UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-02924
LORD ABBETT U.S. GOVERNMENT & GOVERNMENT SPONSORED
ENTERPRISES MONEY MARKET FUND, INC.
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
(Address of principal executive offices) (Zip code)
Brooke A. Fapohunda, Esq., Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800) 201-6984
Date of fiscal year end: 6/30
Date of reporting period: 6/30/2017
Item 1: | Report(s) to Shareholders. |
LORD ABBETT
ANNUAL REPORT
Lord Abbett
U.S. Government & Government Sponsored
Enterprises Money Market Fund
For the fiscal year ended June 30, 2017
Table of Contents
Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund
Annual Report
For the fiscal year ended June 30, 2017
From left to right: James L.L. Tullis, Independent Chairman of the Lord Abbett Funds and Daria L. Foster Director, President, and Chief Executive Officer of the Lord Abbett Funds. | Dear Shareholders: We are pleased to provide you with this annual report for Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund for the fiscal year ended June 30, 2017. For additional information about the Fund, please visit our website at www.lordabbett.com. General information about Lord Abbett mutual funds, as well as in-depth discussions of market trends and investment strategies, is also provided in Lord Abbett Insights, a quarterly newsletter available on our website. Thank you for investing in Lord Abbett mutual funds. We value the trust that you place in us and look forward to serving your investment needs in the years to come. Best regards, Daria L. Foster Director, President and Chief Executive Officer |
1
Expense Example
As a shareholder of the Fund you incur ongoing costs, including management fees; distribution and service (12b-1) fees (currently only Class B shares have an active 12b-1 Plan); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2017 through June 30, 2017).
Actual Expenses
For each class of the Fund, the first line of the applicable table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled “Expenses Paid During Period 1/1/17 – 6/30/17” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
For each class of the Fund, the second line of the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
2
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Beginning Account Value | | Ending Account Value | | Expenses Paid During Period† | |
| | 1/1/17 | | 6/30/17 | | 1/1/17 - 6/30/17 | |
Class A | | | | | | | |
Actual | | $1,000.00 | | $1,000.30 | | $2.83 | |
Hypothetical (5% Return Before Expenses) | | $1,000.00 | | $1,021.97 | | $2.86 | |
Class B | | | | | | | |
Actual | | $1,000.00 | | $1,000.00 | | $3.02 | |
Hypothetical (5% Return Before Expenses) | | $1,000.00 | | $1,021.77 | | $3.06 | |
Class C | | | | | | | |
Actual | | $1,000.00 | | $1,000.30 | | $2.78 | |
Hypothetical (5% Return Before Expenses) | | $1,000.00 | | $1,022.02 | | $2.81 | |
Class I | | | | | | | |
Actual | | $1,000.00 | | $1,000.30 | | $2.73 | |
Hypothetical (5% Return Before Expenses) | | $1,000.00 | | $1,022.07 | | $2.76 | |
† | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (0.57% for Class A, 0.61% for Class B, 0.56% for Class C and 0.55% for Class I) multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Maturity
June 30, 2017
Days | %* |
1 - 30 days | 46.86 | % |
31- 60 days | 9.68 | % |
61- 90 days | 13.75 | % |
91 - 120 days | 19.74 | % |
Over 120 days | 9.97 | % |
Total | 100.00 | % |
| |
* | Represents percent of total investments. |
3
Schedule of Investments
June 30, 2017
Investments | | Yield(1) | | Maturity Date | | Principal Amount (000) | | | Fair Value | |
| | | | | | | |
GOVERNMENT SPONSORED ENTERPRISES SECURITIES 73.08% | | | | | | | |
| | | | | | | |
Federal Home Loan Bank | | 0.619% | | 7/14/2017 | | | $32,000 | | | $ | 31,992,940 | |
Federal Home Loan Bank | | 0.649% | | 7/28/2017 | | | 10,000 | | | | 9,995,200 | |
Federal Home Loan Bank | | 0.951% | | 8/9/2017 | | | 18,000 | | | | 17,981,709 | |
Federal Home Loan Bank | | 0.953% | | 8/9/2017 | | | 10,665 | | | | 10,654,139 | |
Federal Home Loan Bank | | 0.958% | | 10/6/2017 | | | 17,000 | | | | 16,956,714 | |
Federal Home Loan Bank | | 0.973% | | 10/20/2017 | | | 14,000 | | | | 13,958,560 | |
Federal Home Loan Bank | | 0.999% | | 7/24/2017 | | | 10,000 | | | | 9,993,707 | |
Federal Home Loan Bank | | 1.004% | | 10/11/2017 | | | 9,800 | | | | 9,772,511 | |
Federal Home Loan Bank | | 1.019% | | 7/17/2017 | | | 3,600 | | | | 3,598,392 | |
Federal Home Loan Bank | | 1.023% | | 7/19/2017 | | | 3,825 | | | | 3,823,070 | |
Federal Home Loan Bank | | 1.029% | | 11/1/2017 | | | 21,000 | | | | 20,927,174 | |
Federal Home Loan Bank | | 1.034% | | 7/12/2017 | | | 1,200 | | | | 1,199,626 | |
Federal Home Loan Bank | | 1.049% | | 11/8/2017 | | | 3,000 | | | | 2,988,788 | |
Federal Home Loan Bank | | 1.136% | | 12/22/2017 | | | 19,000 | | | | 18,897,147 | |
Federal Home Loan Bank | | 1.138% | | 12/8/2017 | | | 8,000 | | | | 7,960,107 | |
Federal Home Loan Mortgage Corp. | | 0.613% | | 7/17/2017 | | | 22,000 | | | | 21,994,084 | |
Federal Home Loan Mortgage Corp. | | 0.618% | | 7/20/2017 | | | 27,000 | | | | 26,991,308 | |
Federal Home Loan Mortgage Corp. | | 0.856% | | 7/20/2017 | | | 6,550 | | | | 6,547,082 | |
Federal Home Loan Mortgage Corp. | | 0.913% | | 8/31/2017 | | | 17,000 | | | | 16,974,075 | |
Federal National Mortgage Assoc. | | 0.811% | | 7/12/2017 | | | 17,500 | | | | 17,495,722 | |
Federal National Mortgage Assoc. | | 0.882% | | 8/7/2017 | | | 6,000 | | | | 5,994,635 | |
Federal National Mortgage Assoc. | | 0.882% | | 7/19/2017 | | | 13,000 | | | | 12,994,345 | |
Federal National Mortgage Assoc. | | 0.933% | | 7/26/2017 | | | 900 | | | | 899,425 | |
