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)
30 Hudson Street, Jersey City, New Jersey 07302-4804
(Address of principal executive offices) (Zip code)
Randolph A. Stuzin, Esq.
Vice President and Assistant Secretary
30 Hudson Street, Jersey City, New Jersey 07302-4804
(Name and address of agent for service)
Registrant’s telephone number, including area code: (888) 522-2388
Date of fiscal year end: 6/30
Date of reporting period: 6/30/2024
| Item 1: | | Report(s) to Shareholders. |
Lord Abbett U.S. Government Sponsored Enterprises Money Market Fund
Annual Shareholder Report
June 30, 2024
lordabbett.com/FundDocuments
This annual shareholder report contains important information about the Lord Abbett U.S. Government Sponsored Enterprises Money Market Fund for the period of July 1, 2023 to June 30, 2024, as well as certain changes to the Fund. You can find additional information about the Fund at lordabbett.com/FundDocuments. You can also request this information by contacting us at 888-522-2388.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
| Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
|---|
| Class A | $29 | 0.28% |
| Total Net Assets | $1,091,578,390 |
| # of Portfolio Holdings | 9 |
| Total Advisory Fees Paid | $1,394,360 |
| Weighted Average Maturity | 37 Days |
| Weighted Average Life of Investments | 37 Days |
What did the Fund invest in?
| Portfolio Holdings Presented by Maturity | %Footnote Reference* |
| 1 - 30 Days | 43.5% |
| 31 - 60 Days | 33.8% |
| 61 - 90 Days | 9.1% |
| 91 - 180 Days | 13.6% |
| Total | 100.0% |
| Footnote | Description |
Footnote* | Represents percent of total investments |
There were no material fund changes during the period.
Where can I find additional information about the Fund?
For additional information about the Fund, including its Prospectus, Statement of Additional Information, financial statements, holdings and proxy information, please visit lordabbett.com/FundDocuments.
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 (or related notice of internet availability of 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.
Lord Abbett U.S. Government Sponsored Enterprises Money Market Fund
Annual Shareholder Report
June 30, 2024
lordabbett.com/FundDocuments
This annual shareholder report contains important information about the Lord Abbett U.S. Government Sponsored Enterprises Money Market Fund for the period of July 1, 2023 to June 30, 2024, as well as certain changes to the Fund. You can find additional information about the Fund at lordabbett.com/FundDocuments. You can also request this information by contacting us at 888-522-2388.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
| Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
|---|
| Class C | $29 | 0.28% |
| Total Net Assets | $1,091,578,390 |
| # of Portfolio Holdings | 9 |
| Total Advisory Fees Paid | $1,394,360 |
| Weighted Average Maturity | 37 Days |
| Weighted Average Life of Investments | 37 Days |
What did the Fund invest in?
| Portfolio Holdings Presented by Maturity | %Footnote Reference* |
| 1 - 30 Days | 43.5% |
| 31 - 60 Days | 33.8% |
| 61 - 90 Days | 9.1% |
| 91 - 180 Days | 13.6% |
| Total | 100.0% |
| Footnote | Description |
Footnote* | Represents percent of total investments |
There were no material fund changes during the period.
Where can I find additional information about the Fund?
For additional information about the Fund, including its Prospectus, Statement of Additional Information, financial statements, holdings and proxy information, please visit lordabbett.com/FundDocuments.
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 (or related notice of internet availability of 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.
Lord Abbett U.S. Government Sponsored Enterprises Money Market Fund
Annual Shareholder Report
June 30, 2024
lordabbett.com/FundDocuments
This annual shareholder report contains important information about the Lord Abbett U.S. Government Sponsored Enterprises Money Market Fund for the period of July 1, 2023 to June 30, 2024, as well as certain changes to the Fund. You can find additional information about the Fund at lordabbett.com/FundDocuments. You can also request this information by contacting us at 888-522-2388.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
| Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
|---|
| Class I | $29 | 0.28% |
| Total Net Assets | $1,091,578,390 |
| # of Portfolio Holdings | 9 |
| Total Advisory Fees Paid | $1,394,360 |
| Weighted Average Maturity | 37 Days |
| Weighted Average Life of Investments | 37 Days |
What did the Fund invest in?
| Portfolio Holdings Presented by Maturity | %Footnote Reference* |
| 1 - 30 Days | 43.5% |
| 31 - 60 Days | 33.8% |
| 61 - 90 Days | 9.1% |
| 91 - 180 Days | 13.6% |
| Total | 100.0% |
| Footnote | Description |
Footnote* | Represents percent of total investments |
There were no material fund changes during the period.
Where can I find additional information about the Fund?
For additional information about the Fund, including its Prospectus, Statement of Additional Information, financial statements, holdings and proxy information, please visit lordabbett.com/FundDocuments.
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 (or related notice of internet availability of 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.
Item 1(b): Not applicable.
| (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, 2024 (the “Period”). |
| (b) | | Not applicable. |
| | | |
| (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. |
| | | |
| (e) | | Not applicable. |
| | | |
| (f) | | See Item 19(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: Evelyn E. Guernsey and Karla M. Rabusch. 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, 2024 and 2023 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: |
| | | 2024 | | 2023 |
| Audit Fees {a} | | $33,000 | | $32,000 |
| Audit-Related Fees | | - 0 - | | - 0 - |
| Total audit and audit-related fees | | $33,000 | | $32,000 |
| | | | | |
| Tax Fees {b} | | - 0 - | | - 0 - |
| All Other Fees | | - 0 - | | - 0 - |
| | | | | |
| Total Fees | | $33,000 | | $32,000 |
{a} Consists of fees for audits of the Registrant’s annual financial statements.
