------------------------------------------------------------------
Increase (decrease) in
net assets (396,814,182) 5,249,222 42,455,763 28,688,971
- -----------------------------------------------------------------------------------------------
Net Assets
Beginning of year 1,902,404,254 10,999,805 57,674,704 -
- -----------------------------------------------------------------------------------------------
End of year+ $1,505,590,072 $16,249,027 $100,130,467 $28,688,971
- -----------------------------------------------------------------------------------------------
Operations
Net investment income $ 128,422,834 $ 523,900 $ 1,369,504
Capital gain received
from Underlying Funds - - 2,155,289
Net realized gain (loss) from
investment transactions 42,447,914 39,648 3,090,748
Net change in unrealized
appreciation (depreciation)
of investments 4,102,771 60,289 (3,714,929)
Net increase (decrease)
in net assets resulting
from operations 174,973,519 623,837 2,900,612
- -------------------------------------------------------------------------------
Distributions to shareholders
from net investment income:
Class A (121,519,231) (292,470) (1,149,118)
Class B (1,432,091) - (35,604)
Class C (9,773,665) (192,017) (156,346)
Class Y - - -
Total (132,724,987) (484,487) (1,341,068)
- -------------------------------------------------------------------------------
Distributions to shareholders
from net realized gain from
investment transactions:
Class A - - (482,408)
Class B - - -
Class C - - (88,565)
Class Y - - -
Total - - (570,973)
- -------------------------------------------------------------------------------
Total distributions (132,724,987) (484,487) (1,912,041)
- -------------------------------------------------------------------------------
Capital share transactions:
Net proceeds from sales
of shares 122,718,704 9,901,812 40,507,038
Net asset value of shares
issued in reinvestments of
dividends and distributions 68,148,560 324,512 1,728,386
Total 190,867,264 10,226,324 42,235,424
- -------------------------------------------------------------------------------
Cost of shares reacquired (617,123,489) (9,642,090) (5,889,716)
- -------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from capital
share transactions (426,256,225) 584,234 36,345,708
- -------------------------------------------------------------------------------
Increase (decrease) in
net assets (384,007,693) 723,584 37,334,279
- -------------------------------------------------------------------------------
Net Assets
Beginning of year 1, 2,286,411,947 10,276,221 20,340,425
- -------------------------------------------------------------------------------
End of year+ $1,$1,902,404,254 $10,999,805 $57,674,704
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
+ Including undistributed (overdistributed) net investment income of
$(6,938,931), $166,236, $228,203 and $32,880, respectively, as of November
30, 1999 and $(2,391,920), $51,920 and $40,055, respectively, as of
November 30, 1998. See Notes to Financial Statements.
16
<PAGE>
Financial Highlights
U.S. Government Securities Series
<TABLE>
<CAPTION>
Class A Shares
- -----------------------------------------------------------------------------------------------------------------------------------
Year
Ended November 30,
Per Share Operating Performance: 1999 1998 1997
1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
Net asset value, beginning of year $2.64 $2.59 $2.63
$2.73 $2.59
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .15(d) .17(d) .20(d)
.215 .235
Net realized and unrealized gain (loss) on investments (.18) .05 (.03)
(.105) .136
Total from investment operations (.03) .22 .17
.11 .371
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.16) (.17) (.21)
(.210) (.231)
Distribution from net realized gain - -
- - - -
Total distributions (.16) (.17) (.21)
(.210) (.231)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $2.45 $2.64 $2.59
$2.63 $2.73
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) (.72)% 8.86% 6.67%
4.41% 14.89%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.02%(e) 0.96%(e) 0.92%(e)
0.88% 0.90%
Net investment income 6.07% 6.36% 7.82%
8.12% 8.85%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B
Shares Class C Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year
Year
Ended
Ended
November 30, 8/1/96(a) November
30, 7/15/96(a)
Per Share Operating Performance: 1999 1998 1997 to 11/30/96 1999 1998
1997 to 11/30/96
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
Net asset value, beginning of year $2.64 $2.58 $2.63 $2.57 $2.65 $2.59
$2.63 $2.55
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .14(d) .14(d) .18(d) .063 .14(d)
.15(d) .18(d) .066
Net realized and unrealized gain (loss)
on investments (.19) .07 (.04) .060 (.20)
.06 (.03) .085
Total from investment operations (.05) .21 .14 .123 (.06)
.21 .15 .151
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.14) (.15) (.19) (.063) (.14)
(.15) (.19) (.071)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $2.45 $2.64 $2.58 $2.63 $2.45 $2.65
$2.59 $2.63
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) (1.43)% 8.49% 5.47% 5.45%(c) (1.80)%
8.47% 5.86% 6.49%(c)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.69%(e) 1.66%(e) 1.64%(e) 0.48%(c) 1.64%(e)
1.62%(e) 1.55%(e) 0.60%(c)
Net investment income 5.33% 5.36% 6.77% 2.21%(c) 5.46%
5.69% 7.25% 2.60%(c)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended November
30,
Supplemental Data for AllClasses: 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets, end of year (000) $1,505,590 $1,902,404 $2,286,412 $2,907,291 $3,272,865
Portfolio turnover rate 396.37% 399.64% 712.82% 820.59%
544.31%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of offering respective class shares.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Calculated using average shares outstanding during the year.