Federal National Mortgage Assoc. | | 0.943% | | 8/23/2017 | | | 14,700 | | | | 14,679,873 | |
Federal National Mortgage Assoc. | | 0.963% | | 9/11/2017 | | | 26,000 | | | | 25,950,600 | |
Federal National Mortgage Assoc. | | 1.004% | | 8/30/2017 | | | 13,200 | | | | 13,178,220 | |
Federal National Mortgage Assoc. | | 1.029% | | 9/20/2017 | | | 14,000 | | | | 13,968,027 | |
Federal National Mortgage Assoc. | | 1.034% | | 10/16/2017 | | | 15,000 | | | | 14,954,525 | |
Total Government Sponsored Enterprises Securities (cost $373,321,705) | | | | | | 373,321,705 | |
| | | | | | | | | | | | |
U.S. TREASURY OBLIGATIONS 11.35% | | | | | | | | | | | | |
U.S. Treasury Note | | 0.625% | | 9/30/2017 | | | 45,000 | | | | 44,964,080 | |
U.S. Treasury Note | | 0.875% | | 7/15/2017 | | | 13,000 | | | | 13,001,351 | |
Total U.S. Treasury Obligations (cost $57,965,431) | | | | | | | | | | | 57,965,431 | |
4 | See Notes to Financial Statements. | |
Schedule of Investments (concluded)
June 30, 2017
Investments | | Principal Amount (000) | | | Fair Value | |
| | | | | | | | |
REPURCHASE AGREEMENTS 15.32% | | | | | | | | |
| | | | | | | | |
Repurchase Agreement dated 6/30/2017, 0.12% due 7/3/2017 with Fixed Income Clearing Corp. collateralized by $13,575,000 of U.S. Treasury Note at 1.375% due 1/31/2021; value: $13,520,863; proceeds: $13,253,445 | | | $13,253 | | | $ | 13,253,312 | |
Repurchase Agreement dated 6/30/2017, 1.02% due 7/3/2017 with J.P. Morgan Chase & Co. collateralized by $66,080,000 of Federal Home Loan Mortgage Corp. at 1.80% due 4/28/2020; value: $66,278,240; proceeds: $65,005,525 | | | 65,000 | | | | 65,000,000 | |
Total Repurchase Agreements (cost $78,253,312) | | | | | | | 78,253,312 | |
Total Investments in Securities 99.75% (cost $509,540,448)* | | | | | | | 509,540,448 | |
Other Assets in Excess of Liabilities 0.25% | | | | | | | 1,255,091 | |
Net Assets 100.00% | | | | | | $ | 510,795,539 | |
| (1) | Represents annualized yield at date of purchase for discount securities, and coupon for coupon-bearing securities. |
| * | Cost for Federal income tax purposes is $509,540,448. Weighted average maturity of investments: 54 days. |
The following is a summary of the inputs used as of June 30, 2017 in valuing the Fund’s investments carried at fair value(1):
Investment Type(2)(3) | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Government Sponsored Enterprises Securities | | $ | – | | | $ | 373,321,705 | | | $ | – | | | $ | 373,321,705 | |
U.S. Treasury Obligations | | | – | | | | 57,965,431 | | | | – | | | | 57,965,431 | |
Repurchase Agreements | | | – | | | | 78,253,312 | | | | – | | | | 78,253,312 | |
Total | | $ | – | | | $ | 509,540,448 | | | $ | – | | | $ | 509,540,448 | |
| (1) | Refer to Note 2(g) for a description of fair value measurements and the three-tier hierarchy of inputs. |
| (2) | See Schedule of Investments for fair values in each industry and identification of foreign issuers and/or geography. |
| (3) | There were no Level 1/Level 2 transfers during the fiscal year ended June 30, 2017. |
| See Notes to Financial Statements. | 5 |
Statement of Assets and Liabilities
June 30, 2017
ASSETS: | | | |
| | | |
Investments in securities, at cost and fair value | | $431,287,136 | |
Investments in repurchase agreements, at cost and fair value | | 78,253,312 | |
Receivables: | | | |
Capital shares sold | | 3,766,602 | |
Interest | | 122,916 | |
Prepaid expenses | | 39,769 | |
Total assets | | 513,469,735 | |
LIABILITIES: | | | |
| | | |
Payables: | | | |
Capital shares reacquired | | 1,918,200 | |
Management fee | | 198,101 | |
12b-1 distribution plan | | 71,982 | |
Directors’ fees | | 154,105 | |
Fund administration | | 16,784 | |
Distributions payable | | 65,824 | |
Accrued expenses | | 249,200 | |
Total liabilities | | 2,674,196 | |
NET ASSETS | | $510,795,539 | |
COMPOSITION OF NET ASSETS: | | | |
| | | |
Paid-in capital | | $510,789,733 | |
Undistributed net investment income | | 259 | |
Accumulated net realized gain on investments | | 5,547 | |
Net Assets | | $510,795,539 | |
Net assets by class: | | | |
Class A Shares | | $456,316,246 | |
Class B Shares | | $ 1,088,989 | |
Class C Shares | | $ 40,401,395 | |
Class I Shares | | $ 12,988,909 | |
Outstanding shares by class: | | | |
Class A Shares (2 billion shares of common stock authorized, $.001 par value) | | 456,311,149 | |
Class B Shares (400 million shares of common stock authorized, $.001 par value) | | 1,088,822 | |
Class C Shares (500 million shares of common stock authorized, $.001 par value) | | 40,400,997 | |
Class I Shares (100 million shares of common stock authorized, $.001 par value) | | 12,988,826 | |
Net asset value, offering and redemption price per share (Net assets divided by outstanding shares): | | | |
Class A Shares-Net asset value | | $1.00 | |
Class B Shares-Net asset value | | $1.00 | |
Class C Shares-Net asset value | | $1.00 | |
Class I Shares-Net asset value | | $1.00 | |
6 | See Notes to Financial Statements. | |
Statement of Operations
For the Year Ended June 30, 2017
Investment income: | | | | |
| | | | |
Interest and other | | $ | 2,987,255 | |
Expenses: | | | | |
| | | | |
Management fee | | | 2,866,334 | |
12b-1 distribution plan-Class B | | | 15,451 | |
Shareholder servicing | | | 665,899 | |
Fund administration | | | 249,133 | |
Registration | | | 105,807 | |
Professional | | | 72,335 | |
Reports to shareholders | | | 50,136 | |
Directors’ fees | | | 13,369 | |
Custody | | | 10,928 | |
Other | | | 23,773 | |
Gross expenses | | | 4,073,165 | |
Expense reductions (See Note 7) | | | (3,360 | ) |
Fees waived and expenses reimbursed (See Note 3) | | | (1,282,395 | ) |
