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: 811-07538
LORD ABBETT SECURITIES TRUST
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
(Address of principal executive offices) (Zip code)
Thomas R. Phillips, 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: 10/31
Date of reporting period: 10/31/2009
| Item 1: | Report(s) to Shareholders. |
2009
LORD ABBETT
ANNUAL
REPORT 
Lord Abbett
Alpha Strategy Fund
Fundamental Equity Fund*
International Core Equity Fund
International Dividend Income Fund
International Opportunities Fund
Large Cap Value Fund
Value Opportunities Fund
For the fiscal year ended October 31, 2009
* Formerly known as All Value Fund
Lord Abbett Securities Trust
Annual Report
For the fiscal year ended October 31, 2009
From left to right: Robert S. Dow, Director and Chairman of the Lord Abbett Funds; E. Thayer Bigelow, Independent Lead Director of the Lord Abbett Funds; and Daria L. Foster, Director and President of the Lord Abbett Funds.
Dear Shareholders: We are pleased to provide you with this overview of Lord Abbett Securities Trust’s performance for the fiscal year ended October 31, 2009. On this page and the following pages, we discuss the major factors that influenced performance. For detailed and more timely information about the Funds, please visit our Website at www.lordabbett.com, where you also can access the quarterly commentaries by the Funds’ portfolio managers.
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,
Robert S. Dow
Chairman
Q: What were the overall market conditions during the fiscal year ended October 31, 2009?
A: After taking a beating during much of the first half of the fiscal year ended October 31, 2009, the equity markets (as represented by the S&P 500® Index1) began to trend upward during the balance of the period, recovering some of their previous losses. The fiscal year ended with the S&P 500 Index up 9.80%.
Mid cap stocks (as defined by the Russell MidCap® Index2) generally outperformed small cap stocks (as measured by the Russell 2000® Index3) and large cap stocks (as measured by the Russell 1000® Index4). Growth stocks (as represented by the Russell 3000® Growth Index5) outperformed value stocks (as represented by the Russell 3000® Value Index6) for the fiscal year. Overall, most equity asset classes and investing styles trended higher throughout the 12-month fiscal period.
On the international side, foreign equity markets (as measured by the MSCI EAFE® Index with Gross Dividends7) outperformed domestic equity markets for the 12-month period.
1
Lord Abbett Alpha Strategy Fund
Q: How did the Alpha Strategy Fund perform during the fiscal year ended October 31, 2009?
A: The Alpha Strategy Fund is a fund of funds that pursues its investment objective by investing in other Lord Abbett funds. The Fund seeks to achieve long-term growth and capital appreciation through investments in a broadly diversified portfolio of small cap stocks.
The Alpha Strategy Fund currently divides assets among the Lord Abbett International Opportunities Fund, approximately 21.7% of the Alpha Strategy Fund’s portfolio; Lord Abbett Small Cap Value Fund, approximately 19.6%; Lord Abbett Developing Growth Fund, approximately 19.5%; Lord Abbett Micro Cap Value Fund, approximately 9.9%; Lord Abbett Small Cap Blend Fund approximately 9.9%; Lord Abbett Value Opportunities Fund, approximately 9.8%; and Lord Abbett Micro Cap Growth Fund, approximately 9.6%.
The Alpha Strategy Fund’s performance is directly related to the performance of its underlying funds.
The Alpha Strategy Fund returned 20.57%, reflecting performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the combined 85% Russell 2000 Index/15% S&P Developed Ex-U.S. Small Cap Index,8 which returned 11.60% over the same period.
All of the Lord Abbett mutual funds among which the Alpha Strategy Fund allocates its assets enjoyed positive performance for the period. The most significant contributors to the Alpha Strategy Fund’s performance were international stocks in the International Opportunities Fund, growth stocks in the Micro Cap Growth Fund, and value stocks in the Value Opportunities Fund.
In the International Opportunities Fund, performance was helped by positions in the financials, industrials, and energy sectors. The most significant individual contributor to the International Opportunities Fund’s performance was consumer discretionary holding REXLot Holdings Limited (formerly REXCAPITAL Financial Holdings Limited), a provider of lottery-related systems, machines, and services to the Chinese lottery market.
In the Micro Cap Growth Fund, performance was helped by positions in the technology, energy, and consumer discretionary sectors. The most significant contributor to the Fund was energy holding EnerNOC, Inc. (the number-one contributor), a provider of clean and intelligent power solutions.
In the Value Opportunities Fund, performance was helped by positions in the financial services, consumer discretionary, and consumer staples sectors. The most significant contributor to the Value Opportunities Fund was technology holding Rovi Corporation, a provider of digital home entertainment solutions to businesses
2
offering digital goods to consumers across multiple channels.
Lord Abbett Fundamental Equity Fund (formerly All Value Fund)
Q: How did the Fundamental Equity Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 13.84%, reflecting performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the Russell 3000® Value Index, which returned 4.56% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant contributors to the Fund’s performance relative to its benchmark for the 12-month period were the healthcare, consumer staples, and producer durables sectors.
Among the individual holdings that contributed to performance were healthcare holding Schering-Plough Corporation (the Fund’s number-one contributor), a worldwide pharmaceutical company; consumer staples holding, Archer-Daniels-Midland, a provider of agricultural commodities and products; and consumer discretionary holding Wynn Resorts Limited, an owner and operator of luxury hotels and destination casino resorts.
The most significant detractor from the Fund’s performance relative to its benchmark for the 12-month period was the technology sector.
Among the individual holdings that detracted from performance were materials and processing holdings Pactiv Corp. (the Fund’s number-one detractor), a producer of consumer and food service/food packaging products, and Cytec Industries Inc., a maker of specialty chemicals, specialty materials, and building block chemicals; and consumer staples holding The Kroger Co., an operator of U.S. supermarkets and convenience stores.
Lord Abbett International Core Equity Fund
Q: How did the International Core Equity Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 32.32%, reflecting performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the MSCI EAFE Index with Gross Dividends, which returned 28.41% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant contributors to Fund performance relative to its benchmark for the 12-month period were the financials, energy, and utilities sectors.
Among the individual holdings that contributed to performance relative to its benchmark for the 12-month period were energy holding Tullow Oil plc (the Fund’s number-one contributor), a supplier of oil and natural gas operating in the United Kingdom’s southern North Sea, Africa, and
3
South Asia; and financials holdings DnB NOR ASA, a Norwegian-based financial services company, and Irish Life & Permanent plc, a leading provider of personal financial services in the Irish market.
The most significant detractors from Fund performance relative to its benchmark for the 12-month period were the telecommunications services, industrials, and information technology sectors.
Among the individual holdings that detracted from performance were financials holding Royal Bank of Scotland Group plc (the Fund’s number-one detractor), a provider of commercial banking services; consumer staples holding Kao Corporation, a Japanese manufacturer of household and chemical products; and utilities holding National Grid plc, an international electricity and gas company.
Lord Abbett International Dividend Income Fund
Q: How did the International Dividend Income Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 35.88%, reflecting performance at the net asset value (NAV) of Class A shares, with all distributions reinvested, compared to its benchmark, the MSCI All Country World Ex-U.S. Value Index with Gross Dividends,9 which returned 39.02% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant detractors from Fund performance relative to its benchmark were the consumer staples sector, materials sector (owing to an underweight position), and the information technology sector.
Among the individual holdings that detracted from performance were financials holding Swiss Reinsurance Company Ltd. (the Fund’s number-one detractor), a global reinsurer; healthcare holding GlaxoSmithKline plc, a research-based pharmaceutical group; and utilities holding National Grid plc, an international electricity and gas company.
The most significant contributors to Fund performance relative to its benchmark for the 12-month period were the financials, industrials, and utilities sectors.
Among the individual holdings that contributed to performance relative to its benchmark were financials holdings Barclays plc (the Fund’s number-one contributor), a provider of commercial and investment banking and related services; Banco Santander SA ADR, a provider of a range of financial products primarily in Spain, the United Kingdom, Portugal, other European countries, Latin America, and the United States; and Australia and New Zealand Banking Group Limited, a full-service bank.
Lord Abbett International Opportunities Fund
Q: How did the International Opportunities Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 47.94%, reflecting performance at the net asset value (NAV)
4
of Class A shares with all distributions reinvested, compared to its benchmark, the S&P Developed Ex-U.S. Small Cap Index, which returned 44.31% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant contributors to Fund performance relative to its benchmark for the 12-month period were the financials, industrials, and energy sectors.
Among the individual holdings that contributed to performance relative to its benchmark for the 12-month period were consumer discretionary holding REXLot Holdings Limited (formerly REXCAPITAL Financial Holdings Limited, and the Fund’s number-one contributor), a provider of lottery-related systems, machines, and services to the Chinese lottery market; and financials holdings Megaworld Corporation, a Philippines-based real estate company, and Azimut Holding SpA, an asset management company based in Italy.
The most significant detractors from Fund performance relative to its benchmark for the 12-month period were the healthcare sector, the information technology sector, and the utilities sector (owing to an overweight position).
Among the individual holdings that detracted from performance were financials holding EFG International AG (the Fund’s number-one detractor), a Switzerland-based private banking and asset management company; industrials holding Q-Cells SE, a photovoltaic company based in Germany; and information technology holding China Security & Surveillance Technology, Inc., a provider of surveillance and safety products in China.
Lord Abbett Large Cap Value Fund
Q: How did the Large Cap Value Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 3.77%, reflecting performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the Russell 1000® Value Index,10 which returned 4.78% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant detractors from the Fund’s performance relative to its benchmark for the 12-month period were the financial services sector (owing to an overweight position), the technology sector, and the healthcare sector.
Among the individual holdings that detracted from performance were financial services holdings Bank of America Corporation (the Fund’s number-one detractor), a provider of financial and risk-management products and services; Merrill Lynch & Co., Inc., a global provider of investment, financing, advisory, insurance, banking, and related products; and Fifth Third Bancorp, a diversified financial
5
services company operating in the Midwestern and Southeastern regions of the United States.
The most significant contributors to the Fund’s performance relative to its benchmark for the 12-month period were the consumer discretionary sector (owing to an overweight position) and the consumer staples sector.
Among the individual holdings that contributed to performance were financial services holding The Goldman Sachs Group, Inc. (the Fund’s number-one contributor), a global investment banking and securities firm; consumer staples holding Coca-Cola Co., a provider of non-alcoholic beverages; and consumer discretionary sector holding Kohl’s Corporation, an operator of a chain of family-oriented department stores.
Lord Abbett Value Opportunities Fund
Q: How did the Value Opportunities Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 17.81%, reflecting the performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the Russell 2500® Value Index,11 which returned 8.55% for the same period.
Q: What were the most significant factors affecting performance?
A: The most significant contributors to Fund performance relative to its benchmark for the 12-month period were the financial services, consumer discretionary, and consumer staples sectors.
Among the individual holdings that contributed to performance relative to its benchmark for the 12-month period were technology holding Rovi Corporation (the Fund’s number-one contributor), a provider of digital home entertainment solutions to businesses offering digital goods to consumers across multiple channels; and consumer discretionary holdings Chico’s FAS, Inc., a retailer of private label women’s casual clothing and related accessories, and Fossil, Inc., a supplier of consumer fashion accessories.
The most significant detractors from Fund performance relative to its benchmark for the 12-month period were the healthcare sector, the materials and processing sector, and the energy sector (owing to an overweight position).
Among the individual holdings that detracted from performance were financial services holding KeyCorp (the Fund’s number-one detractor), a provider of retail and commercial banking, leasing, and investment products; consumer discretionary holding Genesco, Inc., a retailer of branded footwear and headwear; and materials and processing holding Cytec Industries Inc., a supplier of specialty chemicals.
Each Fund’s portfolio is actively managed and, therefore, its holdings and the weightings of a particular issuer or particular sector as a percentage of portfolio assets are subject to change. Sectors may include many industries.
6
1 The S&P 500® Index is widely regarded as the standard for measuring large-cap U.S. stock market performance and includes a representative sample of leading companies in leading industries.
2 The Russell MidCap® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 31% of the total market capitalization of the Russell 1000 Index.
3 The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 1000 Index.
4 The Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index.
5 The Russell 3000® Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000 Growth or the Russell 2000 Growth indexes.
6 The Russell 3000® Value Index measures the performance of those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000® Value or the Russell 2000® Value indexes.
7 The MSCI EAFE® Index with Gross Dividends is an unmanaged index that reflects the stock markets of 21 countries, including Europe, Australasia, and the Far East, with values expressed in U.S. dollars. The MSCI EAFE Index with Gross Dividends approximates the maximum possible dividend reinvestment. The amount reinvested is the entire dividend distributed to individuals resident in the country of the company, but does not include tax credits. MSCI uses withholding tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates.
8 The S&P Developed Ex-U.S. Small Cap Index is the small cap and developed markets component of S&P’s Broad Market Index (BMI). The Small Cap Index includes the bottom 15% of market capitalizations per country.
9 The MSCI All Country World Ex-U.S. Value Index with Gross Dividends is an unmanaged index that reflects the stock markets of 23 developed and 22 emerging market country indexes, with values expressed in U.S. dollars. The index approximates the maximum possible dividend reinvestment. The amount reinvested is the entire dividend distributed to individuals resident in the country of the company, but does not include tax credits.
10 The Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
11 The Russell 2500® Value Index measures the performance of those Russell 2500® Index companies with lower price-to-book ratios and lower forecasted growth values.
Unless otherwise indicated, indexes are unmanaged and reflect total returns with all distributions reinvested, but do not reflect the deduction of fees, expenses, or taxes, and are not available for direct investment.
Important Performance and Other Information
Performance data quoted reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance quoted. The investment return and principal value of an investment in the Funds will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month end by calling Lord Abbett at 888-522-2388 or referring to our Website at www.lordabbett.com.
Except where noted, comparative Fund performance does not account for the deduction of sales charges and would be different if sales charges were included. The Funds offer additional classes of shares with distinct pricing options. For a full description of the differences in pricing alternatives, please see each Fund’s prospectus.
The views of the Funds’ management and the portfolio holdings described in this report are as of October 31, 2009; these views and portfolio holdings may have changed subsequent to this date, and they do not guarantee the future performance of the markets or the Funds. Information provided in this report should not be considered a recommendation to purchase or sell securities.
A Note about Risk: See Notes to Financial Statements for a discussion of investment risks. For a more detailed discussion of the risks associated with the Funds, please see each Fund’s prospectus.
During certain periods shown, expense reimbursements were in place for the Alpha Strategy Fund, the International Dividend Income Fund, Large Cap Value Fund and the Value Opportunities Fund. Without such expense reimbursements, the Funds’ returns would have been lower.
Mutual funds are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, banks, and are subject to investment risks including possible loss of principal amount invested.
7
Alpha Strategy Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the Russell 2000® Index, 85% Russell 2000® Index/15% S&P Developed Ex-U.S. SmallCap Index, and the S&P Developed Ex-U.S. SmallCap Index, assuming reinvestment of all dividends and distributions. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | | | |
| | | 1 Year | | 5 Years | | 10 Years | | Life of Class |
Class A3 | | 13.64% | | 4.85% | | 4.06% | | – |
Class B4 | | 15.86% | | 5.26% | | 4.14% | | – |
Class C5 | | 19.78% | | 5.42% | | 4.01% | | – |
Class F6 | | 20.95% | | – | | – | | -13.35% |
Class I7 | | 21.06% | | 6.48% | | – | | 6.89% |
Class R28 | | 20.37% | | – | | – | | -13.79% |
Class R39 | | 20.39% | | – | | – | | -13.71% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for each unmanaged index and average does not reflect transaction costs, management fees or sales charges. The performance of each index and average is not necessarily representative of the Fund’s performance.
3 Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Performance reflects the deduction of a CDSC of 4% for 1 year, 1% for 5 years, and 0% for 10 years. Class B shares automatically convert to Class A shares after approximately 8 years. (There is no initial sales charge for automatic conversions.) All returns for periods greater than 8 years reflect this conversion.
5 The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
6 Class F shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
7 Class I shares commenced operations on October 19, 2004. Performance is at net asset value.
8 Class R2 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
9 Class R3 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
8
Fundamental Equity Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the Russell 3000® Value Index and the Russell 1000® Value Index, assuming reinvestment of all dividends and distributions. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | | | |
| | | 1 Year | | 5 Years | | 10 Years | | Life of Class |
Class A3 | | 7.29% | | 1.78% | | 3.86% | | – |
Class B4 | | 8.97% | | 2.16% | | 3.95% | | – |
Class C5 | | 13.02% | | 2.34% | | 3.84% | | – |
Class F6 | | 14.03% | | – | | – | | -9.78% |
Class I7 | | 14.11% | | 3.37% | | – | | 8.51% |
Class P8 | | 13.59% | | 2.87% | | – | | 3.71% |
Class R29 | | 13.44% | | – | | – | | -10.21% |
Class R310 | | 13.55% | | – | | – | | -10.16% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for each unmanaged index does not reflect any transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance.
3 Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Performance reflects the deduction of a CDSC of 4% for 1 year, 1% for 5 years, and 0% for 10 years. Class B shares automatically convert to Class A shares after approximately 8 years. (There is no initial sales charge for automatic conversions.) All returns for periods greater than 8 years reflect this conversion.
5 The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
6 Class F shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
7 Class I shares commenced operations on March 31, 2003. Performance is at net asset value.
8 Class P shares commenced operations on August 15, 2001. Performance is at net asset value.
9 Class R2 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
10 Class R3 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
9
International Core Equity Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the Morgan Stanley Capital International Europe, Australasia, Far East Index (“MSCI EAFE® Index”) with Gross Dividends and the MSCI EAFE® Index with Net Dividends assuming reinvestment of all dividends and distributions. The MSCI EAFE Index with Net Dividends reflects a reduction in dividends after taking into account withholding of taxes by certain foreign countries represented in the MSCI EAFE® Index. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | |
| | | 1 Year | | 5 Years | | Life of Class |
Class A3 | | 24.71% | | 4.82% | | 4.59% |
Class B4 | | 27.46% | | 5.24% | | 4.84% |
Class C5 | | 31.52% | | 5.39% | | 4.99% |
Class F6 | | 32.76% | | – | | -14.20% |
Class I7 | | 32.86% | | 6.45% | | 6.03% |
Class P8 | | 32.29% | | 5.97% | | 5.55% |
Class R29 | | 32.77% | | – | | -14.12% |
Class R310 | | 32.23% | | – | | -14.52% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for each unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance. Performance of each index begins on December 31, 2003.
3 Class A shares commenced operations on December 15, 2003 and performance for the class began on December 31, 2003. Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Class B shares commenced operations on December 15, 2003 and performance for the class began on December 31, 2003. Performance reflects the deduction of a CDSC of 4% for 1 year, 1% for five years and for the life of the class. Class B shares automatically convert to Class A shares after approximately 8 years. (There is no initial sales charge for automatic conversions.) All returns for periods greater than 8 years reflect this conversion.
5 Class C shares commenced operations on December 15, 2003 and performance for the class began on December 31, 2003. The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
6 Class F shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
7 Class I shares commenced operations on December 15, 2003 and performance for the Class began on December 31, 2003. Performance is at net asset value.
8 Class P shares commenced operations on December 15, 2003 and performance for the Class began on December 31, 2003. Performance is at net asset value.
9 Class R2 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
10 Class R3 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
10
International Dividend Income Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the Morgan Stanley Capital International (MSCI) All Country World Ex-U.S. Value Index with Gross Dividends and the MSCI All Country World Ex-U.S. Value Index with Net Dividends, assuming reinvestment of all dividends and distributions. The MSCI All Country World Ex-U.S. Value Index with Net Dividends reflects a reduction in dividends after taking into account withholding of taxes by certain foreign countries represented in the MSCI All Country World Ex-U.S. Value Index. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | |
| | | 1 Year | | Life of Class |
Class A3 | | 28.14% | | -13.19% |
Class C4 | | 34.87% | | -9.91% |
Class F5 | | 36.13% | | -9.13% |
Class I6 | | 36.38% | | -9.00% |
Class R27 | | 36.26% | | -9.07% |
Class R38 | | 36.22% | | -9.06% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for each unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance. Performance of each index begins on June 30, 2008.
3 Class A shares commenced operations on June 23, 2008 and performance for the class began on June 30, 2008. Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Class C shares commenced operations on June 23, 2008 and performance for the class began on June 30, 2008. The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
5 Class F shares commenced operations on June 23, 2008 and performance for the Class began on June 30, 2008. Performance is at net asset value.
6 Class I shares commenced operations on June 23, 2008 and performance for the Class began on June 30, 2008. Performance is at net asset value.
7 Class R2 shares commenced operations on June 23, 2008 and performance for the Class began on June 30, 2008. Performance is at net asset value.
8 Class R3 shares commenced operations on June 23, 2008 and performance for the Class began on June 30, 2008. Performance is at net asset value.
11
International Opportunities Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the S&P Developed Ex-U.S. SmallCap Index, assuming reinvestment of all dividends and distributions. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | | | |
| | | 1 Year | | 5 Years | | 10 Years | | Life of Class |
Class A3 | | 39.51% | | 3.94% | | -0.79% | | – |
Class B4 | | 42.97% | | 4.33% | | -0.71% | | – |
Class C5 | | 47.09% | | 4.52% | | -0.79% | | – |
Class F6 | | 48.36% | | – | | – | | -17.99% |
Class I7 | | 48.47% | | 5.57% | | 0.15% | | – |
Class P7 | | 47.86% | | 5.15% | | -0.17% | | – |
Class R28 | | 47.69% | | – | | – | | -18.41% |
Class R39 | | 47.75% | | – | | – | | -18.22% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for the unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of the index is not necessarily representative of the Fund’s performance.
3 Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Performance reflects the deduction of a CDSC of 4% for 1 year, 1% for 5 years, and 0% for 10 years. Class B shares automatically convert to Class A shares after approximately 8 years. (There is no initial sales charge for automatic conversions.) All returns for periods greater than 8 years reflect this conversion.
5 The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
6 Class F shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
7 Performance is at net asset value.
8 Class R2 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
9 Class R3 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
12
Large Cap Value Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the Russell 1000® Value Index and the S&P 500 Value Index (formerly S&P 500/Citigroup Value Index), assuming reinvestment of all dividends and distributions. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | |
| | | 1 Year | | 5 Years | | Life of Class |
Class A3 | | -2.22% | | -1.88% | | 1.40% |
Class B4 | | -0.81% | | -1.50% | | 1.66% |
Class C5 | | 3.30% | | -1.34% | | 1.69% |
Class F6 | | 4.00% | | – | | -16.70% |
Class I7 | | 4.16% | | -0.37% | | 2.70% |
Class P8 | | 3.67% | | -0.81% | | 2.25% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for each unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance. Performance for each index begins on June 30, 2003.
3 Class A shares commenced operations on June 23, 2003 and performance for the class began on June 30, 2003. Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Class B shares commenced operations on June 23, 2003 and performance for the Class began on June 30, 2003. Performance reflects the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of the class. Class B shares automatically convert to Class A shares after approximately 8 years. (There is no initial sales charge for automatic conversions.) All returns for periods greater than 8 years reflect this conversion.
5 Class C shares commenced operations on June 23, 2003 and performance for the Class began on June 30, 2003. The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
6 Class F shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
7 Class I shares commenced operations on June 23, 2003 and performance for the class began on June 30, 2003. Performance is at net asset value.
8 Class P shares commenced operations on June 23, 2003 and performance for the class began on June 30, 2003. Performance is at net asset value.
13
Value Opportunities Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class A shares with the same investment in the Russell 2500® Value Index and the Russell 2500® Index, assuming reinvestment of all dividends and distributions. The performance of other classes will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such classes. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | |
| | | 1 Year | | Life of Class |
Class A3 | | 11.08% | | 4.58% |
Class B4 | | 12.94% | | 4.88% |
Class C5 | | 17.06% | | 5.56% |
Class F6 | | 18.12% | | -7.02% |
Class I7 | | 18.27% | | 6.60% |
Class P8 | | 17.61% | | 6.10% |
Class R29 | | 17.53% | | -7.49% |
Class R310 | | 17.69% | | -7.39% |
1 Reflects the deduction of the maximum initial sales charge of 5.75%.
2 Performance for each unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance. Performance for each index begins on December 30, 2005.
3 Class A shares commenced operations on December 20, 2005 and performance for the class began on December 30, 2005. Total return, which is the percentage change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Class B shares commenced operations on December 20, 2005 and performance for the Class began on December 30, 2005. Performance reflects the deduction of a CDSC of 4% for 1 year and 3% for life of the Class. Class B shares automatically convert to Class A shares after approximately 8 years. (There is no initial sales charge for automatic conversions.) All returns for periods greater than 8 years reflect this conversion.
5 Class C shares commenced operations on December 20, 2005 and performance for the Class began on December 30, 2005. The 1% CDSC for Class C shares normally applies before the first anniversary of the purchase date. Performance is at net asset value.
6 Class F shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
7 Class I shares commenced operations on December 20, 2005 and performance for the Class began on December 30, 2005. Performance is at net asset value.
8 Class P shares commenced operations on December 20, 2005 and performance for the Class began on December 30, 2005. Performance is at net asset value.
9 Class R2 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
10 Class R3 shares commenced operations and performance for the Class began on September 28, 2007. Performance is at net asset value.
14
Expense Examples
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments (these charges vary among the share classes); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees (these charges vary among the share classes); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in each 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 (May 1, 2009 through October 31, 2009).
Actual Expenses
For each class of each Fund, the first line of the 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 the Period 5/1/09 – 10/31/09” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
For each class of each 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 each 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.
15
Alpha Strategy Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,199.70 | | $ | 1.94 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,023.44 | | $ | 1.79 |
Class B | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,195.20 | | $ | 5.53 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.17 | | $ | 5.09 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,195.20 | | $ | 5.53 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.17 | | $ | 5.09 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,200.80 | | $ | 0.55 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,024.70 | | $ | 0.51 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,201.80 | | $ | 0.00 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,025.21 | | $ | 0.00 |
Class R2 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,197.90 | | $ | 3.32 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,022.19 | | $ | 3.06 |
Class R3 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,198.00 | | $ | 2.77 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,022.69 | | $ | 2.55 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (0.35% for Class A, 1.00% for Classes B and C, 0.10% for Class F, 0.00% for Class I, 0.60% for Class R2 and 0.50% for Class R3) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Goal
October 31, 2009
| | | | | | | | |
| Goal | | %* | | | | | | |
Long Term Capital Appreciation** | | 70.44% | | | | | | |
Long Term Capital Growth** | | 29.38% | | | | | | |
Short-Term Investment | | 0.18% | | | | | | |
Total | | 100.00% | | | | | | |
| * | | Represents percent of total investments. |
| ** | | Alpha Strategy Fund invests in other funds (“Underlying Funds”) managed by Lord, Abbett & Co. LLC. The category shown represents the investment objective of these Underlying Funds. |
16
Fundamental Equity Fund (formerly, All Value Fund)
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,163.00 | | $ | 6.38 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,019.31 | | $ | 5.96 |
Class B | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,158.40 | | $ | 9.90 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,016.03 | | $ | 9.25 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,159.00 | | $ | 9.90 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,016.04 | | $ | 9.25 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,163.60 | | $ | 5.02 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.60 | | $ | 4.69 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,164.70 | | $ | 4.47 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,021.10 | | $ | 4.18 |
Class P | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,161.20 | | $ | 6.92 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.81 | | $ | 6.46 |
Class R2 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,160.80 | | $ | 7.62 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.13 | | $ | 7.12 |
Class R3 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,161.60 | | $ | 7.14 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.59 | | $ | 6.67 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.17% for Class A, 1.82% for Classes B and C, 0.92% for Class F, 0.82% for Class I, 1.27% for Class P, 1.40% for Class R2 and 1.31% for Class R3) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | | | | | | |
| Sector* | | %** | | | | Sector* | | %** |
Consumer Discretionary | | 12.58% | | | | Materials & Processing | | 5.46% |
Consumer Staples | | 1.36% | | | | Producer Durables | | 15.86% |
Energy | | 13.44% | | | | Technology | | 8.34% |
Financial Services | | 20.95% | | | | Short-Term Investment | | 1.83% |
Healthcare | | 20.18% | | | | Total | | 100.00% |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
17
International Core Equity Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,323.90 | | $ | 8.73 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,017.71 | | $ | 7.58 |
Class B | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,319.80 | | $ | 12.51 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,014.44 | | $ | 10.87 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,319.00 | | $ | 12.51 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,014.44 | | $ | 10.87 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,325.40 | | $ | 7.27 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.95 | | $ | 6.31 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,325.50 | | $ | 6.68 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,019.48 | | $ | 5.80 |
Class P | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,323.40 | | $ | 9.25 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,017.23 | | $ | 8.03 |
Class R2 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,323.90 | | $ | 7.26 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.97 | | $ | 6.31 |
Class R3 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,323.00 | | $ | 9.54 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,017.00 | | $ | 8.29 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.49% for Class A, 2.14% for Classes B and C, 1.24% for Class F, 1.14% for Class I, 1.58% for Class P, 1.24% for Class R2 and 1.63% for Class R3) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | | | | | | |
| Sector* | | %** | | | | Sector* | | %** |
Consumer Discretionary | | 10.73% | | | | Information Technology | | 4.07% |
Consumer Staples | | 7.95% | | | | Materials | | 8.63% |
Energy | | 8.30% | | | | Telecommunication Services | | 6.40% |
Financials | | 25.94% | | | | Utilities | | 3.16% |
Healthcare | | 7.68% | | | | Short-Term Investment | | 3.98% |
Industrials | | 13.16% | | | | Total | | 100.00% |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
18
International Dividend Income Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,357.00 | | $ | 8.02 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.43 | | $ | 6.87 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,352.20 | | $ | 11.74 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.23 | | $ | 10.06 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,358.50 | | $ | 6.36 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,019.85 | | $ | 5.45 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,358.40 | | $ | 5.89 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.20 | | $ | 5.04 |
Class R2 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,358.40 | | $ | 6.54 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,019.66 | | $ | 5.60 |
Class R3 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,357.50 | | $ | 6.42 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,019.75 | | $ | 5.50 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.35% for Class A, 1.98% for Class C, 1.07% for Class F, 0.99% for Class I, 1.10% for Class R2 and 1.08% for Class R3), multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | | | | | | |
| Sector* | | %** | | | | Sector* | | %** |
Auto | | 1.12% | | | | Materials & Processing | | 11.28% |
Basic Industry | | 1.00% | | | | Other | | 1.69% |
Consumer Cyclical | | 5.19% | | | | Producer Durables | | 6.60% |
Consumer Discretionary | | 1.49% | | | | Technology | | 0.55% |
Consumer Services | | 3.87% | | | | Telecommunications | | 9.72% |
Consumer Staples | | 3.40% | | | | Transportation | | 1.46% |
Energy | | 5.13% | | | | Utilities | | 6.11% |
Financial Services | | 26.53% | | | | Short-Term Investment | | 4.04% |
Healthcare | | 4.34% | | | | Total | | 100.00% |
Integrated Oils | | 6.48% | | | | | | |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
19
International Opportunities Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,395.00 | | $ | 10.02 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,016.86 | | $ | 8.44 |
Class B | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,390.30 | | $ | 13.86 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,013.59 | | $ | 11.67 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,390.30 | | $ | 13.86 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,013.59 | | $ | 11.67 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,397.60 | | $ | 8.52 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.11 | | $ | 7.17 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,398.00 | | $ | 7.92 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.62 | | $ | 6.67 |
Class P | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,394.10 | | $ | 10.56 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,016.36 | | $ | 8.89 |
Class R2 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,392.70 | | $ | 11.46 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.63 | | $ | 9.65 |
Class R3 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,394.70 | | $ | 10.74 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,016.21 | | $ | 9.05 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.66% for Class A, 2.30% for Classes B and C, 1.41% for Class F, 1.31% for Class I, 1.75% for Class P, 1.90% for Class R2 and 1.78% for Class R3) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | | | | | | |
| Sector* | | %** | | | | Sector* | | %** |
Basic Materials | | 6.25% | | | | Property & Property Services | | 3.39% |
Consumer Cyclical | | 22.93% | | | | Technology | | 4.35% |
Consumer Non-Cyclical | | 8.79% | | | | Telecommunications | | 0.50% |
Diversified Financials | | 5.17% | | | | Transportation | | 2.62% |
Energy | | 5.59% | | | | Utilities | | 5.16% |
Healthcare | | 7.63% | | | | Short-Term Investment | | 3.75% |
Industrial Goods & Services | | 17.17% | | | | Total | | 100.00% |
Non-Property Financials | | 6.70% | | | | | | |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
20
Large Cap Value Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,182.70 | | $ | 7.15 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.66 | | $ | 6.61 |
Class B | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,179.70 | | $ | 10.71 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.38 | | $ | 9.91 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,178.00 | | $ | 10.71 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.38 | | $ | 9.91 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,183.40 | | $ | 5.78 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,019.91 | | $ | 5.35 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,184.70 | | $ | 5.23 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.40 | | $ | 4.84 |
Class P | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,181.90 | | $ | 7.53 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.32 | | $ | 6.97 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.30% Class A, 1.95% for Classes B and C, 1.05% for Class F, 0.95% for Class I and 1.37% for Class P) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | | | | | | |
| Sector* | | %** | | | | Sector* | | %** |
Consumer Discretionary | | 15.19% | | | | Producer Durables | | 7.22% |
Consumer Staples | | 4.71% | | | | Technology | | 7.88% |
Energy | | 18.66% | | | | Utilities | | 3.92% |
Financial Services | | 29.09% | | | | Short-Term Investment | | 1.28% |
Healthcare | | 6.86% | | | | Total | | 100.00% |
Materials & Processing | | 5.19% | | | | | | |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
21
Value Opportunities Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,169.70 | | $ | 7.38 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,018.42 | | $ | 6.87 |
Class B | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,165.80 | | $ | 10.92 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.14 | | $ | 10.16 |
Class C | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,167.00 | | $ | 10.92 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.14 | | $ | 10.16 |
Class F | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,172.40 | | $ | 6.02 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.18 | | $ | 5.60 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,172.20 | | $ | 5.48 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,020.18 | | $ | 5.09 |
Class P | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,169.00 | | $ | 7.93 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,017.90 | | $ | 7.38 |
Class R2 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,169.40 | | $ | 8.69 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,017.20 | | $ | 8.08 |
Class R3 | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,169.50 | | $ | 8.15 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,017.67 | | $ | 7.58 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (1.35% for Class A, 2.00% for Classes B and C, 1.10% for Class F, 1.00% for Class I, 1.45% for Class P, 1.59% for Class R2 and 1.49% for Class R3) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | | | | | | |
| Sector* | | %** | | | | Sector* | | %** |
Consumer Discretionary | | 10.75% | | | | Producer Durables | | 17.25% |
Consumer Staples | | 4.28% | | | | Technology | | 12.55% |
Energy | | 6.06% | | | | Utilities | | 2.80% |
Financial Services | | 20.97% | | | | Short-Term Investment | | 7.94% |
Healthcare | | 10.34% | | | | Total | | 100.00% |
Materials & Processing | | 7.06% | | | | | | |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
22
Schedule of Investments
ALPHA STRATEGY FUND October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| INVESTMENTS IN UNDERLYING FUNDS(a) 99.82% |
| Lord Abbett Developing Growth Fund, Inc. - Class I*(b) | | 7,156,495 | | $ | 103,268 |
| Lord Abbett Securities Trust - International Opportunities Fund - Class I(c) | | 10,433,369 | | | 114,350 |
Lord Abbett Securities Trust - Micro-Cap Growth Fund -
Class I*(c) | | 4,337,360 | | | 50,530 |
Lord Abbett Securities Trust - Micro-Cap
Value Fund -
Class I*(c) | | 2,756,555 | | | 52,320 |
Lord Abbett Blend
Trust - Small-Cap
Blend Fund -
Class I*(d) | | 4,158,858 | | | 52,111 |
Lord Abbett Research Fund, Inc. - Small-Cap Value Fund -
Class I(c) | | 4,433,179 | | | 103,559 |
| Lord Abbett Securities Trust - Value Opportunities Fund - Class I(c) | | 4,420,868 | | | 51,768 |
| | | | | |
Total Investments in Underlying Funds
(cost $630,139,110) | | | | | 527,906 |
| | | | | |
| | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) |
| SHORT-TERM INVESTMENT 0.18% |
| | |
| Repurchase Agreement | | | | | | |
Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $970,000 of U.S. Treasury Bill at 0.10% due 12/24/2009; value: $969,903; proceeds: $949,365
(cost $949,364) | | $ | 949 | | $ | 949 |
| | | | | | |
Total Investments in Securities 100.00%
(cost $631,088,474) | | | | | | 528,855 |
| | | | | | |
| Other Assets in Excess of Liabilities 0.00% | | | | | | 19 |
| | | | | | |
| Net Assets 100.00% | | | | | $ | 528,874 |
| | | | | | |
| * | | Non-income producing security. |
| (a) | | Affiliated issuers (See Note 10). |
| (b) | | The Fund’s investment objective is long-term growth of capital through a diversified and actively managed portfolio consisting of developing growth companies, many of which are traded over the counter. |
| (c) | | The Fund’s investment objective is long-term capital appreciation. |
| (d) | | The Fund’s investment objective is to seek long-term growth of capital by investing primarily in stocks of small companies. |
See Notes to Financial Statements.