(e) The ratio includes expenses paid through an expense offset arrangement. See
Notes to Financial Statements.
17
<PAGE>
Financial Highlights
Limited Duration Series
<TABLE>
<CAPTION>
Class A Shares
- ----------------------------------------------------------------------------------------------------------------------------------
Year One
Ended Month
November 30,
Ended Year Ended
Per Share Operating Performance: 1999 1998 1997 11/30/96
10/31/96 10/31/95
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C> <C>
Net asset value, beginning of year $ 4.46 $ 4.40 $ 4.42 $ 4.39 $
4.53 $ 4.44
Income from investment operations
Net investment income .27(e) .26(e) .25(e) .0174
.1912 .2316
Net realized and unrealized gain (loss) on investments (.15) .04 (.02) .0333
(.0751) .1017
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .12 .30 .23 .0507
.1161 .3333
Distributions
Dividends from net investment income (.24) (.24) (.25) (.0207)
(.2561) (.2433)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 4.34 $ 4.46 $ 4.40 $ 4.42 $
4.39 $ 4.53
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 3.05% 7.06% 5.46% 1.15%(c)
2.67% 8.16%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver and reimbursements .32%(d) 0.47%(d) 0.51%(d) 0.11%(c)
1.81% 1.40%
Expenses, excluding waiver and reimbursements 1.00%(d) 1.38%(d) 1.40%(d) 0.13%(c)
2.73% 1.71%
Net investment income 6.21% 5.86% 5.81% 0.41%(c)
4.58% 5.62%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended One
Month
November 30,
Ended 7/15/96(a)
Per Share Operating Performance: 1999 1998 1997
11/30/96 to 10/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
Net asset value, beginning of year $4.47 $ 4.40 $4.42
$4.39 $4.34
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .23(e) .22(e) .21(e)
.0138 .0667
Net realized and unrealized gain (loss) on investments (.17) .05 (.02)
.0342 .0515
Total from investment operations .06 .27 .19
.0480 .1182
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.20) (.20) (.21)
(.0180) (.0682)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 4.33 $4.47 $4.40
$4.42 $4.39
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 1.33% 6.23% 4.45%
1.09%(c) 2.98%(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver and reimbursements 1.29%(d) 1.35%(d) 1.44%(d)
0.19%(c) 0.69%(c)
Expenses, excluding waiver and reimbursements 1.97%(d) 2.26%(d) 2.32%(d)
0.21%(c) 0.77%(c)
Net investment income 5.30% 4.94% 4.84%
0.33%(c) 1.26%(c)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended One
November 30, Month
Ended Year Ended
Supplemental Data for AllClasses: 1999 1998 1997 11/30/96
10/31/9610/31/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<C> <C>
Net assets, end of year (000) $16,249 $11,000 $10,276 $12,696
$12,735 $8,922
Portfolio turnover rate 310.16% 346.67% 343.53% 175.98%
340.62% 222.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of offering respective class shares.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) The ratio includes expenses paid through an expense offset arrangement.
(e) Calculated using average shares outstanding during the year.
See Notes to Financial Statements.