12b-1 distribution plan-Class B reimbursed (See Note 3) | | | (14,827 | ) |
Net expenses | | | 2,772,583 | |
Net investment income | | | 214,672 | |
Net Increase in Net Assets Resulting From Operations | | $ | 214,672 | |
| See Notes to Financial Statements. | 7 |
Statements of Changes in Net Assets
INCREASE (DECREASE) IN NET ASSETS | | For the Year Ended June 30, 2017 | | | For the Year Ended June 30, 2016 | |
Operations: | | | | | | | | |
| | | | | | | | |
Net investment income | | $ | 214,672 | | | $ | 140,324 | |
Net increase in net assets resulting from operations | | | 214,672 | | | | 140,324 | |
Distributions to shareholders from: | | | | | | | | |
| | | | | | | | |
Net investment income | | | | | | | | |
Class A | | | (189,608 | ) | | | (120,533 | ) |
Class C | | | (18,350 | ) | | | (14,752 | ) |
Class I | | | (6,714 | ) | | | (5,039 | ) |
Total distributions to shareholders | | | (214,672 | ) | | | (140,324 | ) |
Capital share transactions (Net of share conversions) (See Note 11): | | | | | | | | |
| | | | | | | | |
Net proceeds from sales of shares | | | 843,844,411 | | | | 1,119,154,354 | |
Reinvestment of distributions | | | 199,990 | | | | 126,621 | |
Cost of shares reacquired | | | (1,077,453,227 | ) | | | (991,410,925 | ) |
Net increase (decrease) in net assets resulting from capital share transactions | | | (233,408,826 | ) | | | 127,870,050 | |
Net increase (decrease) in net assets | | | (233,408,826 | ) | | | 127,870,050 | |
NET ASSETS: | | | | | | | | |
| | | | | | | | |
Beginning of year | | $ | 744,204,365 | | | $ | 616,334,315 | |
End of year | | $ | 510,795,539 | | | $ | 744,204,365 | |
Undistributed net investment income | | $ | 259 | | | $ | 259 | |
8 | See Notes to Financial Statements. | |
This page is intentionally left blank.
9
Financial Highlights
| | | | | Per Share Operating Performance: | | | |
| | | | | Investment operations: | | Distributions to shareholders from: | | | |
| | | Net asset value, beginning of period | | | Net investment income(a) | | Net realized and unrealized gain | | Total from investment operations | | Net investment income | | | Net asset value, end of period | |
Class A | | | | | | | | | | | | | | | | | | | | | | | | |
6/30/2017 | | | $1.00 | | | | $ – | (c) | | | $ – | | | | $ – | (c) | | | $ – | (c) | | | $1.00 | |
6/30/2016 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2015 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2014 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2013 | | | 1.00 | | | | – | (c) | | | – | (c) | | | – | (c) | | | – | (c) | | | 1.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Class B | | | | | | | | | | | | | | | | | | | | | | | | |
6/30/2017 | | | 1.00 | | | | – | | | | – | | | | – | (c) | | | – | | | | 1.00 | |
6/30/2016 | | | 1.00 | | | | – | | | | – | | | | – | | | | – | | | | 1.00 | |
6/30/2015 | | | 1.00 | | | | – | | | | – | | | | – | | | | – | | | | 1.00 | |
6/30/2014 | | | 1.00 | | | | – | | | | – | | | | – | | | | – | | | | 1.00 | |
6/30/2013 | | | 1.00 | | | | – | (c) | | | – | (c) | | | – | (c) | | | – | | | | 1.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | |
6/30/2017 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2016 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2015 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2014 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2013 | | | 1.00 | | | | – | (c) | | | – | (c) | | | – | (c) | | | – | (c) | | | 1.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Class I | | | | | | | | | | | | | | | | | | | | | | | | |
6/30/2017 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2016 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2015 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2014 | | | 1.00 | | | | – | (c) | | | – | | | | – | (c) | | | – | (c) | | | 1.00 | |
6/30/2013 | | | 1.00 | | | | – | (c) | | | – | (c) | | | – | (c) | | | – | (c) | | | 1.00 | |
| (a) | Calculated using average shares outstanding during the period. |
| (b) | Total return for classes A, B and C does not consider the effects of sales loads and assumes the reinvestment of all distributions. Total return for all other classes assumes the reinvestment of all distributions. |
| (c) | Amount less than $0.01. |
10 | See Notes to Financial Statements. | |
| | | | | | | | Supplemental |
| | Ratios to Average Net Assets: | | Data: |
| | | | | | | | |
Total return(b) (%) | | Total expenses after waivers and/or reimburse- ments (%) | | Total expenses (%) | | Net investment income (%) | | Net assets, end of period (000) |
| | | | | | | | |
0.04 | | 0.45 | | 0.65 | | 0.03 | | $456,316 |
0.02 | | 0.22 | | 0.65 | | 0.02 | | 649,660 |
0.02 | | 0.06 | | 0.68 | | 0.02 | | 522,385 |
0.02 | | 0.06 | | 0.66 | | 0.02 | | 485,799 |
0.02 | | 0.11 | | 0.68 | | 0.02 | | 687,458 |
| | | | | | | | |
– | | 0.45 | | 1.40 | | – | | 1,089 |
– | | 0.22 | | 1.41 | | – | | 2,810 |
– | | 0.08 | | 1.43 | | – | | 5,243 |
– | | 0.08 | | 1.41 | | – | | 8,051 |
– | | 0.13 | | 1.43 | | – | | 13,682 |
| | | | | | | | |
0.04 | | 0.44 | | 0.65 | | 0.03 | | 40,401 |
0.02 | | 0.22 | | 0.65 | | 0.02 | | 65,708 |
0.02 | | 0.06 | | 0.68 | | 0.02 | | 65,596 |
0.02 | | 0.06 | | 0.66 | | 0.02 | | 42,018 |
0.02 | | 0.11 | | 0.68 | | 0.02 | | 62,773 |
| | | | | | | | |
0.04 | | 0.43 | | 0.65 | | 0.03 | | 12,989 |
0.02 | | 0.22 | | 0.65 | | 0.02 | | 26,026 |
0.02 | | 0.06 | | 0.68 | | 0.02 | | 23,111 |
0.02 | | 0.06 | | 0.66 | | 0.02 | | 19,934 |
0.02 | | 0.11 | | 0.68 | | 0.02 | | 13,613 |
| See Notes to Financial Statements. | 11 |
Notes to Financial Statements
Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. The Fund was incorporated under Maryland law on May 9, 1979.