23
Schedule of Investments
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund) October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| COMMON STOCKS 97.19% |
|
| Advertising Agencies 0.73% |
| Omnicom Group, Inc. | | 540,000 | | $ | 18,511 |
| | | | | |
|
| Aerospace 2.14% |
| Curtiss-Wright Corp. | | 200,030 | | | 5,965 |
| General Dynamics Corp. | | 329,019 | | | 20,629 |
| United Technologies Corp. | | 449,400 | | | 27,616 |
| | | | | |
| Total | | | | | 54,210 |
| | | | | |
|
| Air Transportation 0.18% |
| Bristow Group, Inc.* | | 155,000 | | | 4,518 |
| | | | | |
|
| Asset Management & Custodian 1.16% |
| State Street Corp. | | 703,200 | | | 29,520 |
| | | | | |
|
| Auto Parts 1.60% |
| Autoliv, Inc. (Sweden)(a) | | 373,768 | | | 12,551 |
| BorgWarner, Inc. | | 118,200 | | | 3,584 |
| WABCO Holdings, Inc. | | 1,025,000 | | | 24,313 |
| | | | | |
| Total | | | | | 40,448 |
| | | | | |
|
| Automobiles 1.92% |
| Ford Motor Co.* | | 4,300,000 | | | 30,100 |
| Honda Motor Co., Ltd. ADR | | 598,700 | | | 18,542 |
| | | | | |
| Total | | | | | 48,642 |
| | | | | |
|
| Banks: Diversified 6.07% |
| Bank of America Corp. | | 1,885,000 | | | 27,483 |
| City National Corp. | | 585,000 | | | 22,037 |
| Commerce Bancshares, Inc. | | 510,680 | | | 19,590 |
| Cullen/Frost Bankers, Inc. | | 700,000 | | | 32,753 |
| KeyCorp | | 2,551,900 | | | 13,755 |
| PNC Financial Services Group, Inc. (The) | | 205,000 | | | 10,033 |
| SunTrust Banks, Inc. | | 520,000 | | | 9,937 |
| Wells Fargo & Co. | | 662,800 | | | 18,240 |
| | | | | |
| Total | | | | | 153,828 |
| | | | | |
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Biotechnology 3.46% |
| Amgen, Inc.* | | 1,275,000 | | $ | 68,506 |
| Onyx Pharmaceuticals, Inc.* | | 724,700 | | | 19,277 |
| | | | | |
| Total | | | | | 87,783 |
| | | | | |
|
| Building Materials 0.39% |
| Quanex Building Products Corp. | | 670,000 | | | 9,963 |
| | | | | |
|
| Casinos & Gambling 0.43% |
| International Game Technology | | 612,500 | | | 10,927 |
| | | | | |
|
| Chemical: Diversified 0.44% |
| Celanese Corp. Series A | | 403,300 | | | 11,071 |
| | | | | |
|
| Commercial Services 1.00% |
| Accenture plc Class A (Ireland)(a) | | 686,200 | | | 25,444 |
| | | | | |
|
| Commercial Services: Rental & Leasing 0.58% |
| GATX Corp. | | 540,000 | | | 14,677 |
| | | | | |
|
| Computer Services, Software & Systems 5.81% |
| Adobe Systems, Inc.* | | 1,400,000 | | | 46,116 |
| Autodesk, Inc.* | | 325,000 | | | 8,102 |
| Intuit, Inc.* | | 657,900 | | | 19,125 |
| McAfee, Inc.* | | 691,767 | | | 28,971 |
| Microsoft Corp. | | 1,525,000 | | | 42,288 |
| VeriFone Holdings, Inc.* | | 207,661 | | | 2,762 |
| | | | | |
| Total | | | | | 147,364 |
| | | | | |
|
| Computer Technology 1.25% |
| EMC Corp.* | | 1,925,000 | | | 31,705 |
| | | | | |
|
| Consumer Lending 1.14% |
| Berkshire Hathaway, Inc. Class B* | | 8,768 | | | 28,785 |
| | | | | |
|
| Containers & Packaging 0.06% |
| AptarGroup, Inc. | | 41,057 | | | 1,450 |
| | | | | |
See Notes to Financial Statements.
24
Schedule of Investments (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund) October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Diversified Financial Services 7.17% |
| Bank of New York Mellon Corp. (The) | | 320,500 | | $ | 8,545 |
| Capital One Financial Corp. | | 1,000,216 | | | 36,608 |
| JPMorgan Chase & Co. | | 1,166,600 | | | 48,729 |
| Lazard Ltd. Class A | | 1,059,000 | | | 39,977 |
| Morgan Stanley | | 844,400 | | | 27,122 |
| Raymond James Financial, Inc. | | 880,326 | | | 20,784 |
| | | | | |
| Total | | | | | 181,765 |
| | | | | |
|
| Diversified Manufacturing Operations 4.33% |
| Eaton Corp. | | 702,000 | | | 42,436 |
| Honeywell International, Inc. | | 636,200 | | | 22,833 |
| ITT Corp. | | 875,000 | | | 44,362 |
| | | | | |
| Total | | | | | 109,631 |
| | | | | |
|
| Diversified Materials & Processing 0.27% |
| Hexcel Corp.* | | 625,000 | | | 6,875 |
| | | | | |
|
| Diversified Retail 0.92% |
| Costco Wholesale Corp. | | 55,124 | | | 3,134 |
| Nordstrom, Inc. | | 234,788 | | | 7,462 |
| Target Corp. | | 264,200 | | | 12,795 |
| | | | | |
| Total | | | | | 23,391 |
| | | | | |
|
| Electronic Entertainment 0.19% |
| Activision Blizzard, Inc.* | | 447,800 | | | 4,850 |
| | | | | |
|
| Engineering & Contracting Services 0.98% |
| Jacobs Engineering Group, Inc.* | | 585,000 | | | 24,740 |
| | | | | |
|
| Financial Data & Systems 0.80% |
| MasterCard, Inc. Class A | | 92,559 | | | 20,272 |
| | | | | |
|
| Foods 0.71% |
| J.M. Smucker Co. (The) | | 341,800 | | | 18,023 |
| | | | | |
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Gas Pipeline 1.97% |
| El Paso Corp. | | 3,105,033 | | $ | 30,460 |
| EQT Corp. | | 465,000 | | | 19,465 |
| | | | | |
| Total | | | | | 49,925 |
| | | | | |
|
| Gold 2.09% |
| Barrick Gold Corp. (Canada)(a) | | 1,476,000 | | | 53,033 |
| | | | | |
|
| Healthcare Facilities 2.22% |
| DaVita, Inc.* | | 1,060,600 | | | 56,244 |
| | | | | |
|
| Healthcare Management Services 1.34% |
| CIGNA Corp. | | 230,400 | | | 6,414 |
| Humana, Inc.* | | 735,235 | | | 27,630 |
| | | | | |
| Total | | | | | 34,044 |
| | | | | |
|
| Healthcare Services 1.97% |
| McKesson Corp. | | 850,000 | | | 49,920 |
| | | | | |
|
| Hotel/Motel 2.73% |
| Marriott International, Inc. Class A | | 1,275,000 | | | 31,952 |
| Starwood Hotels & Resorts Worldwide, Inc. | | 830,000 | | | 24,120 |
| Wynn Resorts Ltd.* | | 241,100 | | | 13,072 |
| | | | | |
| Total | | | | | 69,144 |
| | | | | |
|
| Household Equipment/Products 0.48% |
| Fortune Brands, Inc. | | 315,000 | | | 12,269 |
| | | | | |
|
| Insurance: Multi-Line 3.73% |
| ACE Ltd. (Switzerland)(a) | | 395,000 | | | 20,287 |
| Aon Corp. | | 797,600 | | | 30,716 |
| Markel Corp.* | | 47,100 | | | 15,199 |
| MetLife, Inc. | | 833,879 | | | 28,377 |
| | | | | |
| Total | | | | | 94,579 |
| | | | | |
|
| Luxury Items 0.69% |
| Fossil, Inc.* | | 653,641 | | | 17,472 |
| | | | | |
See Notes to Financial Statements.
25
Schedule of Investments (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund) October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Machinery: Industrial 0.85% |
| EnPro Industries, Inc.* | | 235,000 | | $ | 5,306 |
| Kennametal, Inc. | | 690,000 | | | 16,256 |
| | | | | |
| Total | | | | | 21,562 |
| | | | | |
|
| Medical & Dental Instruments & Supplies 2.56% |
| C.R. Bard, Inc. | | 103,883 | | | 7,798 |
| Cooper Cos., Inc. (The) | | 218,543 | | | 6,121 |
| Patterson Cos., Inc.* | | 970,000 | | | 24,764 |
| Stryker Corp. | | 280,000 | | | 12,880 |
| Zimmer Holdings, Inc.* | | 255,000 | | | 13,405 |
| | | | | |
| Total | | | | | 64,968 |
| | | | | |
|
| Medical Equipment 2.31% |
| Thermo Fisher Scientific, Inc.* | | 733,500 | | | 33,007 |
| Varian Medical Systems, Inc.* | | 620,000 | | | 25,408 |
| | | | | |
| Total | | | | | 58,415 |
| | | | | |
|
| Metal Fabricating 1.24% |
| Reliance Steel & Aluminum Co. | | 859,100 | | | 31,340 |
| | | | | |
|
| Miscellaneous: Consumer Staples 0.64% |
| Diageo plc ADR | | 248,300 | | | 16,144 |
| | | | | |
|
| Oil: Crude Producers 2.66% |
| Apache Corp. | | 163,900 | | | 15,426 |
| Noble Energy, Inc. | | 258,900 | | | 16,992 |
| Southwestern Energy Co.* | | 225,000 | | | 9,805 |
| XTO Energy, Inc. | | 605,000 | | | 25,144 |
| | | | | |
| Total | | | | | 67,367 |
| | | | | |
|
| Oil: Integrated 4.45% |
| EnCana Corp. (Canada)(a) | | 755,000 | | | 41,819 |
| Exxon Mobil Corp. | | 360,000 | | | 25,801 |
| Williams Cos., Inc. (The) | | 2,394,800 | | | 45,142 |
| | | | | |
| Total | | | | | 112,762 |
| | | | | |
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Oil Well Equipment & Services 4.22% |
| Cameron International Corp.* | | 217,300 | | $ | 8,034 |
| Halliburton Co. | | 1,170,000 | | | 34,176 |
| Helmerich & Payne, Inc. | | 187,200 | | | 7,117 |
| Schlumberger Ltd. | | 382,100 | | | 23,767 |
| Smith International, Inc. | | 467,500 | | | 12,964 |
| Superior Energy Services, Inc.* | | 970,000 | | | 20,962 |
| | | | | |
| Total | | | | | 107,020 |
| | | | | |
|
| Pharmaceuticals 6.11% |
| Abbott Laboratories | | 1,145,675 | | | 57,937 |
| AmerisourceBergen Corp. | | 1,781,200 | | | 39,454 |
| Warner Chilcott plc Class A (Ireland)*(a) | | 1,399,600 | | | 31,001 |
| Watson Pharmaceuticals, Inc.* | | 769,686 | | | 26,493 |
| | | | | |
| Total | | | | | 154,885 |
| | | | | |
|
| Producer Durables: Miscellaneous 0.74% |
| SPX Corp. | | 355,000 | | | 18,737 |
| | | | | |
|
| Railroads 1.95% |
| Canadian National Railway Co. (Canada)(a) | | 325,000 | | | 15,678 |
| Kansas City Southern* | | 1,387,104 | | | 33,610 |
| | | | | |
| Total | | | | | 49,288 |
| | | | | |
|
| Scientific Instruments: Control & Filter 2.42% |
| Parker Hannifin Corp. | | 532,638 | | | 28,209 |
| Robbins & Myers, Inc. | | 1,040,000 | | | 24,128 |
| Roper Industries, Inc. | | 180,120 | | | 9,105 |
| | | | | |
| Total | | | | | 61,442 |
| | | | | |
|
| Scientific Instruments: Electrical 0.10% |
| AMETEK, Inc. | | 70,000 | | | 2,442 |
| | | | | |
See Notes to Financial Statements.
26
Schedule of Investments (concluded)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund) October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Securities Brokerage & Services 0.67% |
| Charles Schwab Corp. (The) | | 974,500 | | $ | 16,898 |
| | | | | |
|
| Semiconductors & Components 1.00% |
| Micron Technology, Inc.* | | 2,325,000 | | | 15,787 |
| Xilinx, Inc. | | 442,375 | | | 9,622 |
| | | | | |
| Total | | | | | 25,409 |
| | | | | |
|
| Shipping 0.16% |
| Kirby Corp.* | | 118,476 | | | 4,004 |
| | | | | |
|
| Specialty Retail 1.99% |
| American Eagle Outfitters, Inc. | | 1,026,895 | | | 17,960 |
| Children’s Place Retail Stores, Inc. (The)* | | 212,120 | | | 6,671 |
| Lowe’s Cos., Inc. | | 974,300 | | | 19,067 |
| TJX Companies, Inc. (The) | | 182,000 | | | 6,798 |
| | | | | |
| Total | | | | | 50,496 |
| | | | | |
|
| Steel 0.92% |
| Nucor Corp. | | 350,000 | | | 13,948 |
| United States Steel Corp. | | 270,000 | | | 9,312 |
| | | | | |
| Total | | | | | 23,260 |
| | | | | |
|
| Textiles Apparel & Shoes 0.96% |
| Guess?, Inc. | | 207,300 | | | 7,577 |
| NIKE, Inc. Class B | | 270,000 | | | 16,789 |
| | | | | |
| Total | | | | | 24,366 |
| | | | | |
|
| Truckers 0.29% |
| Heartland Express, Inc. | | 539,691 | | | 7,340 |
| | | | | |
| Total Common Stocks (cost $2,308,862,130) | | | | | 2,463,168 |
| | | | | |
| | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) |
| SHORT-TERM INVESTMENT 1.81% |
|
| Repurchase Agreement |
| Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $46,790,000 of U.S. Treasury Bill at 0.06% due 12/10/2009; value: $46,790,000; proceeds: $45,868,713 (cost $45,868,675) | | $ | 45,869 | | $ | 45,869 |
| | | | | | |
Total Investments in Securities 99.00%
(cost $2,354,730,805) | | | | | | 2,509,037 |
| | | | | | |
| Other Assets in Excess of Liabilities 1.00% | | | | | | 25,257 |
| | | | | | |
| Net Assets 100.00% | | | | | $ | 2,534,294 |
| | | | | | |
| ADR | | American Depositary Receipt. |
| * | | Non-income producing security. |
| (a) | | Foreign security traded in U.S. dollars. |
See Notes to Financial Statements.
27
Schedule of Investments
INTERNATIONAL CORE EQUITY FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| LONG-TERM INVESTMENTS 92.60% |
|
| COMMON STOCKS 91.13% |
|
| Australia 2.47% |
|
| Metals & Mining 0.59% |
| Lihir Gold Ltd.* | | 1,942,748 | | $ | 5,314 |
| | | | | |
|
| Oil, Gas & Consumable Fuels 1.88% |
| Oil Search Ltd. | | 1,501,046 | | | 7,785 |
| Santos Ltd. | | 692,001 | | | 9,224 |
| | | | | |
| | | | | 17,009 |
| | | | | |
| Total Australia | | | | | 22,323 |
| | | | | |
|
| Austria 0.95% |
|
| Real Estate Management & Development |
| Immoeast AG* | | 1,622,746 | | | 8,566 |
| | | | | |
| | |
| Brazil 3.94% | | | | | |
|
| Construction & Engineering 0.54% |
| Gafisa SA | | 327,200 | | | 4,855 |
| | | | | |
|
| Consumer Finance 0.51% |
| Companhia Brasileira de Meios de Pagamento SA | | 499,212 | | | 4,577 |
| | | | | |
|
| Household Durables 1.47% |
| Agra Empreendimentos Imobiliarios SA | | 4,894,900 | | | 13,338 |
| | | | | |
|
| Oil, Gas & Consumable Fuels 0.86% |
| Petroleo Brasileiro SA ADR | | 193,200 | | | 7,751 |
| | | | | |
|
| Water Utilities 0.56% |
| Companhia de Saneamento Basico do Estado de Sao Paulo ADR | | 132,300 | | | 5,096 |
| | | | | |
| Total Brazil | | | | | 35,617 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| China 1.95% |
|
| Food Products 0.31% |
| China Yurun Food Group Ltd. | | 1,390,000 | | $ | 2,857 |
| | | | | |
|
| Internet Software & Services 0.70% |
| Sohu.com, Inc.* | | 113,700 | | | 6,322 |
| | | | | |
|
| Transportation Infrastructure 0.94% |
| China Zhongwang Holdings Ltd.* | | 9,066,000 | | | 8,488 |
| | | | | |
| Total China | | | | | 17,667 |
| | | | | |
| | |
| Egypt 0.77% | | | | | |
|
| Wireless Telecommunication Services |
| Orascom Telecom Holdings SAE GDR | | 203,300 | | | 6,913 |
| | | | | |
| | |
| Finland 1.42% | | | | | |
|
| Communications Equipment 0.63% |
| Nokia OYJ | | 449,712 | | | 5,680 |
| | | | | |
|
| Industrial Machinery 0.79% |
| Metso OYJ | | 254,677 | | | 7,112 |
| | | | | |
| Total Finland | | | | | 12,792 |
| | | | | |
|
| France 8.25% |
|
| Automobiles 1.39% |
| Renault SA* | | 280,639 | | | 12,559 |
| | | | | |
|
| Commercial Banks 0.58% |
| BNP Paribas SA | | 69,115 | | | 5,207 |
| | | | | |
|
| Construction & Engineering 1.50% |
| Vinci SA | | 259,547 | | | 13,545 |
| | | | | |
|
| Diversified Telecommunication Services 0.72% |
| France Telecom SA | | 263,387 | | | 6,526 |
| | | | | |
See Notes to Financial Statements.
28
Schedule of Investments (continued)
INTERNATIONAL CORE EQUITY FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| France (continued) |
|
| Insurance 0.83% |
| AXA SA | | 301,030 | | $ | 7,487 |
| | | | | |
|
| Media 0.78% |
| Vivendi SA | | 255,297 | | | 7,083 |
| | | | | |
|
| Multi-Line Retail 0.90% |
| PPR | | 74,936 | | | 8,167 |
| | | | | |
|
| Oil, Gas & Consumable Fuels 0.52% |
| TOTAL SA ADR | | 77,700 | | | 4,667 |
| | | | | |
|
| Pharmaceuticals 1.03% |
| Sanofi-Aventis SA | | 101,167 | | | 7,416 |
| Sanofi-Aventis SA ADR | | 52,400 | | | 1,935 |
| | | | | |
| | | | | 9,351 |
| | | | | |
| Total France | | | | | 74,592 |
| | | | | |
|
| Germany 8.14% |
|
| Chemicals 0.87% |
| Lanxess AG | | 249,636 | | | 7,826 |
| | | | | |
|
| Construction Materials 0.32% |
| HeidelbergCement AG | | 49,243 | | | 2,945 |
| | | | | |
|
| Diversified Telecommunication Services 0.95% |
| Deutsche Telekom AG Registered Shares | | 628,054 | | | 8,583 |
| | | | | |
|
| Electric: Utilities 0.72% |
| E. On AG | | 169,717 | | | 6,504 |
| | | | | |
|
| Household Products 0.95% |
| Henkel KGaA | | 221,803 | | | 8,571 |
| | | | | |
|
| Industrial Conglomerates 0.99% |
| Siemens AG Registered Shares | | 98,893 | | | 8,937 |
| | | | | |
|
| Machinery 1.85% |
| GEA Group AG | | 460,558 | | | 8,691 |
| MAN SE | | 97,589 | | | 8,036 |
| | | | | |
| | | | | 16,727 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Metals & Mining 0.96% |
| ThyssenKrupp AG | | 269,453 | | $ | 8,680 |
| | | | | |
|
| Pharmaceuticals 0.53% |
| Bayer AG | | 69,148 | | | 4,797 |
| | | | | |
| Total Germany | | | | | 73,570 |
| | | | | |
| | |
| Greece 3.00% | | | | | |
|
| Beverages 0.52% |
| Coca Cola Hellenic Bottling Co. SA | | 178,672 | | | 4,657 |
| | | | | |
|
| Commercial Banks 2.00% |
| Alpha Bank AE* | | 232,579 | | | 4,484 |
| National Bank of Greece SA* | | 372,125 | | | 13,605 |
| | | | | |
| | | | | 18,089 |
| | | | | |
|
| Electric: Utilities 0.48% |
| Public Power Corp. SA* | | 213,916 | | | 4,363 |
| | | | | |
| Total Greece | | | | | 27,109 |
| | | | | |
| | |
| Hong Kong 1.05% | | | | | |
|
| Automobiles 0.69% |
| Dongfeng Motor Group Co., Ltd. Class H | | 5,258,000 | | | 6,251 |
| | | | | |
|
| Real Estate Management & Development 0.36% |
| Sino-Ocean Land Holdings Ltd. | | 3,295,000 | | | 3,204 |
| | | | | |
| Total Hong Kong | | | | | 9,455 |
| | | | | |
| | |
| Indonesia 1.69% | | | | | |
|
| Diversified Telecommunication Services 0.82% |
| PT Telekomunikasi Indonesia Tbk | | 8,663,867 | | | 7,461 |
| | | | | |
|
| Oil, Gas & Consumable Fuels 0.87% |
| PT Bumi Resources Tbk | | 32,578,000 | | | 7,843 |
| | | | | |
| Total Indonesia | | | | | 15,304 |
| | | | | |
See Notes to Financial Statements.
29
Schedule of Investments (continued)
INTERNATIONAL CORE EQUITY FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Ireland 1.18% | | | | | |
|
| Airlines 0.50% |
| Ryanair Holdings plc* | | 1,039,390 | | $ | 4,527 |
| | | | | |
|
| Insurance 0.68% |
| Irish Life & Permanent plc | | 843,101 | | | 6,097 |
| | | | | |
| Total Ireland | | | | | 10,624 |
| | | | | |
|
| Israel 1.31% |
|
| Pharmaceuticals |
| Teva Pharmaceutical Industries Ltd. ADR | | 234,950 | | | 11,860 |
| | | | | |
| | |
| Italy 1.70% | | | | | |
|
| Commercial Banks |
| Intesa Sanpaolo SpA* | | 1,710,419 | | | 7,198 |
| UniCredit SpA* | | 2,445,767 | | | 8,194 |
| | | | | |
| Total Italy | | | | | 15,392 |
| | | | | |
| | |
| Japan 12.76% | | | | | |
|
| Auto Components 1.82% |
| Bridgestone Corp. | | 996,000 | | | 16,425 |
| | | | | |
|
| Chemicals 1.13% |
| Asahi Kasei Corp. | | 2,061,000 | | | 10,212 |
| | | | | |
|
| Commercial Banks 1.09% |
| Bank of Yokohama Ltd. (The) | | 2,015,000 | | | 9,895 |
| | | | | |
|
| Consumer Finance 0.78% |
| ORIX Corp. | | 108,930 | | | 7,036 |
| | | | | |
|
| Diversified Telecommunication Services 0.69% |
| Nippon Telegraph & Telephone Corp. | | 150,200 | | | 6,198 |
| | | | | |
|
| Marine 0.61% |
| Mitsui OSK Lines Ltd. | | 944,000 | | | 5,481 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Media 0.63% |
| Fuji Media Holdings, Inc. | | 3,860 | | $ | 5,672 |
| | | | | |
|
| Real Estate Investment Trusts 1.60% |
| Japan Prime Realty Investment Corp. | | 3,692 | | | 8,040 |
| Nippon Commercial Investment Corp. | | 3,709 | | | 6,458 |
| | | | | |
| | | | | 14,498 |
| | | | | |
|
| Road & Rail 0.96% |
| East Japan Railway Co. | | 136,300 | | | 8,728 |
| | | | | |
|
| Tobacco 0.70% |
| Japan Tobacco, Inc. | | 2,249 | | | 6,310 |
| | | | | |
|
| Trading Companies & Distributors 1.89% |
| Mitsui & Co., Ltd. | | 586,800 | | | 7,706 |
| Sumitomo Corp. | | 965,600 | | | 9,374 |
| | | | | |
| | | | | 17,080 |
| | | | | |
|
| Wireless Telecommunication Services 0.86% |
| KDDI Corp. | | 1,459 | | | 7,744 |
| | | | | |
| Total Japan | | | | | 115,279 |
| | | | | |
|
| Kazakhstan 0.39% |
|
| Oil, Gas & Consumable Fuels |
| KazMunaiGas Exploration Production GDR | | 150,100 | | | 3,540 |
| | | | | |
|
| Luxembourg 0.87% |
|
| Metals & Mining |
| ArcelorMittal | | 232,483 | | | 7,868 |
| | | | | |
| | |
| Mexico 1.51% | | | | | |
|
| Construction & Engineering 0.34% |
| Empresas ICA SAB de CV* | | 1,404,300 | | | 3,082 |
| | | | | |
|
| Construction Materials 0.76% |
| Cemex SAB de CV ADR* | | 661,900 | | | 6,870 |
| | | | | |
See Notes to Financial Statements.
30
Schedule of Investments (continued)
INTERNATIONAL CORE EQUITY FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Mexico (continued) |
|
| Household Durables 0.41% |
| Desarrolladora Homex SA de CV ADR* | | 103,200 | | $ | 3,670 |
| | | | | |
| Total Mexico | | | | | 13,622 |
| | | | | |
| | |
| Netherlands 1.89% | | | | | |
|
| Diversified Financial Services 1.14% |
| ING Groep NV CVA* | | 794,017 | | | 10,333 |
| | | | | |
|
| Semiconductors & Semiconductor Equipment 0.75% |
| ASML Holding NV | | 249,343 | | | 6,724 |
| | | | | |
| Total Netherlands | | | | | 17,057 |
| | | | | |
| | |
| Norway 3.17% | | | | | |
|
| Commercial Banks 1.96% |
| DnB NOR ASA* | | 1,546,200 | | | 17,713 |
| | | | | |
|
| Metals & Mining 1.21% |
| Norsk Hydro ASA* | | 1,674,200 | | | 10,973 |
| | | | | |
| Total Norway | | | | | 28,686 |
| | | | | |
|
| Singapore 0.85% |
|
| Commercial Banks |
| DBS Group Holdings Ltd. | | 838,100 | | | 7,675 |
| | | | | |
|
| South Africa 0.46% |
|
| Metals & Mining |
| AngloGold Ashanti Ltd. ADR | | 110,500 | | | 4,148 |
| | | | | |
| | |
| South Korea 1.85% | | | | | |
|
| Internet Software & Services 0.83% |
| NHN Corp.* | | 50,947 | | | 7,514 |
| | | | | |
|
| Semiconductors & Semiconductor Equipment 1.02% |
| Samsung Electronics Co., Ltd. | | 15,343 | | | 9,232 |
| | | | | |
| Total South Korea | | | | | 16,746 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Spain 1.29% | | | | | |
|
| Commercial Banks |
| Banco Santander SA | | 425,120 | | $ | 6,841 |
| Banco Santander SA ADR | | 300,800 | | | 4,831 |
| | | | | |
| Total Spain | | | | | 11,672 |
| | | | | |
| | |
| Sweden 1.25% | | | | | |
|
| Commercial Banks |
| Swedbank AB Class A* | | 1,314,450 | | | 11,323 |
| | | | | |
| | |
| Switzerland 8.65% | | | | | |
|
| Biotechnology 1.02% |
| Actelion Ltd. Registered Shares* | | 167,000 | | | 9,206 |
| | | | | |
|
| Capital Markets 1.08% |
| Credit Suisse Group AG ADR | | 42,700 | | | 2,276 |
| Credit Suisse Group AG Registered Shares | | 139,816 | | | 7,474 |
| | | | | |
| | | | | 9,750 |
| | | | | |
|
| Energy Equipment & Services 1.50% |
| Transocean Ltd.* | | 162,000 | | | 13,593 |
| | | | | |
|
| Food Products 1.68% |
| Nestle SA Registered Shares | | 325,504 | | | 15,136 |
| | | | | |
|
| Healthcare Equipment & Supplies 0.97% |
| Synthes, Inc. | | 73,950 | | | 8,773 |
| | | | | |
|
| Insurance 0.83% |
| Zurich Financial Services AG | | 32,838 | | | 7,520 |
| | | | | |
|
| Pharmaceuticals 1.57% |
| Roche Holding Ltd. AG | | 88,633 | | | 14,196 |
| | | | | |
| Total Switzerland | | | | | 78,174 |
| | | | | |
See Notes to Financial Statements.
31
Schedule of Investments (continued)
INTERNATIONAL CORE EQUITY FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Thailand 0.77% | | | | | |
|
| Commercial Banks |
| Bangkok Bank Public Co., Ltd. | | 2,062,000 | | $ | 6,916 |
| | | | | |
|
| United Kingdom 17.60% |
|
| Aerospace & Defense 1.22% |
| BAE Systems plc | | 2,137,618 | | | 10,992 |
| | | | | |
|
| Airlines 0.57% |
| easyJet plc* | | 867,670 | | | 5,108 |
| | | | | |
|
| Commercial Banks 3.35% |
| Barclays plc* | | 1,152,705 | | | 6,041 |
| Barclays plc ADR* | | 285,350 | | | 5,964 |
| HSBC Holdings plc | | 842,135 | | | 9,306 |
| HSBC Holdings plc ADR | | 161,400 | | | 8,940 |
| | | | | |
| | | | | 30,251 |
| | | | | |
|
| Food & Staples Retailing 1.09% |
| Tesco plc | | 1,476,370 | | | 9,844 |
| | | | | |
|
| Insurance 1.42% |
| Aviva plc | | 1,034,425 | | | 6,468 |
| Prudential plc | | 702,026 | | | 6,377 |
| | | | | �� |
| | | | | 12,845 |
| | | | | |
|
| Internet & Catalog Retail 0.73% |
| Home Retail Group plc | | 1,395,000 | | | 6,640 |
| | | | | |
|
| Media 0.80% |
| Reed Elsevier plc | | 949,420 | | | 7,188 |
| | | | | |
|
| Metals & Mining 1.15% |
| Anglo American plc* | | 287,173 | | | 10,391 |
| | | | | |
|
| Multi-Utilities 0.79% |
| National Grid plc | | 716,898 | | | 7,101 |
| | | | | |
|
| Oil, Gas & Consumable Fuels 1.98% |
| Tullow Oil plc | | 924,915 | | | 17,917 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Specialty Retail 0.72% |
| DSG International plc* | | 13,059,545 | | $ | 6,539 |
| | | | | |
|
| Tobacco 2.42% |
| British American Tobacco plc | | 361,632 | | | 11,524 |
| Imperial Tobacco Group plc | | 352,345 | | | 10,383 |
| | | | | |
| | | | | 21,907 |
| | | | | |
|
| Wireless Telecommunication Services 1.36% |
| Vodafone Group plc | | 5,589,413 | | | 12,318 |
| | | | | |
| Total United Kingdom | | | | | 159,041 |
| | | | | |
| Total Common Stocks (cost $727,984,232) | | | | | 823,531 |
| | | | | |
|
| PREFERRED STOCKS 1.47% |
|
| Brazil 0.50% |
|
| Electric: Utilities |
| Companhia de Transmissao de Energia Eletrica Paulista | | 162,453 | | | 4,481 |
| | | | | |
|
| Germany 0.97% |
|
| Healthcare Equipment & Supplies |
| Fresenius SE | | 151,340 | | | 8,792 |
| | | | | |
| Total Preferred Stocks (cost $12,339,671) | | | | | 13,273 |
| | | | | |
Total Long-Term Investments
(cost $740,323,903) | | | | | 836,804 |
| | | | | |
See Notes to Financial Statements.