{b} Fees for the fiscal year ended June 30, 2024 and 2023 consist of fees for services related to the recovery of excess dividend withholding taxes in certain jurisdictions.
(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 Chair, subject to a fee limit of $10,000 per event, and not to exceed $25,000 annually. The Chair 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 paragraphs (b) through (d) of this Item 4, no amount was approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(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, 2024 and 2023 were:
| | | Fiscal year ended: | |
| | | 2024 | | 2023 | |
| All Other Fees {a} | | $250,000 | | $230,000 | |
{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, 2024 and 2023 were:
| | | Fiscal year ended: | |
| | | 2024 | | 2023 | |
| 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.
| (i) | Not Applicable. |
| | |
| (j) | Not Applicable. |
| Item 5: | | Audit Committee of Listed Registrants. |
| | | Not applicable. |
| | | |
| Item 6: | | Investments. |
| | | The Registrant’s “Schedule I – Investments in securities of unaffiliated issuers” as of the close of the reporting period is included under Item 7 of this Form N-CSR. |
| | | |
| Item 7: | | Financial Statements and Financial Highlights for Open-End Management Investment Companies. |
| | | |
| Item 8: | | Changes in and Disagreements with Accountants for Open-End Management Investment Companies. |
| | | |
| Item 9: | | Proxy Disclosures for Open-End Management Investment Companies. |
| | | |
| Item 10: | | Remuneration Paid to Directors, Officers, and Others for Open-End Management Investment Companies. |
| | | |
| Item 11: | | Statement Regarding Basis for Approval of Investment Advisory Contract. |
LORD ABBETT
FINANCIAL STATEMENTS
AND OTHER IMPORTANT
INFORMATION
Lord Abbett
U.S. Government & Government Sponsored
Enterprises Money Market Fund
For the fiscal year ended June 30, 2024
Table of Contents
Schedule of Investments
June 30, 2024
| Investments | | Yield(a) | | Maturity
Date | | Principal
Amount | | | Fair
Value | |
| GOVERNMENT SPONSORED ENTERPRISES SECURITIES 20.51% | | | | | |
| Federal Home Loan Bank Discount Notes | | 5.32% | | 7/17/2024 | | $ | 125,000,000 | | | $ | 124,708,444 | |
| Federal Home Loan Bank Discount Notes | | 5.33% | | 8/28/2024 | | | 100,000,000 | | | | 99,152,878 | |
| Total Government Sponsored Enterprises Securities (cost $223,861,322) | | | | 223,861,322 | |
| | | | | | | | | | | | | |
| U.S. TREASURY OBLIGATIONS 55.45% | | | | | | | | | | | | |
| U.S. Treasury Bills | | 5.28% | | 7/5/2024 | | | 90,000,000 | | | | 89,947,875 | |
| U.S. Treasury Bills | | 5.31% | | 8/1/2024 | | | 120,000,000 | | | | 119,458,430 | |
| U.S. Treasury Bills | | 5.31% | | 8/15/2024 | | | 150,000,000 | | | | 149,017,125 | |
| U.S. Treasury Bills | | 5.30% | | 9/3/2024 | | | 100,000,000 | | | | 99,069,956 | |
| U.S. Treasury Bills | | 5.30% | | 10/8/2024 | | | 150,000,000 | | | | 147,842,006 | |
| Total U.S. Treasury Obligations (cost $605,335,392) | | | | | | | | | | | 605,335,392 | |
| Total Investments in Securities (cost $829,196,714) | | | | | | | | | | | 829,196,714 | |
| | | | | | | | | | | | | |
| REPURCHASE AGREEMENTS 23.64% | | | | | | | | | | | | |
Repurchase Agreement dated 6/28/2024, 5.310% due 7/1/2024 with Barclays Bank PLC collateralized by $239,594,000 of U.S. Treasury Note at 4.625% due 6/15/2027; value: $240,816,327; proceeds: $236,104,430
(cost $236,000,000) | | | 236,000,000 | | | | 236,000,000 | |
Repurchase Agreement dated 6/28/2024, 2.800% due 7/1/2024 with Fixed Income Clearing Corp. collateralized by $22,254,000 of U.S. Treasury Note at 4.875% due 04/30/2026; value: $22,461,005; proceeds: $22,025,659
(cost $22,020,521) | | | 22,020,521 | | | | 22,020,521 | |
| Total Repurchase Agreements (cost $258,020,521) | | | | | | | | | | | 258,020,521 | |
| Total Investments in Securities and Repurchase Agreements 99.60% (cost $1,087,217,235)(b) | | | | | | | 1,087,217,235 | |
| Other Assets and Liabilities – Net 0.40% | | | | | | | | | | | 4,361,155 | |
| Net Assets 100.00% | | | | | | | | | | $ | 1,091,578,390 | |
| | | |
| (a) | | Represents annualized yield at date of purchase for discount securities, and coupon for coupon-bearing securities. |
| (b) | | Cost for Federal income tax purposes is $1,087,217,235. Weighted average maturity and life of investments are: 37 days and 37 days, respectively. |
| | See Notes to Financial Statements. | 1 |
Schedule of Investments (concluded)
June 30, 2024
The following is a summary of the inputs used as of June 30, 2024 in valuing the Fund’s investments carried at fair value(1):
| Investment Type(2) | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Government Sponsored Enterprises Securities | | $ | – | | | $ | 223,861,322 | | | $ | – | | | $ | 223,861,322 | |
| U.S. Treasury Obligations | | | – | | | | 605,335,392 | | | | – | | | | 605,335,392 | |
| Repurchase Agreements | | | – | | | | 258,020,521 | | | | – | | | | 258,020,521 | |
| Total | | $ | – | | | $ | 1,087,217,235 | | | $ | – | | | $ | 1,087,217,235 | |
| | | |
| (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. The table above is presented by Investment Type. Industries are presented within an Investment Type should such Investment Type include securities classified as two or more levels within the three-tier fair value hierarchy. When applicable, each Level 3 security is identified on the Schedule of Investments along with the valuation technique utilized. |
A reconciliation of Level 3 investments is presented when the Fund has a material amount of Level 3 investments at the beginning or end of the year in relation to the Fund’s net assets.