18
<PAGE>
Financial Highlights
Balanced Series
<TABLE>
<CAPTION>
Class A Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended One Month
November 30, Ended Year
Ended 12/27/94(a)
Per Share Operating Performance: 1999 1998 1997 11/30/96
10/31/96 to 10/31/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C> <C>
Net asset value, beginning of year $12.87 $12.80 $11.81 $11.30
$10.71 $ 9.52
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .54(e) .54(e) .47(e) .0312
.472 .365
Net realized and unrealized gain on investments .61 .40 1.15 .5208
.732 1.185
Total from investment operations 1.15 .94 1.62 .552
1.204 1.55
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.54) (.52) (.46) (.0420)
(.462) (.36)
Distributions from net realized gain (1.14) (.35) (.17) -
(.152) -
Total distributions (1.68) (.87) (.63) (.0420)
(.614) (.36)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $12.34 $12.87 $12.80 $11.81
$11.30 $10.71
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 10.01% 7.69% 14.24% 4.89%(c)
11.55% 16.32%(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver and reimbursements .25% 0.27%(f) 1.10%(f) 0.07%(c)
0.93% 0.37%(c)
Expenses, excluding waiver and reimbursements
from Lord Abbett 1.00% 0.92%(f) 1.53%(f) 0.11%(c)
1.59% 1.26%(c)
Net investment income 4.41% 4.28% 3.89% 0.26%(c)
4.18% 4.39%(c)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class B
Shares Class C Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended One
Month
5/1/98(d) November 30,
Ended 7/15/96(d)
Per Share Operating Performance: 1999 to 11/30/98 1999 1998 1997
11/30/96 to 10/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<C> <C>
Net asset value, beginning of year $12.86 $13.14 $12.85 $12.78 $11.79
$11.29 $10.73
- ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .52(e) .25(e) .52(e) .41(e) .35(e)
.0067 .0349
Net realized and unrealized gain on
investments .52 (.28) .52 .40 1.15
.5298 .6346
Total from investment operations 1.04 (.03) 1.04 .81 1.50
.5365 .6695
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.44) (.25) (.44) (.39) (.34)
(.0365) (.0730)
Distributions from net realized gain (1.14) - (1.14) (.35) (.17)
- - (.0365)
Total distributions (1.58) (.25) (1.58) (.74) (.51)
(.0365) (.1095)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $12.32 $12.86 $12.31 $12.85 $12.78
$11.79 $11.29
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(b) 9.03% (0.16)%(c) 9.03% 6.62% 13.14%
4.76%(c) 7.78%(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver and
reimbursements 1.00% 0.61%(c)(f) 1.00% 1.26%(f) 2.08%(f)
0.16%(c) 0.62%(c)
Expenses, excluding waiver and
reimbursements from Lord Abbett 1.75% 1.26%(c)(f) 1.75% 1.91%(f) 2.51%(f)
0.20%(c) 0.77%(c)
Net investment income 4.28% 1.98%(c) 4.28% 3.24% 2.88%
0.17%(c) 0.70%(c)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended One
November 30, Month Ended Year
Ended 12/27/94(a)
Supplemental Data for AllClasses: 1999 1998 1997 11/30/96
10/31/96 to 10/31/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C> <C>
Net assets, end of year (000) $100,130 $57,675 $20,340 $11,406
$10,988 $5,713
Portfolio turnover rate 8.30% 131.36% 216.07% 10.05%
187.78% 131.80%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering respective class shares.
(e) Calculated using average shares outstanding during the year.
(f) The ratio includes expenses paid through an expense offset arrangement.
See Notes to Financial Statements.
<PAGE>
Financial Highlights
HIGH YIELD FUND
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C
Shares Class Y Shares
- ------------------------------------------------------------------------------------------------------------------------------------
12/31/98(a) 12/31/98(a)
12/31/98(a) 5/4/99(d)
Per Share Operating Performance: to 11/30/99 to 11/30/99 to
11/30/99 to 11/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C> <C>
Net asset value, beginning of year $10.08 $10.08
$10.08 $10.36
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income(e) .83 .78
.78 .55
Net realized and unrealized loss on investments (.34) (.37)
(.37) (.62)
Total from investment operations .49 .41
.41 (.07)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.85) (.79)
(.79) (.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $9.72 $9.70
$9.70 $9.73
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(b)(c) 4.99% 4.22%
4.21% (.59)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets(c):
Expenses, including waiver and reimbursements 0.46% 0.90%
0.90% -
Expenses, excluding waiver and reimbursements 1.25%
1.45% 1.45%
.51%
Net investment income 8.44% 7.92%
7.92% 5.59%
- ------------------------------------------------------------------------------------------------------------------------------------
12/31/98(a)
Supplemental Data for
AllClasses: to 11/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000) $28,689
Portfolio turnover
rate 109.57%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of offering respective class shares.
(e) Calculated using average shares outstanding during the year.
See Notes to Financial Statements.
20
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Lord Abbett Investment Trust (the "Trust") is an open-end management investment
company organized as a Delaware business trust on August 16, 1993. The Trust
consists of six separate portfolios. This report covers four of the portfolios
("Series")-Lord Abbett U.S. Government Securities Series ("U.S. Government
Series"), Lord Abbett Limited Duration U.S. Government Securities Series
("Limited Duration Series"), Lord Abbett Balanced Series ("Balanced Series") and
Lord Abbett High Yield Fund ("High Yield Fund"). The Balanced Series invests in
other funds ("Underlying Funds") managed by Lord Abbett & Co. ("Lord Abbett").
Each Series is diversified as defined under the Investment Company Act of 1940.