32
Schedule of Investments (concluded)
INTERNATIONAL CORE EQUITY FUND October 31, 2009
| | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) |
| SHORT-TERM INVESTMENT 3.84% |
| | |
| Repurchase Agreement | | | | | | |
Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $35,365,000 of U.S. Treasury Bill at 0.10% due 12/24/2009;
value: $35,361,464; proceeds: $34,664,319
(cost $34,664,290) | | $ | 34,664 | | $ | 34,664 |
| | | | | | |
Total Investments in Securities 96.44%
(cost $774,988,193) | | | | | | 871,468 |
| | | | | | |
| Foreign Cash and Other Assets in Excess of Liabilities 3.56%(a) | | | | | | 32,168 |
| | | | | | |
| Net Assets 100.00% | | | | | $ | 903,636 |
| | | | | | |
| ADR | | American Depositary Receipt. |
| GDR | | Global Depositary Receipt. |
| * | | Non-income producing security. |
| (a) | | Foreign Cash and Other Assets in Excess of Liabilities include net unrealized appreciation on forward foreign currency exchange contracts, as follows: |
Open Forward Foreign Currency Exchange Contracts at October 31, 2009:
| | | | | | | | | | | | | | | |
Forward
Foreign Currency
Exchange Contracts | | Transaction
Type | | Expiration
Date | | Foreign
Currency | | U.S. $
Cost On
Origination
Date | | U.S. $
Current
Value | | Unrealized
Appreciation/
(Depreciation) |
| Australian Dollar | | Buy | | 11/24/2009 | | 14,500,000 | | $ | 12,045,875 | | $ | 13,026,575 | | $ | 980,700 |
| Australian Dollar | | Buy | | 12/24/2009 | | 12,050,000 | | | 10,450,362 | | | 10,793,245 | | | 342,883 |
| Brazilian Real | | Sell | | 11/24/2009 | | 10,350,000 | | | 5,508,835 | | | 5,851,094 | | | (342,259) |
| Euro | | Buy | | 12/24/2009 | | 20,350,000 | | | 30,094,597 | | | 29,943,522 | | | (151,075) |
| Israeli New Shekel | | Sell | | 11/24/2009 | | 38,646,500 | | | 10,188,901 | | | 10,296,878 | | | (107,977) |
| Japanese Yen | | Buy | | 11/13/2009 | | 2,955,000,000 | | | 30,762,280 | | | 32,829,377 | | | 2,067,097 |
| South African Rand | | Sell | | 11/24/2009 | | 62,631,750 | | | 7,898,708 | | | 7,988,142 | | | (89,434) |
| South Korean Won | | Sell | | 11/24/2009 | | 10,675,000,000 | | | 8,543,417 | | | 9,026,988 | | | (483,571) |
| | | | | | | | | | | | | | | |
| Net Unrealized Appreciation on Forward Foreign Currency Exchange Contracts | | $ | 2,216,364 |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
33
Schedule of Investments
INTERNATIONAL DIVIDEND INCOME FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| LONG-TERM INVESTMENTS 95.34% |
|
| COMMON STOCKS 95.11% |
|
| Australia 13.30% |
|
| Banks: Regional 6.53% |
| Australia & New Zealand Banking Group Ltd. | | 340,816 | | $ | 6,951 |
| Bank of Queensland Ltd. | | 250,284 | | | 2,740 |
| Bendigo and Adelaide Bank Ltd. | | 332,452 | | | 2,694 |
| National Australia Bank Ltd. | | 235,032 | | | 6,210 |
| | | | | |
| | | | | 18,595 |
| | | | | |
|
| Coal 0.48% |
| Centennial Coal Co., Ltd. | | 490,825 | | | 1,371 |
| | | | | |
|
| Food 1.54% |
| Goodman Fielder Ltd. | | 3,051,843 | | | 4,378 |
| | | | | |
|
| Insurance 1.42% |
| QBE Insurance Group Ltd. | | 200,697 | | | 4,042 |
| | | | | |
|
| Real Estate Investment Trusts 0.67% |
| GPT Group | | 3,719,014 | | | 1,898 |
| | | | | |
|
| Retail 1.88% |
| Wesfarmers Ltd. | | 214,430 | | | 5,351 |
| | | | | |
|
| Utilities 0.78% |
| DUET Group | | 1,473,279 | | | 2,229 |
| | | | | |
| Total Australia | | | | | 37,864 |
| | | | | |
|
| Austria 2.18% |
|
| Insurance 1.00% |
| Vienna Insurance Group | | 50,662 | | | 2,855 |
| | | | | |
|
| Steel 0.40% |
| Voestalpine AG | | 33,287 | | | 1,138 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Transportation: Miscellaneous 0.78% |
| Oesterreichische Post AG | | 75,918 | | $ | 2,216 |
| | | | | |
| Total Austria | | | | | 6,209 |
| | | | | |
|
| Brazil 2.33% |
|
| Real Estate Investment Trusts 0.95% |
| Agra Empreendimentos Imobiliarios SA | | 987,600 | | | 2,691 |
| | | | | |
|
| Utilities 1.38% |
| Companhia de Saneamento Basico do Estado de Sao Paulo ADR* | | 102,100 | | | 3,933 |
| | | | | |
| Total Brazil | | | | | 6,624 |
| | | | | |
|
| Canada 4.59% |
|
| Oil 1.85% |
| Baytex Energy Trust Unit | | 161,231 | | | 3,944 |
| Crescent Point Energy Corp. | | 39,320 | | | 1,337 |
| | | | | |
| | | | | 5,281 |
| | | | | |
|
| Oil: Crude Producers 0.58% |
| Penn West Energy Trust Unit | | 99,730 | | | 1,641 |
| | | | | |
|
| Oil: Integrated Domestic 0.72% |
| Enerplus Resources Fund Unit | | 95,020 | | | 2,064 |
| | | | | |
|
| Telecommunications 1.44% |
| Bell Aliant Regional Communications Income Fund Unit | | 164,502 | | | 4,090 |
| | | | | |
| Total Canada | | | | | 13,076 |
| | | | | |
|
| China 0.61% |
|
| Metal Fabricating |
| China Zhongwang Holdings Ltd.* | | 1,840,400 | | | 1,723 |
| | | | | |
See Notes to Financial Statements.
34
Schedule of Investments (continued)
INTERNATIONAL DIVIDEND INCOME FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Czech Republic 1.46% |
|
| Financial Services 0.60% |
| Komercni Banka AS | | 8,745 | | $ | 1,715 |
| | | | | |
|
| Telecommunications 0.86% |
| Telefonica O2 Czech Republic AS | | 104,033 | | | 2,451 |
| | | | | |
| Total Czech Republic | | | | | 4,166 |
| | | | | |
|
| Egypt 0.72% |
|
| Telecommunications |
| Orascom Telecom Holdings SAE GDR | | 60,000 | | | 2,040 |
| | | | | |
|
| Finland 3.18% |
|
| Drugs 1.80% |
| Orion OYJ Class B | | 269,505 | | | 5,121 |
| | | | | |
|
| Machinery: Industrial/Specialty 0.78% |
| Metso OYJ | | 79,342 | | | 2,216 |
| | | | | |
|
| Telecommunications Equipment 0.60% |
| Nokia OYJ | | 136,043 | | | 1,718 |
| | | | | |
| Total Finland | | | | | 9,055 |
| | | | | |
|
| France 12.47% |
|
| Banks: Money Center 0.71% |
| BNP Paribas SA | | 26,979 | | | 2,032 |
| | | | | |
|
| Conglomerates 0.93% |
| Vivendi SA | | 95,845 | | | 2,659 |
| | | | | |
|
| Construction/Homebuilding 1.33% |
| Vinci SA | | 72,616 | | | 3,790 |
| | | | | |
|
| Drugs 1.49% |
| Sanofi-Aventis SA | | 58,022 | | | 4,253 |
| | | | | |
|
| Electric: Power 0.86% |
| Schneider Electric SA | | 23,570 | | | 2,451 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Insurance 0.71% |
| AXA SA | | 81,354 | | $ | 2,023 |
| | | | | |
|
| Metal Fabricating 0.94% |
| Vallourec SA | | 16,927 | | | 2,665 |
| | | | | |
|
| Office Furniture & Business Equipment 0.91% |
| Neopost SA | | 29,497 | | | 2,581 |
| | | | | |
|
| Oil: Integrated International 1.50% |
| TOTAL SA ADR | | 71,100 | | | 4,271 |
| | | | | |
|
| Publishing 1.26% |
| PagesJaunes Groupe | | 292,002 | | | 3,578 |
| | | | | |
|
| Retail: Specialty 1.26% |
| PPR | | 32,839 | | | 3,579 |
| | | | | |
|
| Telephone-Long Distance 0.57% |
| France Telecom SA | | 65,503 | | | 1,623 |
| | | | | |
| Total France | | | | | 35,505 |
| | | | | |
|
| Germany 5.55% |
|
| Business Services 0.61% |
| Deutsche Post AG Registered Shares | | 102,069 | | | 1,727 |
| | | | | |
|
| Chemicals 1.39% |
| BASF SE | | 73,974 | | | 3,960 |
| | | | | |
|
| Electric: Power 0.75% |
| E. On AG | | 55,712 | | | 2,135 |
| | | | | |
|
| Machinery: Industrial/Specialty 0.81% |
| MAN SE | | 28,022 | | | 2,308 |
| | | | | |
|
| Manufacturing 1.24% |
| ThyssenKrupp AG | | 110,029 | | | 3,544 |
| | | | | |
See Notes to Financial Statements.
35
Schedule of Investments (continued)
INTERNATIONAL DIVIDEND INCOME FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Germany (continued) |
|
| Telecommunications 0.75% |
| Deutsche Telekom AG Registered Shares | | 156,702 | | $ | 2,141 |
| | | | | |
| Total Germany | | | | | 15,815 |
| | | | | |
|
| Greece 1.28% |
|
| Financial Services 0.54% |
| Hellenic Exchanges SA | | 108,772 | | | 1,547 |
| | | | | |
|
| Gaming 0.74% |
| OPAP SA | | 82,191 | | | 2,092 |
| | | | | |
| Total Greece | | | | | 3,639 |
| | | | | |
|
| Hong Kong 1.44% |
|
| Diversified 0.64% |
| Shanghai Industrial Holdings Ltd. | | 389,000 | | | 1,827 |
| | | | | |
|
| Telecommunications Equipment 0.80% |
| VTech Holdings Ltd. | | 274,000 | | | 2,284 |
| | | | | |
| Total Hong Kong | | | | | 4,111 |
| | | | | |
|
| Indonesia 1.61% |
|
| Coal 0.41% |
| PT Bumi Resources Tbk | | 4,898,500 | | | 1,179 |
| | | | | |
|
| Telecommunications 1.20% |
| PT Telekomunikasi Indonesia Tbk ADR | | 100,400 | | | 3,405 |
| | | | | |
| Total Indonesia | | | | | 4,584 |
| | | | | |
|
| Italy 3.58% |
|
| Broadcasting 1.65% |
| Mediaset SpA | | 725,395 | | | 4,710 |
| | | | | |
|
| Electric: Power 0.65% |
| Enel SpA | | 309,816 | | | 1,844 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Oil: Integrated International 1.28% |
| Eni SpA ADR | | 73,700 | | $ | 3,654 |
| | | | | |
| Total Italy | | | | | 10,208 |
| | | | | |
|
| Japan 5.61% |
|
| Miscellaneous 1.04% |
| Sumitomo Corp. | | 305,100 | | | 2,962 |
| | | | | |
|
| Office Supplies 1.41% |
| Canon, Inc. | | 106,500 | | | 4,015 |
| | | | | |
|
| Real Estate Investment Trusts 2.34% |
| Japan Prime Realty Investment Corp. | | 978 | | | 2,130 |
| MID REIT, Inc. | | 1,274 | | | 2,869 |
| Nippon Commercial Investment Corp. | | 954 | | | 1,661 |
| | | | | |
| | | | | 6,660 |
| | | | | |
|
| Telecommunications 0.82% |
| NTT DoCoMo, Inc. | | 1,605 | | | 2,328 |
| | | | | |
| Total Japan | | | | | 15,965 |
| | | | | |
|
| Kazakhstan 0.52% |
|
| Oil |
| KazMunaiGas Exploration Production GDR | | 63,300 | | | 1,493 |
| | | | | |
|
| Netherlands 2.53% |
|
| Construction/Homebuilding 1.67% |
| Koninklijke BAM Groep NV | | 405,746 | | | 4,772 |
| | | | | |
|
| Oil: Integrated International 0.86% |
| Royal Dutch Shell plc ADR | | 41,100 | | | 2,442 |
| | | | | |
| Total Netherlands | | | | | 7,214 |
| | | | | |
|
| New Zealand 1.52% |
|
| Construction/Homebuilding |
| Fletcher Building Ltd. | | 732,325 | | | 4,326 |
| | | | | |
See Notes to Financial Statements.
36
Schedule of Investments (continued)
INTERNATIONAL DIVIDEND INCOME FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Portugal 1.89% |
|
| Electric: Power 0.60% |
| EDP – Energias de Portugal SA | | 387,567 | | $ | 1,714 |
| | | | | |
|
| Telecommunications 1.29% |
| Portugal Telecom SGPS SA Registered Shares | | 321,001 | | | 3,669 |
| | | | | |
| Total Portugal | | | | | 5,383 |
| | | | | |
|
| Singapore 1.92% |
|
| Air Transportation 0.67% |
| Singapore Airlines Ltd. | | 201,000 | | | 1,928 |
| | | | | |
|
| Banks: Money Center 1.25% |
| DBS Group Holdings Ltd. | | 387,975 | | | 3,553 |
| | | | | |
| Total Singapore | | | | | 5,481 |
| | | | | |
|
| South Africa 1.34% |
|
| Steel |
| Kumba Iron Ore Ltd. | | 128,152 | | | 3,826 |
| | | | | |
|
| South Korea 0.57% |
|
| Financial Services |
| Daishin Securities Co., Ltd. | | 130,340 | | | 1,633 |
| | | | | |
|
| Spain 3.03% |
|
| Banks: Money Center 2.02% |
| Banco Santander SA ADR | | 358,800 | | | 5,762 |
| | | | | |
|
| Oil: Integrated International 1.01% |
| Repsol YPF SA | | 107,440 | | | 2,860 |
| | | | | |
| Total Spain | | | | | 8,622 |
| | | | | |
|
| Sweden 0.76% |
|
| Construction/Homebuilding |
| Skanska AB Class B | | 146,644 | | | 2,152 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Switzerland 0.99% |
|
| Insurance |
| Zurich Financial Services AG | | 12,277 | | $ | 2,811 |
| | | | | |
|
| Thailand 0.91% |
|
| Financial Services |
| Tisco Financial Group Public Co., Ltd. | | 2,875,700 | | | 1,858 |
| Tisco Financial Group Public Co., Ltd | | 1,152,000 | | | 739 |
| | | | | |
| | | | | 2,597 |
| | | | | |
|
| Turkey 3.01% |
|
| Automotives 1.11% |
| Ford Otomotiv Sanayi AS | | 505,590 | | | 3,180 |
| | | | | |
|
| Oil 1.25% |
| Tupras Turkiye Petrol Rafinerileri AS | | 207,076 | | | 3,557 |
| | | | | |
|
| Telecommunications 0.65% |
| Turk Telekomunikasyon AS | | 609,195 | | | 1,849 |
| | | | | |
| Total Turkey | | | | | 8,586 |
| | | | | |
|
| United Kingdom 15.69% |
|
| Aerospace & Defense 0.54% |
| BAE Systems plc | | 300,225 | | | 1,544 |
| | | | | |
|
| Banks: Money Center 3.08% |
| HSBC Holdings plc | | 511,733 | | | 5,655 |
| Standard Chartered plc | | 126,665 | | | 3,107 |
| | | | | |
| | | | | 8,762 |
| | | | | |
|
| Diversified Materials & Processing 1.02% |
| Smiths Group plc | | 199,336 | | | 2,910 |
| | | | | |
|
| Drugs 1.02% |
| AstraZeneca plc | | 65,026 | | | 2,919 |
| | | | | |
See Notes to Financial Statements.
37
Schedule of Investments (continued)
INTERNATIONAL DIVIDEND INCOME FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| United Kingdom (continued) |
|
| Electric: Power 1.05% |
| National Grid plc | | 300,572 | | $ | 2,977 |
| | | | | |
|
| Environmental Services 0.99% |
| Imperial Tobacco Group plc | | 95,816 | | | 2,824 |
| | | | | |
|
| Household Equipment/Products 1.48% |
| Unilever plc | | 140,831 | | | 4,207 |
| | | | | |
|
| Insurance 1.46% |
| Aviva plc | | 346,798 | | | 2,169 |
| Prudential plc | | 220,115 | | | 1,999 |
| | | | | |
| | | | | 4,168 |
| | | | | |
|
| Oil: Integrated International 1.07% |
| BP plc | | 324,273 | | | 3,039 |
| | | | | |
|
| Retail: Specialty 1.29% |
| Home Retail Group plc | | 770,309 | | | 3,666 |
| | | | | |
|
| Telecommunications 1.37% |
| Vodafone Group plc | | 1,772,068 | | | 3,905 |
| | | | | |
|
| Tobacco 1.32% |
| British American Tobacco plc | | 117,851 | | | 3,755 |
| | | | | |
| Total United Kingdom | | | | | 44,676 |
| | | | | |
|
| United States 0.52% |
| | |
| Tobacco | | | | | |
| Altria Group, Inc. | | 81,900 | | | 1,483 |
| | | | | |
| Total Common Stocks (cost $233,321,677) | | | | | 270,867 |
| | | | | |
| | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) |
| CONVERTIBLE BOND 0.23% |
|
| Luxembourg |
|
| Steel |
| ArcelorMittal at 5.00%, due 5/15/2014 (cost $475,000) | | $ | 475 | | $ | 648 |
| | | | | | |
Total Long-Term Investments
(cost $233,796,677) | | | | | | 271,515 |
| | | | | | |
|
| SHORT-TERM INVESTMENT 4.02% |
|
| Repurchase Agreement |
| Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $11,670,000 of U.S. Treasury Bill at 0.10% due 12/24/2009; value: $11,668,833; proceeds: $11,439,842 (cost $11,439,832) | | | 11,440 | | | 11,440 |
| | | | | | |
| Total Investments in Securities 99.36% (cost $245,236,509) | | | | | | 282,955 |
| | | | | | |
| Foreign Cash and Other Assets in Excess of Liabilities 0.64%(a) | | | | | | 1,833 |
| | | | | | |
| Net Assets 100.00% | | | | | $ | 284,788 |
| | | | | | |
See Notes to Financial Statements.
38
Schedule of Investments (concluded)
INTERNATIONAL DIVIDEND INCOME FUND October 31, 2009
| ADR | | American Depositary Receipt. |
| GDR | | Global Depositary Receipt. |
| Unit | | More than one class of securities traded together. |
| * | | Non-income producing security. |
| (a) | | Foreign Cash and Other Assets in Excess of Liabilities include net unrealized depreciation on forward foreign currency exchange contracts, as follows: |
Open Forward Foreign Currency Exchange Contracts at October 31, 2009:
| | | | | | | | | | | | | | | |
Forward
Foreign Currency
Exchange Contracts | | Transaction
Type | | Expiration
Date | | Foreign
Currency | | U.S. $
Cost On
Origination
Date | | U.S. $
Current
Value | | Unrealized
Depreciation |
| Australian Dollar | | Buy | | 1/22/2010 | | 8,645,000 | | $ | 7,890,464 | | $ | 7,720,087 | | $ | (170,377) |
| British Pound | | Sell | | 1/22/2010 | | 4,235,000 | | | 6,915,967 | | | 6,947,624 | | | (31,657) |
| | | | | | | | | | | | | | | |
| Net Unrealized Depreciation on Forward Foreign Currency Exchange Contracts | | $ | (202,034) |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
39
Schedule of Investments
INTERNATIONAL OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| LONG-TERM INVESTMENTS 94.61% |
|
| COMMON STOCKS 92.57% |
| | |
| Australia 2.94% | | | | | |
|
| Mining & Metals 0.56% |
| Lihir Gold Ltd.* | | 604,228 | | $ | 1,653 |
| | | | | |
|
| Oil & Gas 1.42% |
| Centennial Coal Co., Ltd. | | 859,908 | | | 2,402 |
| Felix Resources Ltd. | | 115,607 | | | 1,766 |
| | | | | |
| | | | | 4,168 |
| | | | | |
|
| Utilities & Infrastructure 0.96% |
| DUET Group | | 1,850,696 | | | 2,800 |
| | | | | |
| Total Australia | | | | | 8,621 |
| | | | | |
|
| Austria 1.21% |
|
| Leisure & Recreation |
| bwin Interactive Entertainment AG* | | 73,405 | | | 3,548 |
| | | | | |
|
| Brazil 2.39% |
|
| Consumer Building 0.31% |
| Gafisa SA | | 62,100 | | | 922 |
| | | | | |
|
| Consumer Durables 1.90% |
| Agra Empreendimentos Imobiliarios SA | | 1,469,508 | | | 4,004 |
| Brookfield Incorporacoes SA | | 402,800 | | | 1,553 |
| | | | | |
| | | | | 5,557 |
| | | | | |
|
| Retail 0.18% |
| Restoque Comercio e Confeccoes de Roupas SA | | 226,605 | | | 527 |
| | | | | |
| Total Brazil | | | | | 7,006 |
| | | | | |
| | |
| Canada 1.25% | | | | | |
|
| Mining & Metals |
| Equinox Minerals Ltd.* | | 1,091,900 | | | 3,673 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| China 3.20% | | | | | |
|
| Electrical Equipment 0.80% |
| Zhuzhou CSR Times Electric Co., Ltd. Class H | | 1,300,000 | | $ | 2,356 |
| | | | | |
|
| Food & Drink 1.44% |
| American Dairy, Inc.* | | 64,100 | | | 1,855 |
| Zhongpin, Inc.* | | 176,965 | | | 2,355 |
| | | | | |
| | | | | 4,210 |
| | | | | |
|
| Internet Companies 0.96% |
| Sohu.com, Inc.* | | 50,554 | | | 2,811 |
| | | | | |
| Total China | | | | | 9,377 |
| | | | | |
| | |
| Denmark 0.66% | | | | | |
|
| Food & Drink |
| Carlsberg A/S Class B | | 27,728 | | | 1,944 |
| | | | | |
| | |
| Egypt 1.55% | | | | | |
|
| Autos & Auto Parts 0.50% |
| Ghabbour Auto* | | 331,890 | | | 1,470 |
| | | | | |
|
| Diversified Financials 1.05% |
| EFG-Hermes Holding SAE | | 531,510 | | | 3,086 |
| | | | | |
| Total Egypt | | | | | 4,556 |
| | | | | |
| | |
| France 2.81% | | | | | |
|
| Autos & Auto Parts 1.12% |
| Renault SA* | | 73,613 | | | 3,294 |
| | | | | |
|
| Computer Hardware 0.46% |
| Gemalto NV* | | 31,987 | | | 1,344 |
| | | | | |
|
| Media 1.23% |
| Ipsos SA | | 65,291 | | | 1,999 |
| Publicis Groupe | | 42,385 | | | 1,611 |
| | | | | |
| | | | | 3,610 |
| | | | | |
| Total France | | | | | 8,248 |
| | | | | |
See Notes to Financial Statements.
40
Schedule of Investments (continued)
INTERNATIONAL OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Germany 8.50% |
|
| Chemicals 1.42% |
| Symrise GmbH & Co. AG | | 229,657 | | $ | 4,164 |
| | | | | |
|
| Diversified Industrial Goods & Services 2.98% |
| Hamburger Hafen und Logistik AG | | 45,797 | | | 1,784 |
| Kloeckner & Co. SE* | | 139,293 | | | 3,054 |
| Rheinmetall AG | | 71,881 | | | 3,907 |
| | | | | |
| | | | | 8,745 |
| | | | | |
|
| Electrical Equipment 0.62% |
| Tognum AG | | 118,877 | | | 1,817 |
| | | | | |
|
| Engineering & Capital Goods 0.80% |
| MAN SE | | 28,550 | | | 2,351 |
| | | | | |
|
| Healthcare Facilities 1.24% |
| Gerresheimer AG | | 127,772 | | | 3,629 |
| | | | | |
|
| Media 0.47% |
| Sky Deutschland AG* | | 328,341 | | | 1,364 |
| | | | | |
|
| Retail 0.97% |
| Adidas AG | | 61,535 | | | 2,849 |
| | | | | |
| Total Germany | | | | | 24,919 |
| | | | | |
| | |
| Greece 2.77% | | | | | |
|
| Banks & Financial Services 0.64% |
| Hellenic Exchanges SA | | 131,450 | | | 1,870 |
| | | | | |
|
| Non-Property Financials 1.02% |
| Piraeus Bank SA* | | 172,839 | | | 2,980 |
| | | | | |
|
| Retail 1.11% |
| Jumbo SA | | 261,747 | | | 3,273 |
| | | | | |
| Total Greece | | | | | 8,123 |
| | | | | |
| | |
| Hong Kong 2.86% | | | | | |
|
| Communications Equipment 0.55% |
| VTech Holdings Ltd. | | 194,000 | | | 1,617 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Leisure & Recreation 1.55% |
| REXLot Holdings Ltd. | | 51,550,000 | | $ | 4,535 |
| | | | | |
|
| Retail 0.76% |
| Daphne International Holdings Ltd. | | 2,954,000 | | | 2,232 |
| | | | | |
| Total Hong Kong | | | | | 8,384 |
| | | | | |
| | |
| Indonesia 1.31% | | | | | |
|
| Oil & Gas 0.44% |
| PT Bumi Resources Tbk | | 5,404,500 | | | 1,301 |
| | | | | |
|
| Property (Excluding Services) 0.87% |
| PT Bakrieland Development Tbk* | | 46,623,000 | | | 1,309 |
| PT Ciputra Development Tbk* | | 19,182,944 | | | 1,240 |
| | | | | |
| | | | | 2,549 |
| | | | | |
| Total Indonesia | | | | | 3,850 |
| | | | | |
| | |
| Ireland 1.39% | | | | | |
|
| Food & Drink 0.79% |
| C&C Group plc | | 626,058 | | | 2,310 |
| | | | | |
|
| Healthcare Products & Supplies 0.60% |
| United Drug plc | | 539,413 | | | 1,778 |
| | | | | |
| Total Ireland | | | | | 4,088 |
| | | | | |
| | |
| Italy 7.70% | | | | | |
|
| Aerospace & Defense 1.07% |
| Finmeccanica SpA | | 187,242 | | | 3,142 |
| | | | | |
|
| Diversified Financials 1.24% |
| Azimut Holding SpA | | 302,063 | | | 3,644 |
| | | | | |
|
| Food & Drink 2.11% |
| Davide Campari-Milano SpA | | 495,208 | | | 4,726 |
| Parmalat SpA | | 527,259 | | | 1,464 |
| | | | | |
| | | | | 6,190 |
| | | | | |
See Notes to Financial Statements.
41
Schedule of Investments (continued)
INTERNATIONAL OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Italy (continued) | | | | | |
|
| Surface Transportation 1.07% |
| Ansaldo STS SpA | | 163,242 | | $ | 3,124 |
| | | | | |
|
| Utilities & Infrastructure 2.21% |
| Hera SpA | | 1,181,553 | | | 2,612 |
| Terna-Rete Elettrica Nationale SpA | | 973,220 | | | 3,859 |
| | | | | |
| | | | | 6,471 |
| | | | | |
| Total Italy | | | | | 22,571 |
| | | | | |
| | |
| Japan 18.91% | | | | | |
|
| Chemicals 2.23% |
| JSR Corp. | | 150,400 | | | 2,933 |
| Sumitomo Chemical Co., Ltd. | | 345,000 | | | 1,374 |
| ZEON Corp. | | 494,000 | | | 2,246 |
| | | | | |
| | | | | 6,553 |
| | | | | |
|
| Consumer Durables 1.38% |
| Makita Corp. | | 121,700 | | | 4,033 |
| | | | | |
|
| Diversified Consumer Cyclicals 1.22% |
| Benesse Corp. | | 81,000 | | | 3,572 |
| | | | | |
|
| Electronics 1.33% |
| Axell Corp. | | 40,800 | | | 1,554 |
| IBIDEN Co., Ltd. | | 65,700 | | | 2,352 |
| | | | | |
| | | | | 3,906 |
| | | | | |
|
| General Manufacturing & Services 2.68% |
| FP Corp. | | 80,700 | | | 3,998 |
| Nippon Electric Glass Co. Ltd. | | 359,000 | | | 3,866 |
| | | | | |
| | | | | 7,864 |
| | | | | |
|
| Healthcare Products & Supplies 3.89% |
| Hogy Medical Co., Ltd. | | 60,500 | | | 3,252 |
| Medipal Holdings Corp. | | 217,900 | | | 3,043 |
| Rohto Pharmaceutical Co., Ltd. | | 127,000 | | | 1,624 |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Shionogi & Co., Ltd. | | 161,000 | | $ | 3,473 |
| | | | | |
| | | | | 11,392 |
| | | | | |
|
| Leisure & Recreation 0.59% |
| Pacific Golf Group International Holdings KK | | 2,526 | | | 1,733 |
| | | | | |
|
| Non-Property Financials 0.85% |
| Kabu.com Securities Co., Ltd. | | 2,339 | | | 2,502 |
| | | | | |
|
| Property (Excluding Services) 1.04% |
| Japan Prime Realty Investment Corp. REIT | | 639 | | | 1,392 |
| United Urban Investment Corp. REIT | | 282 | | | 1,645 |
| | | | | |
| | | | | 3,037 |
| | | | | |
|
| Retail 3.21% |
| Isetan Mitsukoshi Holdings Ltd. | | 271,608 | | | 2,603 |
| K’s Holdings Corp. | | 102,500 | | | 3,322 |
| Nitori Co., Ltd. | | 43,050 | | | 3,501 |
| | | | | |
| | | | | 9,426 |
| | | | | |
|
| Telecommunications Services 0.49% |
| Okinawa Cellular Telephone Co. | | 763 | | | 1,444 |
| | | | | |
| Total Japan | | | | | 55,462 |
| | | | | |
|
| Kazakhstan 1.16% |
|
| Oil & Gas |
| KazMunaiGas Exploration Production GDR | | 144,500 | | | 3,408 |
| | | | | |
|
| Mexico 0.93% |
|
| Engineering & Construction |
| Empresas ICA SAB de CV* | | 1,237,594 | | | 2,716 |
| | | | | |
|
| Netherlands 1.69% |
|
| Electrical Equipment 1.02% |
| Draka Holding NV* | | 160,009 | | | 2,982 |
| | | | | |
See Notes to Financial Statements.
42
Schedule of Investments (continued)
INTERNATIONAL OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Netherlands (continued) |
|
| Electronics 0.67% |
| ASML Holding NV | | 73,118 | | $ | 1,972 |
| | | | | |
| Total Netherlands | | | | | 4,954 |
| | | | | |
|
| Norway 0.67% |
|
| Chemicals |
| Yara International ASA | | 59,790 | | | 1,977 |
| | | | | |
|
| Philippines 1.43% |
|
| Property Services |
| Megaworld Corp. | | 133,278,000 | | | 4,190 |
| | | | | |
|
| Spain 4.75% |
|
| Food & Drink 2.57% |
| Ebro Puleva SA | | 235,503 | | | 4,485 |
| Viscofan SA | | 117,216 | | | 3,064 |
| | | | | |
| | | | | 7,549 |
| | | | | |
|
| General Manufacturing & Services 1.42% |
| Prosegur Compania de Seguridad SA Registered Shares | | 99,007 | | | 4,166 |
| | | | | |
|
| Utilities & Infrastructure 0.76% |
| Red Electrica Corporacion SA | | 43,088 | | | 2,225 |
| | | | | |
| Total Spain | | | | | 13,940 |
| | | | | |
|
| Sweden 0.84% |
|
| Non-Property Financials |
| Swedbank AB Class A* | | 286,569 | | | 2,469 |
| | | | | |
|
| Switzerland 2.40% |
|
| Diversified Financials 1.03% |
| EFG International AG | | 181,191 | | | 3,018 |
| | | | | |
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| Healthcare Products & Supplies 0.38% |
| Lonza Group AG Registered Shares | | 14,236 | | $ | 1,107 |
| | | | | |
|
| Leisure & Recreation 0.99% |
| Orascom Development Holding AG* | | 37,282 | | | 2,908 |
| | | | | |
| Total Switzerland | | | | | 7,033 |
| | | | | |
|
| Taiwan 0.51% |
|
| Diversified Financials |
| iShares MSCI Taiwan Index Fund ETF | | 127,648 | | | 1,482 |
| | | | | |
|
| Thailand 2.50% |
|
| Banks & Financial Services 1.32% |
| Bangkok Bank Public Co., Ltd. | | 1,156,074 | | | 3,877 |
| | | | | |
|
| Diversified Financials 1.18% |
| Tisco Financial Group Public Co., Ltd. | | 1,997,200 | | | 1,281 |
| Tisco Financial Group Public Co., Ltd. | | 3,343,900 | | | 2,161 |
| | | | | |
| | | | | 3,442 |
| | | | | |
| Total Thailand | | | | | 7,319 |
| | | | | |
|
| Turkey 0.51% |
|
| Diversified Financials |
| Turkiye Is Bankasi AS Class C | | 397,265 | | | 1,505 |
| | | | | |
|
| United Kingdom 15.73% |
|
| Aerospace & Defense 1.38% |
| Cobham plc | | 1,126,046 | | | 4,046 |
| | | | | |
|
| Air Transportation 1.51% |
| easyJet plc* | | 752,542 | | | 4,430 |
| | | | | |
|
| Computer Software 0.30% |
| Micro Focus International plc | | 161,358 | | | 892 |
| | | | | |
See Notes to Financial Statements.