| 2 | See Notes to Financial Statements. | |
Statement of Assets and Liabilities
June 30, 2024
| ASSETS: | | | |
| Investments in securities, at cost and fair value | | $ | 829,196,714 | |
| Investments in repurchase agreements, at cost and fair value | | | 258,020,521 | |
| Receivables: | | | | |
| Capital shares sold | | | 11,548,257 | |
| Interest | | | 109,569 | |
| Prepaid expenses | | | 25,908 | |
| Total assets | | | 1,098,900,969 | |
| LIABILITIES: | | | | |
| Payables: | | | | |
| Capital shares reacquired | | | 2,382,922 | |
| Directors’ fees | | | 142,198 | |
| Management fee | | | 130,081 | |
| Fund administration | | | 34,688 | |
| 12b-1 distribution plan | | | 498 | |
| Distributions payable | | | 4,394,160 | |
| Accrued expenses | | | 238,032 | |
| Total liabilities | | | 7,322,579 | |
| NET ASSETS | | $ | 1,091,578,390 | |
| COMPOSITION OF NET ASSETS: | | | | |
| Paid-in capital | | $ | 1,092,059,222 | |
| Total distributable earnings (loss) | | | (480,832 | ) |
| Net Assets | | $ | 1,091,578,390 | |
| Net assets by class: | | | | |
| Class A Shares | | $ | 1,063,956,843 | |
| Class C Shares | | $ | 19,975,815 | |
| Class I Shares | | $ | 7,645,732 | |
| Outstanding shares by class: | | | | |
| Class A Shares (2.8 billion shares of common stock authorized, $.001 par value) | | | 1,064,366,097 | |
| Class C Shares (500 million shares of common stock authorized, $.001 par value) | | | 19,984,917 | |
| Class I Shares (437.5 million shares of common stock authorized, $.001 par value) | | | 7,649,160 | |
| Net asset value, offering and redemption price per share (Net assets divided by outstanding shares): | | | | |
| Class A Shares-Net asset value | | | $1.00 | |
| Class C Shares-Net asset value | | | $1.00 | |
| Class I Shares-Net asset value | | | $1.00 | |
| | See Notes to Financial Statements. | 3 |
Statement of Operations
For the Year Ended June 30, 2024
| Investment income: | | | |
| Interest and other | | $ | 49,623,998 | |
| Expenses: | | | | |
| Management fee | | | 1,394,360 | |
| Fund administration | | | 371,834 | |
| Shareholder servicing | | | 324,872 | |
| Registration | | | 159,601 | |
| Directors’ fees | | | 91,764 | |
| Professional | | | 44,543 | |
| Reports to shareholders | | | 39,430 | |
| Custody | | | 10,123 | |
| Other | | | 135,672 | |
| Gross expenses | | | 2,572,199 | |
| Fees waived and expenses reimbursed (See Note 3) | | | (10,123 | ) |
| Net expenses | | | 2,562,076 | |
| Net investment income | | | 47,061,922 | |
| Net realized gain (loss) on investments | | | 32,629 | |
| Net Increase in Net Assets Resulting From Operations | | $ | 47,094,551 | |
| 4 | See Notes to Financial Statements. |
Statements of Changes in Net Assets
| INCREASE IN NET ASSETS | | For the Year Ended
June 30, 2024 | | | For the Year Ended
June 30, 2023 | |
| Operations: | | | | | | | | |
| Net investment income | | | $ | 47,061,922 | | | | $ | 27,614,517 | |
| Net realized gain (loss) on investments | | | | 32,629 | | | | | (393,862 | ) |
| Net increase in net assets resulting from operations | | | | 47,094,551 | | | | | 27,220,655 | |
| Distributions to shareholders | | | | | | | | | | |
| Class A | | | | (45,516,574 | ) | | | | (26,318,264 | ) |
| Class C | | | | (1,141,406 | ) | | | | (1,057,205 | ) |
| Class I | | | | (403,943 | ) | | | | (239,048 | ) |
| Total distribution to shareholders | | | | (47,061,923 | ) | | | | (27,614,517 | ) |
| Capital share transactions (See Note 12): | | | | | | | | | | |
| Net proceeds from sales of shares | | | | 1,129,531,033 | | | | | 839,606,859 | |
| Reinvestment of distributions | | | | 45,622,759 | | | | | 26,529,947 | |
| Cost of shares reacquired | | | | (893,871,769 | ) | | | | (824,072,889 | ) |
| Net increase in net assets resulting from capital share transactions | | | | 281,282,023 | | | | | 42,063,917 | |
| Net increase in net assets | | | | 281,314,651 | | | | | 41,670,055 | |
| NET ASSETS: | | | | | | | | | | |
| Beginning of year | | | $ | 810,263,739 | | | | $ | 768,593,684 | |
| End of year | | | $ | 1,091,578,390 | | | | $ | 810,263,739 | |
| | See Notes to Financial Statements. | 5 |
Financial Highlights
| | | | | Per Share Operating Performance: | | |