The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make certain
estimates and assumptions at the date of the financial statements. The following
summarizes the significant account ing policies of the Trust:
(a) Securities are valued as follows: Portfolio securities listed or admitted to
trading privileges on any securities exchange are valued at the last sales price
on the exchange on which such securities are traded as of the close of business
on the day the securities are being valued or, lacking any sales, at the latest
price on the basis of current quotations from dealers (as in the case of bonds),
from valuations furnished by an independent pricing s ervice or, in their
absence, fair value as determined under procedures approved by the Board of
Trustees. Securities traded only in the over-the-counter market are valued at
the mean between the bid and asked prices, except that securities admitted to
trading on the NASDAQ National Market System are valued at the last sales price
if it is determined that such price more accurately reflects the value of such
securities. Investments in the Underlying Funds are valued at the closing net
asset value per share of each Under lying Fund on the day of valuation.
Short-term securities maturing in 60 days or less are valued at amortized cost
which approximates market value.
(b) It is the policy of the Trust to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income. Therefore, no federal income tax provision is required.
(c) Security transactions are accounted for on the date that the securities are
purchased or sold (trade date). Realized gains and losses from investment
transactions are determined on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Net investment income (other than
distribution and service fees) and realized and unrealized gains or losses are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day. Discounts on strips are accrued to maturity
using the constant yield method. The Trust has elected not to amortize premiums
on U.S. Government bonds, which is consistent with the treatment for federal
income tax purposes.
(d) The organization expenses of Balanced Series are amortized evenly over a
period of five years from its commencement date of operations.
2. Management Fee and Other Transactions with Affiliates The Trust has a
management agreement with Lord Abbett pursuant to which Lord Abbett supplies the
Trust with investment management, research, statistical and advisory services
and pays officers' remuneration and certain other expenses of the Trust. The
management fee is based on average daily net assets for each month at the annual
rate of 0.50% for U.S. Government Series and Limited Duration Series, 0.75% for
Balanced Series and 0.60% for High Yield Fund. The management fee for U.S.
Govern ment Series is reduced to 0.45% for average daily net assets in excess of
$3 billion. Lord Abbett waived its management fee for Limited Duration Series,
Balanced Series and High Yield Fund during the year ended November 30, 1999. At
November 30, 1999, the management fees payable were $643,423 for U.S. Government
Series and $65,753 for Limited Duration Series.
Each Series of the Trust has Rule 12b-1 plans and agreements with respect to one
or more classes of shares as described below (the "Class A, Class B and Class C
Plans") with Lord Abbett Distributor LLC("Distributor"), an affiliate of Lord
Abbett. Each Series makes payments to Distributor which uses or passes on such
payments to authorized institutions. Pursuant to the Class A Plan, the Series
pay Distributor (1) an annual service fee of (a) 0.15% of the average daily net
asset value of shares sold prior to September 1, 1985 and 0.25% of the average
daily net asset value of shares sold on or after that date for U.S. Government
Series and (b) 0.25% of the average daily net asset value of Class A shares of
Limited Duration Series, Balanced Series and High Yield Fund, (2) a one-time
distribution fee of up to 1% on certain qualifying purchases, and (3) an annual
distribution fee of 0.10% of the average daily net asset value of Class A
shares. The Class A Plan of Limited Duration Series will not become operative
until the first day of the calendar quarter subsequent to the Series' net assets
reaching $100 million. Pursuant to the Class B Plan of U.S. Government Series,
Balanced Series and High Yield Fund and the Class C Plan of High Yield Fund,
each Series pays Distributor an annual service and distribution fee of 0.25% and
0.75%, respectively, of the average daily net asset value of the shares
outstanding for the class. Pursuant to the Class C Plan of U.S. Government,
Limited Duration and Balanced Series, each Series pays Distributor (1)a service
fee and a distribution fee, at the time such shares are sold, not to exceed
0.25% and 0.75%, respectively, of the net asset value of such shares sold, and
(2) at each quarter-end after the first anniversary of the sale of such shares,
a service fee and a distribution fee at an annual rate not to exceed 0.25% and
0.75%, respectively, of the average annual net asset value of such shares
outstanding. Class Y does not have a Rule 12b-1 Plan. At November 30, 1999, the
12b-1 fees payable were $531,992 for U.S. Government Series, $2,537 for Limited
Duration Series, $34,460 for Balanced Series and $15,723 for High Yield Fund.
The Balanced Series has entered into a Servicing Arrangement with each
Underlying Fund pursuant to which each Underlying Fund will pay a portion of the
expenses (excluding management fee, distribution and service fees) of the
Balanced Series in proportion to the average daily value of shares owned by the
Balanced Series.
Distributor received the following commissions on sales of shares of the Trust
after concessions were paid to authorized dealers:
Distributor Dealers'
Series Commissions Concessions
- --------------------------------------------------------------------------------
U.S. Government Series-Class A $100,557 $646,899
- --------------------------------------------------------------------------------
Limited Duration Series-Class A $ 14,260 $ 86,421
- --------------------------------------------------------------------------------
Balanced Series-Class A $148,003 $892,059
- --------------------------------------------------------------------------------
High Yield Fund-Class A $ 33,368 $276,728
- --------------------------------------------------------------------------------
3. Distributions
Dividends from net investment income are declared daily and paid monthly with
respect to U.S. Government Series and Limited Duration Series and declared and
paid monthly with respect to Balanced Series and High Yield Fund. Taxable net
realized gains from investment transactions in excess of any capital loss
carryforward are distributed to shareholders annually. 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.