43
Schedule of Investments (continued)
INTERNATIONAL OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| United Kingdom (continued) |
|
| Consumer Building 0.72% |
| Bellway plc | | 175,908 | | $ | 2,104 |
| | | | | |
|
| Electrical Equipment 0.37% |
| Ceres Power Holdings plc* | | 371,701 | | | 1,076 |
| | | | | |
|
| Engineering & Construction 1.54% |
| Babcock International Group plc | | 454,913 | | | 4,516 |
| | | | | |
|
| Food & Drink 1.07% |
| Britvic plc | | 547,089 | | | 3,129 |
| | | | | |
|
| General Manufacturing & Services 1.26% |
| Intertek Group plc | | 180,383 | | | 3,706 |
| | | | | |
|
| Healthcare Facilities 0.51% |
| Southern Cross Healthcare Ltd.* | | 743,965 | | | 1,496 |
| | | | | |
|
| Leisure & Recreation 1.66% |
| PartyGaming plc* | | 766,505 | | | 2,868 |
| Sportingbet plc* | | 1,853,134 | | | 2,006 |
| | | | | |
| | | | | 4,874 |
| | | | | |
|
| Non-Property Financials 1.48% |
| Schroders plc | | 241,331 | | | 4,339 |
| | | | | |
|
| Oil & Gas 2.47% |
| Dana Petroleum plc* | | 77,102 | | | 1,613 |
| Dragon Oil plc* | | 585,802 | | | 3,933 |
| Premier Oil plc* | | 87,810 | | | 1,693 |
| | | | | |
| | | | | 7,239 |
| | | | | |
|
| Retail 1.46% |
| HMV Group plc | | 853,397 | | | 1,550 |
| Marks & Spencer Group plc | | 484,678 | | | 2,715 |
| | | | | |
| | | | | 4,265 |
| | | | | |
| Total United Kingdom | | | | | 46,112 |
| | | | | |
| Total Common Stocks (cost $231,590,708) | | | | | 271,475 |
| | | | | |
| | | | | | |
| Investments | | Shares | | U.S. $
Value
(000) |
| PREFERRED STOCKS 2.04% |
|
| Brazil 1.16% |
|
| Utilities & Infrastructure |
| Companhia de Transmissao de Energia Eletrica Paulista | | | 122,751 | | $ | 3,386 |
| | | | | | |
|
| Germany 0.88% |
|
| Healthcare Products & Supplies |
| Fresenius SE | | | 44,580 | | | 2,590 |
| | | | | | |
| Total Preferred Stocks (cost $5,488,260) | | | | | | 5,976 |
| | | | | | |
Total Long-Term Investments
(cost $237,078,968) | | | | | | 277,451 |
| | | | | | |
| | |
| | | Principal
Amount
(000) | | |
| SHORT-TERM INVESTMENT 3.69% |
|
| Repurchase Agreement |
Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $11,030,000 of U.S. Treasury Bill at 0.06% due 12/10/2009; value: $11,030,000; proceeds: $10,812,192
(cost $10,812,182) | | $ | 10,812 | | | 10,812 |
| | | | | | |
Total Investments in Securities 98.30%
(cost $247,891,150) | | | | | | 288,263 |
| | | | | | |
| Foreign Cash and Other Assets in Excess of Liabilities 1.70%(a) | | | | | | 4,981 |
| | | | | | |
| Net Assets 100.00% | | | | | $ | 293,244 |
| | | | | | |
See Notes to Financial Statements.
44
Schedule of Investments (concluded)
INTERNATIONAL OPPORTUNITIES FUND October 31, 2009
| ETF | | Exchange Traded Fund. |
| GDR | | Global Depositary Receipt. |
| REIT | | Real Estate Investment Trust. |
| * | | Non-income producing security. |
| (a) | | Foreign Cash and Other Assets in Excess of Liabilities include net unrealized depreciation on forward foreign currency exchange contracts as follows: |
Open Forward Foreign Currency Exchange Contracts at October 31, 2009:
| | | | | | | | | | | | | | |
Forward
Foreign Currency
Exchange Contracts | | Transaction
Type | | Expiration
Date | | Foreign
Currency | | U.S. $
Cost On
Origination
Date | | U.S. $
Current
Value | | Unrealized
Appreciation
(Depreciation) |
| Australian Dollar | | Buy | | 1/25/2010 | | 6,860,000 | | $6,330,065 | | $ | 6,124,135 | | $ | (205,930) |
| Brazilian Real | | Sell | | 1/25/2010 | | 11,100,000 | | 6,325,147 | | | 6,201,481 | | | 123,666 |
| Canadian Dollar | | Buy | | 11/24/2009 | | 2,670,000 | | 2,476,120 | | | 2,467,572 | | | (8,548) |
| Canadian Dollar | | Buy | | 12/24/2009 | | 11,950,000 | | 11,153,526 | | | 11,044,192 | | | (109,334) |
| Canadian Dollar | | Buy | | 1/22/2010 | | 5,260,000 | | 5,066,608 | | | 4,861,351 | | | (205,257) |
| Euro | | Buy | | 1/25/2010 | | 4,200,000 | | 6,317,220 | | | 6,179,128 | | | (138,092) |
| South Korean Won | | Buy | | 12/23/2009 | | 8,950,000,000 | | 7,396,694 | | | 7,566,830 | | | 170,136 |
| | | | | | | | | | | | | | |
| Net Unrealized Depreciation on Forward Foreign Currency Exchange Contracts | | $ | (373,359) |
| | | | | | | | | | | | | | |
See Notes to Financial Statements.
45
Schedule of Investments
LARGE CAP VALUE FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| COMMON STOCKS 99.48% |
| | |
| Aerospace 0.70% | | | | | |
| Raytheon Co. | | 1,580 | | $ | 72 |
| United Technologies Corp. | | 4,190 | | | 257 |
| | | | | |
| Total | | | | | 329 |
| | | | | |
|
| Air Transportation 0.32% |
| Delta Air Lines, Inc.* | | 21,040 | | | 150 |
| | | | | |
|
| Asset Management & Custodian 3.87% |
| BlackRock, Inc. | | 690 | | | 149 |
| Franklin Resources, Inc. | | 5,630 | | | 589 |
| State Street Corp. | | 14,740 | | | 619 |
| T. Rowe Price Group, Inc. | | 9,550 | | | 465 |
| | | | | |
| Total | | | | | 1,822 |
| | | | | |
|
| Automobiles 1.05% |
| Ford Motor Co.* | | 70,700 | | | 495 |
| | | | | |
|
| Banks: Diversified 11.07% |
| Bank of America Corp. | | 108,159 | | | 1,577 |
| BB&T Corp. | | 5,000 | | | 120 |
| Comerica, Inc. | | 8,850 | | | 246 |
| Fifth Third Bancorp | | 41,870 | | | 374 |
| M&T Bank Corp. | | 2,190 | | | 138 |
| PNC Financial Services Group, Inc. (The) | | 15,690 | | | 768 |
| Regions Financial Corp. | | 16,830 | | | 81 |
| SunTrust Banks, Inc. | | 20,150 | | | 385 |
| Wells Fargo & Co. | | 55,360 | | | 1,523 |
| | | | | |
| Total | | | | | 5,212 |
| | | | | |
|
| Beverage: Soft Drinks 0.64% |
| Coca-Cola Co. (The) | | 2,830 | | | 151 |
| PepsiCo, Inc. | | 2,470 | | | 150 |
| | | | | |
| Total | | | | | 301 |
| | | | | |
|
| Biotechnology 1.54% |
| Amgen, Inc.* | | 13,470 | | | 724 |
| | | | | |
|
| Cable Television Services 0.55% |
| Time Warner Cable, Inc. | | 6,563 | | | 259 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Chemical: Diversified 1.87% |
| Dow Chemical Co. (The) | | 27,220 | | $ | 639 |
| E.I. du Pont de Nemours & Co. | | 7,560 | | | 241 |
| | | | | |
| Total | | | | | 880 |
| | | | | |
|
| Commercial Services 0.06% |
| Verisk Analytics, Inc. Class A* | | 1,048 | | | 29 |
| | | | | |
|
| Communications Technology 0.31% |
| Cisco Systems, Inc.* | | 6,440 | | | 147 |
| | | | | |
|
| Computer Services, Software & Systems 1.76% |
| Adobe Systems, Inc.* | | 21,050 | | | 693 |
| Microsoft Corp. | | 4,820 | | | 134 |
| | | | | |
| Total | | | | | 827 |
| | | | | |
|
| Computer Technology 2.37% |
| Dell, Inc.* | | 15,800 | | | 229 |
| EMC Corp.* | | 29,990 | | | 494 |
| Hewlett-Packard Co. | | 8,250 | | | 391 |
| | | | | |
| Total | | | | | 1,114 |
| | | | | |
|
| Copper 0.55% |
| Freeport-McMoRan Copper & Gold, Inc. | | 3,530 | | | 259 |
| | | | | |
|
| Diversified Financial Services 12.28% |
| Bank of New York Mellon Corp. (The) | | 15,494 | | | 413 |
| Capital One Financial Corp. | | 15,140 | | | 554 |
| Goldman Sachs Group, Inc. (The) | | 9,340 | | | 1,589 |
| JPMorgan Chase & Co. | | 50,880 | | | 2,125 |
| Morgan Stanley | | 34,170 | | | 1,098 |
| | | | | |
| Total | | | | | 5,779 |
| | | | | |
|
| Diversified Manufacturing Operations 3.19% |
| Eaton Corp. | | 9,422 | | | 570 |
| General Electric Co. | | 51,500 | | | 734 |
| Honeywell International, Inc. | | 5,550 | | | 199 |
| | | | | |
| Total | | | | | 1,503 |
| | | | | |
See Notes to Financial Statements.
46
Schedule of Investments (continued)
LARGE CAP VALUE FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| Diversified Media 0.45% |
| Time Warner, Inc. | | 7,040 | | $ | 212 |
| | | | | |
|
| Diversified Retail 4.21% |
| J.C. Penney Co., Inc. | | 11,690 | | | 387 |
| Kohl’s Corp.* | | 11,250 | | | 644 |
| Target Corp. | | 19,640 | | | 951 |
| | | | | |
| Total | | | | | 1,982 |
| | | | | |
|
| Drug & Grocery Store Chains 1.48% |
| CVS Caremark Corp. | | 13,850 | | | 489 |
| Kroger Co. (The) | | 9,025 | | | 209 |
| | | | | |
| Total | | | | | 698 |
| | | | | |
|
| Electronic Components 0.28% |
| Corning, Inc. | | 9,000 | | | 131 |
| | | | | |
|
| Electronic Entertainment 0.56% |
| Activision Blizzard, Inc.* | | 24,240 | | | 263 |
| | | | | |
|
| Entertainment 0.34% |
| Viacom, Inc. Class B* | | 5,880 | | | 162 |
| | | | | |
|
| Fertilizers 0.98% |
| Potash Corp. of Saskatchewan, Inc. (Canada)(a) | | 4,980 | | | 462 |
| | | | | |
|
| Foods 1.11% |
| Kraft Foods, Inc. Class A | | 18,955 | | | 522 |
| | | | | |
|
| Gas Pipeline 0.39% |
| El Paso Corp. | | 18,640 | | | 183 |
| | | | | |
|
| Gold 1.02% |
| Barrick Gold Corp. (Canada)(a) | | 13,390 | | | 481 |
| | | | | |
|
| Healthcare Management Services 0.90% |
| UnitedHealth Group, Inc. | | 11,720 | | | 304 |
| WellPoint, Inc.* | | 2,610 | | | 122 |
| | | | | |
| Total | | | | | 426 |
| | | | | |
|
| Homebuilding 0.49% |
| Pulte Homes, Inc. | | 25,810 | | | 233 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Hotel/Motel 1.81% |
| Marriott International, Inc. Class A | | 24,252 | | $ | 608 |
| Starwood Hotels & Resorts Worldwide, Inc. | | 8,370 | | | 243 |
| | | | | |
| Total | | | | | 851 |
| | | | | |
|
| Insurance: Life 0.63% |
| Principal Financial Group, Inc. | | 2,110 | | | 53 |
| Prudential Financial, Inc. | | 5,420 | | | 245 |
| | | | | |
| Total | | | | | 298 |
| | | | | |
|
| Insurance: Multi-Line 0.90% |
| MetLife, Inc. | | 12,440 | | | 423 |
| | | | | |
|
| Leisure Time 1.29% |
| Carnival Corp. Unit | | 20,800 | | | 606 |
| | | | | |
|
| Machinery: Construction & Handling 1.48% |
| Caterpillar, Inc. | | 12,640 | | | 696 |
| | | | | |
|
| Machinery: Industrial 0.17% |
| Joy Global, Inc. | | 1,560 | | | 79 |
| | | | | |
|
| Medical & Dental Instruments & Supplies 0.54% |
| Boston Scientific Corp.* | | 12,200 | | | 99 |
| Covidien plc (Ireland)(a) | | 3,730 | | | 157 |
| | | | | |
| Total | | | | | 256 |
| | | | | |
|
| Oil: Crude Producers 4.32% |
| Devon Energy Corp. | | 3,870 | | | 250 |
| EOG Resources, Inc. | | 4,350 | | | 355 |
| Occidental Petroleum Corp. | | 8,640 | | | 656 |
| Range Resources Corp. | | 2,080 | | | 104 |
| Southwestern Energy Co.* | | 5,580 | | | 243 |
| XTO Energy, Inc. | | 10,250 | | | 426 |
| | | | | |
| Total | | | | | 2,034 |
| | | | | |
|
| Oil: Integrated 8.99% |
| Chevron Corp. | | 15,270 | | | 1,169 |
| ConocoPhillips | | 7,570 | | | 380 |
| EnCana Corp. (Canada)(a) | | 1,900 | | | 105 |
See Notes to Financial Statements.
47
Schedule of Investments (continued)
LARGE CAP VALUE FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| Oil: Integrated (continued) |
| Exxon Mobil Corp. | | 17,761 | | $ | 1,273 |
| Hess Corp. | | 16,080 | | | 880 |
| Suncor Energy, Inc. (Canada)(a) | | 12,880 | | | 425 |
| | | | | |
| Total | | | | | 4,232 |
| | | | | |
|
| Oil Well Equipment & Services 5.10% |
| Cameron International Corp.* | | 3,000 | | | 111 |
| Halliburton Co. | | 26,660 | | | 779 |
| Schlumberger Ltd. | | 20,008 | | | 1,244 |
| Smith International, Inc. | | 9,710 | | | 269 |
| | | | | |
| Total | | | | | 2,403 |
| | | | | |
|
| Personal Care 1.35% |
| Colgate-Palmolive Co. | | 2,580 | | | 203 |
| Procter & Gamble Co. (The) | | 7,470 | | | 433 |
| | | | | |
| Total | | | | | 636 |
| | | | | |
|
| Pharmaceuticals 3.92% |
| Abbott Laboratories | | 6,520 | | | 330 |
| Johnson & Johnson | | 4,660 | | | 275 |
| Merck & Co., Inc. | | 15,070 | | | 466 |
| Pfizer, Inc. | | 32,560 | | | 554 |
| Teva Pharmaceutical Industries Ltd. ADR | | 4,380 | | | 221 |
| | | | | |
| Total | | | | | 1,846 |
| | | | | |
|
| Railroads 0.69% |
| Canadian National Railway Co. (Canada)(a) | | 6,750 | | | 326 |
| | | | | |
|
| Real Estate Investment Trusts 0.57% |
| Host Hotels & Resorts, Inc. | | 26,400 | | | 267 |
| | | | | |
|
| Rental & Leasing Services: Consumer 1.12% |
| Hertz Global Holdings, Inc.* | | 56,740 | | | 528 |
| | | | | |
|
| Scientific Instruments: Control & Filter 0.66% |
| Parker Hannifin Corp. | | 5,880 | | | 311 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Semiconductors & Components 2.39% |
| Arrow Electronics, Inc.* | | 3,480 | | $ | 88 |
| Avnet, Inc.* | | 5,900 | | | 146 |
| Intel Corp. | | 22,890 | | | 437 |
| Micron Technology, Inc.* | | 30,440 | | | 207 |
| Texas Instruments, Inc. | | 10,480 | | | 246 |
| | | | | |
| Total | | | | | 1,124 |
| | | | | |
|
| Specialty Retail 3.17% |
| Best Buy Co., Inc. | | 13,640 | | | 521 |
| Gap, Inc. (The) | | 3,410 | | | 73 |
| Home Depot, Inc. (The) | | 35,860 | | | 900 |
| | | | | |
| Total | | | | | 1,494 |
| | | | | |
|
| Steel 0.81% |
| Nucor Corp. | | 5,020 | | | 200 |
| United States Steel Corp. | | 5,260 | | | 181 |
| | | | | |
| Total | | | | | 381 |
| | | | | |
|
| Telecommunications Equipment 0.28% |
| Crown Castle International Corp.* | | 4,300 | | | 130 |
| | | | | |
|
| Textiles Apparel & Shoes 0.82% |
| J. Crew Group, Inc.* | | 9,430 | | | 385 |
| | | | | |
|
| Tobacco 0.17% |
| Altria Group, Inc. | | 4,450 | | | 81 |
| | | | | |
|
| Utilities: Electrical 0.95% |
| Duke Energy Corp. | | 9,080 | | | 144 |
| FPL Group, Inc. | | 1,990 | | | 98 |
| Southern Co. | | 6,510 | | | 203 |
| | | | | |
| Total | | | | | 445 |
| | | | | |
|
| Utilities: Telecommunications 3.01% |
| AT&T, Inc. | | 35,403 | | | 909 |
| Verizon Communications, Inc. | | 17,100 | | | 506 |
| | | | | |
| Total | | | | | 1,415 |
| | | | | |
Total Common Stocks
(cost $41,391,259) | | | | | 46,832 |
| | | | | |
See Notes to Financial Statements.
48
Schedule of Investments (concluded)
LARGE CAP VALUE FUND October 31, 2009
| | | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) | |
| SHORT-TERM INVESTMENT 1.29% | |
| | |
| Repurchase Agreement | | | | | | | |
Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $625,000 of U.S. Treasury Bill at 0.10% due 12/24/2009; value: $624,938;
proceeds: $609,433
(cost $609,433) | | $ | 609 | | $ | 609 | |
| | | | | | | |
Total Investments in Securities 100.77%
(cost $42,000,692) | | | | | | 47,441 | |
| | | | | | | |
| Liabilities in Excess of Other Assets (0.77%) | | | | | | (364 | ) |
| | | | | | | |
| Net Assets 100.00% | | | | | $ | 47,077 | |
| | | | | | | |
| ADR | | American Depositary Receipt. |
| Unit | | More than one class of securities traded together. |
| * | | Non-income producing security. |
| (a) | | Foreign security traded in U.S. dollars. |
See Notes to Financial Statements.
49
Schedule of Investments
VALUE OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| COMMON STOCKS 93.63% |
| | |
| Aerospace 1.15% | | | | | |
| Curtiss-Wright Corp. | | 88,900 | | $ | 2,651 |
| L-3 Communications Holdings, Inc. | | 48,100 | | | 3,477 |
| | | | | |
| Total | | | | | 6,128 |
| | | | | |
| | |
| Air Transportation 1.80% | | | | | |
| Atlas Air Worldwide Holdings, Inc.* | | 191,300 | | | 5,029 |
| Bristow Group, Inc.* | | 155,452 | | | 4,531 |
| | | | | |
| Total | | | | | 9,560 |
| | | | | |
| | |
| Auto Parts 1.57% | | | | | |
| Autoliv, Inc. (Sweden)(a) | | 133,289 | | | 4,476 |
| Gentex Corp. | | 240,800 | | | 3,855 |
| | | | | |
| Total | | | | | 8,331 |
| | | | | |
| | |
| Banks: Diversified 7.17% | | | | | |
| Comerica, Inc. | | 380,600 | | | 10,562 |
| Commerce Bancshares, Inc. | | 187,508 | | | 7,193 |
| Fifth Third Bancorp | | 358,100 | | | 3,201 |
| First Financial Bancorp | | 391,100 | | | 4,959 |
| First Midwest Bancorp, Inc. | | 487,500 | | | 5,070 |
| Hancock Holding Co. | | 94,000 | | | 3,409 |
| KeyCorp | | 679,000 | | | 3,660 |
| | | | | |
| Total | | | | | 38,054 |
| | | | | |
|
| Banks: Savings, Thrift & Mortgage Lending 0.98% |
| Washington Federal, Inc. | | 304,700 | | | 5,226 |
| | | | | |
|
| Biotechnology 0.94% |
| Charles River Laboratories International, Inc.* | | 70,200 | | | 2,564 |
| Cypress Bioscience, Inc.* | | 399,400 | | | 2,452 |
| | | | | |
| Total | | | | | 5,016 |
| | | | | |
|
| Building Materials 0.35% |
| Quanex Building Products Corp. | | 125,926 | | | 1,873 |
| | | | | |
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Casinos & Gambling 0.73% |
| International Game Technology | | 218,300 | | $ | 3,894 |
| | | | | |
|
| Chemical: Diversified 2.68% |
| Albemarle Corp. | | 278,020 | | | 8,780 |
| Sigma-Aldrich Corp. | | 104,737 | | | 5,439 |
| | | | | |
| Total | | | | | 14,219 |
| | | | | |
|
| Commercial Finance & Mortgage Companies 0.92% |
| Financial Federal Corp. | | 240,309 | | | 4,907 |
| | | | | |
|
| Commercial Services 1.57% |
| Robert Half International, Inc. | | 107,900 | | | 2,503 |
| Tetra Tech, Inc.* | | 122,100 | | | 3,142 |
| Verisk Analytics, Inc. Class A* | | 97,300 | | | 2,669 |
| | | | | |
| Total | | | | | 8,314 |
| | | | | |
|
| Communications Technology 1.86% |
| Polycom, Inc.* | | 191,100 | | | 4,103 |
| QLogic Corp.* | | 327,800 | | | 5,750 |
| | | | | |
| Total | | | | | 9,853 |
| | | | | |
|
| Computer Services, Software & Systems 8.12% |
| Amdocs Ltd. (Guernsey)*(a) | | 242,998 | | | 6,124 |
| Autodesk, Inc.* | | 235,100 | | | 5,861 |
| CA, Inc. | | 338,800 | | | 7,088 |
| Diebold, Inc. | | 256,000 | | | 7,741 |
| Rovi Corp.* | | 261,077 | | | 7,193 |
| Sapient Corp.* | | 1,117,227 | | | 9,094 |
| | | | | |
| Total | | | | | 43,101 |
| | | | | |
|
| Containers & Packaging 0.99% |
| Silgan Holdings, Inc. | | 98,141 | | | 5,275 |
| | | | | |
|
| Diversified Financial Services 1.58% |
| Lazard Ltd. Class A | | 222,200 | | | 8,388 |
| | | | | |
See Notes to Financial Statements.
50
Schedule of Investments (continued)
VALUE OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Diversified Manufacturing Operations 1.18% |
| Carlisle Cos., Inc. | | 39,400 | | $ | 1,223 |
| ITT Corp. | | 99,800 | | | 5,060 |
| | | | | |
| Total | | | | | 6,283 |
| | | | | |
|
| Diversified Materials & Processing 0.85% |
| Hexcel Corp.* | | 412,536 | | | 4,538 |
| | | | | |
|
| Drug & Grocery Store Chains 1.01% |
| Kroger Co. (The) | | 231,900 | | | 5,364 |
| | | | | |
|
| Electronic Components 1.39% |
| Amphenol Corp. Class A | | 183,400 | | | 7,358 |
| | | | | |
|
| Engineering & Contracting Services 2.71% |
| Jacobs Engineering Group, Inc.* | | 171,900 | | | 7,270 |
| MYR Group, Inc.* | | 191,823 | | | 3,296 |
| URS Corp.* | | 98,150 | | | 3,814 |
| | | | | |
| Total | | | | | 14,380 |
| | | | | |
|
| Financial Data & Systems 4.74% |
| Alliance Data Systems Corp.* | | 147,000 | | | 8,082 |
| Fiserv, Inc.* | | 123,359 | | | 5,658 |
| Global Payments, Inc. | | 110,022 | | | 5,416 |
| Lender Processing Services, Inc. | | 151,700 | | | 6,038 |
| | | | | |
| Total | | | | | 25,194 |
| | | | | |
|
| Foods 3.34% |
| J.M. Smucker Co. (The) | | 133,900 | | | 7,061 |
| NBTY, Inc.* | | 293,414 | | | 10,683 |
| | | | | |
| Total | | | | | 17,744 |
| | | | | |
|
| Healthcare Facilities 0.86% |
| DaVita, Inc.* | | 86,000 | | | 4,561 |
| | | | | |
|
| Healthcare Management Services 2.43% |
| Healthspring, Inc.* | | 369,600 | | | 5,296 |
| Humana, Inc.* | | 203,017 | | | 7,629 |
| | | | | |
| Total | | | | | 12,925 |
| | | | | |
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Healthcare Services 1.35% |
| McKesson Corp. | | 122,100 | | $ | 7,171 |
| | | | | |
|
| Household Furnishings 0.83% |
| Leggett & Platt, Inc. | | 226,600 | | | 4,380 |
| | | | | |
|
| Insurance: Multi-Line 0.98% |
| HCC Insurance Holdings, Inc. | | 196,372 | | | 5,182 |
| | | | | |
|
| Insurance: Property-Casualty 2.23% |
| PartnerRe Ltd. | | 154,500 | | | 11,816 |
| | | | | |
|
| Luxury Items 1.73% |
| Fossil, Inc.* | | 342,904 | | | 9,166 |
| | | | | |
|
| Medical & Dental Instruments & Supplies 0.91% |
| Teleflex, Inc. | | 97,200 | | | 4,836 |
| | | | | |
|
| Medical Equipment 0.83% |
| PerkinElmer, Inc. | | 237,400 | | | 4,418 |
| | | | | |
|
| Metal Fabricating 1.11% |
| Reliance Steel & Aluminum Co. | | 162,100 | | | 5,913 |
| | | | | |
|
| Oil: Crude Producers 2.74% |
| Goodrich Petroleum Corp.* | | 168,600 | | | 4,328 |
| Petrohawk Energy Corp.* | | 122,800 | | | 2,888 |
| Range Resources Corp. | | 73,600 | | | 3,684 |
| St. Mary Land & Exploration Co. | | 107,064 | | | 3,651 |
| | | | | |
| Total | | | | | 14,551 |
| | | | | |
|
| Oil: Integrated 0.72% |
| Weatherford International Ltd. (Switzerland)*(a) | | 218,600 | | | 3,832 |
| | | | | |
|
| Oil Well Equipment & Services 2.70% |
| Helmerich & Payne, Inc. | | 97,900 | | | 3,722 |
| Oceaneering International, Inc.* | | 98,800 | | | 5,049 |
See Notes to Financial Statements.
51
Schedule of Investments (continued)
VALUE OPPORTUNITIES FUND October 31, 2009
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Oil Well Equipment & Services (continued) |
| Superior Energy Services, Inc.* | | 257,200 | | $ | 5,558 |
| | | | | |
| Total | | | | | 14,329 |
| | | | | |
|
| Pharmaceuticals 3.18% |
| AmerisourceBergen Corp. | | 275,400 | | | 6,100 |
| Warner Chilcott plc Class A (Ireland)*(a) | | 305,200 | | | 6,760 |
| Watson Pharmaceuticals, Inc.* | | 117,600 | | | 4,048 |
| | | | | |
| Total | | | | | 16,908 |
| | | | | |
|
| Railroads 1.96% |
| Genesee & Wyoming, Inc. Class A* | | 109,500 | | | 3,177 |
| Kansas City Southern* | | 298,000 | | | 7,221 |
| | | | | |
| Total | | | | | 10,398 |
| | | | | |
|
| Real Estate Investment Trusts 2.73% |
| DiamondRock Hospitality Co.* | | 528,000 | | | 4,018 |
| EastGroup Properties, Inc. | | 89,900 | | | 3,309 |
| Highwoods Properties, Inc. | | 87,500 | | | 2,408 |
| Host Hotels & Resorts, Inc. | | 472,609 | | | 4,778 |
| | | | | |
| Total | | | | | 14,513 |
| | | | | |
|
| Scientific Instruments: Control & Filter 1.18% |
| Roper Industries, Inc. | | 123,400 | | | 6,238 |
| | | | | |
|
| Scientific Instruments: Electrical 1.76% |
| AMETEK, Inc. | | 109,900 | | | 3,834 |
| EnerSys* | | 249,254 | | | 5,508 |
| | | | | |
| Total | | | | | 9,342 |
| | | | | |
|
| Scientific Instruments: Pollution Control 1.00% |
| Waste Connections, Inc.* | | 169,700 | | | 5,334 |
| | | | | |
|
| Shipping 1.73% |
| Kirby Corp.* | | 147,938 | | | 5,000 |
| UTi Worldwide, Inc. | | 334,200 | | | 4,167 |
| | | | | |
| Total | | | | | 9,167 |
| | | | | |
| | | | | |
| Investments | | Shares | |
Value
(000) |
| Specialty Retail 4.50% |
| American Eagle Outfitters, Inc. | | 221,200 | | $ | 3,869 |
| AnnTaylor Stores Corp.* | | 291,600 | | | 3,782 |
| Brown Shoe Co., Inc. | | 467,600 | | | 4,849 |
| Chico’s FAS, Inc.* | | 211,320 | | | 2,525 |
| Gymboree Corp. (The)* | | 41,873 | | | 1,783 |
| Sonic Automotive, Inc. Class A | | 45,708 | | | 409 |
| Tween Brands, Inc.* | | 788,600 | | | 6,687 |
| | | | | |
| Total | | | | | 23,904 |
| | | | | |
|
| Steel 1.19% |
| Carpenter Technology Corp. | | 118,076 | | | 2,483 |
| Gerdau Ameristeel Corp. | | 567,300 | | | 3,858 |
| | | | | |
| Total | | | | | 6,341 |
| | | | | |
|
| Technology: Miscellaneous 1.41% |
| Plexus Corp.* | | 296,300 | | | 7,496 |
| | | | | |
|
| Textiles Apparel & Shoes 1.58% |
| Guess?, Inc. | | 76,800 | | | 2,807 |
| Phillips-Van Heusen Corp. | | 139,200 | | | 5,589 |
| | | | | |
| Total | | | | | 8,396 |
| | | | | |
|
| Truckers 1.51% |
| Heartland Express, Inc. | | 320,929 | | | 4,365 |
| Knight Transportation, Inc. | | 228,000 | | | 3,657 |
| | | | | |
| Total | | | | | 8,022 |
| | | | | |
|
| Utilities: Electrical 2.44% |
| Cleco Corp. | | 282,100 | | | 6,982 |
| Otter Tail Corp. | | 132,200 | | | 3,075 |
| Wisconsin Energy Corp. | | 65,983 | | | 2,881 |
| | | | | |
| Total | | | | | 12,938 |
| | | | | |
|
| Utilities: Gas Distributors 0.41% |
| Piedmont Natural Gas Co., Inc. | | 93,475 | | | 2,176 |
| | | | | |
| Total Common Stocks (cost $452,543,180) | | | | | 497,253 |
| | | | | |
See Notes to Financial Statements.
52
Schedule of Investments (concluded)
VALUE OPPORTUNITIES FUND October 31, 2009
| | | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) | |
| SHORT-TERM INVESTMENT 8.08% | |
|
| Repurchase Agreement | |
| Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $43,760,000 of U.S. Treasury Bill at 0.10% due 12/24/2009; value: $43,755,624; proceeds: $42,895,786 (cost $42,895,751) | | $ | 42,896 | | $ | 42,896 | |
| | | | | | | |
| Total Investments in Securities 101.71% (cost $495,438,931) | | | | | | 540,149 | |
| | | | | | | |
| Liabilities in Excess of Other Assets (1.71%) | | | | | | (9,092 | ) |
| | | | | | | |
| Net Assets 100.00% | | | | | $ | 531,057 | |
| | | | | | | |
| * | | Non-income producing security. |
| (a) | | Foreign security traded in U.S. dollars. |
See Notes to Financial Statements.
53
Statements of Assets and Liabilities
October 31, 2009
| | | | | | | | | | | | |
| | | Alpha Strategy Fund | | | Fundamental Equity Fund* | | | International Core Equity Fund | |
ASSETS: | | | | | | | | | | | | |
Investments in securities, at cost | | $ | 631,088,474 | | | $ | 2,354,730,805 | | | $ | 774,988,193 | |
Investments in securities, at value | | $ | 528,854,891 | | | $ | 2,509,037,160 | | | $ | 871,468,332 | |
Foreign cash, at value (cost $0, $0, $2,847,356, $1,221,073, $2,423,940, $0, and $0, respectively) | | | – | | | | – | | | | 2,846,426 | |
Receivables: | | | | | | | | | | | | |
Interest and dividends | | | – | | | | 1,852,390 | | | | 2,624,231 | |
Investment securities sold | | | – | | | | 51,571,501 | | | | 41,160,084 | |
Capital shares sold | | | 2,162,846 | | | | 6,467,111 | | | | 1,666,097 | |
From affiliates (See Note 3) | | | 107,416 | | | | – | | | | – | |
From advisor (See Note 3) | | | – | | | | – | | | | – | |
Unrealized appreciation on forward foreign currency exchange contracts | | | – | | | | – | | | | 3,390,680 | |
Prepaid expenses and other assets | | | 21,780 | | | | 158,231 | | | | 14,012 | |
Total assets | | | 531,146,933 | | | | 2,569,086,393 | | | | 923,169,862 | |
LIABILITIES: | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | |
Investment securities purchased | | | 490,274 | | | | 24,610,240 | | | | 14,746,521 | |
Capital shares reacquired | | | 1,112,508 | | | | 6,105,701 | | | | 2,023,476 | |
Management fee | | | – | | | | 1,167,262 | | | | 573,278 | |
12b-1 distribution fees | | | 310,350 | | | | 1,338,967 | | | | 328,711 | |
Fund administration | | | – | | | | 87,230 | | | | 30,567 | |
Trustees’ fees | | | 54,293 | | | | 510,394 | | | | 114,188 | |
To affiliates (See Note 3) | | | – | | | | 14,219 | | | | 30,179 | |
Unrealized depreciation on forward foreign currency exchange contracts | | | – | | | | – | | | | 1,174,316 | |
Accrued expenses and other liabilities | | | 305,056 | | | | 958,511 | | | | 512,978 | |
Total liabilities | | | 2,272,481 | | | | 34,792,524 | | | | 19,534,214 | |
NET ASSETS | | $ | 528,874,452 | | | $ | 2,534,293,869 | | | $ | 903,635,648 | |
COMPOSITION OF NET ASSETS: | | | | | | | | | | | | |
Paid-in capital | | $ | 654,615,035 | | | $ | 2,710,897,444 | | | $ | 1,218,539,450 | |
Undistributed (distributions in excess of) net investment income | | | (54,293 | ) | | | (53,000 | ) | | | 3,803,601 | |
Accumulated net realized loss on investments and foreign currency related transactions | | | (23,452,707 | ) | | | (330,856,930 | ) | | | (417,455,898 | ) |
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | | | (102,233,583 | ) | | | 154,306,355 | | | | 98,748,495 | |
Net Assets | | $ | 528,874,452 | | | $ | 2,534,293,869 | | | $ | 903,635,648 | |
| * | Formerly, All Value Fund |
See Notes to Financial Statements.