| | | | | Investment Operations: | | Distributions
to
shareholders
from: | | |
| | | | | | | | | |
| | | Net asset
value,
beginning of
period | | Net
investment
income
(loss)(a) | | Total from
investment
operations | | Net
investment
income | | Net asset
value,
end of
period |
| Class A | | | | | | | | | | | | | | | | | | | | |
| 6/30/2024 | | | $1.00 | | | | $0.05 | | | | $0.05 | | | | $(0.05 | ) | | | $1.00 | |
| 6/30/2023 | | | 1.00 | | | | 0.03 | | | | 0.03 | | | | (0.03 | ) | | | 1.00 | |
| 6/30/2022 | | | 1.00 | | | | – | (c)(d) | | | – | (d) | | | – | (d)(e) | | | 1.00 | |
| 6/30/2021 | | | 1.00 | | | | – | (d) | | | – | (d) | | | – | (d) | | | 1.00 | |
| 6/30/2020 | | | 1.00 | | | | 0.01 | | | | 0.01 | | | | (0.01 | ) | | | 1.00 | |
| Class C | | | | | | | | | | | | | | | | | | | | |
| 6/30/2024 | | | 1.00 | | | | 0.05 | | | | 0.05 | | | | (0.05 | ) | | | 1.00 | |
| 6/30/2023 | | | 1.00 | | | | 0.03 | | | | 0.03 | | | | (0.03 | ) | | | 1.00 | |
| 6/30/2022 | | | 1.00 | | | | – | (c)(d) | | | – | (d) | | | – | (d)(e) | | | 1.00 | |
| 6/30/2021 | | | 1.00 | | | | – | (d) | | | – | (d) | | | – | (d) | | | 1.00 | |
| 6/30/2020 | | | 1.00 | | | | 0.01 | | | | 0.01 | | | | (0.01 | ) | | | 1.00 | |
| Class I | | | | | | | | | | | | | | | | | | | | |
| 6/30/2024 | | | 1.00 | | | | 0.05 | | | | 0.05 | | | | (0.05 | ) | | | 1.00 | |
| 6/30/2023 | | | 1.00 | | | | 0.03 | | | | 0.03 | | | | (0.03 | ) | | | 1.00 | |
| 6/30/2022 | | | 1.00 | | | | – | (c)(d) | | | – | (d) | | | – | (d)(e) | | | 1.00 | |
| 6/30/2021 | | | 1.00 | | | | – | (d) | | | – | (d) | | | – | (d) | | | 1.00 | |
| 6/30/2020 | | | 1.00 | | | | 0.01 | | | | 0.01 | | | | (0.01 | ) | | | 1.00 | |
| (a) | | Calculated using average shares outstanding during the period. |
| (b) | | Total return for classes A 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) | | Includes net realized gain (loss) on investments. |
| (d) | | Amount less than $0.01. |
| (e) | | Includes capital gain distribution. |
| 6 | See Notes to Financial Statements. |
| | | Ratios to Average Net Assets: | | Supplemental
Data: |
| | | | | |
Total
return(b)
(%) | | Total
expenses after
waivers and/or
reimburse-
ments
(%) | | Total
expenses
(%) | | Net
investment
income (loss)
(%) | | Net assets,
end of
period
(000) |
| | | | | | | | | | | | | | | | | | | |
| | 5.17 | | | | 0.28 | | | | 0.28 | | | | 5.05 | | | | $1,063,957 | |
| | 3.49 | | | | 0.28 | | | | 0.29 | | | | 3.50 | | | | 775,869 | |
| | 0.15 | | | | 0.12 | | | | 0.28 | | | | 0.13 | | | | 721,193 | |
| | 0.01 | | | | 0.07 | | | | 0.31 | | | | 0.01 | | | | 569,289 | |
| | 1.05 | | | | 0.24 | | | | 0.30 | | | | 0.74 | | | | 630,663 | |
| | | | | | | | | | | | | | | | | | | |
| | 5.17 | | | | 0.28 | | | | 0.28 | | | | 5.05 | | | | 19,976 | |
| | 3.48 | | | | 0.28 | | | | 0.29 | | | | 3.29 | | | | 25,742 | |
| | 0.15 | | | | 0.12 | | | | 0.28 | | | | 0.14 | | | | 39,078 | |
| | 0.01 | | | | 0.07 | | | | 0.31 | | | | 0.01 | | | | 24,664 | |
| | 1.05 | | | | 0.23 | | | | 0.29 | | | | 0.63 | | | | 56,098 | |
| | | | | | | | | | | | | | | | | | | |
| | 5.17 | | | | 0.28 | | | | 0.28 | | | | 5.05 | | | | 7,646 | |
| | 3.47 | | | | 0.28 | | | | 0.29 | | | | 3.45 | | | | 8,652 | |
| | 0.15 | | | | 0.11 | | | | 0.28 | | | | 0.11 | | | | 8,323 | |
| | 0.01 | | | | 0.07 | | | | 0.31 | | | | 0.01 | | | | 5,802 | |
| | 1.05 | | | | 0.29 | | | | 0.32 | | | | 1.24 | | | | 5,986 | |
| | See Notes to Financial Statements. | 7 |
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 operates as a government money market fund under Rule 2a-7 under the Act.
The Fund has three active share classes: Classes A, 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. Class C shares 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 month on which the purchase order was accepted, provided that the Fund or financial intermediary through which a shareholder purchased Class C shares has records verifying that the C shares have been held at least eight years.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standard Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services - Investment Companies. 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.