The investment objective of the Fund is to seek high current income and preservation of capital through investments in high quality, short-term, liquid securities. These securities are commonly known as money market instruments.
The Fund has four classes of shares: Classes A, B, C and I. There are no front-end sales charges on shares of each class, although there may be a contingent deferred sales charge (“CDSC”) applied to a class of shares as follows: certain redemptions of Class A or Class C shares acquired through an exchange; and Class B shares redeemed before the sixth anniversary of purchase. Class B shares will automatically convert to Class A shares on the 25th day of the month (or, if the 25th day is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. The Fund no longer issues Class B shares for purchase.
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
2. | SIGNIFICANT ACCOUNTING POLICIES |
(a) | Investment Valuation–Under procedures approved by the Fund’s Board of Directors (the “Board”), Lord, Abbett & Co. LLC (“Lord Abbett”), the Fund’s investment manager, has formed a Pricing Committee to administer the pricing and valuation of portfolio investments and to ensure that prices utilized reasonably reflect fair value. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value. |
| |
| The Fund values securities utilizing the amortized cost method, which approximates fair value. Under the amortized cost method, all investments purchased at a discount or premium are valued by amortizing the difference between the original purchase price and maturity value of the issue over the period to maturity. Securities purchased at face value are valued at cost, which approximates fair value due to the short duration of the issue. |
| |
(b) | Security Transactions–Security transactions are recorded as of the date that the securities are purchased or sold (trade date). Realized gains and losses on sales of portfolio securities are calculated using the identified-cost method. |
| |
(c) | Investment Income–Interest income is recorded on the accrual basis as earned. Discounts are accreted and premiums are amortized using the effective interest method and are included in Interest and other income on the Statement of Operations. Investment income is allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day. Withholding taxes on foreign dividends have been provided for in accordance with the applicable country’s tax rules and rates. |
12
Notes to Financial Statements (continued)
(d) | Income Taxes–It is the policy of the Fund to meet the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income and capital gains to its shareholders. Therefore, no income tax provision is required. |
| |
| The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund’s filed U.S. federal tax returns remains open for the fiscal years ended June 30, 2014 through June 30, 2017. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. |
| |
(e) | Expenses–Expenses, excluding class-specific expenses, are allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day. Class B shares bear all expenses and fees relating to the Fund’s 12b-1 Distribution Plan. |
| |
(f) | Repurchase Agreements–The Fund may enter into repurchase agreements with respect to securities. A repurchase agreement is a transaction in which a fund acquires a security and simultaneously commits to resell that security to the seller (a bank or securities dealer) at an agreed-upon price on an agreed-upon date. The Fund requires at all times that the repurchase agreement be collateralized by cash, or by securities of the U.S. Government, its agencies, its instrumentalities, or U.S. Government sponsored enterprises having a value equal to, or in excess of, the value of the repurchase agreement (including accrued interest). If the seller of the agreement defaults on its obligation to repurchase the underlying securities at a time when the fair value of these securities has declined, the Fund may incur a loss upon disposition of the securities. |
| |
(g) | Fair Value Measurements–Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk – for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three-tier hierarchy classification is determined based on the lowest level of inputs that is significant to the fair value measurement, and is summarized in the three broad Levels listed below: |
| • | Level 1 – | unadjusted quoted prices in active markets for identical investments; |
| | | |
| • | Level 2 – | other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.); and |
| | | |
| • | Level 3 – | significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). |
13
Notes to Financial Statements (continued)
| A summary of inputs used in valuing the Fund’s investments as of June 30, 2017 and, if applicable, Level 1/Level 2 transfers and Level 3 rollforwards for the fiscal year then ended is included in the Fund’s Schedule of Investments. |
| |
| Changes in valuation techniques may result in transfers into or out of an assigned level within the three-tier hierarchy. All transfers between different levels within the three-tier hierarchy are deemed to have occurred as of the beginning of the reporting period. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. |
3. | MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES |
Management Fee
The Fund has a management agreement with Lord Abbett, pursuant to which Lord Abbett supplies the Fund with investment management services and executive and other personnel, provides office space and pays for ordinary and necessary office and clerical expenses relating to research and statistical work and supervision of the Fund’s investment portfolio.
The management fee is based on the Fund’s average daily net assets at the following annual rate:
First $250 million | .50% |
Next $250 million | .45% |
Over $500 million | .40% |
For the fiscal year ended June 30, 2017, the effective management fee, net of waivers, was at an annualized rate of .25% of the Fund’s average daily net assets.
In addition, Lord Abbett provides certain administrative services to the Fund pursuant to an Administrative Services Agreement in return for a fee at an annual rate of .04% of the Fund’s average daily net assets.
For the year ended June 30, 2017, Lord Abbett voluntarily waived a portion of the Fund’s management fee. Such fee waiver is included in the Statement of Operations.
12b-1 Distribution Plan
The Fund has adopted a distribution plan with respect to Class A, B and C shares pursuant to Rule 12b-1 under the Act, which provides for the payment of ongoing distribution and service fees to Lord Abbett Distributor LLC (the “Distributor”), an affiliate of Lord Abbett. The following annual rates have been authorized by the Board pursuant to the plan:
Fees | | Class A | | Class B | | Class C | |
Service | | – | | – | | – | |
Distribution | | – | | .75%(1) | | – | |
(1) | For the year ended June 30, 2017, the Distributor voluntarily reimbursed a portion of its Class B 12b-1 distribution fees. Such reimbursement is included in the Statement of Operations. |
Class I shares do not have a distribution plan.