54
| | | | | | | | | | | | | | |
International Dividend Income Fund | | | International
Opportunities Fund | | | Large Cap Value Fund | | | Value Opportunities Fund | |
| | | | | | | | | | | | | | |
| $ | 245,236,509 | | | $ | 247,891,150 | | | $ | 42,000,692 | | | $ | 495,438,931 | |
| $ | 282,955,125 | | | $ | 288,262,560 | | | $ | 47,441,357 | | | $ | 540,149,175 | |
| | | |
| | 1,215,320 | | | | 2,463,407 | | | | – | | | | – | |
| | | | | | | | | | | | | | |
| | 745,364 | | | | 396,427 | | | | 57,284 | | | | 42,178 | |
| | 4,376,648 | | | | 12,556,274 | | | | – | | | | 7,121,196 | |
| | 1,372,090 | | | | 606,134 | | | | 67,595 | | | | 3,609,126 | |
| | – | | | | – | | | | – | | | | – | |
| | 85,455 | | | | – | | | | – | | | | 56,915 | |
| | | |
| | – | | | | 293,802 | | | | – | | | | – | |
| | 34,622 | | | | 4,669 | | | | 22,978 | | | | 71,709 | |
| | 290,784,624 | | | | 304,583,273 | | | | 47,589,214 | | | | 551,050,299 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 5,446,400 | | | | 9,759,001 | | | | 233,288 | | | | 18,241,785 | |
| | 2,980 | | | | 374,904 | | | | 184,482 | | | | 969,631 | |
| | 177,950 | | | | 186,940 | | | | 15,841 | | | | 329,959 | |
| | 20,285 | | | | 76,765 | | | | 8,143 | | | | 226,043 | |
| | 9,491 | | | | 9,925 | | | | 1,584 | | | | 17,598 | |
| | 5,738 | | | | 48,074 | | | | 7,658 | | | | 23,631 | |
| | 37,712 | | | | 33,411 | | | | – | | | | 18,282 | |
| | | |
| | 202,034 | | | | 667,161 | | | | – | | | | – | |
| | 93,671 | | | | 183,289 | | | | 61,004 | | | | 166,593 | |
| | 5,996,261 | | | | 11,339,470 | | | | 512,000 | | | | 19,993,522 | |
| $ | 284,788,363 | | | $ | 293,243,803 | | | $ | 47,077,214 | | | $ | 531,056,777 | |
| | | | | | | | | | | | | | |
| $ | 284,283,505 | | | $ | 399,070,309 | | | $ | 63,447,368 | | | $ | 543,411,723 | |
| | | |
| | 153,008 | | | | 151,774 | | | | 259,125 | | | | 26,074 | |
| | | |
| | (37,186,291 | ) | | | (146,005,250 | ) | | | (22,069,944 | ) | | | (57,091,264 | ) |
| | | |
| | 37,538,141 | | | | 40,026,970 | | | | 5,440,665 | | | | 44,710,244 | |
| $ | 284,788,363 | | | $ | 293,243,803 | | | $ | 47,077,214 | | | $ | 531,056,777 | |
See Notes to Financial Statements.
55
Statements of Assets and Liabilities (concluded)
October 31, 2009
| | | | | | | | | |
| | | Alpha Strategy Fund | | Fundamental Equity Fund* | | International Core Equity Fund |
| | | | | | | | | |
Net assets by class: | | | | | | | | | |
Class A Shares | | $ | 296,988,961 | | $ | 1,656,208,894 | | $ | 574,731,093 |
Class B Shares | | $ | 31,293,751 | | $ | 161,232,814 | | $ | 43,492,329 |
Class C Shares | | $ | 150,632,569 | | $ | 485,483,568 | | $ | 105,557,367 |
Class F Shares | | $ | 29,762,385 | | $ | 73,741,574 | | $ | 9,009,432 |
Class I Shares | | $ | 11,784,696 | | $ | 98,569,514 | | $ | 167,573,872 |
Class P Shares | | | – | | $ | 29,360,612 | | $ | 1,825,332 |
Class R2 Shares | | $ | 1,433,261 | | $ | 1,186,786 | | $ | 7,291 |
Class R3 Shares | | $ | 6,978,829 | | $ | 28,510,107 | | $ | 1,438,932 |
Outstanding shares by class (unlimited number of authorized shares of beneficial interest): | | | | | | | | | |
Class A Shares | | | 17,226,222 | | | 165,852,685 | | | 51,313,667 |
Class B Shares | | | 1,907,530 | | | 16,823,006 | | | 3,946,937 |
Class C Shares | | | 9,245,491 | | | 50,857,016 | | | 9,563,386 |
Class F Shares | | | 1,728,803 | | | 7,406,119 | | | 807,539 |
Class I Shares | | | 680,181 | | | 9,817,300 | | | 14,856,310 |
Class P Shares | | | – | | | 2,973,608 | | | 163,994 |
Class R2 Shares | | | 83,693 | | | 119,995 | | | 651 |
Class R3 Shares | | | 407,574 | | | 2,873,898 | | | 129,635 |
Net asset value, offering and redemption price per share (Net assets divided by outstanding shares): | | | | | | | | | |
Class A Shares-Net asset value | | | $17.24 | | | $9.99 | | | $11.20 |
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) | | | $18.29 | | | $10.60 | | | $11.88 |
Class B Shares-Net asset value | | | $16.41 | | | $9.58 | | | $11.02 |
Class C Shares-Net asset value | | | $16.29 | | | $9.55 | | | $11.04 |
Class F Shares-Net asset value | | | $17.22 | | | $9.96 | | | $11.16 |
Class I Shares-Net asset value | | | $17.33 | | | $10.04 | | | $11.28 |
Class P Shares-Net asset value | | | – | | | $9.87 | | | $11.13 |
Class R2 Shares-Net asset value | | | $17.13 | | | $9.89 | | | $11.20 |
Class R3 Shares-Net asset value | | | $17.12 | | | $9.92 | | | $11.10 |
| * | Formerly, All Value Fund |
See Notes to Financial Statements.
56
| | | | | | | | | | |
International Dividend Income Fund | | International
Opportunities Fund | | Large Cap Value Fund | | Value Opportunities Fund |
| | | | | | | | | | |
| | | | | | | | | | |
| $ | 52,935,216 | | $ | 92,187,957 | | $ | 27,443,760 | | $ | 250,434,642 |
| | – | | $ | 17,103,328 | | $ | 2,558,140 | | $ | 18,738,997 |
| $ | 4,376,136 | | $ | 21,667,944 | | $ | 5,654,045 | | $ | 79,526,592 |
| $ | 1,771,631 | | $ | 383,742 | | $ | 202,401 | | $ | 51,756,978 |
| $ | 225,687,915 | | $ | 160,455,626 | | $ | 11,207,434 | | $ | 121,461,804 |
| | – | | $ | 781,468 | | $ | 11,434 | | $ | 3,444,839 |
| $ | 8,739 | | $ | 90,798 | | | – | | $ | 1,465,847 |
| $ | 8,726 | | $ | 572,940 | | | – | | $ | 4,227,078 |
| | | |
| | | | | | | | | | |
| | 6,436,377 | | | 8,613,249 | | | 3,185,844 | | | 21,502,939 |
| | – | | | 1,681,100 | | | 302,160 | | | 1,645,543 |
| | 534,333 | | | 2,141,631 | | | 667,236 | | | 6,984,436 |
| | 215,212 | | | 36,037 | | | 23,586 | | | 4,452,905 |
| | 27,386,958 | | | 14,645,074 | | | 1,293,716 | | | 10,378,660 |
| | – | | | 71,961 | | | 1,323 | | | 296,455 |
| | 1,054 | | | 8,532 | | | – | | | 126,455 |
| | 1,054 | | | 54,045 | | | – | | | 364,994 |
| | | |
| | | | | | | | | | |
| | $8.22 | | | $10.70 | | | $8.61 | | | $11.65 |
| | | |
| | $8.72 | | | $11.35 | | | $9.14 | | | $12.36 |
| | – | | | $10.17 | | | $8.47 | | | $11.39 |
| | $8.19 | | | $10.12 | | | $8.47 | | | $11.39 |
| | $8.23 | | | $10.65 | | | $8.58 | | | $11.62 |
| | $8.24 | | | $10.96 | | | $8.66 | | | $11.70 |
| | – | | | $10.86 | | | $8.64 | | | $11.62 |
| | $8.29 | | | $10.64 | | | – | | | $11.59 |
| | $8.28 | | | $10.60 | | | – | | | $11.58 |
See Notes to Financial Statements.
57
Statements of Operations
For the Year Ended October 31, 2009
| | | | | | | | | | | | |
| | | Alpha Strategy
Fund | | | Fundamental
Equity Fund* | | | International
Core Equity
Fund | |
Investment income: | | | | | | | | | | | | |
Dividends (net of foreign withholding taxes of $0, $246,943, $1,715,619, $864,697, $516,686, $3,055 and $0, respectively) | | $ | 1,833,571 | | | $ | 32,821,313 | | | $ | 19,453,257 | |
Interest and other | | | – | | | | 3,414 | | | | 25,500 | |
Total investment income | | | 1,833,571 | | | | 32,824,727 | | | | 19,478,757 | |
Expenses: | | | | | | | | | | | | |
Management fee | | | 439,859 | | | | 12,106,435 | | | | 5,871,258 | |
12b-1 distribution plan-Class A | | | 885,718 | | | | 5,243,275 | | | | 1,774,079 | |
12b-1 distribution plan-Class B | | | 288,663 | | | | 1,559,989 | | | | 378,655 | |
12b-1 distribution plan-Class C | | | 1,244,329 | | | | 4,241,437 | | | | 915,848 | |
12b-1 distribution plan-Class F | | | 18,345 | | | | 40,216 | | | | 6,157 | |
12b-1 distribution plan-Class P | | | – | | | | 114,262 | | | | 6,041 | |
12b-1 distribution plan-Class R2 | | | 5,936 | | | | 3,503 | | | | – | |
12b-1 distribution plan-Class R3 | | | 25,422 | | | | 92,820 | | | | 4,097 | |
Shareholder servicing | | | 1,516,518 | | | | 4,691,723 | | | | 2,111,289 | |
Professional | | | 33,913 | | | | 76,422 | | | | 60,911 | |
Reports to shareholders | | | 137,701 | | | | 439,456 | | | | 173,637 | |
Fund administration | | | – | | | | 892,515 | | | | 313,134 | |
Custody | | | 7,198 | | | | 39,043 | | | | 243,804 | |
Trustees’ fees | | | 24,712 | | | | 126,522 | | | | 44,346 | |
Registration | | | 107,048 | | | | 195,017 | | | | 114,213 | |
Subsidy (See Note 3) | | | – | | | | 201,497 | | | | 403,845 | |
Other | | | 18,176 | | | | 81,969 | | | | 58,673 | |
Gross expenses | | | 4,753,538 | | | | 30,146,101 | | | | 12,479,987 | |
Expense reductions (See Note 7) | | | (1,491 | ) | | | (7,756 | ) | | | (2,717 | ) |
Expenses reimbursed by advisor (See Note 3) | | | – | | | | – | | | | – | |
Expenses assumed by Underlying Funds (See Note 3) | | | (1,843,775 | ) | | | – | | | | – | |
Management fee waived (See Note 3) | | | (439,859 | ) | | | – | | | | – | |
Net expenses | | | 2,468,413 | | | | 30,138,345 | | | | 12,477,270 | |
Net investment income (loss) | | | (634,842 | ) | | | 2,686,382 | | | | 7,001,487 | |
Net realized and unrealized gain (loss): | | | | | | | | | | | | |
Net realized loss on investments (net of foreign capital gain tax) and foreign currency related transactions | | | (18,928,639 | ) | | | (288,541,654 | ) | | | (220,158,466 | ) |
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | | | 102,595,833 | | | | 583,449,890 | | | | 434,137,412 | |
Net realized and unrealized gain | | | 83,667,194 | | | | 294,908,236 | | | | 213,978,946 | |
Net Increase in Net Assets Resulting From Operations | | $ | 83,032,352 | | | $ | 297,594,618 | | | $ | 220,980,433 | |
| * | Formerly, All Value Fund |
See Notes to Financial Statements.
58
| | | | | | | | | | | | | | |
International
Dividend
Income Fund | | | International
Opportunities
Fund | | | Large Cap
Value Fund | | | Value
Opportunities
Fund | |
| | | | | | | | | | | | | | |
| | | |
| $ | 8,067,473 | | | $ | 5,202,592 | | | $ | 929,752 | | | $ | 3,554,956 | |
| | 14,817 | | | | 89,328 | | | | 2,617 | | | | – | |
| | 8,082,290 | | | | 5,291,920 | | | | 932,369 | | | | 3,554,956 | |
| | | | | | | | | | | | | | |
| | 1,164,829 | | | | 1,737,321 | | | | 180,432 | | | | 2,643,378 | |
| | 98,876 | | | | 253,711 | | | | 83,502 | | | | 558,336 | |
| | – | | | | 144,549 | | | | 24,926 | | | | 153,226 | |
| | 13,163 | | | | 168,003 | | | | 47,930 | | | | 580,665 | |
| | 196 | | | | 264 | | | | 146 | | | | 27,771 | |
| | – | | | | 2,922 | | | | 47 | | | | 13,102 | |
| | – | | | | 334 | | | | – | | | | 3,060 | |
| | – | | | | 824 | | | | – | | | | 12,987 | |
| | 49,192 | | | | 595,771 | | | | 83,368 | | | | 596,610 | |
| | 53,646 | | | | 54,994 | | | | 43,714 | | | | 46,617 | |
| | 23,889 | | | | 31,868 | | | | 7,396 | | | | 74,689 | |
| | 62,124 | | | | 92,657 | | | | 18,043 | | | | 140,980 | |
| | 165,009 | | | | 133,765 | | | | 16,990 | | | | 13,155 | |
| | 7,471 | | | | 12,829 | | | | 2,585 | | | | 18,509 | |
| | 32,264 | | | | 77,799 | | | | 57,553 | | | | 101,468 | |
| | 394,815 | | | | 525,262 | | | | – | | | | 287,857 | |
| | 39,847 | | | | 27,565 | | | | 3,593 | | | | 16,926 | |
| | 2,105,321 | | | | 3,860,438 | | | | 570,225 | | | | 5,289,336 | |
| | (421 | ) | | | (765 | ) | | | (161 | ) | | | (1,084 | ) |
| | (439,566 | ) | | | – | | | | (51,848 | ) | | | (414,923 | ) |
| | | |
| | – | | | | – | | | | – | | | | – | |
| | – | | | | – | | | | – | | | | – | |
| | 1,665,334 | | | | 3,859,673 | | | | 518,216 | | | | 4,873,329 | |
| | 6,416,956 | | | | 1,432,247 | | | | 414,153 | | | | (1,318,373 | ) |
| | | | | | | | | | | | | | |
| | | |
| | (16,517,581 | ) | | | (63,319,994 | ) | | | (14,750,983 | ) | | | (31,924,730 | ) |
| | | |
| | 67,339,160 | | | | 155,917,304 | | | | 16,617,404 | | | | 101,544,068 | |
| | 50,821,579 | | | | 92,597,310 | | | | 1,866,421 | | | | 69,619,338 | |
| | | |
| $ | 57,238,535 | | | $ | 94,029,557 | | | $ | 2,280,574 | | | $ | 68,300,965 | |
See Notes to Financial Statements.
59
Statements of Changes in Net Assets
| | | | | | | | |
| | | Alpha Strategy Fund | |
| INCREASE (DECREASE) IN NET ASSETS | | For the
Year Ended
October 31, 2009 | | | For the
Year Ended
October 31, 2008 | |
Operations: | | | | | | | | |
Net investment income (loss) | | $ | (634,842 | ) | | $ | (1,784,259 | ) |
Capital gains received from Underlying Funds | | | – | | | | 51,358,516 | |
Net realized loss on investments and foreign currency related transactions | | | (18,928,639 | ) | | | (7,315,268 | ) |
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | | | 102,595,833 | | | | (329,836,057 | ) |
Net increase (decrease) in net assets resulting from operations | | | 83,032,352 | | | | (287,577,068 | ) |
Distributions to shareholders from: | | | | | | | | |
Net investment income | | | | | | | | |
Class A | | | (494,752 | ) | | | (9,180,478 | ) |
Class B | | | – | | | | (1,247,863 | ) |
Class C | | | – | | | | (3,669,303 | ) |
Class F | | | (35,304 | ) | | | (302 | ) |
Class I | | | (54,877 | ) | | | (64,370 | ) |
Class P | | | – | | | | – | |
Class R2 | | | (1,180 | ) | | | (288 | ) |
Class R3 | | | (15,394 | ) | | | (303 | ) |
Net realized gain | | | | | | | | |
Class A | | | (19,003,782 | ) | | | (17,909,168 | ) |
Class B | | | (2,310,730 | ) | | | (3,144,253 | ) |
Class C | | | (9,107,549 | ) | | | (8,529,534 | ) |
Class F | | | (463,904 | ) | | | (539 | ) |
Class I | | | (638,401 | ) | | | (113,914 | ) |
Class P | | | – | | | | – | |
Class R2 | | | (48,485 | ) | | | (537 | ) |
Class R3 | | | (320,424 | ) | | | (559 | ) |
Total distributions to shareholders | | | (32,494,782 | ) | | | (43,861,411 | ) |
Capital share transactions (Net of share conversions) (See Note 12): | | | | | |
Net proceeds from sales of shares | | | 169,481,954 | | | | 345,829,207 | |
Reinvestment of distributions | | | 27,229,784 | | | | 36,696,667 | |
Cost of shares reacquired | | | (149,121,142 | ) | | | (157,940,191 | ) |
Net increase (decrease) in net assets
resulting from capital share transactions | | | 47,590,596 | | | | 224,585,683 | |
Net increase (decrease) in net assets | | | 98,128,166 | | | | (106,852,796 | ) |
NET ASSETS: | | | | | | | | |
Beginning of year | | $ | 430,746,286 | | | $ | 537,599,082 | |
End of year | | $ | 528,874,452 | | | $ | 430,746,286 | |
Undistributed (distributions in excess of) net investment income | | $ | (54,293 | ) | | $ | (39,293 | ) |
| * | Formerly, All Value Fund |
See Notes to Financial Statements.
60
| | | | | | | | | | | | | | |
| Fundamental Equity Fund* | | | International Core Equity Fund | |
For the
Year Ended
October 31, 2009 | | | For the
Year Ended
October 31, 2008 | | | For the
Year Ended
October 31, 2009 | | | For the
Year Ended
October 31, 2008 | |
| | | | | | | | | | | | | | |
| $ | 2,686,382 | | | $ | 12,325,577 | | | $ | 7,001,487 | | | $ | 22,501,763 | |
| | – | | | | – | | | | – | | | | – | |
| | | |
| | (288,541,654 | ) | | | (42,051,970 | ) | | | (220,158,466 | ) | | | (199,431,849 | ) |
| | | |
| | 583,449,890 | | | | (974,887,405 | ) | | | 434,137,412 | | | | (590,182,522 | ) |
| | 297,594,618 | | | | (1,004,613,798 | ) | | | 220,980,433 | | | | (767,112,608 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (10,797,172 | ) | | | (13,489,340 | ) | | | (12,986,796 | ) | | | (8,012,157 | ) |
| | – | | | | – | | | | (531,069 | ) | | | (204,237 | ) |
| | – | | | | (126 | ) | | | (1,149,088 | ) | | | (470,637 | ) |
| | (103,050 | ) | | | (89 | ) | | | (51,481 | ) | | | (103 | ) |
| | (636,029 | ) | | | (495,585 | ) | | | (3,707,413 | ) | | | (2,684,109 | ) |
| | (146,405 | ) | | | (235,212 | ) | | | (27,708 | ) | | | (23,780 | ) |
| | (3,122 | ) | | | (77 | ) | | | (163 | ) | | | (98 | ) |
| | (119,358 | ) | | | (79 | ) | | | (16,857 | ) | | | (99 | ) |
| | | | | | | | | | | | | | |
| | – | | | | (161,640,464 | ) | | | – | | | | (92,686,363 | ) |
| | – | | | | (19,803,452 | ) | | | – | | | | (7,224,370 | ) |
| | – | | | | (45,461,398 | ) | | | – | | | | (18,758,430 | ) |
| | – | | | | (690 | ) | | | – | | | | (870 | ) |
| | – | | | | (3,721,818 | ) | | | – | | | | (22,554,732 | ) |
| | – | | | | (3,349,806 | ) | | | – | | | | (204,843 | ) |
| | – | | | | (688 | ) | | | – | | | | (867 | ) |
| | – | | | | (688 | ) | | | – | | | | (867 | ) |
| | (11,805,136 | ) | | | (248,199,512 | ) | | | (18,470,575 | ) | | | (152,826,562 | ) |
| | | | | | | | | | | | | | |
| | 704,211,694 | | | | 585,762,696 | | | | 155,799,233 | | | | 311,725,795 | |
| | 11,157,952 | | | | 225,482,454 | | | | 17,506,373 | | | | 141,116,171 | |
| | (670,276,536 | ) | | | (753,242,546 | ) | | | (252,355,203 | ) | | | (393,957,395 | ) |
| | | |
| | 45,093,110 | | | | 58,002,604 | | | | (79,049,597 | ) | | | 58,884,571 | |
| | 330,882,592 | | | | (1,194,810,706 | ) | | | 123,460,261 | | | | (861,054,599 | ) |
| | | | | | | | | | | | | | |
| $ | 2,203,411,277 | | | $ | 3,398,221,983 | | | $ | 780,175,387 | | | $ | 1,641,229,986 | |
| $ | 2,534,293,869 | | | $ | 2,203,411,277 | | | $ | 903,635,648 | | | $ | 780,175,387 | |
| $ | (53,000 | ) | | $ | 9,068,841 | | | $ | 3,803,601 | | | $ | 18,373,704 | |
See Notes to Financial Statements.
61
Statements of Changes in Net Assets (continued)
| | | | | | | | |
| | | International Dividend Income Fund | |
| INCREASE (DECREASE) IN NET ASSETS | | For the
Year Ended
October 31, 2009 | | | For the
Period Ended
October 31, 2008* | |
Operations: | | | | | | | | |
Net investment income | | $ | 6,416,956 | | | $ | 2,483,680 | |
Net realized loss on investments and foreign currency related transactions | | | (16,517,581 | ) | | | (21,423,805 | ) |
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | | | 67,339,160 | | | | (29,801,019 | ) |
Net increase (decrease) in net assets resulting from operations | | | 57,238,535 | | | | (48,741,144 | ) |
Distributions to shareholders from: | | | | | | | | |
Net investment income | | | | | | | | |
Class A | | | (1,128,282 | ) | | | (152,587 | ) |
Class B | | | – | | | | – | |
Class C | | | (45,092 | ) | | | (881 | ) |
Class F | | | (5,176 | ) | | | (604 | ) |
Class I | | | (5,046,074 | ) | | | (1,805,924 | ) |
Class P | | | – | | | | – | |
Class R2 | | | (238 | ) | | | (124 | ) |
Class R3 | | | (245 | ) | | | (127 | ) |
Net realized gain | | | | | | | | |
Class A | | | – | | | | – | |
Class B | | | – | | | | – | |
Class C | | | – | | | | – | |
Class F | | | – | | | | – | |
Class I | | | – | | | | – | |
Class P | | | – | | | | – | |
Class R2 | | | – | | | | – | |
Class R3 | | | – | | | | – | |
Total distributions to shareholders | | | (6,225,107 | ) | | | (1,960,247 | ) |
Capital share transactions (Net of share conversions) (See Note 12): | | | | | |
Net proceeds from sales of shares | | | 146,808,974 | | | | 143,060,862 | |
Reinvestment of distributions | | | 6,048,660 | | | | 1,913,886 | |
Cost of shares reacquired | | | (11,788,979 | ) | | | (1,567,077 | ) |
Net increase (decrease) in net assets
resulting from capital share transactions | | | 141,068,655 | | | | 143,407,671 | |
Net increase (decrease) in net assets | | | 192,082,083 | | | | 92,706,280 | |
NET ASSETS: | | | | | | | | |
Beginning of year | | $ | 92,706,280 | | | $ | – | |
End of year | | $ | 284,788,363 | | | $ | 92,706,280 | |
Undistributed (distributions in excess of) net investment income | | $ | 153,008 | | | $ | (1,065 | ) |
| * | For the period June 23, 2008 (commencement of investment operations) to October 31, 2008. |
See Notes to Financial Statements.
62
| | | | | | | | | | | | | | |
| International Opportunities Fund | | | Large Cap Value Fund | |
For the
Year Ended
October 31, 2009 | | | For the
Year Ended
October 31, 2008 | | | For the
Year Ended
October 31, 2009 | | | For the
Year Ended
October 31, 2008 | |
| | | | | | | | | | | | | | |
| $ | 1,432,247 | | | $ | 2,433,983 | | | $ | 414,153 | | | $ | 693,386 | |
| | | |
| | (63,319,994 | ) | | | (82,658,669 | ) | | | (14,750,983 | ) | | | (7,184,110 | ) |
| | | |
| | 155,917,304 | | | | (194,425,862 | ) | | | 16,617,404 | | | | (16,805,784 | ) |
| | 94,029,557 | | | | (274,650,548 | ) | | | 2,280,574 | | | | (23,296,508 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (468,483 | ) | | | (777,242 | ) | | | (360,321 | ) | | | (371,592 | ) |
| | – | | | | – | | | | (21,657 | ) | | | (29,316 | ) |
| | – | | | | – | | | | (41,102 | ) | | | (48,317 | ) |
| | (1,516 | ) | | | (73 | ) | | | (541 | ) | | | (162 | ) |
| | (1,433,999 | ) | | | (1,115,657 | ) | | | (351,007 | ) | | | (333,339 | ) |
| | (997 | ) | | | (8,529 | ) | | | (166 | ) | | | (203 | ) |
| | (136 | ) | | | (69 | ) | | | – | | | | – | |
| | (272 | ) | | | (70 | ) | | | – | | | | – | |
| | | | | | | | | | | | | | |
| | – | | | | (21,778,775 | ) | | | – | | | | (3,678,316 | ) |
| | – | | | | (4,924,465 | ) | | | – | | | | (534,598 | ) |
| | – | | | | (4,985,509 | ) | | | – | | | | (873,871 | ) |
| | – | | | | (1,155 | ) | | | – | | | | (1,313 | ) |
| | – | | | | (17,305,855 | ) | | | – | | | | (2,665,784 | ) |
| | – | | | | (236,757 | ) | | | – | | | | (2,206 | ) |
| | – | | | | (1,151 | ) | | | – | | | | – | |
| | – | | | | (1,150 | ) | | | – | | | | – | |
| | (1,905,403 | ) | | | (51,136,457 | ) | | | (774,794 | ) | | | (8,539,017 | ) |
| | | | | | | | | | | | | | |
| | 35,650,692 | | | | 129,747,428 | | | | 22,506,779 | | | | 23,052,222 | |
| | 1,882,036 | | | | 49,702,304 | | | | 679,787 | | | | 7,435,719 | |
| | (45,563,525 | ) | | | (98,019,240 | ) | | | (22,676,612 | ) | | | (15,227,710 | ) |
| | | |
| | (8,030,797 | ) | | | 81,430,492 | | | | 509,954 | | | | 15,260,231 | |
| | 84,093,357 | | | | (244,356,513 | ) | | | 2,015,734 | | | | (16,575,294 | ) |
| | | | | | | | | | | | | | |
| $ | 209,150,446 | | | $ | 453,506,959 | | | $ | 45,061,480 | | | $ | 61,636,774 | |
| $ | 293,243,803 | | | $ | 209,150,446 | | | $ | 47,077,214 | | | $ | 45,061,480 | |
| | | |
| $ | 151,774 | | | $ | 1,476,204 | | | $ | 259,125 | | | $ | 619,782 | |
See Notes to Financial Statements.
63
Statements of Changes in Net Assets (concluded)
| | | | | | | | |
| | | Value Opportunities Fund | |
| INCREASE (DECREASE) IN NET ASSETS | | For the
Year Ended
October 31, 2009 | | | For the
Year Ended
October 31, 2008 | |
Operations: | | | | | | | | |
Net investment income (loss) | | $ | (1,318,373 | ) | | $ | 825,725 | |
Net realized loss on investments | | | (31,924,730 | ) | | | (24,893,377 | ) |
Net change in unrealized appreciation/depreciation on investments | | | 101,544,068 | | | | (74,634,785 | ) |
Net increase (decrease) in net assets resulting from operations | | | 68,300,965 | | | | (98,702,437 | ) |
Distributions to shareholders from: | | | | | | | | |
Net investment income | | | | | | | | |
Class A | | | (206,714 | ) | | | (84,095 | ) |
Class F | | | (33,314 | ) | | | (31 | ) |
Class I | | | (425,649 | ) | | | (213,809 | ) |
Class P | | | – | | | | (5,036 | ) |
Class R2 | | | – | | | | (19 | ) |
Class R3 | | | (3,458 | ) | | | (715 | ) |
Net realized gain | | | | | | | | |
Class A | | | – | | | | (5,270,291 | ) |
Class B | | | – | | | | (512,824 | ) |
Class C | | | – | | | | (2,168,311 | ) |
Class F | | | – | | | | (359 | ) |
Class I | | | – | | | | (2,275,577 | ) |
Class P | | | – | | | | (197,156 | ) |
Class R2 | | | – | | | | (358 | ) |
Class R3 | | | – | | | | (9,543 | ) |
Total distributions to shareholders | | | (669,135 | ) | | | (10,738,124 | ) |
Capital share transactions (Net of share conversions) (See Note 12): | | | | | |
Net proceeds from sales of shares | | | 280,778,475 | | | | 175,953,420 | |
Reinvestment of distributions | | | 624,834 | | | | 9,139,621 | |
Cost of shares reacquired | | | (82,289,745 | ) | | | (91,267,168 | ) |
Net increase in net assets resulting from capital share transactions | | | 199,113,564 | | | | 93,825,873 | |
Net increase (decrease) in net assets | | | 266,745,394 | | | | (15,614,688 | ) |
NET ASSETS: | | | | | | | | |
Beginning of year | | $ | 264,311,383 | | | $ | 279,926,071 | |
End of year | | $ | 531,056,777 | | | $ | 264,311,383 | |
Undistributed net investment income | | $ | 26,074 | | | $ | 536,169 | |
See Notes to Financial Statements.