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
| (a) | Investment Valuation–Under procedures approved by the Fund’s Board of Directors (the “Board”), the Board has designated the determination of fair value of the Fund’s portfolio investments to Lord, Abbett & Co. LLC (“Lord Abbett”) as its valuation designee. Accordingly, Lord Abbett is responsible for, among other things, assessing and managing valuation risks, establishing, applying and testing fair value methodologies, and evaluating pricing services. Lord Abbett has formed a Pricing Committee that performs these responsibilities on behalf of Lord Abbett, administers the pricing and valuation of portfolio investments and ensures that prices utilized reasonably reflect fair value. Among other things, these procedures allow Lord Abbett, subject to Board oversight, 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 in accordance with Rule 2a-7 under the Act. 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 amortized cost, which approximates fair value due to the short duration of the issue.
8
Notes to Financial Statements (continued)
| (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–Dividend income is recorded on the ex-dividend date. 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, if applicable, in 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. |
| (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, 2021 through June 30, 2024. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the Fund’s 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. |
| (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 |
9
Notes to Financial Statements (continued)
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). |
A summary of inputs used in valuing the Fund’s investments as of June 30, 2024 and, if applicable, 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. 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 provides 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 accrued daily and payable monthly.
The management fee is 0.15% of the Fund’s daily average 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 0.04% of the Fund’s average daily net assets. The fund administration fee is accrued daily and payable monthly. Lord Abbett voluntarily waived $10,123 of fund administration fees during the fiscal year ended June 30, 2024.
12b–1 Distribution Plan
The Fund has adopted a distribution plan with respect to Class A 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 Board has not authorized any fees to date pursuant to the plan.
Class I shares do not have a distribution plan.
One Director and certain of the Fund’s officers have an interest in Lord Abbett.
| 4. | DISTRIBUTIONS AND TAX INFORMATION |
Dividends are paid from net investment income, if any. Capital gain distributions are paid from taxable net realized gains from investments transactions, reduced by allowable capital loss carryforwards, if any. The capital loss carryforward amount, if any, is available to offset future net capital gains.
The tax character of distributions paid during the fiscal year ended June 30, 2024 was as follows:
| Fund | |
Tax-Exempt
Income | | |
Ordinary
Income | | | Net
Long-Term
Capital Gains | | |
Return of
Capital | | | Total
Distributions
Paid | |
| U.S. Government & Government Sponsored Enterprises Money Market Fund | | $ | – | | | | $47,061,923 | | | $ | – | | | $ | – | | | | $47,061,923 | |
10
Notes to Financial Statements (continued)
The tax character of distributions paid during the fiscal year ended June 30, 2023 was as follows:
| Fund | | Tax-Exempt
Income | | | Ordinary
Income | | | Net
Long-Term
Capital Gains | | | Return of
Capital | | | Total
Distributions
Paid | |
| U.S. Government & Government Sponsored Enterprises Money Market Fund | | $ | – | | | | $27,614,517 | | | $ | – | | | $ | – | | | | $27,614,517 | |
Net capital losses recognized by the Fund may be carried forward indefinitely and retain their character as short-term and/or long-term losses. Capital losses incurred that will be carried forward are as follows:
| Fund | | Short-Term
Losses | | | Long-Term
Losses | | | Net Capital
Losses | | | | | | | | | |
| U.S. Government & Government Sponsored Enterprises Money Market Fund | | | $361,234 | | | | $ – | | | | $361,234 | | | | | | | | | |
| 5. | DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES |
The 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 the 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 | | | $ | 258,020,521 | | | | $ | – | | | | $ | 258,020,521 | |
| Total | | | $ | 258,020,521 | | | | $ | – | | | | $ | 258,020,521 | |
| | | Net Amounts
of Assets
Presented in
the Statement
of Assets and
Liabilities | | |
Amounts Not Offset in the
Statement of Assets and Liabilities | | | | |
| Counterparty | | | | Financial
Instruments | | | Cash
Collateral
Received(a) | | | Securities
Collateral
Received(a) | | | Net
Amount(b) | |
| Barclays Bank PLC | | | $ | 236,000,000 | | | | $ | – | | | | $ | – | | | | $ | (236,000,000 | ) | | | $ | – | |
| Fixed Income Clearing Corp. | | | | 22,020,521 | | | | | – | | | | | – | | | | | (22,020,521 | ) | | | | – | |
| Total | | | $ | 258,020,521 | | | | $ | – | | | | $ | – | | | | $ | (258,020,521 | ) | | | $ | – | |
| (a) | Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets (liabilities) 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, 2024. |
11
Notes to Financial Statements (continued)
| 6. | DIRECTORS’ REMUNERATION |
The Fund’s officers and one Director, 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 primarily based on the relative net assets of each fund. There is an equity-based plan available to all Independent Directors under which Independent Directors may elect to defer receipt of a portion of Directors’ fees. The deferred amounts are treated as though equivalent dollar amounts had been invested in the Fund. Such amounts and earnings accrued thereon are included in Directors’ fees in the Statement of Operations and in Directors’ fees payable in the Statement of Assets and Liabilities and are not deductible for U.S. federal income tax purposes until such amounts are paid.
For the period ended June 30, 2024, the Fund and certain other funds managed by Lord Abbett (collectively, the “Participating Funds”) were party to a syndicated line of credit facility with various lenders for $1.6 billion (the “Syndicated Facility”) under which State Street Bank and Trust Company (“SSB”) participated as a lender and as agent for the lenders. The Participating Funds were subject to graduated borrowing limits of one-third of fund net assets (if fund net assets are less than $750 million), $250 million, $300 million, $700 million, or $1 billion, based on past borrowings and likelihood of future borrowings, among other factors.