Two Directors and certain of the Fund’s officers have an interest in Lord Abbett.
14
Notes to Financial Statements (continued)
Dividends from net investment income are declared daily and paid monthly.
The tax character of distributions paid during the fiscal years ended June 30, 2017 and June 30, 2016 was as follows:
| | Year Ended 6/30/2017 | | Year Ended 6/30/2016 | |
Distributions paid from: | | | | | |
Ordinary income | | $214,672 | | $140,324 | |
Total distributions paid | | $214,672 | | $140,324 | |
5. | DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES |
The Financial Accounting Standards Board (“FASB”) requires disclosures intended to help better assess the effect or potential effect of offsetting arrangements on a fund’s financial position. The following tables illustrate gross and net information about recognized assets and liabilities eligible for offset in the statement of assets and liabilities; and disclose such amounts subject to an enforceable master netting agreement or similar agreement, by counterparty. A master netting agreement is an agreement between a fund and a counterparty which provides for the net settlement of amounts owed under all contracts traded under that agreement, as well as cash collateral, through a single payment by one party to the other in the event of default on or termination of any one contract. The Fund’s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the master netting agreement does not result in an offset of reported amounts of financial assets and liabilities in the statement of assets and liabilities across transactions between the Fund and the applicable counterparty:
Description | | Gross Amounts of Recognized Assets | | | Gross Amounts Offset in the Statement of Assets and Liabilities | | | Net Amounts of Assets Presented in the Statement of Assets and Liabilities | |
Repurchase Agreements | | | $78,253,312 | | | | $ – | | | | $78,253,312 | |
Total | | | $78,253,312 | | | | $ – | | | | $78,253,312 | |
| | Net Amounts | | | | | | | | | | | |
| | of Assets | | Amounts Not Offset in the | | | |
| | Presented in | | Statement of Assets and Liabilities | | | |
Counterparty | | the Statement of Assets and Liabilities | | Financial Instruments | | | Cash Collateral Received(a) | | | Securities Collateral Received(a) | | Net Amount(b) | |
Fixed Income Clearing Corp. | | $13,253,312 | | | $ – | | | | $ – | | | $(13,253,312) | | | $ – | |
J.P. Morgan Chase | | 65,000,000 | | | – | | | | – | | | (65,000,000) | | | – | |
Total | | $78,253,312 | | | $ – | | | | $ – | | | $(78,253,312) | | | $ – | |
(a) | Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statement of Assets and Liabilities, for each respective counterparty. |
(b) | Net amount represents the amount owed to the Fund by the counterparty as of June 30, 2017. |
15
Notes to Financial Statements (continued)
6. | DIRECTORS’ REMUNERATION |
The Fund’s officers and two Directors, who are associated with Lord Abbett, do not receive any compensation from the Fund for serving in such capacities. Independent Directors’ fees are allocated among all Lord Abbett-sponsored funds based on the net assets of each fund. There is an equity-based plan available to all Independent Directors under which Independent Directors must defer receipt of a portion of, and may elect to defer receipt of an additional portion of Directors’ fees. The deferred amounts are treated as though equivalent dollar amounts had been invested in the funds. Such amounts and earnings accrued thereon are included in Directors’ fees on the Statement of Operations and in Directors’ fees payable on the Statement of Assets and Liabilities and are not deductible for U.S. federal income tax purposes until such amounts are paid.
The Fund has entered into an arrangement with its transfer agent and custodian, whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s expenses.
8. | INTERFUND LENDING PROGRAM |
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC exemptive order”), certain registered open-end management investment companies managed by Lord Abbett, including the Fund, participate in a joint lending and borrowing program (the “Interfund Lending Program”). The SEC exemptive order allows the Fund to borrow money from and lend money to each other for temporary or emergency purposes subject to the limitations and conditions. During the year ended June 30, 2017, the Fund did not participate as a borrower or a lender in the Interfund Lending Program.
9. | CUSTODIAN AND ACCOUNTING AGENT |
State Street Bank and Trust Company (“SSB”) is the Fund’s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating the Fund’s net asset value.
The Fund’s yield may vary in response to changes in interest rates and other market factors.
The Fund generally invests a substantial portion of its assets in money market securities issued by the U.S. Government and by various government-sponsored enterprises such as Federal Home Loan Mortgage Corporation, the Federal Home Loan Banks and Federal National Mortgage Association. Such securities are not guaranteed by the U.S. Government, but are supported only by the credit of the particular government-sponsored enterprises involved, and the discretionary authority of the U.S. Treasury to purchase the enterprise’s obligations. There is no assurance that the U.S. Government will provide financial support to enterprises that are not supported by the full faith and credit of the U.S. Government. The Fund also may invest in repurchase agreements involving the securities described herein.
These factors can affect the Fund’s performance.
An investment in the Fund is not a bank deposit and 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 an investment at $1.00 per share, it is possible to lose money by investing in the Fund.