64
Financial Highlights
ALPHA STRATEGY FUND
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $15.58 | | | $29.08 | | | $23.68 | | | $19.11 | | | $15.96 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)(a) | | .01 | | | (.02 | ) | | (.04 | ) | | (.06 | ) | | (.01 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 2.81 | | | (11.23 | ) | | 6.44 | | | 4.63 | | | 3.26 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.82 | | | (11.25 | ) | | 6.40 | | | 4.57 | | | 3.25 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.03 | ) | | (.76 | ) | | (.74 | ) | | – | | | (.10 | ) |
| | | | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | (.26 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (1.16 | ) | | (2.25 | ) | | (1.00 | ) | | – | | | (.10 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $17.24 | | | $15.58 | | | $29.08 | | | $23.68 | | | $19.11 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 20.57 | % | | (41.64 | )% | | 28.00 | % | | 23.91 | % | | 20.46 | % |
| | | | | |
Ratios to Average Net Assets:* | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | .35 | % | | .35 | % | | .35 | % | | .35 | % | | .35 | % |
| | | | | |
Expenses, including expense reductions and expenses assumed and waived | | .35 | % | | .35 | % | | .35 | % | | .35 | % | | .35 | % |
| | | | | |
Expenses, excluding expense reductions and expenses assumed and waived | | .87 | % | | .76 | % | | .79 | % | | .80 | % | | .83 | % |
| | | | | |
Net investment income (loss) | | .09 | % | | (.09 | )% | | (.17 | )% | | (.28 | )% | | (.08 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $296,989 | | | $257,398 | | | $332,175 | | | $196,448 | | | $90,641 | |
| | | | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % | | 8.83 | % | | 6.94 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
65
Financial Highlights (continued)
ALPHA STRATEGY FUND
| | | | | | | | | | | | | | | |
| | | Class B Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $14.94 | | | $27.98 | | | $22.79 | | | $18.51 | | | $15.46 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.08 | ) | | (.15 | ) | | (.20 | ) | | (.20 | ) | | (.12 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 2.68 | | | (10.81 | ) | | 6.21 | | | 4.48 | | | 3.17 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.60 | | | (10.96 | ) | | 6.01 | | | 4.28 | | | 3.05 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | – | | | (.59 | ) | | (.56 | ) | | – | | | – | |
| | | | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | (.26 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (1.13 | ) | | (2.08 | ) | | (.82 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $16.41 | | | $14.94 | | | $27.98 | | | $22.79 | | | $18.51 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 19.86 | % | | (42.04 | )% | | 27.17 | % | | 23.12 | % | | 19.73 | % |
| | | | | |
Ratios to Average Net Assets:* | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % |
| | | | | |
Expenses, including expense reductions and expenses assumed and waived | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % |
| | | | | |
Expenses, excluding expense reductions and expenses assumed and waived | | 1.52 | % | | 1.42 | % | | 1.44 | % | | 1.44 | % | | 1.47 | % |
| | | | | |
Net investment loss | | (.55 | )% | | (.70 | )% | | (.79 | )% | | (.92 | )% | | (.71 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $31,294 | | | $31,193 | | | $58,045 | | | $47,954 | | | $45,179 | |
| | | | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % | | 8.83 | % | | 6.94 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
66
Financial Highlights (continued)
ALPHA STRATEGY FUND
| | | | | | | | | | | | | | | |
| | | Class C Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $14.85 | | | $27.87 | | | $22.79 | | | $18.51 | | | $15.46 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.08 | ) | | (.16 | ) | | (.21 | ) | | (.20 | ) | | (.12 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 2.65 | | | (10.73 | ) | | 6.21 | | | 4.48 | | | 3.17 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.57 | | | (10.89 | ) | | 6.00 | | | 4.28 | | | 3.05 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | – | | | (.64 | ) | | (.66 | ) | | – | | | – | |
| | | | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | (.26 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (1.13 | ) | | (2.13 | ) | | (.92 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $16.29 | | | $14.85 | | | $27.87 | | | $22.79 | | | $18.51 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 19.78 | % | | (42.02 | )% | | 27.20 | % | | 23.12 | % | | 19.73 | % |
| | | | | |
Ratios to Average Net Assets:* | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % |
| | | | | |
Expenses, including expense reductions and expenses assumed and waived | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % | | 1.00 | % |
| | | | | |
Expenses, excluding expense reductions and expenses assumed and waived | | 1.52 | % | | 1.41 | % | | 1.44 | % | | 1.45 | % | | 1.47 | % |
| | | | | |
Net investment loss | | (.59 | )% | | (.74 | )% | | (.83 | )% | | (.92 | )% | | (.71 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $150,633 | | | $122,504 | | | $145,528 | | | $75,193 | | | $29,998 | |
| | | | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % | | 8.83 | % | | 6.94 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
67
Financial Highlights (continued)
ALPHA STRATEGY FUND
| | | | | | | | | |
| | | Class F Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $15.58 | | | $29.09 | | | $27.77 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | .01 | | | (.02 | ) | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 2.85 | | | (11.17 | ) | | 1.32 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 2.86 | | | (11.19 | ) | | 1.32 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.09 | ) | | (.83 | ) | | – | |
| | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (1.22 | ) | | (2.32 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $17.22 | | | $15.58 | | | $29.09 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 20.95 | % | | (41.50 | )% | | 4.75 | %(e) |
| | | |
Ratios to Average Net Assets:* | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | .10 | % | | .10 | % | | .01 | %(e) |
| | | |
Expenses, including expense reductions and expenses assumed and waived | | .10 | % | | .10 | % | | .01 | %(e) |
| | | |
Expenses, excluding expense reductions and expenses assumed and waived | | .60 | % | | .55 | % | | .07 | %(e) |
| | | |
Net investment income (loss) | | .05 | % | | (.11 | )% | | (.01 | )%(e) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $29,762 | | | $6,845 | | | $11 | |
| | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
68
Financial Highlights (continued)
ALPHA STRATEGY FUND
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $15.67 | | | $29.23 | | | $23.77 | | | $19.12 | | | $15.96 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .06 | | | .01 | | | .05 | | | .02 | | | .05 | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.83 | | | (11.24 | ) | | 6.47 | | | 4.63 | | | 3.27 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.89 | | | (11.23 | ) | | 6.52 | | | 4.65 | | | 3.32 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.10 | ) | | (.84 | ) | | (.80 | ) | | – | | | (.16 | ) |
| | | | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | (.26 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (1.23 | ) | | (2.33 | ) | | (1.06 | ) | | – | | | (.16 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $17.33 | | | $15.67 | | | $29.23 | | | $23.77 | | | $19.12 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 21.06 | % | | (41.45 | )% | | 28.48 | % | | 24.32 | % | | 20.91 | % |
| | | | | |
Ratios to Average Net Assets:* | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | .00 | % | | .00 | % | | .00 | % | | .00 | % | | .00 | % |
| | | | | |
Expenses, including expense reductions and expenses assumed and waived | | .00 | % | | .00 | % | | .00 | % | | .00 | % | | .00 | % |
| | | | | |
Expenses, excluding expense reductions and expenses assumed and waived | | .52 | % | | .41 | % | | .44 | % | | .45 | % | | .48 | % |
| | | | | |
Net investment income | | .39 | % | | .06 | % | | .19 | % | | .08 | % | | .27 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $11,785 | | | $8,293 | | | $1,819 | | | $1,001 | | | $539 | |
| | | | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % | | 8.83 | % | | 6.94 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
69
Financial Highlights (continued)
ALPHA STRATEGY FUND
| | | | | | | | | |
| | | Class R2 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $15.51 | | | $29.08 | | | $27.77 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment loss(b) | | (.05 | ) | | (.12 | ) | | (.01 | ) |
| | | |
Net realized and unrealized gain (loss) | | 2.83 | | | (11.16 | ) | | 1.32 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 2.78 | | | (11.28 | ) | | 1.31 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.03 | ) | | (.80 | ) | | – | |
| | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (1.16 | ) | | (2.29 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $17.13 | | | $15.51 | | | $29.08 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 20.37 | % | | (41.82 | )% | | 4.72 | %(d) |
| | | |
Ratios to Average Net Assets:* | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | .60 | % | | .60 | % | | .05 | %(d) |
| | | |
Expenses, including expense reductions and expenses assumed and waived | | .60 | % | | .59 | % | | .05 | %(d) |
| | | |
Expenses, excluding expense reductions and expenses assumed and waived | | 1.11 | % | | 1.02 | % | | .11 | %(d) |
| | | |
Net investment loss | | (.32 | )% | | (.59 | )% | | (.05 | )%(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $1,433 | | | $564 | | | $10 | |
| | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
70
Financial Highlights (concluded)
ALPHA STRATEGY FUND
| | | | | | | | | |
| | | Class R3 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $15.53 | | | $29.08 | | | $27.77 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment loss(b) | | (.02 | ) | | (.10 | ) | | (.01 | ) |
| | | |
Net realized and unrealized gain (loss) | | 2.79 | | | (11.15 | ) | | 1.32 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 2.77 | | | (11.25 | ) | | 1.31 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.05 | ) | | (.81 | ) | | – | |
| | | |
Net realized gain | | (1.13 | ) | | (1.49 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (1.18 | ) | | (2.30 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $17.12 | | | $15.53 | | | $29.08 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 20.39 | % | | (41.72 | )% | | 4.72 | %(d) |
| | | |
Ratios to Average Net Assets:* | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses assumed and waived | | .50 | % | | .50 | % | | .04 | %(d) |
| | | |
Expenses, including expense reductions and expenses assumed and waived | | .50 | % | | .49 | % | | .04 | %(d) |
| | | |
Expenses, excluding expense reductions and expenses assumed and waived | | 1.01 | % | | .95 | % | | .10 | %(d) |
| | | |
Net investment loss | | (.15 | )% | | (.51 | )% | | (.04 | )%(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $6,979 | | | $3,949 | | | $10 | |
| | | |
Portfolio turnover rate | | 7.18 | % | | 7.64 | % | | 39.09 | % |
| * | | Does not include expenses of the Underlying Funds in which the Fund invests. |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
71
Financial Highlights
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.85 | | | $13.69 | | | $13.14 | | | $12.13 | | | $11.18 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .03 | | | .07 | | | .08 | | | .08 | | | .07 | |
| | | | | |
Net realized and unrealized gain (loss) | | 1.17 | | | (3.89 | ) | | 1.52 | | | 1.82 | | | 1.06 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.20 | | | (3.82 | ) | | 1.60 | | | 1.90 | | | 1.13 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.06 | ) | | (.08 | ) | | (.08 | ) | | (.06 | ) | | (.07 | ) |
| | | | | |
Net realized gain | | – | | | (.94 | ) | | (.97 | ) | | (.83 | ) | | (.11 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.06 | ) | | (1.02 | ) | | (1.05 | ) | | (.89 | ) | | (.18 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $9.99 | | | $ 8.85 | | | $13.69 | | | $13.14 | | | $12.13 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 13.84 | % | | (29.89 | )% | | 13.12 | % | | 16.49 | % | | 10.19 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.19 | % | | 1.12 | % | | 1.12 | % | | 1.14 | % | | 1.17 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.19 | % | | 1.12 | % | | 1.12 | % | | 1.14 | % | | 1.17 | % |
| | | | | |
Net investment income | | .28 | % | | .58 | % | | .63 | % | | .63 | % | | .62 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $1,656,209 | | | $1,512,312 | | | $2,375,786 | | | $2,198,884 | | | $1,771,120 | |
| | | | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % | | 63.84 | % | | 52.24 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
72
Financial Highlights (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | | | | | | | |
| | | Class B Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.48 | | | $13.16 | | | $12.66 | | | $11.74 | | | $10.84 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.03 | ) | | (.01 | ) | | – | (b) | | – | (b) | | – | (b) |
| | | | | |
Net realized and unrealized gain (loss) | | 1.13 | | | (3.73 | ) | | 1.47 | | | 1.76 | | | 1.02 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.10 | | | (3.74 | ) | | 1.47 | | | 1.76 | | | 1.02 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | – | | | – | | | – | (b) | | – | | | (.01 | ) |
| | | | | |
Net realized gain | | – | | | (.94 | ) | | (.97 | ) | | (.84 | ) | | (.11 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | – | | | (.94 | ) | | (.97 | ) | | (.84 | ) | | (.12 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $9.58 | | | $ 8.48 | | | $13.16 | | | $12.66 | | | $11.74 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 12.97 | % | | (30.35 | )% | | 12.50 | % | | 15.68 | % | | 9.52 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.84 | % | | 1.77 | % | | 1.77 | % | | 1.79 | % | | 1.81 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.84 | % | | 1.77 | % | | 1.77 | % | | 1.79 | % | | 1.81 | % |
| | | | | |
Net investment loss | | (.35 | )% | | (.07 | )% | | (.01 | )% | | (.02 | )% | | (.01 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $161,233 | | | $169,131 | | | $280,279 | | | $278,649 | | | $240,977 | |
| | | | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % | | 63.84 | % | | 52.24 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
73
Financial Highlights (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | | | | | | | |
| | | Class C Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.45 | | | $13.11 | | | $12.62 | | | $11.71 | | | $10.81 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.03 | ) | | (.01 | ) | | – | (b) | | – | (b) | | – | (b) |
| | | | | |
Net realized and unrealized gain (loss) | | 1.13 | | | (3.71 | ) | | 1.46 | | | 1.75 | | | 1.02 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.10 | | | (3.72 | ) | | 1.46 | | | 1.75 | | | 1.02 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | – | | | – | (b) | | – | (b) | | – | | | (.01 | ) |
| | | | | |
Net realized gain | | – | | | (.94 | ) | | (.97 | ) | | (.84 | ) | | (.11 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | – | | | (.94 | ) | | (.97 | ) | | (.84 | ) | | (.12 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $9.55 | | | $ 8.45 | | | $13.11 | | | $12.62 | | | $11.71 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 13.02 | % | | (30.31 | )% | | 12.48 | % | | 15.64 | % | | 9.56 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.84 | % | | 1.77 | % | | 1.77 | % | | 1.79 | % | | 1.81 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.84 | % | | 1.77 | % | | 1.77 | % | | 1.79 | % | | 1.81 | % |
| | | | | |
Net investment loss | | (.37 | )% | | (.07 | )% | | (.01 | )% | | (.02 | )% | | (.01 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $485,484 | | | $419,157 | | | $639,749 | | | $622,822 | | | $513,752 | |
| | | | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % | | 63.84 | % | | 52.24 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
74
Financial Highlights (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | |
| | | Class F Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $8.85 | | | $13.70 | | | $13.62 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income(b) | | .03 | | | .08 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 1.18 | | | (3.87 | ) | | .08 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 1.21 | | | (3.79 | ) | | .08 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.10 | ) | | (.12 | ) | | – | |
| | | |
Net realized gain | | – | | | (.94 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.10 | ) | | (1.06 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $9.96 | | | $ 8.85 | | | $13.70 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 14.03 | % | | (29.70 | )% | | .59 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, including expense reductions | | .93 | % | | .87 | % | | .08 | %(e) |
| | | |
Expenses, excluding expense reductions | | .93 | % | | .88 | % | | .08 | %(e) |
| | | |
Net investment income | | .29 | % | | .77 | % | | .04 | %(e) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $73,742 | | | $8,995 | | | $10 | |
| | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
75
Financial Highlights (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 8.92 | | | $13.79 | | | $13.21 | | | $12.19 | | | $11.22 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .05 | | | .11 | | | .10 | | | .12 | | | .12 | |
| | | | | |
Net realized and unrealized gain (loss) | | 1.17 | | | (3.92 | ) | | 1.57 | | | 1.83 | | | 1.06 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.22 | | | (3.81 | ) | | 1.67 | | | 1.95 | | | 1.18 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.10 | ) | | (.12 | ) | | (.12 | ) | | (.10 | ) | | (.10 | ) |
| | | | | |
Net realized gain | | – | | | (.94 | ) | | (.97 | ) | | (.83 | ) | | (.11 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.10 | ) | | (1.06 | ) | | (1.09 | ) | | (.93 | ) | | (.21 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $10.04 | | | $ 8.92 | | | $13.79 | | | $13.21 | | | $12.19 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 14.11 | % | | (29.62 | )% | | 13.68 | % | | 16.87 | % | | 10.61 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | .84 | % | | .77 | % | | .78 | % | | .79 | % | | .81 | % |
| | | | | |
Expenses, excluding expense reductions | | .84 | % | | .77 | % | | .78 | % | | .79 | % | | .81 | % |
| | | | | |
Net investment income | | .58 | % | | .92 | % | | .78 | % | | .97 | % | | .97 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $98,570 | | | $54,483 | | | $53,737 | | | $3,880 | | | $2,645 | |
| | | | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % | | 63.84 | % | | 52.24 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
76
Financial Highlights (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | | | | | | | |
| | | Class P Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.75 | | | $13.55 | | | $13.03 | | | $12.05 | | | $11.12 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .01 | | | .06 | | | .07 | | | .06 | | | .06 | |
| | | | | |
Net realized and unrealized gain (loss) | | 1.16 | | | (3.85 | ) | | 1.51 | | | 1.82 | | | 1.05 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.17 | | | (3.79 | ) | | 1.58 | | | 1.88 | | | 1.11 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.05 | ) | | (.07 | ) | | (.09 | ) | | (.06 | ) | | (.07 | ) |
| | | | | |
Net realized gain | | – | | | (.94 | ) | | (.97 | ) | | (.84 | ) | | (.11 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.05 | ) | | (1.01 | ) | | (1.06 | ) | | (.90 | ) | | (.18 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $9.87 | | | $ 8.75 | | | $13.55 | | | $13.03 | | | $12.05 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 13.59 | % | | (29.98 | )% | | 13.08 | % | | 16.36 | % | | 10.09 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.29 | % | | 1.22 | % | | 1.22 | % | | 1.24 | % | | 1.26 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.29 | % | | 1.22 | % | | 1.22 | % | | 1.25 | % | | 1.26 | % |
| | | | | |
Net investment income | | .17 | % | | .49 | % | | .53 | % | | .49 | % | | .47 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $29,361 | | | $24,711 | | | $48,641 | | | $42,516 | | | $13,279 | |
| | | | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % | | 63.84 | % | | 52.24 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
77
Financial Highlights (continued)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | |
| | | Class R2 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $8.82 | | | $13.69 | | | $13.62 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | (.01 | ) | | .05 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 1.17 | | | (3.88 | ) | | .07 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 1.16 | | | (3.83 | ) | | .07 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.09 | ) | | (.10 | ) | | – | |
| | | |
Net realized gain | | – | | | (.94 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.09 | ) | | (1.04 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $9.89 | | | $ 8.82 | | | $13.69 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 13.44 | % | | (29.98 | )% | | .51 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, including expense reductions | | 1.42 | % | | 1.30 | % | | .12 | %(e) |
| | | |
Expenses, excluding expense reductions | | 1.42 | % | | 1.31 | % | | .12 | %(e) |
| | | |
Net investment income (loss) | | (.14 | )% | | .47 | % | | .00 | %(e)(f) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $1,187 | | | $319 | | | $10 | |
| | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
| (f) | | Amount is less than .01%. |
See Notes to Financial Statements.
78
Financial Highlights (concluded)
FUNDAMENTAL EQUITY FUND (formerly, All Value Fund)
| | | | | | | | | |
| | | Class R3 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $8.82 | | | $13.69 | | | $13.62 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income(b) | | – | (c) | | .04 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 1.17 | | | (3.86 | ) | | .07 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 1.17 | | | (3.82 | ) | | .07 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.07 | ) | | (.11 | ) | | – | |
| | | |
Net realized gain | | – | | | (.94 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.07 | ) | | (1.05 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $9.92 | | | $ 8.82 | | | $13.69 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 13.55 | % | | (29.96 | )% | | .51 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, including expense reductions | | 1.33 | % | | 1.26 | % | | .11 | %(e) |
| | | |
Expenses, excluding expense reductions | | 1.33 | % | | 1.26 | % | | .11 | %(e) |
| | | |
Net investment income | | .05 | % | | .37 | % | | .01 | %(e) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $28,510 | | | $14,303 | | | $10 | |
| | | |
Portfolio turnover rate | | 88.13 | % | | 85.13 | % | | 63.23 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
79
Financial Highlights
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 8.68 | | | $18.34 | | | $15.23 | | | $12.37 | | | $10.42 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .08 | | | .23 | | | .17 | | | .08 | | | .09 | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.66 | | | (8.23 | ) | | 3.92 | | | 3.17 | | | 1.87 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.74 | | | (8.00 | ) | | 4.09 | | | 3.25 | | | 1.96 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.22 | ) | | (.13 | ) | | (.06 | ) | | (.05 | ) | | (.01 | ) |
| | | | | |
Net realized gain | | – | | | (1.53 | ) | | (.92 | ) | | (.34 | ) | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.22 | ) | | (1.66 | ) | | (.98 | ) | | (.39 | ) | | (.01 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.20 | | | $ 8.68 | | | $18.34 | | | $15.23 | | | $12.37 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 32.32 | % | | (47.48 | )% | | 28.22 | % | | 26.86 | % | | 18.80 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.55 | % | | 1.43 | % | | 1.40 | % | | 1.53 | % | | 1.66 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.55 | % | | 1.42 | % | | 1.40 | % | | 1.52 | % | | 1.66 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.55 | % | | 1.43 | % | | 1.41 | % | | 1.53 | % | | 1.66 | % |
| | | | | |
Net investment income | | .92 | % | | 1.68 | % | | 1.02 | % | | .55 | % | | .79 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $574,731 | | | $527,567 | | | $1,082,308 | | | $655,273 | | | $235,563 | |
| | | | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % | | 134.00 | % | | 100.87 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
80
Financial Highlights (continued)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | | | | | | | |
| | | Class B Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 8.50 | | | $18.00 | | | $15.00 | | | $12.24 | | | $10.36 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)(a) | | .02 | | | .14 | | | .06 | | | (.01 | ) | | .03 | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.62 | | | (8.07 | ) | | 3.86 | | | 3.13 | | | 1.85 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.64 | | | (7.93 | ) | | 3.92 | | | 3.12 | | | 1.88 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.12 | ) | | (.04 | ) | | – | (b) | | (.02 | ) | | – | |
| | | | | |
Net realized gain | | – | | | (1.53 | ) | | (.92 | ) | | (.34 | ) | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.12 | ) | | (1.57 | ) | | (.92 | ) | | (.36 | ) | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.02 | | | $ 8.50 | | | $18.00 | | | $15.00 | | | $12.24 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 31.46 | % | | (47.80 | )% | | 27.39 | % | | 25.98 | % | | 18.15 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 2.20 | % | | 2.08 | % | | 2.05 | % | | 2.18 | % | | 2.30 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 2.20 | % | | 2.08 | % | | 2.05 | % | | 2.17 | % | | 2.30 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.20 | % | | 2.08 | % | | 2.06 | % | | 2.18 | % | | 2.30 | % |
| | | | | |
Net investment income (loss) | | .27 | % | | 1.02 | % | | .36 | % | | (.09 | )% | | .22 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $43,492 | | | $39,604 | | | $82,699 | | | $51,040 | | | $17,472 | |
| | | | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % | | 134.00 | % | | 100.87 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
81
Financial Highlights (continued)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | | | | | | | |
| | | Class C Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 8.50 | | | $18.00 | | | $15.00 | | | $12.24 | | | $10.37 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)(a) | | .03 | | | .14 | | | .06 | | | (.01 | ) | | .02 | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.62 | | | (8.07 | ) | | 3.86 | | | 3.13 | | | 1.85 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.65 | | | (7.93 | ) | | 3.92 | | | 3.12 | | | 1.87 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.11 | ) | | (.04 | ) | | – | (b) | | (.02 | ) | | – | |
| | | | | |
Net realized gain | | – | | | (1.53 | ) | | (.92 | ) | | (.34 | ) | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.11 | ) | | (1.57 | ) | | (.92 | ) | | (.36 | ) | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.04 | | | $ 8.50 | | | $18.00 | | | $15.00 | | | $12.24 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 31.52 | % | | (47.82 | )% | | 27.39 | % | | 25.98 | % | | 18.03 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 2.20 | % | | 2.08 | % | | 2.06 | % | | 2.18 | % | | 2.30 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 2.20 | % | | 2.08 | % | | 2.06 | % | | 2.17 | % | | 2.30 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.20 | % | | 2.08 | % | | 2.06 | % | | 2.18 | % | | 2.30 | % |
| | | | | |
Net investment income (loss) | | .28 | % | | 1.01 | % | | .37 | % | | (.07 | )% | | .19 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $105,557 | | | $95,496 | | | $216,646 | | | $138,424 | | | $44,240 | |
| | | | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % | | 134.00 | % | | 100.87 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
82
Financial Highlights (continued)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | |
| | | Class F Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 8.68 | | | $18.34 | | | $17.65 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | .16 | | | .24 | | | (.01 | ) |
| | | |
Net realized and unrealized gain (loss) | | 2.59 | | | (8.19 | ) | | .70 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 2.75 | | | (7.95 | ) | | .69 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.27 | ) | | (.18 | ) | | – | |
| | | |
Net realized gain | | – | | | (1.53 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.27 | ) | | (1.71 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $11.16 | | | $ 8.68 | | | $18.34 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 32.76 | % | | (47.37 | )% | | 3.91 | %(d) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.27 | % | | 1.26 | % | | .12 | %(d) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.27 | % | | 1.25 | % | | .12 | %(d) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.27 | % | | 1.26 | % | | .12 | %(d) |
| | | |
Net investment income (loss) | | 1.73 | % | | 2.02 | % | | (.06 | )%(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $9,009 | | | $1,869 | | | $10 | |
| | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
83
Financial Highlights (continued)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 8.77 | | | $18.49 | | | $15.33 | | | $12.43 | | | $10.45 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .13 | | | .29 | | | .25 | | | .13 | | | .12 | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.65 | | | (8.30 | ) | | 3.93 | | | 3.19 | | | 1.89 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.78 | | | (8.01 | ) | | 4.18 | | | 3.32 | | | 2.01 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.27 | ) | | (.18 | ) | | (.10 | ) | | (.08 | ) | | (.03 | ) |
| | | | | |
Net realized gain | | – | | | (1.53 | ) | | (.92 | ) | | (.34 | ) | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.27 | ) | | (1.71 | ) | | (1.02 | ) | | (.42 | ) | | (.03 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.28 | | | $ 8.77 | | | $18.49 | | | $15.33 | | | $12.43 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 32.86 | % | | (47.30 | )% | | 28.67 | % | | 27.26 | % | | 19.23 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.19 | % | | 1.07 | % | | 1.05 | % | | 1.19 | % | | 1.30 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.19 | % | | 1.07 | % | | 1.05 | % | | 1.18 | % | | 1.30 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.19 | % | | 1.07 | % | | 1.06 | % | | 1.19 | % | | 1.30 | % |
| | | | | |
Net investment income | | 1.34 | % | | 2.05 | % | | 1.53 | % | | .92 | % | | 1.01 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $167,574 | | | $113,975 | | | $259,354 | | | $70,641 | | | $11,952 | |
| | | | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % | | 134.00 | % | | 100.87 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
84
Financial Highlights (continued)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | | | | | | | |
| | | Class P Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 8.63 | | | $18.30 | | | $15.22 | | | $12.36 | | | $10.41 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .07 | | | .23 | | | .15 | | | .08 | | | .07 | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.64 | | | (8.19 | ) | | 3.91 | | | 3.16 | | | 1.88 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.71 | | | (7.96 | ) | | 4.06 | | | 3.24 | | | 1.95 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.21 | ) | | (.18 | ) | | (.06 | ) | | (.03 | ) | | – | |
| | | | | |
Net realized gain | | – | | | (1.53 | ) | | (.92 | ) | | (.35 | ) | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.21 | ) | | (1.71 | ) | | (.98 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.13 | | | $ 8.63 | | | $18.30 | | | $15.22 | | | $12.36 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 32.29 | % | | (47.56 | )% | | 28.07 | % | | 26.69 | % | | 18.73 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.64 | % | | 1.52 | % | | 1.51 | % | | 1.63 | % | | 1.71 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.64 | % | | 1.52 | % | | 1.51 | % | | 1.62 | % | | 1.71 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.64 | % | | 1.52 | % | | 1.51 | % | | 1.63 | % | | 1.71 | % |
| | | | | |
Net investment income | | .78 | % | | 1.68 | % | | .91 | % | | .55 | % | | .63 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $1,825 | | | $1,135 | | | $192 | | | $66 | | | $16 | |
| | | | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % | | 134.00 | % | | 100.87 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
85
Financial Highlights (continued)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | |
| | | Class R2 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 8.69 | | | $18.33 | | | $17.65 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | .12 | | | .27 | | | (.01 | ) |
| | | |
Net realized and unrealized gain (loss) | | 2.65 | | | (8.21 | ) | | .69 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 2.77 | | | (7.94 | ) | | .68 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.26 | ) | | (.17 | ) | | – | |
| | | |
Net realized gain | | – | | | (1.53 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.26 | ) | | (1.70 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $11.20 | | | $ 8.69 | | | $18.33 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 32.77 | % | | (47.24 | )% | | 3.85 | %(d) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.16 | % | | 1.17 | % | | .14 | %(d) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.16 | % | | 1.16 | % | | .14 | %(d) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.16 | % | | 1.17 | % | | .14 | %(d) |
| | | |
Net investment income (loss) | | 1.33 | % | | 1.92 | % | | (.08 | )%(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $7 | | | $5 | | | $10 | |
| | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
86
Financial Highlights (concluded)
INTERNATIONAL CORE EQUITY FUND
| | | | | | | | | |
| | | Class R3 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 8.65 | | | $18.33 | | | $17.65 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | .06 | | | .22 | | | (.01 | ) |
| | | |
Net realized and unrealized gain (loss) | | 2.64 | | | (8.20 | ) | | .69 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 2.70 | | | (7.98 | ) | | .68 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.25 | ) | | (.17 | ) | | – | |
| | | |
Net realized gain | | – | | | (1.53 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.25 | ) | | (1.70 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $11.10 | | | $ 8.65 | | | $18.33 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 32.23 | % | | (47.55 | )% | | 3.85 | %(d) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.68 | % | | 1.62 | % | | .14 | %(d) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.68 | % | | 1.62 | % | | .14 | %(d) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.68 | % | | 1.62 | % | | .14 | %(d) |
| | | |
Net investment income (loss) | | .65 | % | | 1.79 | % | | (.08 | )%(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $1,439 | | | $523 | | | $10 | |
| | | |
Portfolio turnover rate | | 132.22 | % | | 125.37 | % | | 122.32 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
87
Financial Highlights
INTERNATIONAL DIVIDEND INCOME FUND
| | | | | | |
| | | Class A Shares | |
| | | Year
Ended
10/31/2009 | | | 6/23/2008 (a)
to
10/31/2008 | |
Per Share Operating Performance | | | | | | |
Net asset value, beginning of period | | $6.29 | | | $10.00 | |
| | | | | | |
| | |
Investment operations: | | | | | | |
| | |
Net investment income(b) | | .28 | | | .16 | |
| | |
Net realized and unrealized gain (loss) | | 1.90 | | | (3.74 | ) |
| | | | | | |
| | |
Total from investment operations | | 2.18 | | | (3.58 | ) |
| | | | | | |
| | |
Distributions to shareholders from: | | | | | | |
| | |
Net investment income | | (.25 | ) | | (.13 | ) |
| | | | | | |
Net asset value, end of period | | $8.22 | | | $ 6.29 | |
| | | | | | |
| | |
Total Return(c) | | 35.88 | % | | (36.10 | )%(d) |
| | |
Ratios to Average Net Assets: | | | | | | |
| | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.35 | % | | .48 | %(d) |
| | |
Expenses, including expense reductions and expenses reimbursed | | 1.35 | % | | .48 | %(d) |
| | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.63 | % | | .68 | %(d) |
| | |
Net investment income | | 4.08 | % | | 1.98 | %(d) |
| | |
| Supplemental Data: | | | | | | |
Net assets, end of period (000) | | $52,935 | | | $9,075 | |
| | |
Portfolio turnover rate | | 105.74 | % | | 53.94 | % |
| (a) | | Commencement of investment operations was 6/23/2008, SEC effective date was 6/20/2008 and date shares first became available to the public was 6/30/2008. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
88
Financial Highlights (continued)
INTERNATIONAL DIVIDEND INCOME FUND
| | | | | | |
| | | Class C Shares | |
| | | Year
Ended
10/31/2009 | | | 6/23/2008 (a)
to
10/31/2008 | |
Per Share Operating Performance | | | | | | |
Net asset value, beginning of period | | $6.28 | | | $10.00 | |
| | | | | | |
| | |
Investment operations: | | | | | | |
| | |
Net investment income(b) | | .21 | | | .09 | |
| | |
Net realized and unrealized gain (loss) | | 1.92 | | | (3.68 | ) |
| | | | | | |
| | |
Total from investment operations | | 2.13 | | | (3.59 | ) |
| | | | | | |
| | |
Distributions to shareholders from: | | | | | | |
| | |
Net investment income | | (.22 | ) | | (.13 | ) |
| | | | | | |
Net asset value, end of period | | $8.19 | | | $ 6.28 | |
| | | | | | |
| | |
Total Return(c) | | 34.87 | % | | (36.22 | )%(d) |
| | |
Ratios to Average Net Assets: | | | | | | |
| | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.98 | % | | .68 | %(d) |
| | |
Expenses, including expense reductions and expenses reimbursed | | 1.98 | % | | .68 | %(d) |
| | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.26 | % | | 1.44 | %(d) |
| | |
Net investment income | | 2.93 | % | | 1.23 | %(d) |
| | |
| Supplemental Data: | | | | | | |
Net assets, end of period (000) | | $4,376 | | | $177 | |
| | |
Portfolio turnover rate | | 105.74 | % | | 53.94 | % |
| (a) | | Commencement of investment operations was 6/23/2008, SEC effective date was 6/20/2008 and date shares first became available to the public was 6/30/2008. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
89
Financial Highlights (continued)
INTERNATIONAL DIVIDEND INCOME FUND
| | | | | | |
| | | Class F Shares | |
| | | Year
Ended
10/31/2009 | | | 6/23/2008 (a)
to
10/31/2008 | |
Per Share Operating Performance | | | | | | |
Net asset value, beginning of period | | $6.29 | | | $10.00 | |
| | | | | | |
| | |
Investment operations: | | | | | | |
| | |
Net investment income(b) | | .18 | | | .15 | |
| | |
Net realized and unrealized gain (loss) | | 2.02 | | | (3.72 | ) |
| | | | | | |
| | |
Total from investment operations | | 2.20 | | | (3.57 | ) |
| | | | | | |
| | |
Distributions to shareholders from: | | | | | | |
| | |
Net investment income | | (.26 | ) | | (.14 | ) |
| | | | | | |
Net asset value, end of period | | $8.23 | | | $ 6.29 | |
| | | | | | |
| | |
Total Return(c) | | 36.13 | % | | (36.08 | )%(d) |
| | |
Ratios to Average Net Assets: | | | | | | |
| | |
Expenses excluding expense reductions and including expenses reimbursed | | 1.07 | % | | .35 | %(d) |
| | |
Expenses, including expense reductions and expenses reimbursed | | 1.07 | % | | .35 | %(d) |
| | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.39 | % | | 1.53 | %(d) |
| | |
Net investment income | | 2.32 | % | | 1.91 | %(d) |
| | |
| Supplemental Data: | | | | | | |
Net assets, end of period (000) | | $1,772 | | | $28 | |
| | |
Portfolio turnover rate | | 105.74 | % | | 53.94 | % |
| (a) | | Commencement of investment operations was 6/23/2008, SEC effective date was 6/20/2008 and date shares first became available to the public was 6/30/2008. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
90
Financial Highlights (continued)
INTERNATIONAL DIVIDEND INCOME FUND
| | | | | | |
| | | Class I Shares | |
| | | Year
Ended
10/31/2009 | | | 6/23/2008 (a)
to
10/31/2008 | |
Per Share Operating Performance | | | | | | |
Net asset value, beginning of period | | $6.29 | | | $10.00 | |
| | | | | | |
| | |
Investment operations: | | | | | | |
| | |
Net investment income(b) | | .29 | | | .19 | |
| | |
Net realized and unrealized gain (loss) | | 1.93 | | | (3.76 | ) |
| | | | | | |
| | |
Total from investment operations | | 2.22 | | | (3.57 | ) |
| | | | | | |
| | |
Distributions to shareholders from: | | | | | | |
| | |
Net investment income | | (.27 | ) | | (.14 | ) |
| | | | | | |
Net asset value, end of period | | $8.24 | | | $ 6.29 | |
| | | | | | |
| | |
Total Return(c) | | 36.38 | % | | (36.07 | )%(d) |
| | |
Ratios to Average Net Assets: | | | | | | |
| | |
Expenses, excluding expense reductions and including expenses reimbursed | | .99 | % | | .36 | %(d) |
| | |
Expenses, including expense reductions and expenses reimbursed | | .99 | % | | .36 | %(d) |
| | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.28 | % | | .54 | %(d) |
| | |
Net investment income | | 4.13 | % | | 2.19 | %(d) |
| | |
| Supplemental Data: | | | | | | |
Net assets, end of period (000) | | $225,688 | | | $83,413 | |
| | |
Portfolio turnover rate | | 105.74 | % | | 53.94 | % |
| (a) | | Commencement of investment operations was 6/23/2008, SEC effective date was 6/20/2008 and date shares first became available to the public was 6/30/2008. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
91
Financial Highlights (continued)
INTERNATIONAL DIVIDEND INCOME FUND
| | | | | | |
| | | Class R2 Shares | |
| | | Year
Ended
10/31/2009 | | | 6/23/2008 (a)
to
10/31/2008 | |
Per Share Operating Performance | | | | | | |
Net asset value, beginning of period | | $6.30 | | | $10.00 | |
| | | | | | |
| | |
Investment operations: | | | | | | |
| | |
Net investment income(b) | | .31 | | | .18 | |
| | |
Net realized and unrealized gain (loss) | | 1.91 | | | (3.76 | ) |
| | | | | | |
| | |
Total from investment operations | | 2.22 | | | (3.58 | ) |
| | | | | | |
| | |
Distributions to shareholders from: | | | | | | |
| | |
Net investment income | | (.23 | ) | | (.12 | ) |
| | | | | | |
Net asset value, end of period | | $8.29 | | | $ 6.30 | |
| | | | | | |
| | |
Total Return(c) | | 36.26 | % | | (36.08 | )%(d) |
| | |
Ratios to Average Net Assets: | | | | | | |
| | |
Expenses, excluding expense reductions and including expenses reimbursed | | .96 | % | | .50 | %(d) |
| | |
Expenses, including expense reductions and expenses reimbursed | | .96 | % | | .50 | %(d) |
| | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.27 | % | | 2.87 | %(d) |
| | |
Net investment income | | 4.63 | % | | 2.07 | %(d) |
| | |
| Supplemental Data: | | | | | | |
Net assets, end of period (000) | | $9 | | | $6 | |
| | |
Portfolio turnover rate | | 105.74 | % | | 53.94 | % |
| (a) | | Commencement of investment operations was 6/23/2008, SEC effective date was 6/20/2008 and date shares first became available to the public was 6/30/2008. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
92
Financial Highlights (concluded)
INTERNATIONAL DIVIDEND INCOME FUND
| | | | | | |
| | | Class R3 Shares | |
| | | Year
Ended
10/31/2009 | | | 6/23/2008 (a)
to
10/31/2008 | |
Per Share Operating Performance | | | | | | |
Net asset value, beginning of period | | $6.30 | | | $10.00 | |
| | | | | | |
| | |
Investment operations: | | | | | | |
| | |
Net investment income(b) | | .31 | | | .18 | |
| | |
Net realized and unrealized gain (loss) | | 1.91 | | | (3.75 | ) |
| | | | | | |
| | |
Total from investment operations | | 2.22 | | | (3.57 | ) |
| | | | | | |
| | |
Distributions to shareholders from: | | | | | | |
| | |
Net investment income | | (.24 | ) | | (.13 | ) |
| | | | | | |
Net asset value, end of period | | $8.28 | | | $ 6.30 | |
| | | | | | |
| | |
Total Return(c) | | 36.22 | % | | (36.06 | )%(d) |
| | |
Ratios to Average Net Assets: | | | | | | |
| | |
Expenses, excluding expense reductions and including expenses reimbursed | | .96 | % | | .46 | %(d) |
| | |
Expenses, including expense reductions and expenses reimbursed | | .96 | % | | .46 | %(d) |
| | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.27 | % | | 2.84 | %(d) |
| | |
Net investment income | | 4.62 | % | | 2.10 | %(d) |
| | |
| Supplemental Data: | | | | | | |
Net assets, end of period (000) | | $9 | | | $6 | |
| | |
Portfolio turnover rate | | 105.74 | % | | 53.94 | % |
| (a) | | Commencement of investment operations was 6/23/2008, SEC effective date was 6/20/2008 and date shares first became available to the public was 6/30/2008. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
93
Financial Highlights
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 7.29 | | | $19.81 | | | $15.72 | | | $11.97 | | | $ 9.61 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)(a) | | .04 | | | .09 | | | .04 | | | .05 | | | (.01 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 3.42 | | | (10.36 | ) | | 4.07 | | | 3.70 | | | 2.37 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 3.46 | | | (10.27 | ) | | 4.11 | | | 3.75 | | | 2.36 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.05 | ) | | (.08 | ) | | (.02 | ) | | – | | | – | |
| | | | | |
Net realized gain | | – | | | (2.17 | ) | | – | | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.05 | ) | | (2.25 | ) | | (.02 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $10.70 | | | $ 7.29 | | | $19.81 | | | $15.72 | | | $11.97 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 47.94 | % | | (57.81 | )% | | 26.14 | % | | 31.33 | % | | 24.56 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.77 | % | | 1.60 | % | | 1.56 | % | | 1.60 | % | | 1.74 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.77 | % | | 1.61 | % | | 1.56 | % | | 1.60 | % | | 1.74 | % |
| | | | | |
Net investment income (loss) | | .50 | % | | .65 | % | | .23 | % | | .38 | % | | (.11 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $92,188 | | | $67,815 | | | $200,909 | | | $148,996 | | | $89,402 | |
| | | | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % | | 98.16 | % | | 78.65 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
94
Financial Highlights (continued)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | | | | | | | |
| | | Class B Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 6.92 | | | $18.96 | | | $15.12 | | | $11.59 | | | $ 9.37 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.01 | ) | | – | (b) | | (.07 | ) | | (.04 | ) | | (.08 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 3.26 | | | (9.87 | ) | | 3.91 | | | 3.57 | | | 2.30 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 3.25 | | | (9.87 | ) | | 3.84 | | | 3.53 | | | 2.22 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net realized gain | | – | | | (2.17 | ) | | – | | | – | | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $10.17 | | | $ 6.92 | | | $18.96 | | | $15.12 | | | $11.59 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 46.97 | % | | (58.10 | )% | | 25.40 | % | | 30.46 | % | | 23.69 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 2.42 | % | | 2.25 | % | | 2.21 | % | | 2.24 | % | | 2.38 | % |
| | | | | |
Expenses, excluding expense reductions | | 2.42 | % | | 2.26 | % | | 2.21 | % | | 2.24 | % | | 2.39 | % |
| | | | | |
Net investment loss | | (.15 | )% | | (.01 | )% | | (.43 | )% | | (.30 | )% | | (.76 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $17,103 | | | $14,192 | | | $43,231 | | | $36,642 | | | $27,115 | |
| | | | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % | | 98.16 | % | | 78.65 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
95
Financial Highlights (continued)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | | | | | | | |
| | | Class C Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 6.88 | | | $18.86 | | | $15.05 | | | $11.54 | | | $ 9.32 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)(a) | | (.01 | ) | | — | (b) | | (.07 | ) | | (.04 | ) | | (.08 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 3.25 | | | (9.81 | ) | | 3.88 | | | 3.55 | | | 2.30 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 3.24 | | | (9.81 | ) | | 3.81 | | | 3.51 | | | 2.22 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net realized gain | | – | | | (2.17 | ) | | – | | | – | | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $10.12 | | | $ 6.88 | | | $18.86 | | | $15.05 | | | $11.54 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 47.09 | % | | (58.09 | )% | | 25.32 | % | | 30.42 | % | | 23.82 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 2.42 | % | | 2.25 | % | | 2.21 | % | | 2.24 | % | | 2.38 | % |
| | | | | |
Expenses, excluding expense reductions | | 2.42 | % | | 2.26 | % | | 2.21 | % | | 2.25 | % | | 2.39 | % |
| | | | | |
Net investment income (loss) | | (.14 | )% | | .00 | %(d) | | (.40 | )% | | (.27 | )% | | (.75 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $21,668 | | | $15,297 | | | $43,422 | | | $30,673 | | | $17,621 | |
| | | | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % | | 98.16 | % | | 78.65 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
| (d) | | Amount is less than .01%. |
See Notes to Financial Statements.