Effective August 1, 2024, the Participating Funds renewed the Syndicated Facility for $1.6 billion. The Participating Funds are subject to graduated borrowing limits of one-third of fund net assets (if fund net assets are less than $750 million), $250 million, $700 million, or $1 billion, based on past borrowings and likelihood of future borrowings, among other factors.
For the period ended June 30, 2024, the Participating Funds were also party to an additional uncommitted line of credit facility with SSB for $330 million (the “Bilateral Facility”). Under the Bilateral Facility, the Participating Funds were subject to graduated borrowing limits of one-third of fund net assets (if fund net assets are less than $750 million), or $250 million based on past borrowings and likelihood of future borrowings, among other factors.
Effective August 1, 2024, the Participating Funds renewed the Bilateral Facility in the same amount. The Participating Funds remain subject to the same borrowing limits as were in place prior to the renewal.
These credit facilities are to be used for short-term working capital purposes as additional sources of liquidity to satisfy redemptions.
For the fiscal year ended June 30, 2024, the Fund did not utilize the Syndicated Facility or Bilateral Facility.
| 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 funds that participate in the Interfund Lending Program to borrow money from and lend money to each other for temporary or emergency purposes subject to the limitations and conditions.
For the fiscal year ended June 30, 2024, the Fund did not participate as a borrower or lender in the Interfund Lending Program.
12
Notes to Financial Statements (continued)
| 9. | CUSTODIAN AND ACCOUNTING AGENT |
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.
| 10. | SECURITIES LENDING AGREEMENT |
The Fund has established a securities lending agreement with Citibank, N.A. for the lending of securities to qualified brokers in exchange for securities or cash collateral equal to at least the market value of securities loaned, plus interest, if applicable. Cash collateral is invested in an approved money market fund. In accordance with the Fund’s securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. As with other extensions of credit, the Fund may experience a delay in the recovery of its securities or incur a loss should the borrower of the securities breach its agreement with the Fund or the borrower becomes insolvent at a time when the collateral is insufficient to cover the cost of repurchasing securities on loan. Any income earned from securities lending is included in Securities lending net income in the Fund’s Statement of Operations.
The initial collateral received by the Fund is required to have a value equal to at least 100% of the market value of the securities loaned. The collateral must be marked-to-market daily to cover increases in the market value of the securities loaned (or potentially a decline in the value of the collateral). In general, the risk of borrower default will be borne by Citibank, N.A.; the Fund will bear the risk of loss with respect to the investment of the cash collateral. The advantage of such loans is that the Fund continues to receive income on loaned securities while receiving a portion of any securities lending fees and earning returns on the cash amounts which may be reinvested for the purchase of investments in securities.
As of June 30, 2024, the Fund did not have any securities on loan.
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.
Geopolitical and other events (e.g., wars, terrorism, natural disasters, epidemics or pandemics) may disrupt securities markets and adversely affect global economies and markets, thereby decreasing the value of the Fund’s investments. Market disruptions can also prevent the Fund from implementing its investment strategies and achieving its investment objective.
13
Notes to Financial Statements (concluded)
Other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, may reduce liquidity in the market generally or have other adverse effects on the economy, the Fund or issuers in which the Fund invests. In addition, issuers in which the Fund invest and the Fund may not be able to identify all potential solvency or stress concerns with respect to a financial institution or to transfer assets from one bank or financial institution to another in a timely manner in the event such bank or financial institution comes under stress or fails.
The impact of the COVID-19 outbreak, and the effects of other infectious illness outbreaks, epidemics, or pandemics, may be short term or may continue for an extended period of time. For example, a global pandemic or other widespread health crises could negatively affect the global economy, the economies of individual countries, and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Health crises caused by outbreaks of disease may also exacerbate other pre-existing political, social, and economic risks in certain countries or globally. The foregoing could disrupt the operations of the Fund and its service providers, adversely affect the value and liquidity of the Fund’s investments, and negatively impact each Fund’s performance and your investment in the Fund.
Advancements in technology may also adversely impact markets and the overall performance of the Funds. For instance, the economy may be significantly impacted by the advanced development and increased regulation of technology. As the use of technology grows, liquidity and market movements may be affected. As technology is used more widely in the asset management industry, the profitability and growth of each Fund’s holdings may be impacted, which could significantly impact the overall performance of the Fund.
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.