21
<PAGE>
Notes to Financial Statements
At November 30, 1999, accumulated net realized gain (loss) for financial
reporting purposes was as follows:
- --------------------------------------------------------------------------------
U.S. Government Series $(614,869,791)
- --------------------------------------------------------------------------------
Limited Duration Series (1,931,008)
- --------------------------------------------------------------------------------
Balanced Series 5,596,709
- --------------------------------------------------------------------------------
High Yield Fund (301,197)
- --------------------------------------------------------------------------------
At November 30, 1999, the capital loss carryforwards were as follows:
Expiration Date
- --------------------------------------------------------------------------------
2002 2003 2004 2005 2007
- --------------------------------------------------------------------------------
U.S. Government
Series $344,134,995 $38,717,115 $146,737,465 $43,030,400 $42,249,816
- --------------------------------------------------------------------------------
Limited Duration
Series 1,197,523 142,293 350,445 - 240,747
- --------------------------------------------------------------------------------
High Yield Fund 301,197
- --------------------------------------------------------------------------------
In addition to the Series' regular dividend distributions, dividends declared on
December 9, 1999 and paid on December 23, 1999 to shareholders of record as of
December 22, 1999, and capital gain distributions declared on December 9, 1999
and paid on December 17, 1999 to shareholders of record as of December 9, 1999
were as follows:
Rate Aggregate
Dividends Per Share Amount
- --------------------------------------------------------------------------------
Balanced Series-Net Investment Income-Class A $0.0273 $ 170,058
- --------------------------------------------------------------------------------
Balanced Series-Net Investment Income-Class B $0.0211 $ 24,488
- --------------------------------------------------------------------------------
Balanced Series-Net Investment Income-Class C $0.0211 $ 28,085
- --------------------------------------------------------------------------------
Balanced Series-Capital Gains-Class A $0.6720 $3,949,004
- --------------------------------------------------------------------------------
Balanced Series-Capital Gains-Class B $0.6720$ 722,328
- --------------------------------------------------------------------------------
Balanced Series-Capital Gains-Class C $0.6720$ 839,213
- --------------------------------------------------------------------------------
High Yield Fund-Net Investment Income-Class A $0.0084$ 12,943
- --------------------------------------------------------------------------------
High Yield Fund-Net Investment Income-Class B $0.0132$ 11,497
- --------------------------------------------------------------------------------
High Yield Fund-Net Investment Income-Class C $0.0132$ 8,822
- --------------------------------------------------------------------------------
High Yield Fund-Net Investment Income-Class Y $0.0213 $ 2
4. Capital
Transactions in shares of beneficial interest (both shares and dollar amounts)
were as follows:
<TABLE>
<CAPTION>
Year Ended November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
U.S. Government Series Limited Duration Series Balanced Series
Class A Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales of shares 57,845,002 $147,028,495 2,793,591 $12,299,280 2,552,160 $31,273,012
Shares issued to shareholders
in reinvestment of dividends
and distributions 21,818,128 55,558,445 63,392 279,103 546,253 6,475,063
Total 79,663,130 202,586,940 2,856,983 12,578,383 3,098,413 37,748,075
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (174,961,950) (443,626,921) (1,759,526) (7,734,753) (729,757) (8,931,216)
Increase (decrease) (95,298,820) $(241,039,981) 1,097,457 $ 4,843,630 2,368,656 $28,816,859
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
U.S. Government SeriesLimited Duration Series
Class A Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 31,799,161 $83,299,155 1,524,406 $ 6,744,941
Shares issued to shareholders in reinvestment of
dividends and distributions 23,996,526 62,543,335 47,643 210,812
Total 55,795,687 145,842,490 1,572,049 6,955,753
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (212,324,614) (553,290,364) (1,392,054) (6,158,851)
Increase (decrease) (156,528,927) $(407,447,874) 179,995 $ 796,902
- ------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
U.S. Government Series Balanced Series
Class B Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 6,206,611 $ 15,835,695 696,037 $8,488,941
Shares issued to shareholders in reinvestment
of dividends and distributions 343,631 875,956 66,423 788,288
Total 6,550,242 16,711,651 762,460 9,277,229
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (4,118,711) (10,483,992) (91,703) (1,130,578)
Increase 2,431,531 $ 6,227,659 670,757 $8,146,651
- ------------------------------------------------------------------------------------------------------------------
Year Ended
November 30, 1998
- ------------------------------------------------------------------------------------------------------------------
U.S.Government Series
Class B Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 7,509,963 $ 19,690,555
Shares issued to shareholders in reinvestment of dividends 188,901 492,870
Total 7,698,864 20,183,425
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (2,095,473) (5,468,912)
Increase 5,603,391 $14,714,513