96
Financial Highlights (continued)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | |
| | | Class F Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 7.28 | | | $19.81 | | | $18.82 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income(b) | | .09 | | | .09 | | | .01 | |
| | | |
Net realized and unrealized gain (loss) | | 3.37 | | | (10.31 | ) | | .98 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 3.46 | | | (10.22 | ) | | .99 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.09 | ) | | (.14 | ) | | – | |
| | | |
Net realized gain | | – | | | (2.17 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.09 | ) | | (2.31 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $10.65 | | | $ 7.28 | | | $19.81 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 48.36 | % | | (57.70 | )% | | 5.26 | %(d) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, including expense reductions | | 1.49 | % | | 1.42 | % | | .13 | %(d) |
| | | |
Expenses, excluding expense reductions | | 1.49 | % | | 1.43 | % | | .13 | %(d) |
| | | |
Net investment income | | 1.00 | % | | .84 | % | | .03 | %(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $384 | | | $121 | | | $11 | |
| | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
97
Financial Highlights (continued)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 7.48 | | | $20.29 | | | $16.08 | | | $12.21 | | | $ 9.77 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .08 | | | .14 | | | .12 | | | .11 | | | .02 | |
| | | | | |
Net realized and unrealized gain (loss) | | 3.50 | | | (10.64 | ) | | 4.15 | | | 3.76 | | | 2.43 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 3.58 | | | (10.50 | ) | | 4.27 | | | 3.87 | | | 2.45 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.10 | ) | | (.14 | ) | | (.06 | ) | | – | | | (.01 | ) |
| | | | | |
Net realized gain | | – | | | (2.17 | ) | | – | | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.10 | ) | | (2.31 | ) | | (.06 | ) | | – | | | (.01 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $10.96 | | | $ 7.48 | | | $20.29 | | | $16.08 | | | $12.21 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 48.47 | % | | (57.66 | )% | | 26.67 | % | | 31.70 | % | | 25.06 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.42 | % | | 1.27 | % | | 1.20 | % | | 1.25 | % | | 1.38 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.42 | % | | 1.27 | % | | 1.21 | % | | 1.25 | % | | 1.39 | % |
| | | | | |
Net investment income | | .87 | % | | 1.05 | % | | .65 | % | | .76 | % | | .22 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $160,456 | | | $110,838 | | | $164,086 | | | $149,509 | | | $67,574 | |
| | | | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % | | 98.16 | % | | 78.65 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
98
Financial Highlights (continued)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | | | | | | | |
| | | Class P Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 7.36 | | | $20.00 | | | $15.89 | | | $12.11 | | | $ 9.71 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)(a) | | .03 | | | .07 | | | .02 | | | .09 | | | (.01 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 3.48 | | | (10.46 | ) | | 4.12 | | | 3.69 | | | 2.41 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 3.51 | | | (10.39 | ) | | 4.14 | | | 3.78 | | | 2.40 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.01 | ) | | (.08 | ) | | (.03 | ) | | – | | | – | |
| | | | | |
Net realized gain | | – | | | (2.17 | ) | | – | | | – | | | – | |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.01 | ) | | (2.25 | ) | | (.03 | ) | | – | | | – | |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $10.86 | | | $ 7.36 | | | $20.00 | | | $15.89 | | | $12.11 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 47.86 | % | | (57.86 | )% | | 26.10 | % | | 31.21 | % | | 24.72 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, including expense reductions | | 1.87 | % | | 1.70 | % | | 1.65 | % | | 1.74 | % | | 1.69 | % |
| | | | | |
Expenses, excluding expense reductions | | 1.87 | % | | 1.71 | % | | 1.65 | % | | 1.74 | % | | 1.69 | % |
| | | | | |
Net investment income (loss) | | .36 | % | | .55 | % | | .11 | % | | .62 | % | | (.06 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $781 | | | $834 | | | $1,826 | | | $1,489 | | | $3 | |
| | | | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % | | 98.16 | % | | 78.65 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
99
Financial Highlights (continued)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | |
| | | Class R2 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 7.24 | | | $19.80 | | | $18.82 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income(b) | | .03 | | | .06 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 3.40 | | | (10.32 | ) | | .98 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 3.43 | | | (10.26 | ) | | .98 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.03 | ) | | (.13 | ) | | – | |
| | | |
Net realized gain | | – | | | (2.17 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.03 | ) | | (2.30 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $10.64 | | | $ 7.24 | | | $19.80 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 47.69 | % | | (57.93 | )% | | 5.21 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, including expense reductions | | 1.97 | % | | 1.84 | % | | .16 | %(e) |
| | | |
Expenses, excluding expense reductions | | 1.97 | % | | 1.84 | % | | .16 | %(e) |
| | | |
Net investment income | | .34 | % | | .51 | % | | .00 | %(e)(f) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $91 | | | $31 | | | $11 | |
| | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
| (f) | | Amount is less than .01%. |
See Notes to Financial Statements.
100
Financial Highlights (concluded)
INTERNATIONAL OPPORTUNITIES FUND
| | | | | | | | | |
| | | Class R3 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 7.27 | | | $19.81 | | | $18.82 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income(b) | | .01 | | | .10 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 3.41 | | | (10.34 | ) | | .99 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 3.42 | | | (10.24 | ) | | .99 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.09 | ) | | (.13 | ) | | – | |
| | | |
Net realized gain | | – | | | (2.17 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.09 | ) | | (2.30 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $10.60 | | | $ 7.27 | | | $19.81 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 47.75 | % | | (57.77 | )% | | 5.26 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, including expense reductions | | 1.81 | % | | 1.52 | % | | .15 | %(e) |
| | | |
Expenses, excluding expense reductions | | 1.81 | % | | 1.52 | % | | .15 | %(e) |
| | | |
Net investment income | | .14 | % | | .81 | % | | .00 | %(e)(f) |
|
| Supplemental Data: | |
Net assets, end of period (000) | | $573 | | | $22 | | | $11 | |
| | | |
Portfolio turnover rate | | 115.58 | % | | 130.51 | % | | 115.79 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
| (f) | | Amount is less than .01%. |
See Notes to Financial Statements.
101
Financial Highlights
LARGE CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.48 | | | $15.47 | | | $14.19 | | | $12.38 | | | $11.80 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .07 | | | .14 | | | .19 | | | .17 | | | .14 | |
| | | | | |
Net realized and unrealized gain (loss) | | .20 | | | (4.92 | ) | | 1.58 | | | 2.05 | | | .71 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | .27 | | | (4.78 | ) | | 1.77 | | | 2.22 | | | .85 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.14 | ) | | (.20 | ) | | (.17 | ) | | (.12 | ) | | (.11 | ) |
| | | | | |
Net realized gain | | – | | | (2.01 | ) | | (.32 | ) | | (.29 | ) | | (.16 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.14 | ) | | (2.21 | ) | | (.49 | ) | | (.41 | ) | | (.27 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $8.61 | | | $ 8.48 | | | $15.47 | | | $14.19 | | | $12.38 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 3.77 | % | | (35.16 | )% | | 12.95 | % | | 18.40 | % | | 7.23 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.16 | % | | .95 | % | | .95 | % | | .95 | % | | .95 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.16 | % | | .95 | % | | .95 | % | | .95 | % | | .95 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.27 | % | | 1.25 | % | | 1.16 | % | | 1.28 | % | | 1.50 | % |
| | | | | |
Net investment income | | .87 | % | | 1.24 | % | | 1.30 | % | | 1.26 | % | | 1.14 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $27,444 | | | $21,010 | | | $28,538 | | | $20,994 | | | $13,763 | |
| | | | | |
Portfolio turnover rate | | 103.30 | % | | 126.70 | % | | 109.22 | % | | 42.16 | % | | 54.12 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
102
Financial Highlights (continued)
LARGE CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class B Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.30 | | | $15.18 | | | $13.96 | | | $12.19 | | | $11.67 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .02 | | | .07 | | | .09 | | | .08 | | | .06 | |
| | | | | |
Net realized and unrealized gain (loss) | | .22 | | | (4.83 | ) | | 1.56 | | | 2.03 | | | .69 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | .24 | | | (4.76 | ) | | 1.65 | | | 2.11 | | | .75 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.07 | ) | | (.11 | ) | | (.11 | ) | | (.04 | ) | | (.07 | ) |
| | | | | |
Net realized gain | | – | | | (2.01 | ) | | (.32 | ) | | (.30 | ) | | (.16 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.07 | ) | | (2.12 | ) | | (.43 | ) | | (.34 | ) | | (.23 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $8.47 | | | $ 8.30 | | | $15.18 | | | $13.96 | | | $12.19 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 3.19 | % | | (35.60 | )% | | 12.23 | % | | 17.65 | % | | 6.49 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.79 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.79 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.91 | % | | 1.90 | % | | 1.81 | % | | 1.93 | % | | 2.11 | % |
| | | | | |
Net investment income | | .30 | % | | .59 | % | | .65 | % | | .60 | % | | .49 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $2,558 | | | $2,549 | | | $4,005 | | | $3,109 | | | $1,749 | |
| | | | | |
Portfolio turnover rate | | 103.30 | % | | 126.70 | % | | 109.22 | % | | 42.16 | % | | 54.12 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
103
Financial Highlights (continued)
LARGE CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class C Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.30 | | | $15.19 | | | $13.95 | | | $12.20 | | | $11.69 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .02 | | | .06 | | | .09 | | | .08 | | | .06 | |
| | | | | |
Net realized and unrealized gain (loss) | | .23 | | | (4.83 | ) | | 1.57 | | | 2.02 | | | .70 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | .25 | | | (4.77 | ) | | 1.66 | | | 2.10 | | | .76 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.08 | ) | | (.11 | ) | | (.10 | ) | | (.05 | ) | | (.09 | ) |
| | | | | |
Net realized gain | | – | | | (2.01 | ) | | (.32 | ) | | (.30 | ) | | (.16 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.08 | ) | | (2.12 | ) | | (.42 | ) | | (.35 | ) | | (.25 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $8.47 | | | $ 8.30 | | | $15.19 | | | $13.95 | | | $12.20 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 3.30 | % | | (35.64 | )% | | 12.29 | % | | 17.58 | % | | 6.50 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.81 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.81 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % | | 1.60 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.91 | % | | 1.90 | % | | 1.81 | % | | 1.93 | % | | 2.18 | % |
| | | | | |
Net investment income | | .22 | % | | .58 | % | | .65 | % | | .61 | % | | .46 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $5,654 | | | $4,266 | | | $6,643 | | | $4,753 | | | $3,155 | |
| | | | | |
Portfolio turnover rate | | 103.30 | % | | 126.70 | % | | 109.22 | % | | 42.16 | % | | 54.12 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
104
Financial Highlights (continued)
LARGE CAP VALUE FUND
| | | | | | | | | |
| | | Class F Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a)
to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $8.47 | | | $15.47 | | | $15.32 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income(b) | | .05 | | | .17 | | | .02 | |
| | | |
Net realized and unrealized gain (loss) | | .23 | | | (4.91 | ) | | .13 | |
| | | | | | | | | |
| | | |
Total from investment operations | | .28 | | | (4.74 | ) | | .15 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.17 | ) | | (.25 | ) | | – | |
| | | |
Net realized gain | | – | | | (2.01 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.17 | ) | | (2.26 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $8.58 | | | $ 8.47 | | | $15.47 | |
| | | | | | | | | |
| | | |
Total Return(c) | | 4.00 | % | | (35.00 | )% | | .98 | %(d) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.03 | % | | .68 | % | | .06 | %(d) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.03 | % | | .68 | % | | .06 | %(d) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.05 | % | | .98 | % | | .07 | %(d) |
| | | |
Net investment income | | .62 | % | | 1.64 | % | | .12 | %(d) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $202 | | | $27 | | | $10 | |
| | | |
Portfolio turnover rate | | 103.30 | % | | 126.70 | % | | 109.22 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
105
Financial Highlights (continued)
LARGE CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.54 | | | $15.58 | | | $14.27 | | | $12.44 | | | $11.85 | |
| | | | | | | | | | | | | | | |
|
Investment operations: | |
| | | | | |
Net investment income(a) | | .10 | | | .18 | | | .24 | | | .21 | | | .17 | |
| | | | | |
Net realized and unrealized gain (loss) | | .19 | | | (4.96 | ) | | 1.60 | | | 2.07 | | | .72 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | .29 | | | (4.78 | ) | | 1.84 | | | 2.28 | | | .89 | |
| | | | | | | | | | | | | | | |
|
Distributions to shareholders from: | |
| | | | | |
Net investment income | | (.17 | ) | | (.25 | ) | | (.21 | ) | | (.15 | ) | | (.14 | ) |
| | | | | |
Net realized gain | | – | | | (2.01 | ) | | (.32 | ) | | (.30 | ) | | (.16 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.17 | ) | | (2.26 | ) | | (.53 | ) | | (.45 | ) | | (.30 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $8.66 | | | $ 8.54 | | | $15.58 | | | $14.27 | | | $12.44 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 4.16 | % | | (34.99 | )% | | 13.40 | % | | 18.83 | % | | 7.58 | % |
|
Ratios to Average Net Assets: | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | .79 | % | | .60 | % | | .60 | % | | .60 | % | | .60 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | .79 | % | | .60 | % | | .60 | % | | .60 | % | | .60 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | .92 | % | | .90 | % | | .81 | % | | .93 | % | | 1.18 | % |
| | | | | |
Net investment income | | 1.35 | % | | 1.62 | % | | 1.67 | % | | 1.61 | % | | 1.37 | % |
|
| Supplemental Data: | |
Net assets, end of year (000) | | $11,207 | | | $17,199 | | | $22,423 | | | $30,156 | | | $19,576 | |
| | | | | |
Portfolio turnover rate | | 103.30 | % | | 126.70 | % | | 109.22 | % | | 42.16 | % | | 54.12 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
106
Financial Highlights (concluded)
LARGE CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class P Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $8.50 | | | $15.49 | | | $14.19 | | | $12.38 | | | $11.80 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income(a) | | .07 | | | .13 | | | .18 | | | .15 | | | .13 | |
| | | | | |
Net realized and unrealized gain (loss) | | .20 | | | (4.92 | ) | | 1.59 | | | 2.05 | | | .70 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | .27 | | | (4.79 | ) | | 1.77 | | | 2.20 | | | .83 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | (.13 | ) | | (.19 | ) | | (.15 | ) | | (.10 | ) | | (.09 | ) |
| | | | | |
Net realized gain | | – | | | (2.01 | ) | | (.32 | ) | | (.29 | ) | | (.16 | ) |
| | | | | | | | | | | | | | | |
| | | | | |
Total distributions | | (.13 | ) | | (2.20 | ) | | (.47 | ) | | (.39 | ) | | (.25 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $8.64 | | | $ 8.50 | | | $15.49 | | | $14.19 | | | $12.38 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 3.67 | % | | (35.20 | )% | | 12.92 | % | | 18.23 | % | | 7.07 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.23 | % | | 1.03 | % | | 1.04 | % | | 1.05 | % | | 1.05 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.23 | % | | 1.03 | % | | 1.04 | % | | 1.05 | % | | 1.05 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.34 | % | | 1.34 | % | | 1.26 | % | | 1.38 | % | | 1.52 | % |
| | | | | |
Net investment income | | .90 | % | | 1.16 | % | | 1.21 | % | | 1.17 | % | | 1.06 | % |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $11 | | | $11 | | | $17 | | | $15 | | | $13 | |
| | | | | |
Portfolio turnover rate | | 103.30 | % | | 126.70 | % | | 109.22 | % | | 42.16 | % | | 54.12 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
107
Financial Highlights
VALUE OPPORTUNITIES FUND
| | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | | | 12/20/2005(a) to
10/31/2006 | |
| | | 2009 | | | 2008 | | | 2007 | | |
Per Share Operating Performance | | | | | | | | | | | | |
Net asset value, beginning of period | | $ 9.91 | | | $14.31 | | | $12.43 | | | $10.00 | |
| | | | | | | | | | | | |
| | | | |
Investment operations: | | | | | | | | | | | | |
| | | | |
Net investment income (loss)(b) | | (.04 | ) | | .04 | | | .03 | | | .01 | |
| | | | |
Net realized and unrealized gain (loss) | | 1.80 | | | (3.92 | ) | | 2.23 | | | 2.42 | |
| | | | | | | | | | | | |
| | | | |
Total from investment operations | | 1.76 | | | (3.88 | ) | | 2.26 | | | 2.43 | |
| | | | | | | | | | | | |
| | | | |
Distributions to shareholders from: | | | | | | | | | | | | |
| | | | |
Net investment income | | (.02 | ) | | (.01 | ) | | – | (c) | | – | |
| | | | |
Net realized gain | | – | | | (.51 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
| | | | |
Total distributions | | (.02 | ) | | (.52 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
Net asset value, end of period | | $11.65 | | | $ 9.91 | | | $14.31 | | | $12.43 | |
| | | | | | | | | | | | |
| | | | |
Total Return(d) | | 17.81 | % | | (28.01 | )% | | 18.70 | % | | 24.30 | %(e) |
| | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | |
| | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.35 | % | | 1.34 | % | | 1.30 | % | | 1.11 | %(e) |
| | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.35 | % | | 1.33 | % | | 1.30 | % | | 1.11 | %(e) |
| | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.46 | % | | 1.44 | % | | 1.45 | % | | 1.73 | %(f) |
| | | | |
Net investment income (loss) | | (.34 | )% | | .33 | % | | .19 | % | | .14 | %(f) |
| | | | |
| Supplemental Data: | | | | | | | | | | | | |
Net assets, end of period (000) | | $250,435 | | | $117,992 | | | $145,765 | | | $59,245 | |
| | | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % | | 296.82 | % |
| (a) | | Commencement of investment operations and SEC effective date was 12/20/2005 and date shares first became available to the public was 1/3/2006. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
108
Financial Highlights (continued)
VALUE OPPORTUNITIES FUND
| | | | | | | | | | | | |
| | | Class B Shares | |
| | | Year Ended 10/31 | | | 12/20/2005(a)
to
10/31/2006 | |
| | | 2009 | | | 2008 | | | 2007 | | |
Per Share Operating Performance | | | | | | | | | | | | |
Net asset value, beginning of period | | $ 9.74 | | | $14.14 | | | $12.37 | | | $10.00 | |
| | | | | | | | | | | | |
| | | | |
Investment operations: | | | | | | | | | | | | |
| | | | |
Net investment loss(b) | | (.09 | ) | | (.04 | ) | | (.06 | ) | | (.06 | ) |
| | | | |
Net realized and unrealized gain (loss) | | 1.74 | | | (3.85 | ) | | 2.21 | | | 2.43 | |
| | | | | | | | | | | | |
| | | | |
Total from investment operations | | 1.65 | | | (3.89 | ) | | 2.15 | | | 2.37 | |
| | | | | | | | | | | | |
| | | | |
Distributions to shareholders from: | | | | | | | | | | | | |
| | | | |
Net realized gain | | – | | | (.51 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
Net asset value, end of period | | $11.39 | | | $ 9.74 | | | $14.14 | | | $12.37 | |
| | | | | | | | | | | | |
| | | | |
Total Return(c) | | 16.94 | % | | (28.40 | )% | | 17.87 | % | | 23.70 | %(d) |
| | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | |
| | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 2.00 | % | | 1.99 | % | | 1.94 | % | | 1.67 | %(d) |
| | | | |
Expenses, including expense reductions and expenses reimbursed | | 2.00 | % | | 1.99 | % | | 1.94 | % | | 1.67 | %(d) |
| | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.12 | % | | 2.09 | % | | 2.09 | % | | 2.30 | %(e) |
| | | | |
Net investment loss | | (.95 | )% | | (.32 | )% | | (.47 | )% | | (.53 | )%(e) |
| | | | |
| Supplemental Data: | | | | | | | | | | | | |
Net assets, end of period (000) | | $18,739 | | | $14,239 | | | $14,681 | | | $5,440 | |
| | | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % | | 296.82 | % |
| (a) | | Commencement of investment operations and SEC effective date was 12/20/2005 and date shares first became available to the public was 1/3/2006. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
109
Financial Highlights (continued)
VALUE OPPORTUNITIES FUND
| | | | | | | | | | | | |
| | | Class C Shares | |
| | | Year Ended 10/31 | | | 12/20/2005(a)
to
10/31/2006 | |
| | | 2009 | | | 2008 | | | 2007 | | |
Per Share Operating Performance | | | | | | | | | | | | |
Net asset value, beginning of period | | $ 9.74 | | | $14.14 | | | $12.37 | | | $10.00 | |
| | | | | | | | | | | | |
| | | | |
Investment operations: | | | | | | | | | | | | |
| | | | |
Net investment loss(b) | | (.10 | ) | | (.04 | ) | | (.06 | ) | | (.06 | ) |
| | | | |
Net realized and unrealized gain (loss) | | 1.75 | | | (3.85 | ) | | 2.21 | | | 2.43 | |
| | | | | | | | | | | | |
| | | | |
Total from investment operations | | 1.65 | | | (3.89 | ) | | 2.15 | | | 2.37 | |
| | | | | | | | | | | | |
| | | | |
Distributions to shareholders from: | | | | | | | | | | | | |
| | | | |
Net realized gain | | – | | | (.51 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
Net asset value, end of period | | $11.39 | | | $ 9.74 | | | $14.14 | | | $12.37 | |
| | | | | | | | | | | | |
| | | | |
Total Return(c) | | 17.06 | % | | (28.47 | )% | | 17.87 | % | | 23.70 | %(d) |
| | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | |
| | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 2.00 | % | | 1.99 | % | | 1.94 | % | | 1.67 | %(d) |
| | | | |
Expenses, including expense reductions and expenses reimbursed | | 2.00 | % | | 1.98 | % | | 1.94 | % | | 1.67 | %(d) |
| | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.11 | % | | 2.09 | % | | 2.10 | % | | 2.29 | %(e) |
| | | | |
Net investment loss | | (.97 | )% | | (.33 | )% | | (.48 | )% | | (.53 | )%(e) |
| | | | |
| Supplemental Data: | | | | | | | | | | | | |
Net assets, end of period (000) | | $79,527 | | | $48,837 | | | $59,609 | | | $14,850 | |
| | | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % | | 296.82 | % |
| (a) | | Commencement of investment operations and SEC effective date was 12/20/2005 and date shares first became available to the public was 1/3/2006. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
110
Financial Highlights (continued)
VALUE OPPORTUNITIES FUND
| | | | | | | | | |
| | | Class F Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a) to
10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 9.91 | | | $14.31 | | | $14.21 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | (.02 | ) | | .06 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 1.78 | | | (3.91 | ) | | .10 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 1.76 | | | (3.85 | ) | | .10 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.05 | ) | | (.04 | ) | | – | |
| | | |
Net realized gain | | – | | | (.51 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.05 | ) | | (.55 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $11.62 | | | $ 9.91 | | | $14.31 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 18.12 | % | | (27.81 | )% | | .70 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.09 | % | | 1.09 | % | | .10 | %(e) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.09 | % | | 1.09 | % | | .10 | %(e) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.20 | % | | 1.21 | % | | .14 | %(e) |
| | | |
Net investment income (loss) | | (.19 | )% | | .50 | % | | .00 | %(e)(f) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $51,757 | | | $4,157 | | | $10 | |
| | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
| (f) | | Amount is less than .01%. |
See Notes to Financial Statements.
111
Financial Highlights (continued)
VALUE OPPORTUNITIES FUND
| | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | | | 12/20/2005(a)
to 10/31/2006 | |
| | | 2009 | | | 2008 | | | 2007 | | |
Per Share Operating Performance | | | | | | | | | | | | |
Net asset value, beginning of period | | $ 9.98 | | | $14.39 | | | $12.47 | | | $10.00 | |
| | | | | | | | | | | | |
| | | | |
Investment operations: | | | | | | | | | | | | |
| | | | |
Net investment income(b) | | – | (c) | | .08 | | | .06 | | | .05 | |
| | | | |
Net realized and unrealized gain (loss) | | 1.78 | | | (3.93 | ) | | 2.26 | | | 2.42 | |
| | | | | | | | | | | | |
| | | | |
Total from investment operations | | 1.78 | | | (3.85 | ) | | 2.32 | | | 2.47 | |
| | | | | | | | | | | | |
| | | | |
Distributions to shareholders from: | | | | | | | | | | | | |
| | | | |
Net investment income | | (.06 | ) | | (.05 | ) | | (.02 | ) | | – | |
| | | | |
Net realized gain | | – | | | (.51 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
| | | | |
Total distributions | | (.06 | ) | | (.56 | ) | | (.40 | ) | | – | |
| | | | | | | | | | | | |
Net asset value, end of period | | $11.70 | | | $ 9.98 | | | $14.39 | | | $12.47 | |
| | | | | | | | | | | | |
| | | | |
Total Return(d) | | 18.27 | % | | (27.77 | )% | | 19.11 | % | | 24.70 | %(e) |
| | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | |
| | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.00 | % | | .99 | % | | .94 | % | | .81 | %(e) |
| | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.00 | % | | .98 | % | | .94 | % | | .81 | %(e) |
| | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.12 | % | | 1.08 | % | | 1.15 | % | | 1.53 | %(f) |
| | | | |
Net investment income | | .03 | % | | .67 | % | | .46 | % | | .53 | %(f) |
| | | | |
| Supplemental Data: | | | | | | | | | | | | |
Net assets, end of period (000) | | $121,462 | | | $74,335 | | | $55,045 | | | $3,345 | |
| | | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % | | 296.82 | % |
| (a) | | Commencement of investment operations and SEC effective date was 12/20/2005 and date shares first became available to the public was 1/3/2006. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
112
Financial Highlights (continued)
VALUE OPPORTUNITIES FUND
| | | | | | | | | | | | |
| | | Class P Shares | |
| | | Year Ended 10/31 | | | 12/20/2005(a) to 10/31/2006 | |
| | | 2009 | | | 2008 | | | 2007 | | |
Per Share Operating Performance | | | | | | | | | | | | |
Net asset value, beginning of period | | $ 9.88 | | | $14.28 | | | $12.42 | | | $10.00 | |
| | | | | | | | | | | | |
| | | | |
Investment operations: | | | | | | | | | | | | |
| | | | |
Net investment income (loss)(b) | | (.04 | ) | | .03 | | | – | (c) | | .02 | |
| | | | |
Net realized and unrealized gain (loss) | | 1.78 | | | (3.91 | ) | | 2.24 | | | 2.40 | |
| | | | | | | | | | | | |
| | | | |
Total from investment operations | | 1.74 | | | (3.88 | ) | | 2.24 | | | 2.42 | |
| | | | | | | | | | | | |
| | | | |
Distributions to shareholders from: | | | | | | | | | | | | |
| | | | |
Net investment income | | – | | | (.01 | ) | | – | | | – | |
| | | | |
Net realized gain | | – | | | (.51 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
| | | | |
Total distributions | | – | | | (.52 | ) | | (.38 | ) | | – | |
| | | | | | | | | | | | |
Net asset value, end of period | | $11.62 | | | $ 9.88 | | | $14.28 | | | $12.42 | |
| | | | | | | | | | | | |
| | | | |
Total Return(d) | | 17.61 | % | | (28.04 | )% | | 18.54 | % | | 24.20 | %(e) |
| | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | |
| | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.45 | % | | 1.44 | % | | 1.39 | % | | 1.20 | %(e) |
| | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.45 | % | | 1.43 | % | | 1.39 | % | | 1.20 | %(e) |
| | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.57 | % | | 1.53 | % | | 1.57 | % | | 3.09 | %(f) |
| | | | |
Net investment income (loss) | | (.39 | )% | | .23 | % | | .01 | % | | .27 | %(f) |
| | | | |
| Supplemental Data: | | | | | | | | | | | | |
Net assets, end of period (000) | | $3,445 | | | $2,905 | | | $4,795 | | | $12 | |
| | | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % | | 296.82 | % |
| (a) | | Commencement of investment operations and SEC effective date was 12/20/2005 and date shares first became available to the public was 1/3/2006. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
113
Financial Highlights (continued)
VALUE OPPORTUNITIES FUND
| | | | | | | | | |
| | | Class R2 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a) to 10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 9.87 | | | $14.30 | | | $14.21 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | (.09 | ) | | .01 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 1.81 | | | (3.90 | ) | | .09 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 1.72 | | | (3.89 | ) | | .09 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | – | | | (.03 | ) | | – | |
| | | |
Net realized gain | | – | | | (.51 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | – | | | (.54 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $11.59 | | | $ 9.87 | | | $14.30 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 17.53 | % | | (28.14 | )% | | .63 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.59 | % | | 1.58 | % | | .12 | %(e) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.59 | % | | 1.58 | % | | .12 | %(e) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.68 | % | | 1.66 | % | | .16 | %(e) |
| | | |
Net investment income (loss) | | (.83 | )% | | .11 | % | | (.02 | )%(e) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $1,466 | | | $33 | | | $10 | |
| | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
114
Financial Highlights (concluded)
VALUE OPPORTUNITIES FUND
| | | | | | | | | |
| | | Class R3 Shares | |
| | | Year Ended 10/31 | | | 9/28/2007(a) to 10/31/2007 | |
| | | 2009 | | | 2008 | | |
Per Share Operating Performance | | | | | | | | | |
Net asset value, beginning of period | | $ 9.87 | | | $14.30 | | | $14.21 | |
| | | | | | | | | |
| | | |
Investment operations: | | | | | | | | | |
| | | |
Net investment income (loss)(b) | | (.05 | ) | | .02 | | | – | (c) |
| | | |
Net realized and unrealized gain (loss) | | 1.78 | | | (3.90 | ) | | .09 | |
| | | | | | | | | |
| | | |
Total from investment operations | | 1.73 | | | (3.88 | ) | | .09 | |
| | | | | | | | | |
| | | |
Distributions to shareholders from: | | | | | | | | | |
| | | |
Net investment income | | (.02 | ) | | (.04 | ) | | – | |
| | | |
Net realized gain | | – | | | (.51 | ) | | – | |
| | | | | | | | | |
| | | |
Total distributions | | (.02 | ) | | (.55 | ) | | – | |
| | | | | | | | | |
Net asset value, end of period | | $11.58 | | | $ 9.87 | | | $14.30 | |
| | | | | | | | | |
| | | |
Total Return(d) | | 17.69 | % | | (28.08 | )% | | .63 | %(e) |
| | | |
Ratios to Average Net Assets: | | | | | | | | | |
| | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.49 | % | | 1.49 | % | | .12 | %(e) |
| | | |
Expenses, including expense reductions and expenses reimbursed | | 1.49 | % | | 1.48 | % | | .12 | %(e) |
| | | |
Expenses, excluding expense reductions and expenses reimbursed | | 1.61 | % | | 1.58 | % | | .16 | %(e) |
| | | |
Net investment income (loss) | | (.50 | )% | | .19 | % | | (.02 | )%(e) |
| | | |
| Supplemental Data: | | | | | | | | | |
Net assets, end of period (000) | | $4,227 | | | $1,814 | | | $10 | |
| | | |
Portfolio turnover rate | | 77.87 | % | | 83.92 | % | | 100.58 | % |
| (a) | | Commencement of investment operations was 9/28/2007, SEC effective date was 9/14/2007 and date shares first became available to the public was 10/1/2007. |
| (b) | | Calculated using average shares outstanding during the period. |
| (c) | | Amount is less than $.01. |
| (d) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
115
Notes to Financial Statements
1. ORGANIZATION
Lord Abbett Securities Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company and was organized as a Delaware statutory trust on February 26, 1993. The Trust currently consists of nine funds. This report covers the following seven funds (separately, a “Fund” and collectively, the “Funds”) and their respective classes: Lord Abbett Alpha Strategy Fund (“Alpha Strategy Fund”), Class A, B, C, F, I, P, R2 and R3 shares; Lord Abbett Fundamental Equity Fund (“Fundamental Equity Fund,” formerly, “All Value Fund”), Class A, B, C, F, I, P, R2 and R3 shares; Lord Abbett International Core Equity Fund (“International Core Equity Fund”), Class A, B, C, F, I, P, R2 and R3 shares; Lord Abbett International Dividend Income Fund (“International Dividend Income Fund”), Class A, B, C, F, I, R2 and R3 shares; Lord Abbett International Opportunities Fund (“International Opportunities Fund”), Class A, B, C, F, I, P, R2 and R3 shares; Lord Abbett Large-Cap Value Fund (“Large Cap Value Fund”), Class A, B, C, F, I, P, R2 and R3 shares; and Lord Abbett Value Opportunities Fund (“Value Opportunities Fund”), Class A, B, C, F, I, P, R2 and R3 shares. As of the date of this report, Alpha Strategy Fund has not issued Class P shares, International Dividend Income Fund has not issued Class B shares and Large Cap Value Fund has not issued Class R2 and R3 shares. The Funds’ Class P shares are closed to substantially all new investors, with certain exceptions as set forth in the Funds’ prospectuses.