16
Notes to Financial Statements (concluded)
11. | SUMMARY OF CAPITAL TRANSACTIONS |
Transactions in shares of capital stock were as follows:
| | | | | Year Ended | | | | | | Year Ended | |
| | | | | June 30, 2017 | | | | | | June 30, 2016 | |
| | | | | | | | | | | | |
Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | | 777,748,012 | | | $ | 777,748,012 | | | | 1,011,727,109 | | | $ | 1,011,727,109 | |
Converted from Class B* | | | 1,265,145 | | | | 1,265,145 | | | | 1,546,455 | | | | 1,546,455 | |
Reinvestment of distributions | | | 182,683 | | | | 182,683 | | | | 112,999 | | | | 112,999 | |
Shares reacquired | | | (972,539,252 | ) | | | (972,539,252 | ) | | | (886,111,782 | ) | | | (886,111,783 | ) |
Increase (decrease) | | | (193,343,412 | ) | | $ | (193,343,412 | ) | | | 127,274,781 | | | $ | 127,274,780 | |
| | | | | | | | | | | | | | | | |
Class B Shares | | | | | | | | | | | | | | | | |
Shares sold | | | 1,588,685 | | | $ | 1,588,685 | | | | 2,142,492 | | | $ | 2,142,492 | |
Shares reacquired | | | (2,044,418 | ) | | | (2,044,418 | ) | | | (3,029,025 | ) | | | (3,029,025 | ) |
Converted to Class A* | | | (1,265,145 | ) | | | (1,265,145 | ) | | | (1,546,455 | ) | | | (1,546,455 | ) |
Decrease | | | (1,720,878 | ) | | $ | (1,720,878 | ) | | | (2,432,988 | ) | | $ | (2,432,988 | ) |
| | | | | | | | | | | | | | | | |
Class C Shares | | | | | | | | | | | | | | | | |
Shares sold | | | 47,064,891 | | | $ | 47,064,891 | | | | 84,496,000 | | | $ | 84,496,000 | |
Reinvestment of distributions | | | 17,148 | | | | 17,148 | | | | 13,439 | | | | 13,439 | |
Shares reacquired | | | (72,389,044 | ) | | | (72,389,044 | ) | | | (84,396,747 | ) | | | (84,396,747 | ) |
Increase (decrease) | | | (25,307,005 | ) | | $ | (25,307,005 | ) | | | 112,692 | | | $ | 112,692 | |
| | | | | | | | | | | | | | | | |
Class I Shares | | | | | | | | | | | | | | | | |
Shares sold | | | 17,442,823 | | | $ | 17,442,823 | | | | 20,788,753 | | | $ | 20,788,753 | |
Reinvestment of distributions | | | 159 | | | | 159 | | | | 183 | | | | 183 | |
Shares reacquired | | | (30,480,513 | ) | | | (30,480,513 | ) | | | (17,873,370 | ) | | | (17,873,370 | ) |
Increase (decrease) | | | (13,037,531 | ) | | $ | (13,037,531 | ) | | | 2,915,566 | | | $ | 2,915,566 | |
* | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th day is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
12. | RECENT ACCOUNTING REGULATION |
In October 2016, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Regulation S-X that, along with other regulatory changes, are intended to modernize the reporting and disclosure of information by registered investment companies. In part, the amendments require standardized, enhanced disclosure about derivatives in investment company financial statements. The compliance date for the amendments is for periods ending after August 1, 2017. Although management continues to evaluate the potential impact of the amendments on the Fund, it expects such impact will be limited to additional financial statement disclosures, with no effect on the Fund’s net assets or results of operations.
17
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc. (the “Fund”), including the schedule of investments, as of June 30, 2017, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2017, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc. as of June 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
August 23, 2017
18
Basic Information About Management
The Board is responsible for the management of the business and affairs of the Fund in accordance with the laws of the State of Maryland. The Board elects officers who are responsible for the day-to-day operations of the Fund and who execute policies authorized by the Board. The Board also approves an investment adviser to the Fund and continues to monitor the cost and quality of the services the investment adviser provides, and annually considers whether to renew the contract with the adviser. Generally, each Director holds office until his/her successor is elected and qualified or until his/her earlier resignation or removal, as provided in the Fund’s organizational documents.
Lord Abbett, a Delaware limited liability company, is the Fund’s investment adviser. Designated Lord Abbett personnel are responsible for the day-to-day management of the Fund.
Interested Directors
Ms. Foster and Mr. Sieg are affiliated with Lord Abbett and are “interested persons” of the Fund as defined in the Act. Ms. Foster and Mr. Sieg are directors/trustees of each of the 12 investment companies in the Lord Abbett Family of Funds, which consist of 61 portfolios or series. Ms. Foster is an officer of the Lord Abbett Family of Funds.
Name, Address and Year of Birth | Current Position and Length of Service with the Fund | Principal Occupation and Other Directorships During the Past Five Years |
Daria L. Foster Lord, Abbett & Co. LLC 90 Hudson Street Jersey City, NJ 07302 (1954) | Director and President since 2006; Chief Executive Officer since 2012 | Principal Occupation: Managing Partner of Lord Abbett, joined Lord Abbett in 1990. Other Directorships: None. |
Douglas B. Sieg Lord, Abbett & Co. LLC 90 Hudson Street Jersey City, NJ 07302 (1969) | Director since 2016 | Principal Occupation: Partner (since 2001) and Head of Client Services (since 2013), formerly Director of Marketing and Relationship Management, joined Lord Abbett in 1994. Other Directorships: None. |
Independent Directors
The following Independent Directors also are directors/trustees of each of the 12 investment companies in the Lord Abbett Family of Funds, which consist of 61 portfolios or series.
Name, Address and Year of Birth | Current Position and Length of Service with the Fund | Principal Occupation and Other Directorships During the Past Five Years |
Robert B. Calhoun, Jr. Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1942) | Director since 1998 | Principal Occupation: Senior Advisor of Monitor Clipper Partners, a private equity investment fund (1997 - 2012); President of Clipper Asset Management Corp. (1991 - 2009). Other Directorships: None. |
Eric C. Fast Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1949) | Director since 2014 | Principal Occupation: Chief Executive Officer of Crane Co., an industrial products company (2001 - 2014). Other Directorships: Currently serves as director of Automatic Data Processing, Inc. (since 2007) and Regions Financial Corporation (since 2010). Previously served as a director of Crane Co. (1999 - 2014). |
19
Basic Information About Management (continued)
Name, Address and Year of Birth | Current Position and Length of Service with the Fund | Principal Occupation and Other Directorships During the Past Five Years |
Evelyn E. Guernsey Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1955) | Director since 2011 | Principal Occupation: CEO, Americas of J.P. Morgan Asset Management (2004 - 2010). Other Directorships: None. |
Julie A. Hill Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1946) | Director since 2004 | Principal Occupation: Owner and CEO of The Hill Company, a business consulting firm (since 1998). Other Directorships: Currently serves as director of Anthem, Inc., a health benefits company (since 1994). |
Franklin W. Hobbs Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | Director since 2000 | Principal Occupation: Advisor of One Equity Partners, a private equity firm (since 2004). Other Directorships: Currently serves as director and Chairman of the Board of Ally Financial Inc., a financial services firm (since 2009), and as director of Molson Coors Brewing Company (since 2002). |
James M. McTaggart Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | Director since 2012 | Principal Occupation: Independent management advisor and consultant (since 2012); Vice President, CRA International, Inc. (doing business as Charles River Associates), a global management consulting firm (2009 - 2012); Founder and Chairman of Marakon Associates, Inc., a strategy consulting firm (1978 - 2009); and Officer and Director of Trinsum Group, a holding company (2007 - 2009). Other Directorships: Blyth, Inc., a home products company (2004 - 2015). |
Mark A. Schmid Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1959) | Director since 2016 | Principal Occupation: Vice President and Chief Investment Officer of the University of Chicago (since 2009). Other Directorships: None. |
James L.L. Tullis Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | Director since 2006; Chairman since 2017 | Principal Occupation: CEO of Tullis-Dickerson and Co. Inc., a venture capital management firm (since 1990); CEO of Tullis Health Investors Inc. (since 2012). Other Directorships: Currently serves as director of Crane Co. (since 1998). |
20
Basic Information About Management (continued)
Officers
None of the officers listed below have received compensation from the Fund. All of the officers of the Fund also may be officers of the other Lord Abbett Funds and maintain offices at 90 Hudson Street, Jersey City, NJ 07302. Unless otherwise indicated, the position(s) and title(s) listed under the “Principal Occupation During the Past Five Years” column indicate each officer’s position(s) and title(s) with Lord Abbett. Each officer serves for an indefinite term (i.e., until his or her death, resignation, retirement, or removal).