- ------------------------------------------------------------------------------------------------------------------
December 31, 1998*
to November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
High Yield Fund
Class A Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 1,773,480 $17,848,000
Shares issued to shareholders
in reinvestment of dividends
and distributions 69,775 688,298
Total 1,843,255 18,536,298
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (389,093) (3,820,793)
Increase (decrease) 1,454,162 $14,715,505
- ------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1998
- ------------------------------------------------------------------------------------------------------------------
Balanced Series
Class A Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 2,402,438 $30,136,303
Shares issued to shareholders in reinvestment of
dividends and distributions 117,883 1,467,499
Total 2,520,321 31,603,802
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (388,736) (4,812,834)
Increase (decrease) 2,131,585 $26,790,968
- ------------------------------------------------------------------------------------------------------------------
December 31, 1998*
to November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
High Yield Fund
Class B Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 1,021,780 $10,214,135
Shares issued to shareholders in reinvestment
of dividends and distributions 27,138 266,803
Total 1,048,918 10,480,938
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (161,478) (1,603,737)
Increase 887,440 $ 8,877,201
- ------------------------------------------------------------------------------------------------------------------
May 1, 1998**
to November 30, 1998
- ------------------------------------------------------------------------------------------------------------------
Balanced Series
Class B Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 410,635 $5,100,065
Shares issued to shareholders in reinvestment of dividends 2,589 31,378
Total 413,224 5,131,443
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (16,357) (192,344)
Increase 396,867 $4,939,099
- ------------------------------------------------------------------------------------------------------------------
22
<PAGE>
Year Ended November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
U.S. Government Series Limited Duration Series Balanced Series
Class C Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 3,744,749 $ 9,302,199 1,153,772 $ 5,065,731 679,267 $8,283,098
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,538,413 3,935,839 29,408 129,416 90,448 1,070,276
Total 5,283,162 13,238,038 1,183,180 5,195,147 769,715 9,353,374
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (17,811,371) (45,356,630) (999,252) (4,374,025) (173,289) (2,106,140)
Increase (decrease) (12,528,209) $(32,118,592) 183,928 $ 821,122 596,426 $7,247,234
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
U.S. Government SeriesLimited Duration Series
Class C Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 7,523,887 $ 19,728,994 709,733 $ 3,156,871
Shares issued to shareholders in
reinvestment of dividends and distributions 1,957,718 5,112,355 25,683 113,700
Total 9,481,605 24,841,349 735,416 3,270,571
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (22,360,867) (58,364,213) (785,920) (3,483,239)
Increase (decrease) (12,879,262) $(33,522,864) (50,504)$ (212,668)
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Class Y
- ------------------------------------------------------------------------------------------------------------------
Sales of shares
Shares issued to shareholders in
reinvestment of dividends and distributions
Increase
- ------------------------------------------------------------------------------------------------------------------
December 31, 1998*
to November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
High Yield Fund
Class C Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 638,634 $6,427,103
Shares issued to shareholders
in reinvestment of dividends
and distributions 22,025 216,609
Total 660,659 6,643,712
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (48,021) (468,700)
Increase (decrease) 612,638 $6,175,012
- ------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1998
- ------------------------------------------------------------------------------------------------------------------
Balanced Series
Class C Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 417,362 $5,270,670
Shares issued to shareholders
in reinvestment of dividends
and distributions 18,437 229,509
Total 435,799 5,500,179
- ------------------------------------------------------------------------------------------------------------------
Shares reacquired (70,625) (884,538)
Increase (decrease) 365,174 $4,615,641
- ------------------------------------------------------------------------------------------------------------------
May 4, 1999**
to November 30, 1999
- ------------------------------------------------------------------------------------------------------------------
High Yield Fund
Class Y Shares Amount
- ------------------------------------------------------------------------------------------------------------------
Sales of shares 110 $1,134
Shares issued to shareholders
in reinvestment of dividends 5 50
and distributions
Increase 115 $1,184
</TABLE>
There was no capital stock activity for Class P shares during the year.
*Commencement of Operations.
**Commencement of offering respective class shares.
At November 30, 1999, paid in capital aggregated $2,169,572,575 for U.S. Govern
ment Series, $18,208,034 for Limited Duration Series, $98,189,306 for Balanced
Series and $29,768,902 for High Yield Fund.