| 12. | SUMMARY OF CAPITAL TRANSACTIONS |
Transactions in shares of capital stock were as follows:
| | | | | | Year Ended | | | | | | Year Ended | |
| | | | | | June 30, 2024 | | | | | | June 30, 2023 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
| Shares sold | | | 1,107,153,481 | | | $ | 1,107,153,481 | | | | 804,206,959 | | | $ | 804,206,975 | |
| Reinvestment of distributions | | | 44,236,018 | | | | 44,236,018 | | | | 25,385,632 | | | | 25,385,632 | |
| Shares reacquired | | | (863,327,810 | ) | | | (863,327,810 | ) | | | (774,540,025 | ) | | | (774,540,025 | ) |
| Increase | | | 288,061,689 | | | $ | 288,061,689 | | | | 55,052,566 | | | $ | 55,052,582 | |
| | | | | | | | | | | | | |
| Class C Shares | | | | | | | | | | | | | | | | |
| Shares sold | | | 8,170,094 | | | $ | 8,170,094 | | | | 22,455,674 | | | $ | 22,455,674 | |
| Reinvestment of distributions | | | 1,099,349 | | | | 1,099,349 | | | | 981,788 | | | | 981,788 | |
| Shares reacquired | | | (15,041,590 | ) | | | (15,041,590 | ) | | | (36,760,003 | ) | | | (36,760,003 | ) |
| Decrease | | | (5,772,147 | ) | | $ | (5,772,147 | ) | | | (13,322,541 | ) | | $ | (13,322,541 | ) |
| | | | | | | | | | | | | |
| Class I Shares | | | | | | | | | | | | | | | | |
| Shares sold | | | 14,207,458 | | | $ | 14,207,458 | | | | 12,944,210 | | | $ | 12,944,210 | |
| Reinvestment of distributions | | | 287,392 | | | | 287,392 | | | | 162,527 | | | | 162,527 | |
| Shares reacquired | | | (15,502,369 | ) | | | (15,502,369 | ) | | | (12,772,861 | ) | | | (12,772,861 | ) |
| Increase (decrease) | | | (1,007,519 | ) | | $ | (1,007,519 | ) | | | 333,876 | | | $ | 333,876 | |
14
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund, Inc.:
Opinion on the Financial Statements and Financial Highlights
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, 2024, 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, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of June 30, 2024, and 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.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of June 30, 2024, by correspondence with the custodian or counterparties. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
New York, New York
August 27, 2024
We have served as the auditor of one or more Lord Abbett Family of Funds’ investment companies since 1932.
15
Changes in and Disagreements with Accountants
There were no changes in or disagreements with accountants during the period.
Proxy Disclosures
There were no matters submitted to a vote of shareholders during the period.
Remuneration Paid to Directors, Officers, and Others
Remuneration paid to directors, officers, and others is included in “Directors’ Remuneration” under Item 7 of this Form N-CSR.
Statement Regarding Basis for Approval of Investment Advisory Contract
The Board, including all of the Directors who are not “interested persons” of the Fund or of Lord Abbett, as defined in the Investment Company Act of 1940, as amended (the “Independent Directors”), annually considers whether to approve the continuation of the existing management agreement between the Fund and Lord Abbett (the “Agreement”). In connection with its most recent approval, the Board reviewed materials relating specifically to the Agreement, as well as numerous materials received throughout the course of the year. Before making its decision as to the Fund, the Board had the opportunity to ask questions and request further information, taking into account its knowledge of Lord Abbett gained through its meetings and discussions. The Independent Directors also met with their independent legal counsel in various private sessions at which no representatives of management were present.
The materials received by the Board included, but were not limited to: (1) information provided by Broadridge Financial Solutions (“Broadridge”) regarding the investment performance of the Fund compared to the investment performance of certain funds with similar investment styles as determined by Broadridge, based, in part, on the Fund’s Morningstar category (the “performance peer group”), and the investment performance of a benchmark average of comparable funds; (2) information provided by Broadridge regarding the expense ratios, contractual and actual management fee rates, and other expense components for the Fund and certain funds in the same Morningstar category, with generally the same or similar share classes and operational characteristics, including asset size (the “expense peer group”); (3) certain supplemental investment performance information provided by Lord Abbett; (4) information provided by Lord Abbett on the expense ratios, management fee rates, and other expense components for the Fund; (5) sales and redemption information for the Fund; (6) information regarding Lord Abbett’s financial condition; (7) an analysis of the relative profitability to Lord Abbett of providing management and administrative services to the Fund; and (8) information regarding the personnel and other resources devoted by Lord Abbett to managing the Fund.
Investment Management and Related Services Generally. The Board considered the services provided by Lord Abbett to the Fund, including investment research, portfolio management, and trading, and Lord Abbett’s commitment to compliance with all applicable legal requirements. The Board also observed that Lord Abbett was solely engaged in the investment management business and accordingly did not experience the conflicts of interest that may result from being engaged in other lines of business. The Board considered the investment advisory services provided by Lord Abbett to other clients, the fees charged for the services, and the differences in the nature of the services provided to the Fund and other Lord Abbett Funds, on the one hand, and the services
16
Statement Regarding Basis for Approval of Investment Advisory Contract (continued)
provided to other clients, on the other. After reviewing these and related factors, the Board concluded that the Fund was likely to continue to benefit from the nature, extent and quality of the investment services provided by Lord Abbett under the Agreement.
Investment Performance. The Board reviewed the Fund’s investment performance in relation to that of the performance peer group and a benchmark average of comparable funds as of various periods ended June 30, 2023. The Board observed that the Fund’s investment performance was below the median of the performance peer group for the one-, three-, five- and ten-year periods. The Board considered the nature of the Fund and its peer funds resulted in a peer universe with relatively limited performance dispersion. The Board also considered Lord Abbett’s performance and reputation generally, the performance of other Lord Abbett-managed funds overseen by the Board, and the willingness of Lord Abbett to take steps intended to improve performance when appropriate. After reviewing these and other factors, including those described below, the Board concluded that the Fund’s Agreement should be continued.
Lord Abbett’s Personnel and Methods. The Board considered the qualifications of the personnel providing investment management services to the Fund, in light of its investment objective and discipline, and other services provided to the Fund by Lord Abbett. Among other things, the Board considered the size, experience, and turnover of Lord Abbett’s staff, Lord Abbett’s investment methodology and philosophy, and Lord Abbett’s approach to recruiting, training, and retaining personnel.
Nature and Quality of Other Services. The Board considered the nature, quality, and extent of compliance, administrative, and other services performed by Lord Abbett and the nature and extent of Lord Abbett’s supervision of third-party service providers, including the Fund’s transfer agent and custodian.