Name and Year of Birth | | Current Position with the Fund | | Length of Service of Current Position | | Principal Occupation During the Past Five Years |
Daria L. Foster (1954) | | President and Chief Executive Officer | | Elected as President in 2006 and Chief Executive Officer in 2012 | | Managing Partner of Lord Abbett, joined Lord Abbett in 1990. |
Robert A. Lee (1969) | | Executive Vice President | | Elected in 2000 | | Partner and Chief Investment Officer, joined Lord Abbett in 1997. |
Kewjin Yuoh (1971) | | Executive Vice President | | Elected in 2011 | | Partner and Portfolio Manager, joined Lord Abbett in 2010. |
John W. Ashbrook (1964) | | Vice President and Assistant Secretary | | Elected in 2014 | | Assistant General Counsel, joined Lord Abbett in 2008. |
Brooke A. Fapohunda (1975) | | Vice President and Assistant Secretary | | Elected in 2014 | | Deputy General Counsel, joined Lord Abbett in 2006. |
John K. Forst (1960) | | Vice President and Assistant Secretary | | Elected in 2005 | | Partner and Deputy General Counsel, joined Lord Abbett in 2004. |
Bernard J. Grzelak (1971) | | Chief Financial Officer and Vice President | | Elected in 2017 | | Partner and Chief Operations Officer, and was formerly Director of Fund Administration, joined Lord Abbett in 2003. |
Lawrence H. Kaplan (1957) | | Vice President and Secretary | | Elected in 1997 | | Partner and General Counsel, joined Lord Abbett in 1997. |
Linda Y. Kim (1980) | | Vice President and Assistant Secretary | | Elected in 2016 | | Counsel, joined Lord Abbett in 2015 and was formerly an Associate at Stroock & Stroock & Lavan LLP (2007 - 2015). |
Hyun Lee (1970) | | Vice President | | Elected in 2016 | | Portfolio Manager, joined Lord Abbett in 2001. |
21
Basic Information About Management (concluded)
Name and Year of Birth | | Current Position with the Fund | | Length of Service of Current Position | | Principal Occupation During the Past Five Years |
Joseph M. McGill (1962) | | Chief Compliance Officer | | Elected in 2014 | | Partner and Chief Compliance Officer, joined Lord Abbett in 2014 and was formerly Managing Director and the Chief Compliance Officer at UBS Global Asset Management (2003 - 2013). |
A. Edward Oberhaus, III (1959) | | Vice President | | Elected in 1996 | | Partner and Director, joined Lord Abbett in 1983. |
Lawrence B. Stoller (1963) | | Vice President and Assistant Secretary | | Elected in 2007 | | Partner and Senior Deputy General Counsel, joined Lord Abbett in 2007. |
Scott S. Wallner (1955) | | AML Compliance Officer | | Elected in 2011 | | Assistant General Counsel, joined Lord Abbett in 2004. |
Christian J. Kelly (1975) | | Treasurer | | Elected in 2017 | | Director of Fund Administration, joined Lord Abbett in 2009. |
Please call 888-522-2388 for a copy of the statement of additional information, which contains further information about the Fund’s Directors. It is available free upon request.
22
Householding
The Fund has adopted a policy that allows it to send only one copy of the Fund’s prospectus, proxy material, annual report and semiannual report to certain shareholders residing at the same “household.” This reduces Fund expenses, which benefits you and other shareholders. If you need additional copies or do not want your mailings to be “householded,” please call Lord Abbett at 888-522-2388 or send a written request with your name, the name of your fund or funds and your account number or numbers to Lord Abbett Family of Funds, P.O. Box 219336, Kansas City, MO 64121.
Proxy Voting Policies, Procedures and Records
A description of the policies and procedures that Lord Abbett uses to vote proxies related to the Fund’s portfolio securities, and information on how Lord Abbett voted the Fund’s proxies during the 12-month period ended June 30 are available without charge, upon request, (i) by calling 888-522-2388; (ii) on Lord Abbett’s Website at www.lordabbett.com; and (iii) on the Securities and Exchange Commission’s (“SEC”) Website at www.sec.gov.
Shareholder Reports and Quarterly Portfolio Disclosure
The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. Copies of the filings are available without charge, upon request on the SEC’s Website at www.sec.gov and may be available by calling Lord Abbett at 888-522-2388. You can also obtain copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330).