5. Portfolio Securities
Purchases and sales of investment securities (other than short-term investments)
were as follows:
Series Purchases Sales
- --------------------------------------------------------------------------------
U.S. Government Series $8,069,214,114 $8,435,856,407
- --------------------------------------------------------------------------------
Limited Duration Series $ 58,555,130 $ 50,338,849
- --------------------------------------------------------------------------------
Balanced Series $ 51,395,563 $ 6,754,000
- --------------------------------------------------------------------------------
High Yield Fund $ 47,752,969 $ 20,055,536
- --------------------------------------------------------------------------------
As of November 30, 1999, net unrealized appreciation, unrealized appreciation
and unrealized depreciation of invest ments based on cost for federal income tax
purposes were as follows:
Net Unrealized Unrealized Unrealized
Series Depreciation Appreciation Depreciation
- --------------------------------------------------------------------------------
U.S. Government Series $(42,173,781) $3,016,960 $(45,190,741)
- --------------------------------------------------------------------------------
Limited Duration Series $ (194,235) $ 11,610 $ (205,845)
- --------------------------------------------------------------------------------
Balanced Series $ (3,883,751) $ - $ (3,883,751)
- --------------------------------------------------------------------------------
High Yield Fund $ (811,614) $ 338,204 $ (1,149,818)
- --------------------------------------------------------------------------------
The cost of investments for federal income tax purposes is substantially the
same as that used for financial reporting purposes. The Trust may lend its
securities to member banks of the Federal Reserve System and to registered
broker-dealers approved by the Trust. The loans are collateralized at all times
by cash and/or U.S. Treasury securities in an amount at least equal to the
market value of the securities loaned.
As of November 30, 1999, the value of securities loaned for U.S. Government
Series was $112,931,013. These loans were collateralized by cash of
$115,042,981. Income from securities lending of $74,234 is included in interest
income on the Statement of Operations. The interest income earned on the
securities loaned is accounted for in the same manner as other interest income.
6. Trustees' Remuneration
The Trustees of the Trust associated with Lord Abbett and all officers of the
Trust receive no compensation from the Trust for acting as such. Outside
Trustees' fees and retirement costs are allocated among all funds in the Lord
Abbett group based on the net assets of each fund. Trustees' fees payable at
November 30, 1999, under a deferred compensation plan, were $806,069.
7. Expense Reduction
The Trust has entered into an arrangement with its transfer agent whereby
credits realized as a result of uninvested cash balances were used to reduce a
portion of each Series' expenses.
Copyright(C)2000 by Lord Abbett Investment Trust, 90 Hudson Street, Jersey City,
NJ 07302-3973 This publication, when not used for the general information of
shareholders of Lord Abbett Investment Trust, is to be distributed only if
preceded or accompanied by a current prospectus which includes information
concerning each Series' investment objective and policies, sales charges and
other matters. There is no guarantee that the forecasts contained within this
publication will come to pass. All rights reserved. Printed in the U.S.A.
Independent Auditors' Report
The Board of Trustees and Shareholders,
Lord Abbett Investment Trust:
We have audited the accompanying statements of net assets of Lord Abbett
Investment Trust- U.S. Govern ment Securities Series, Limited Duration U.S.
Government Securities Series, Balanced Series and High Yield Fund as of November
30, 1999, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the periods presented. These financial
state ments and the financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits. We conducted our
audits in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audits 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, 1999 by correspondence 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
audits provide 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-U.S. Government Securities Series, Limited Duration
U.S.Government Securities Series, Balanced Series and High Yield Fund at
November 30, 1999, the results of their operations, the changes in their net
assets and their financial highlights for each of the periods presented in
conformity with generally accepted accounting principles.
[GRAPHIC OMITTED]
Deloitte & Touche LLP
New York, New York
January 28, 2000
Our Management
Board of Directors
Robert S. Dow
E. Thayer Bigelow*
William H.T. Bush*+
Robert B. Calhoun, Jr.*
Stewart S. Dixon*+
John C. Jansing*+
C. Alan MacDonald*
Hansel B. Millican, Jr.*
Thomas J. Neff*+
* Outside Director
+ Audit Committee
Officers
Robert S. Dow, Chairman and President
Zane E. Brown, Executive Vice
President and Portfolio Manager
Paul A. Hilstad, Vice President
and Secretary
Daniel E. Carper, Vice President
Philip Fang, Vice President
Robert G. Morris, Vice President
John R. Mousseau, Vice President
Lawrence H. Kaplan, Vice President
and Assistant Secretary
A. Edward Oberhaus III, Vice President
Joan Binstock, Vice President
Tracie Richter, Vice President
Donna McManus, Treasurer
Lydia Guzman, Assistant Secretary
Robert M. Hickey, Assistant Secretary
Investment Manager and
Underwriter
Lord, Abbett & Co. and
Lord Abbett Distributor LLC
90 Hudson Street
Jersey City, NJ 07302-3973
800-201-6984
Custodian
The Bank of New York
New York, NY
Transfer Agent
United Missouri Bank of
Kansas City, N.A.