Expenses. The Board considered the expense level of the Fund, including the contractual and actual management fee rates, and the expense levels of the Fund’s expense peer group. It also considered how each of the expense level and the actual management fee rates of the Fund related to those of the expense peer group and the amount and nature of the fees paid by shareholders. The Board observed that the net total expense ratio and the actual management fee of the Fund were both below the median of the expense peer group. After reviewing these and related factors, the Board concluded, within the context of its overall approval of the Agreement, that the management fees paid by the Fund were reasonable in light of all of the factors it considered, including the nature, quality and extent of services provided by Lord Abbett.
Profitability. The Board considered the level of Lord Abbett’s operating margin in managing the Fund, including a review of Lord Abbett’s methodology for allocating its costs to its management of the Fund. It considered whether the Fund was profitable to Lord Abbett in connection with the Fund’s operation, including the fee that Lord Abbett receives from the Fund for providing administrative services to the Fund. The Board considered Lord Abbett’s profit margins, excluding Lord Abbett’s marketing and distribution expenses. The Board also considered Lord Abbett’s profit margins without those exclusions in comparison with available industry data and how those profit margins could affect Lord Abbett’s ability to recruit and retain personnel. The Board recognized that Lord Abbett’s overall profitability was a factor in enabling it to attract and retain qualified personnel to provide services to the Fund. After reviewing these and related factors, the Board concluded, within the context of its overall approval of the Agreement, that Lord Abbett’s profitability with respect to the Fund was not excessive.
17
Statement Regarding Basis for Approval of Investment Advisory Contract (concluded)
Economies of Scale. The Board considered the extent to which there had been economies of scale in managing the Fund, whether the Fund’s shareholders had appropriately benefited from such economies of scale, and whether there was potential for realization of any further economies of scale. The Board also considered information provided by Lord Abbett regarding how it shares any potential economies of scale through its investments in its businesses supporting the Funds. The Board also considered the Fund’s existing management fee schedule. Based on these considerations, the Board concluded that any economies of scale were adequately addressed.
Other Benefits to Lord Abbett. The Board considered the amount and nature of the fees paid by the Fund and the Fund’s shareholders to Lord Abbett for services other than investment advisory services, such as the fee that Lord Abbett receives from the Fund for providing administrative services to the Fund. The Board also considered the revenues and profitability of Lord Abbett’s investment advisory business apart from its mutual fund business, and the intangible benefits enjoyed by Lord Abbett from sponsoring an affiliated money market fund. The Board observed that the Distributor receives 12b-1 fees from certain of the Lord Abbett Funds as to shares held in accounts for which there is no other broker of record, that the Distributor may retain a portion of the 12b-1 fees it receives, and that the Distributor receives a portion of the sales charges on sales and redemptions of some classes of shares of the Lord Abbett Funds. In addition, the Board observed that Lord Abbett accrues certain benefits for its business of providing investment advice to clients other than the Lord Abbett Funds, but that business also benefits the Funds. The Board also noted that Lord Abbett, as disclosed in the prospectus of the Fund, has entered into revenue sharing arrangements with certain entities that distribute shares of the Lord Abbett Funds. The Board also took into consideration the investment research that Lord Abbett receives as a result of client brokerage transactions.
Alternative Arrangements. The Board considered whether, instead of approving continuation of the Agreement, it might be in the best interests of the Fund to implement one or more alternative arrangements, such as continuing to employ Lord Abbett, but on different terms. After considering all of the relevant factors, the Board unanimously found that continuation of the Agreement was in the best interests of the Fund and its shareholders and voted unanimously to approve the continuation of the Agreement. In considering whether to approve the continuation of the Agreement, the Board did not identify any single factor as paramount or controlling. Individual Directors may have evaluated the information presented differently from one another, giving different weights to various factors. This summary does not discuss in detail all matters considered.
18
Tax Information (unaudited) For foreign shareholders, 100% of the ordinary income distributions paid by the Fund during the fiscal year ended June 30, 2024 represent interest-related dividends. |
19
| 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 (08/24) |
| Item 12: | | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
| | | Not applicable. |
| | | |
| Item 13: | | Portfolio Managers of Closed-End Management Investment Companies. |
| | | Not applicable. |
| | | |
| Item 14: | | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
| | | Not applicable. |
| | | |
| Item 15: | | Submission of Matters to a Vote of Security Holders. |
| | | Not applicable. |
| | | |
| Item 16: | | Controls and Procedures. |
| (a) | | The principal executive officer and principal financial & accounting officer have concluded as of a date within 90 days of the filing date of this report, 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), that the design of such procedures is effective to provide reasonable assurance that material information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. |
| | | |
| (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 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 17: | | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
| | | Not applicable. |
| | | |
| Item 18: | | Recovery of Erroneously Awarded Compensation. |
| | | Not applicable. |
| | | |
| Item 19: | | Exhibits. |
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/ Douglas B. Sieg |
| | | Douglas B. Sieg |
| | | President and Chief Executive Officer |
| | | (Principal Executive Officer) |
| | | |
| Date: August 28, 2024 | | |
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/ Douglas B. Sieg |
| | | Douglas B. Sieg |
| | | President and Chief Executive Officer |
| | | (Principal Executive Officer) |
| | | |
| Date: August 28, 2024 | | |
| | | |
| | By: | /s/ Michael J. Hebert |
| | | Michael J. Hebert |
| | | Chief Financial Officer and Treasurer |
| | | (Principal Financial Officer) |
| | | |
| Date: August 28, 2024 | | |
iso4217:USDxbrli:shares