Tax Information |
For foreign shareholders, all of the ordinary income distributions paid by the Fund during the fiscal year ended June 30, 2017 represent interest-related dividends. |
23
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This report, when not used for the general information of shareholders of the Fund, is to be distributed only if preceded or accompanied by a current fund prospectus. | | |
| | |
Lord Abbett mutual fund shares are distributed by LORD ABBETT DISTRIBUTOR LLC. | Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc. | LAMM-2 (08/17) |
| (a) | In accordance with applicable requirements, the Registrant adopted a Sarbanes-Oxley Code of Ethics on June 19, 2003 that applies to the principal executive officer and senior financial officers of the Registrant (“Code of Ethics”). The Code of Ethics was in effect during the fiscal year ended June 30, 2017 (the “Period”). |
| (c) | The Registrant has not amended the Code of Ethics as described in Form N-CSR during the Period. |
| (d) | The Registrant has not granted any waiver, including an implicit waiver, from a provision of the Code of Ethics as described in Form N-CSR during the Period. |
| (f) | See Item 12(a)(1) concerning the filing of the Code of Ethics. |
Item 3: | Audit Committee Financial Expert. |
| |
| The Registrant’s board of directors has determined that each of the following independent directors who are members of the audit committee is an audit committee financial expert: Robert B. Calhoun, Evelyn E. Guernsey, and Mark A. Schmid. Each of these persons is independent within the meaning of the Form N-CSR. |
Item 4: | Principal Accountant Fees and Services. |
In response to sections (a), (b), (c) and (d) of Item 4, the aggregate fees billed to the Registrant for the fiscal years ended June 30, 2017 and 2016 by the Registrant’s principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively, “Deloitte”) were as follows:
| Fiscal year ended: |
| 2017 | 2016 |
Audit Fees {a} | $31,500 | $32,700 |
Audit-Related Fees | - 0 - | - 0 - |
Total audit and audit-related fees | $31,500 | $32,700 |
| | |
Tax Fees {b} | 4,410 | 4,621 |
All Other Fees | - 0 - | - 0 - |
| | |
Total Fees | $35,910 | $37,321 |
{a} Consists of fees for audits of the Registrant’s annual financial statements.
{b} Fees for the fiscal year ended June 30, 2017 and 2016 consist of fees for preparing the U.S. Income Tax Return for Regulated Investment Companies, New Jersey Corporation Business Tax Return, New Jersey Annual Report Form, U.S. Return of Excise Tax on Undistributed Income of Investment Companies, IRS Forms 1099-MISC and 1096 Annual Summary and Transmittal of U.S. Information Returns.
(e) (1) Pursuant to Rule 2-01(c) (7) of Regulation S-X, the Registrant’s Audit Committee has adopted pre-approval policies and procedures. Such policies and procedures generally provide that the Audit Committee must pre-approve:
| · | any audit, audit-related, tax, and other services to be provided to the Lord Abbett Funds, including the Registrant, and |
| · | any audit-related, tax, and other services to be provided to the Registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to one or more Funds comprising the Registrant if the engagement relates directly to operations and financial reporting of a Fund, by the independent auditor to assure that the provision of such services does not impair the auditor’s independence. |
The Audit Committee has delegated pre-approval authority to its Chairman, subject to a fee limit of $10,000 per event, and not to exceed $25,000 annually. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. Unless a type of service to be provided by the independent auditor has received general pre-approval, it must be pre-approved by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
(e) (2) The Registrant’s Audit Committee has approved 100% of the services described in this Item 4 (b) through (d).
(f) Not applicable.
(g) The aggregate non-audit fees billed by Deloitte for services rendered to the Registrant are shown above in the response to Item 4 (a), (b), (c) and (d) as “All Other Fees”.
The aggregate non-audit fees billed by Deloitte for services rendered to the Registrant’s investment adviser, Lord, Abbett & Co. LLC (“Lord Abbett”), for the fiscal years ended June 30, 2017 and 2016 were:
| Fiscal year ended: |
| 2017 | 2016 |
All Other Fees {a} | $201,416 | $210,261 |
{a} Consist of fees for Independent Services Auditors’ Report on Controls Placed in Operation and Tests of Operating Effectiveness related to Lord Abbett’s Asset Management Services (“SOC-1 Report”).
The aggregate non-audit fees billed by Deloitte for services rendered to entities under the common control of Lord Abbett for the fiscal years ended June 30, 2017 and 2016 were:
| Fiscal year ended: |
| 2017 | 2016 |
All Other Fees | $ - 0 - | $ - 0- |
(h) The Registrant’s Audit Committee has considered the provision of non-audit services that were rendered to the Registrant’s investment adviser, and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant, that were not pre-approved pursuant to Rule 2-01 (c)(7)(ii) of Regulation S-X and has determined that the provision of such services is compatible with maintaining Deloitte’s independence.
Item 5: | Audit Committee of Listed Registrants. |
| |
| Not applicable. |
| |
Item 6: | Investments. |
| |
| Not applicable. |
| |
Item 7: | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
| |
| Not applicable. |
| |
Item 8: | Portfolio Managers of Closed-End Management Investment Companies. |
| |
| Not applicable. |
Item 9: | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
| | |
| | Not applicable. |
| | |
Item 10: | Submission of Matters to a Vote of Security Holders. |
| | |
| | Not applicable. |
| | |
Item 11: | Controls and Procedures. |
| | |
| (a) | Based on their evaluation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days prior to the filing date of this report, the Chief Executive Officer and Chief Financial Officer of the Registrant have concluded that such disclosure controls and procedures are reasonably designed and effective to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to them by others within those entities. |
| | |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
| | |
Item 12: | Exhibits. |
| | |
| (a)(1) | The Lord Abbett Family of Funds Sarbanes Oxley Code of Ethics for the Principal Executive Officer and Senior Financial Officers is attached hereto as part of Ex-99. CODEETH. |
| (a)(2) | Certification of each Principal Executive Officer and Principal Financial Officer of the Registrant as required by Rule 30a-2 under the Investment Company Act of 1940 is attached hereto as a part of EX-99.CERT. |
| (b) | Certification of each Principal Executive Officer and Principal Financial Officer of the Registrant as required by Section 906 of the Sarbanes-Oxley Act of 2002 is provided as a part of EX-99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LORD ABBETT U.S. GOVERNMENT & GOVERNMENT SPONSORED ENTERPRISES MONEY MARKET FUND, INC. |
| | |
| By: | /s/ Daria L. Foster |
| | Daria L. Foster |
| | President and Chief Executive Officer |
Date: August 23, 2017
| By: | /s/ Bernard J. Grzelak |
| | Bernard J. Grzelak |
| | Chief Financial Officer and Vice President |
Date: August 23, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By: | /s/ Daria L. Foster |
| | Daria L. Foster |
| | President and Chief Executive Officer |
Date: August 23, 2017
| By: | /s/ Bernard J. Grzelak |
| | Bernard J. Grzelak |
| | Chief Financial Officer and Vice President |
Date: August 23, 2017