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 219100
Kansas City, MO 64141
800-821-5129
Auditors
Deloitte & Touche LLP
New York, NY
Counsel
Wilmer, Cutler & Pickering
Washington, DC\<PAGE>
Lord, Abbett & Co.
Investment Profile
[PHOTO]
Zane E. Brown, Partner and Director of Fixed Income Management at Lord, Abbett &
Co., has over 20 years of experience in the financial services industry. He
joined Lord Abbett in 1992 as Portfolio Manager of Global Fund - Income Series.
Zane holds a BA in Management and Marketing from Clarion University and a MBA in
Investment Management from Colorado State University.
About Your Trusts's Board of Trustees
The Securities and Ex change Com mission (SEC) views the role of the independent
Board of Trustees as one of the most important com po nents in overseeing a
mutual fund. The Board of Trustees watches over your Fund's general oper ations
and represents your interests. Board members review and approve every contract
between your Trust and Lord, Abbett & Co. (the Fund's investment manager) and
Lord Abbett Distributor LLC (the Trust's underwriter). They meet regularly to
review a wide variety of information and issues regard ing your Fund. Every
member of the Board possesses extensive business experience. Lord Abbett
Investment Trust's shareholders are indeed fortunate to have a group of
independent directors with diverse backgrounds to provide a variety of
viewpoints in the oversight of their Trust. Below, we feature one of our
independent trustees, E. Thayer Bigelow, Jr.
E. Thayer Bigelow, Jr.
Trustee--Lord Abbett
Investment Trust
[PHOTO]
Mr. Bigelow is a graduate of Trinity College and earned his MBA at the
University of Virginia's Darden Business School. He is currently Senior Advisor
at Time Warner Inc. Prior to that, he was acting CEO of Courtroom Television
Network, and previously served for five years as President and CEO of Time
Warner Cable Programming, Inc.
Mr. Bigelow serves as a member of the Board of Trustees for the Cate School. He
is also a member of the Board of Directors of Crane Co. He has been an
independent director for all of Lord Abbett's Family of Funds since 1994.
<PAGE>
Investing in the
Lord Abbett
Family of Funds
<TABLE>
<CAPTION>
GROWTH
- ---------------------------------------------------------------------------------------------------------------------------
INCOME
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggressive Growth Funds Growth & Balanced Fund Income Funds Tax-Free Money
Growth Fund Income Funds Income Funds Market
Fund
Developing Research Fund - Research Fund - Balanced World Bond- National U. S.
Government
Growth Fund* Small-Cap Value Large-Cap Series*** Debenture Series California
Securities Money
Series Series Global Fund - Connecticut Market
Fund +++
Growth Alpha Series** Growth & Income Series Florida
Opportunities International Income Series High Yield Fund Georgia
Fund Series Affiliated Fund Bond-Debenture Hawaii
Mid-Cap Fund Michigan
Value Fund Limited Duration Minnesota
Global Fund - U. S. Government Missouri
Equity Series Securities Series+ New Jersey
U. S. Government) New York
Securities Series+ Pennsylvania
Texas
Washington
</TABLE>
Finding the right mutual fund can be confusing. At Lord, Abbett & Co., we
believe your investment professional provides value in helping you identify and
understand your investment objectives and, ultimately, offering fund
recommendations suitable for your individual needs.
This publication, when used as sales literature, is to be distributed only if
preceded or accompanied by a current prospectus for the fund(s) covered by this
report.
For more complete information about any Lord Abbett fund, including risks,
charges and ongoing expenses, call your investment professional or Lord Abbett
Distributor LLC at 800-874-3733 for a prospectus. Read it carefully before
investing.
The Lord Abbett Family of Funds lets you access more than 30 portfolios designed
to meet a variety of investment needs.
Diversification. You and your investment professional can diversify your
investments between equity and income funds.
Flexibility. As your investment goals change, your investment professional can
help you reallocate your portfolio.
You may reallocate assets among our funds at any time. Speak with your
investment professional to help you customize your investment plan.
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature Only: 800-874-3733
24-Hour Automated Shareholder
Service Line: 800-865-7582
Visit Our Web Site:
www.lordabbett.com
* Lord Abbett Developing Growth Fund is closed to new investors.
** Lord Abbett Securities Trust - Alpha Series is a fund of funds investing in
shares of Lord Abbett Developing Growth Fund, Lord Abbett Research Fund -
Small-Cap Value Series and Lord Abbett Securities Trust - International
Series.
*** Lord Abbett Balanced Series is a fund of funds investing in shares of
certain other Lord Abbett funds.
+ An investment in this Fund is neither insured nor guaranteed by the U.S.
Government.
++ An investment in this Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund. This Fund is managed to
maintain, and has maintained its stable $1.00 price per share.
[LOGO]
LAEF-3-1199
(1/00)