Alpha Strategy Fund’s, International Core Equity Fund’s, International Opportunities Fund’s, and Value Opportunities Fund’s investment objective is to seek long-term capital appreciation. Alpha Strategy Fund invests in other funds (“Underlying Funds”) managed by Lord, Abbett & Co. LLC (“Lord Abbett”). Fundamental Equity Fund’s investment objective is to seek long-term growth of capital and income without excessive fluctuations in market value. International Dividend Income Fund’s and Large Cap Value Fund’s investment objective is to seek a high level of total return.
Each class of shares has different expenses and dividends. A front-end sales charge is normally added to the net asset value (“NAV”) for Class A shares. There is no front-end sales charge in the case of Class B, C, F, I, P, R2 and R3 shares, although there may be a contingent deferred sales charge (“CDSC”) in certain cases as follows: Class A shares purchased without a sales charge and redeemed before the first day of the month in which the one-year anniversary of the purchase falls (subject to certain exceptions); Class B shares redeemed before the sixth anniversary of purchase; and Class C shares redeemed before the first anniversary of purchase. Class B shares will automatically convert to Class A shares on the 25th day of the month (or, if the 25th 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 preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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–Securities actively traded on any recognized U.S. or non-U.S. exchange or on The NASDAQ Stock Market LLC are valued at the last sale price or official |
116
Notes to Financial Statements (continued)
| | closing price on the exchange or system on which they are principally traded. Events occurring after the close of trading on non-U.S. exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange LLC (“NYSE”). Each Fund may rely on an independent fair valuation service in adjusting the valuations of foreign securities. Unlisted equity securities are valued at the last quoted sale price or, if no sale price is available, at the mean between the most recently quoted bid and asked prices. Fixed income securities are valued at the mean between the bid and asked prices on the basis of prices supplied by independent pricing services, which reflect broker/dealer supplied valuations and the independent pricing services’ own electronic data processing techniques. Securities for which market quotations are not readily available are valued at fair value as determined by management and approved in good faith by the Board of Trustees. Investments in the Underlying Funds are valued at their NAV each business day at the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time. Short-term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates current market value. |
| (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. Realized and unrealized gains (losses) are allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day. |
| (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. Withholding taxes on foreign dividends have been provided for in accordance with the applicable country’s tax rules and rates. 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 each 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. |
| | | Each 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 Funds’ U.S. federal tax returns remains open for the fiscal years ended October 31, 2006 through October 31, 2009. The statutes of limitations on the Trust’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. |
| (e) | | Expenses–Expenses incurred by the Trust that do not specifically relate to an individual fund are generally allocated to the Funds within the Trust on a pro rata basis by relative net assets. 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 A, B, C, F, P, R2 and R3 shares bear their class-specific share of all expenses and fees relating to the Funds’ 12b-1 Distribution Plan. |
| (f) | | Foreign Transactions–The books and records of the Funds are maintained in U.S. dollars and transactions denominated in foreign currencies are recorded in each Fund’s records at the rate |
117
Notes to Financial Statements (continued)
| | prevailing when earned or recorded. Asset and liability accounts that are denominated in foreign currencies are adjusted daily to reflect current exchange rates and any unrealized gain (loss) is included in Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies on each Fund’s Statement of Operations. The resultant exchange gains and losses upon settlement of such transactions are included in Net realized loss on investments and foreign currency related transactions on each Fund’s Statement of Operations. The Funds do not isolate the portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in market prices of the securities. |
| | | The Funds use foreign currency exchange contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts’ terms. |
| (g) | | Forward Foreign Currency Exchange Contracts–International Core Equity Fund, International Dividend Income Fund and International Opportunities Fund may enter into forward foreign currency exchange contracts in order to reduce their exposure to changes in foreign currency exchange rates on their foreign portfolio holdings. A forward foreign currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The contracts are valued daily at forward exchange rates and any unrealized gain (loss) is included in Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies on each Fund’s Statement of Operations. The gain (loss) arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contracts is included in Net realized loss on investments and foreign currency related transactions on each Fund’s Statement of Operations. |
| (h) | | Repurchase Agreements–Each 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. Each 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 value of these securities has declined, a Fund may incur a loss upon disposition of the securities. |
| (i) | | When-Issued or Forward Transactions–Each Fund may purchase portfolio securities on a when-issued or forward basis. When-issued or forward transactions involve a commitment by a Fund to purchase securities, with payment and delivery (“settlement”) to take place in the future, in order to secure what is considered to be an advantageous price or yield at the time of entering into the transaction. During the period between purchase and settlement, the value of the securities will fluctuate and assets consisting of cash and/or marketable securities (normally short-term U.S. Government or U.S. Government sponsored enterprise securities) marked to market daily in an amount sufficient to make payment at settlement will be segregated at each Fund’s custodian in order to pay for the commitment. At the time each Fund makes the commitment to purchase a security on a when-issued basis, it will record the transaction and reflect the liability for the purchase and value of the security in determining |
118
Notes to Financial Statements (continued)
| | its net asset value. Each Fund, generally, has the ability to close out a purchase obligation on or before the settlement date rather than take delivery of the security. Under no circumstances will settlement for such securities take place more than 120 days after the purchase date. |
| (j) | | Fair Value Measurements–Each Fund adopted Financial Accounting Standards Board, Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (formerly SFAS 157), effective November 1, 2008. In accordance with ASC 820, fair value is defined as the price that each Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820 established a three-tier hierarchy 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 of inputs is summarized in the three broad Levels listed below: |
| | • | | Level 1 – 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 each Fund’s own assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
119
Notes to Financial Statements (continued)
The following is a summary of the inputs used as of October 31, 2009 in valuing each Fund’s investments carried at value:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Alpha Strategy Fund | | | Fundamental Equity Fund | |
Investment
Type* | | Level 1 (000) | | Level 2 (000) | | | Level 3 (000) | | Total (000) | | | Level 1 (000) | | Level 2 (000) | | | Level 3 (000) | | Total (000) | |
Common Stocks | | $ | – | | $ | – | | | $ | – | | $ | – | | | $ | 2,463,168 | | $ | – | | | $ | – | | $ | 2,463,168 | |
Investments in Underlying Funds | | | 527,906 | | | – | | | | – | | | 527,906 | | | | – | | | – | | | | – | | | – | |
Repurchase Agreement | | | – | | | 949 | | | | – | | | 949 | | | | – | | | 45,869 | | | | – | | | 45,869 | |
Total | | $ | 527,906 | | $ | 949 | | | $ | – | | $ | 528,855 | | | $ | 2,463,168 | | $ | 45,869 | | | $ | – | | $ | 2,509,037 | |
| | |
| | | International Core Equity Fund | | | International Dividend Income Fund | |
Investment
Type* | | Level 1 (000) | | Level 2 (000) | | | Level 3 (000) | | Total (000) | | | Level 1 (000) | | Level 2 (000) | | | Level 3 (000) | | Total (000) | |
Common Stocks | | $ | 113,776 | | $ | 709,755 | | | $ | – | | $ | 823,531 | | | $ | 42,575 | | $ | 228,292 | | | $ | – | | $ | 270,867 | |
Convertible Bond | | | – | | | – | | | | – | | | – | | | | – | | | 648 | | | | – | | | 648 | |
Preferred Stocks | | | 4,481 | | | 8,792 | | | | – | | | 13,273 | | | | – | | | – | | | | – | | | – | |
Repurchase Agreement | | | – | | | 34,664 | | | | – | | | 34,664 | | | | – | | | 11,440 | | | | – | | | 11,440 | |
Total | | $ | 118,257 | | $ | 753,211 | | | $ | – | | $ | 871,468 | | | $ | 42,575 | | $ | 240,380 | | | $ | – | | $ | 282,955 | |
Other Financial Instruments(1) | | | | | | | | | | | | | | | | | | | | | | |
Assets | | $ | - | | $ | 3,390,680 | | | $ | - | | $ | 3,390,680 | | | $ | - | | $ | - | | | $ | - | | $ | - | |
Liabilities | | | - | | | (1,174,316 | ) | | | - | | | (1,174,316 | ) | | | - | | | (202,034 | ) | | | - | | | (202,034 | ) |
Total | | $ | - | | $ | 2,216,364 | | | $ | – | | $ | 2,216,364 | | | $ | - | | $ | (202,034 | ) | | $ | - | | $ | (202,034 | ) |
| | |
| | | International Opportunities Fund | | | Large Cap Value Fund | |
Investment
Type* | | Level 1 (000) | | Level 2 (000) | | | Level 3 (000) | | Total (000) | | | Level 1 (000) | | Level 2 (000) | | | Level 3 (000) | | Total (000) | |
Common Stocks | | $ | 25,523 | | $ | 245,952 | | | $ | – | | $ | 271,475 | | | $ | 46,832 | | $ | – | | | $ | – | | $ | 46,832 | |
Preferred Stocks | | | 3,386 | | | 2,590 | | | | – | | | 5,976 | | | | – | | | – | | | | – | | | – | |
Repurchase Agreement | | | – | | | 10,812 | | | | – | | | 10,812 | | | | – | | | 609 | | | | – | | | 609 | |
Total | | $ | 28,909 | | $ | 259,354 | | | $ | – | | $ | 288,263 | | | $ | 46,832 | | $ | 609 | | | $ | – | | $ | 47,441 | |
Other Financial Instruments(1) | | | | | | | | | | | | | | | | | | | | | | |
Assets | | $ | - | | $ | 293,802 | | | $ | - | | $ | 293,802 | | | $ | - | | $ | - | | | $ | - | | $ | - | |
Liabilities | | | - | | | (667,161 | ) | | | - | | | (667,161 | ) | | | - | | | - | | | | - | | | – | |
Total | | $ | - | | $ | (373,359 | ) | | $ | – | | $ | (373,359 | ) | | $ | – | | $ | – | | | $ | – | | $ | – | |
| | | | | | | | | | | | |
| |
| | | Value Opportunities Fund |
Investment
Type* | | Level 1 (000) | | Level 2 (000) | | Level 3 (000) | | Total (000) |
Common Stocks | | $ | 497,253 | | $ | – | | $ | – | | $ | 497,253 |
Repurchase Agreement | | | – | | | 42,896 | | | – | | | 42,896 |
Total | | $ | 497,253 | | $ | 42,896 | | $ | – | | $ | 540,149 |
| * | See Schedule of Investments for values in each industry. |
| (1) | Other financial instruments are forward foreign currency exchange contracts. |
120
Notes to Financial Statements (continued)
| (k) | | Disclosures about Derivative Instruments and Hedging Activities–International Core Equity Fund, International Dividend Income Fund and International Opportunities Fund adopted ASC Topic 815, Derivatives and Hedging (formerly SFAS 161), for the fiscal year ended October 31, 2009. |
The Funds entered into forward foreign currency exchange contracts during the fiscal year ended October 31, 2009 (as described in Note 2(g)). A forward foreign currency exchange contract reduces each Fund’s exposure to changes in the value of the currency it will deliver (or settle in cash) and increases its exposure to changes in the value of the currency it will receive (or settle in cash) for the duration of the contract. Each Fund’s use of forward foreign currency exchange contracts involves the risk that Lord Abbett will not accurately predict currency movements, and each Fund’s returns could be reduced as a result. Forward foreign currency exchange contracts are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time. Each Fund’s risk of loss from counterparty credit risk is the fair value of the foreign currency exchange contracts.
As of October 31, 2009, the Funds’ asset derivatives and liability derivatives are included in the Statement of Assets and Liabilities under the captions Unrealized appreciation on forward foreign currency exchange contracts and Unrealized depreciation on forward foreign currency exchange contracts, respectively. Net realized gain/(loss) and change in unrealized appreciation/depreciation on forward foreign currency exchange contracts are included in the Statement of Operations under the captions Net realized loss on investments and foreign currency related transactions and Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies, respectively.
The following is a summary of forward foreign currency exchange contracts as of and for the fiscal year ended October 31, 2009:
| | | | | | |
| | | Asset
Derivatives | | Liability
Derivatives |
International Core Equity Fund | | $ | 3,390,680 | | $ | 1,174,316 |
International Dividend Income Fund | | | – | | | 202,034 |
International Opportunities Fund | | | 293,802 | | | 667,161 |
| | | | | | | | | | |
| | | Net Realized Gain | | Change in
Unrealized
Appreciation/
Depreciation | | | Average
Notional
Amounts* |
International Core Equity Fund | | $ | 2,566,951 | | $ | 2,216,364 | | | $ | 70,348,726 |
International Dividend Income Fund | | | 1,053,918 | | | (202,034 | ) | | | 4,370,906 |
International Opportunities Fund | | | 2,214,143 | | | (373,359 | ) | | | 12,362,888 |
| | * | Calculated based on the notional amounts for the fiscal year ended October 31, 2009. |
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Management Fee
The Trust has a management agreement with Lord Abbett pursuant to which Lord Abbett supplies the Trust with investment management services and executive and other personnel, provides office
121
Notes to Financial Statements (continued)
space and pays for ordinary and necessary office and clerical expenses relating to research and statistical work and supervision of the Trust’s investment portfolio.
The management fee is based on each Fund’s average daily net assets at the following annual rates:
| | | | |
| | | Management Fee | | Contractual
Waiver |
Alpha Strategy Fund | | .10% | | .10%(1) |
Fundamental Equity Fund | | .54%(2) | | – |
International Core Equity Fund | | .75%(3) | | – |
International Dividend Income Fund | | .75%(3) | | – |
International Opportunities Fund | | .75%(3) | | – |
Large Cap Value Fund | | .40%(4) | | – |
Value Opportunities Fund | | .75%(3) | | – |
| (1) | Lord Abbett contractually agreed to waive its management fee through February 28, 2010. |
| (2) | The management fee for Fundamental Equity Fund is based on the Fund’s average daily net assets at the following annual rates: |
| | |
First $200 million | | .75% |
Next $300 million | | .65% |
Over $500 million | | .50% |
| (3) | The management fee for International Core Equity Fund, International Dividend Income Fund, International Opportunities Fund and Value Opportunities Fund is based on average daily net assets at the following annual rates: |
| | |
First $1 billion | | .75% |
Next $1 billion | | .70% |
Over $2 billion | | .65% |
| (4) | The management fee for Large Cap Value Fund is based on average daily net assets at the following annual rates: |
| | |
First $2 billion | | .40% |
Next $3 billion | | .375% |
Over $5 billion | | .35% |
For the period November 1, 2008 through February 28, 2009, Lord Abbett contractually agreed to reimburse the Alpha Strategy Fund to the extent necessary so that each class’ total annual operating expenses did not exceed the rates below. Effective March 1, 2009, Lord Abbett voluntarily agreed to reimburse the Alpha Strategy Fund to the extent necessary so that each class’ total annual operating expenses do not exceed the following annualized rates:
| | |
| Class | | % of Average
Daily Net Assets |
A | | 1.60% |
B | | 2.25% |
C | | 2.25% |
F | | 1.35% |
I | | 1.25% |
P | | 1.70% |
R2 | | 1.85% |
R3 | | 1.75% |
Lord Abbett may discontinue the voluntary reimbursement or change the level of its voluntary reimbursement at any time.
122
Notes to Financial Statements (continued)
For the period November 1, 2008 through February 28, 2010, Lord Abbett contractually agreed to reimburse the International Dividend Income Fund to the extent necessary so that each class’ total annual operating expenses do not exceed the following annual rates:
| | |
| Class | | % of Average
Daily Net Assets |
A | | 1.35% |
B | | 2.00% |
C | | 2.00% |
F | | 1.10% |
I | | 1.00% |
R2 | | 1.60% |
R3 | | 1.50% |
For the period November 1, 2008 through February 28, 2009, Lord Abbett contractually agreed to reimburse the Large Cap Value Fund to the extent necessary so that each class’ total annual operating expenses do not exceed the following annual rates:
| | |
| Class | | % of Average
Daily Net Assets |
A | | .95% |
B | | 1.60% |
C | | 1.60% |
F | | .70% |
I | | .60% |
P | | 1.05% |
R2 | | 1.20% |
R3 | | 1.10% |
Effective March 1, 2009, the contractual reimbursements for all classes of the Fund ended.
For the period November 1, 2008 through February 28, 2009, Lord Abbett contractually agreed to reimburse the Value Opportunities Fund to the extent necessary so that each class’ total annual operating expenses did not exceed the rates below. Effective March 1, 2009, Lord Abbett voluntarily agreed to reimburse the Fund to the extent necessary so that each class’ total annual operating expenses do not exceed the following annual rates:
| | |
| Class | | % of Average
Daily Net Assets |
A | | 1.35% |
B | | 2.00% |
C | | 2.00% |
F | | 1.10% |
I | | 1.00% |
P | | 1.45% |
R2 | | 1.60% |
R3 | | 1.50% |
Lord Abbett may discontinue the voluntary reimbursement or change the level of its reimbursement at any time.
Lord Abbett provides certain administrative services to each Fund, other than Alpha Strategy Fund, pursuant to an Administrative Services Agreement at an annual rate of .04% of each Fund’s average daily net assets.
123
Notes to Financial Statements (continued)
Alpha Strategy Fund has entered into a Servicing Arrangement with the Underlying Funds in which it invests (Lord Abbett Developing Growth Fund, Inc.; Lord Abbett Blend Trust – Lord Abbett Small-Cap Blend Fund; Lord Abbett Research Fund, Inc. – Lord Abbett Small-Cap Value Fund; and Lord Abbett Securities Trust – Lord Abbett International Opportunities Fund, Lord Abbett Micro-Cap Growth Fund, Lord Abbett Micro-Cap Value Fund and Lord Abbett Value Opportunities Fund), pursuant to which each Underlying Fund will pay a portion of the expenses (excluding management fees and distribution and service fees) of Alpha Strategy Fund in proportion to the average daily value of total Underlying Fund shares owned by Alpha Strategy Fund. The expenses assumed by the Underlying Funds are reflected in Expenses assumed by Underlying Funds on Alpha Strategy Fund’s Statement of Operations and Receivables from affiliates on Alpha Strategy Fund’s Statement of Assets and Liabilities.
In addition, Fundamental Equity Fund, International Core Equity Fund, International Dividend Income Fund, International Opportunities Fund, and Value Opportunities Fund, along with certain other funds managed by Lord Abbett, have entered into a Servicing Arrangement with Lord Abbett Alpha Strategy Fund of Lord Abbett Securities Trust, Lord Abbett Balanced Strategy Fund, Lord Abbett Diversified Equity Strategy Fund, Lord Abbett Diversified Income Strategy Fund, and Lord Abbett Growth & Income Strategy Fund of Lord Abbett Investment Trust, and Lord Abbett Global Allocation Fund of Lord Abbett Global Fund, Inc. (each, a “Fund of Funds”), pursuant to which each Underlying Fund pays a portion of the expenses (excluding management fees and distribution and service fees) of the Fund of Funds in proportion to the average daily value of Underlying Fund shares owned by the Fund of Funds. Amounts paid pursuant to the Servicing Arrangement are included in Subsidy expense on each Fund’s Statement of Operations and Payable to affiliates on each Fund’s Statement of Assets and Liabilities.
As of October 31, 2009, the percentages of Fundamental Equity Fund’s, International Core Equity Fund’s, International Dividend Income Fund’s, International Opportunities Fund’s and Value Opportunities Fund’s outstanding shares owned by each Fund of Funds were as follows:
| | | | | | | | | | |
| | | Underlying Funds |
| Fund of Funds | | Fundamental Equity Fund | | International
Core Equity
Fund | | International
Dividend
Income Fund | | International
Opportunities
Fund | | Value
Opportunities
Fund |
Alpha Strategy Fund | | – | | – | | – | | 38.29% | | 9.66% |
Balanced Strategy Fund | | – | | 8.36% | | 58.48% | | – | | – |
Diversified Equity Strategy Fund | | .47% | | 1.60% | | – | | 3.23% | | 2.24% |
Diversified Income Strategy Fund | | – | | – | | 2.42% | | – | | – |
Global Allocation Fund | | .28% | | .52% | | 10.17% | | 3.23% | | – |
Growth & Income Strategy Fund | | 1.64% | | 7.07% | | 7.59% | | 7.48% | | 3.89% |
12b-1 Distribution Plan
Each Fund has adopted a distribution plan with respect to Class A, B, C, F, P, R2 and R3 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 fees are accrued daily at annual rates based upon average daily net assets as follows:
| | | | | | | | | | | | | | |
| Fees* | | Class A | | Class B(1) | | Class C | | Class F | | Class P(2) | | Class R2(3) | | Class R3(3) |
Service | | .25% | | .25% | | .25% | | – | | .20% | | .25% | | .25% |
Distribution | | .10% | | .75% | | .75% | | .10% | | .25% | | .35% | | .25% |
| * | The Fund may designate a portion of the aggregate fee as attributable to service activities for purposes of calculating Financial Industry Regulatory Authority, Inc. (“FINRA”) sales charge limitations. |
124
Notes to Financial Statements (continued)
| (1) | International Dividend Income Fund has not issued Class B shares. |
| (2) | Fundamental Equity Fund, International Core Equity Fund, International Opportunities Fund, Large Cap Value Fund, and Value Opportunities Fund only. |
| (3) | Large Cap Value Fund has not issued Class R2 and R3 shares. |
Class I does not have a distribution plan.
Commissions
Distributor received the following commissions on sales of shares of the Funds, after concessions were paid to authorized dealers, for the fiscal year ended October 31, 2009:
| | | | | | |
| | | Distributor
Commissions | | Dealers’
Concessions |
Alpha Strategy Fund | | $ | 160,494 | | $ | 901,764 |
Fundamental Equity Fund | | | 819,827 | | | 4,530,153 |
International Core Equity Fund | | | 339,780 | | | 1,818,704 |
International Dividend Income Fund | | | 91,410 | | | 485,113 |
International Opportunities Fund | | | 32,975 | | | 180,318 |
Large Cap Value Fund | | | 24,716 | | | 132,941 |
Value Opportunities Fund | | | 89,710 | | | 551,216 |
Distributor received the following amount of CDSCs for the fiscal year ended October 31, 2009:
| | | | | | |
| | | Class A | | Class C |
Alpha Strategy Fund | | $ | 1,745 | | $ | 37,803 |
Fundamental Equity Fund | | | 18,094 | | | 54,640 |
International Core Equity Fund | | | 38,019 | | | 9,741 |
International Opportunities Fund | | | 1,508 | | | 3,094 |
Large Cap Value Fund | | | 8,667 | | | 937 |
Value Opportunities Fund | | | 1,106 | | | 14,183 |
Two Trustees and certain of the Trust’s officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS
Dividends from net investment income, if any, are declared and paid quarterly for International Dividend Income Fund, and annually for Alpha Strategy Fund, Fundamental Equity Fund, International Core Equity Fund, International Opportunities Fund, Large Cap Value Fund, and Value Opportunities Fund. Taxable net realized gains from investment transactions, reduced by capital loss carryforwards, if any, are declared and distributed to shareholders at least annually. The capital loss carryforward amount, if any, is available to offset future net capital gains. Dividends and distributions to shareholders are recorded on the ex-dividend date. The amounts of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. These book/tax differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets based on their federal tax basis treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profits for tax purposes, are reported as a tax return of capital.
125
Notes to Financial Statements (continued)
Distributions were declared on November 18, 2009 and paid on November 24, 2009 to shareholders of record on November 23, 2009. The approximate amounts were as follows:
| | | |
| | | Net Investment
Income |
Fundamental Equity Fund | | $ | 1,343,000 |
International Opportunities | | | 2,597,000 |
Large Cap Value Fund | | | 302,000 |
Distributions were declared on December 16, 2009 and paid on December 18, 2009 to shareholders of record on December 17, 2009. The approximate amounts were as follows:
| | | |
| | | Net Investment
Income |
International Core Equity Fund | | $ | 5,934,000 |
International Dividend Income Fund | | | 2,672,000 |
Distributions were declared on December 16, 2009 and paid on December 23, 2009 to shareholders of record on December 22, 2009. The approximate amounts was as follows:
| | | |
| | | Net Investment
Income |
Alpha Strategy Fund | | $ | 621,000 |
The tax character of distributions paid during the fiscal years ended October 31, 2009 and 2008 was as follows:
| | | | | | | | | | | | |
| | | Alpha
Strategy Fund | | Fundamental
Equity Fund |
| | | Year Ended 10/31/09 | | Year Ended 10/31/08 | | Year Ended 10/31/09 | | Year Ended 10/31/08 |
Distributions paid from: | | | | | | | | | | | | |
Ordinary income | | $ | 601,507 | | $ | 22,386,509 | | $ | 11,805,136 | | $ | 29,483,171 |
Net long-term capital gains | | | 31,893,275 | | | 21,474,902 | | | – | | | 218,716,341 |
Total distributions paid | | $ | 32,494,782 | | $ | 43,861,411 | | $ | 11,805,136 | | $ | 248,199,512 |
| | |
| | | International Core
Equity Fund | | International Dividend
Income Fund |
| | | Year Ended 10/31/09 | | Year Ended 10/31/08 | | Year Ended 10/31/09 | | Period Ended 10/31/08* |
Distributions paid from: | | | | | | | | | | | | |
Ordinary income | | $ | 18,470,575 | | $ | 137,636,390 | | $ | 6,225,107 | | $ | 1,817,702 |
Return of capital | | | – | | | – | | | – | | | 142,545 |
Net long-term capital gains | | | – | | | 15,190,172 | | | – | | | – |
Total distributions paid | | $ | 18,470,575 | | $ | 152,826,562 | | $ | 6,225,107 | | $ | 1,960,247 |
| | |
| | | International
Opportunities Fund | | Large Cap Value Fund |
| | | Year Ended 10/31/09 | | Year Ended 10/31/08 | | Year Ended 10/31/09 | | Year Ended 10/31/08 |
Distributions paid from: | | | | | | | | | | | | |
Ordinary income | | $ | 1,905,403 | | $ | 4,675,178 | | $ | 774,794 | | $ | 1,641,537 |
Net long-term capital gains | | | – | | | 46,461,279 | | | – | | | 6,897,480 |
Total distributions paid | | $ | 1,905,403 | | $ | 51,136,457 | | $ | 774,794 | | $ | 8,539,017 |
126
Notes to Financial Statements (continued)
| | | | | | |
| | | Value Opportunities Fund |
| | | Year Ended 10/31/09 | | Year Ended 10/31/08 |
Distributions paid from: | | | | | | |
Ordinary income | | $ | 669,135 | | $ | 10,375,317 |
Net long-term capital gains | | | – | | | 362,807 |
Total distributions paid | | $ | 669,135 | | $ | 10,738,124 |
| * | For the period June 23, 2008 (commencement of investment operations) to October 31, 2008. |
As of October 31, 2009, the components of accumulated gains (losses) on a tax-basis were as follows:
| | | | | | | | |
| | | Alpha
Strategy Fund | | | Fundamental
Equity Fund | |
Undistributed ordinary income – net | | $ | – | | | $ | 157,954 | |
Total undistributed earnings | | | – | | | | 157,954 | |
Capital loss carryforwards* | | | (13,821,425 | ) | | | (326,694,911 | ) |
Temporary differences | | | (54,293 | ) | | | (510,394 | ) |
Unrealized gains/losses – net | | | (111,864,865 | ) | | | 150,443,776 | |
Total accumulated losses – net | | $ | (125,740,583 | ) | | $ | (176,603,575 | ) |
| | |
| | | International Core
Equity Fund | | | International
Dividend Income
Fund | |
Undistributed ordinary income – net | | $ | 5,930,391 | | | $ | 897,298 | |
Total undistributed earnings | | | 5,930,391 | | | | 897,298 | |
Capital loss carryforwards* | | | (409,451,123 | ) | | | (29,003,217 | ) |
Temporary differences | | | (114,188 | ) | | | (5,738 | ) |
Unrealized gains – net | | | 88,731,118 | | | | 28,616,515 | |
Total accumulated gains (losses) – net | | $ | (314,903,802 | ) | | $ | 504,858 | |
| | |
| | | International
Opportunities Fund | | | Large Cap Value
Fund | |
Undistributed ordinary income – net | | $ | 2,131,421 | | | $ | 266,783 | |
Total undistributed earnings | | | 2,131,421 | | | | 266,783 | |
Capital loss carryforwards* | | | (138,506,451 | ) | | | (19,797,494 | ) |
Temporary differences | | | (48,074 | ) | | | (7,658 | ) |
Unrealized gains – net | | | 30,596,598 | | | | 3,168,215 | |
Total accumulated losses – net | | $ | (105,826,506 | ) | | $ | (16,370,154 | ) |
| | |
| | | Value
Opportunities Fund | | | | |
Capital loss carryforwards* | | $ | (55,114,396 | ) | | | | |
Temporary differences | | | (23,631 | ) | | | | |
Unrealized gains – net | | | 42,783,081 | | | | | |
Total accumulated losses – net | | $ | (12,354,946 | ) | | | | |
127
Notes to Financial Statements (continued)
| * | As of October 31, 2009, the capital loss carryforwards, along with the related expiration dates, were as follows: |
| | | | | | | | | |
| | | 2016 | | 2017 | | Total |
Alpha Strategy Fund | | $ | – | | $ | 13,821,425 | | $ | 13,821,425 |
Fundamental Equity Fund | | | 31,731,174 | | | 294,963,737 | | | 326,694,911 |
International Core Equity Fund | | | 176,974,698 | | | 232,476,425 | | | 409,451,123 |
International Dividend Income Fund | | | 15,359,509 | | | 13,643,708 | | | 29,003,217 |
International Opportunities Fund | | | 69,722,729 | | | 68,783,722 | | | 138,506,451 |
Large Cap Value Fund | | | 5,849,092 | | | 13,948,402 | | | 19,797,494 |
Value Opportunities Fund | | | 25,015,914 | | | 30,098,482 | | | 55,114,396 |
As of October 31, 2009, the aggregate unrealized security gains and losses based on cost for U.S. federal income tax purposes were as follows:
| | | | | | | | | | | | |
| | | Alpha
Strategy Fund | | | Fundamental
Equity Fund | | | International Core
Equity Fund | |
Tax cost | | $ | 640,719,756 | | | $ | 2,358,593,384 | | | $ | 782,789,206 | |
Gross unrealized gain | | | – | | | | 265,453,842 | | | | 133,727,275 | |
Gross unrealized loss | | | (111,864,865 | ) | | | (115,010,066 | ) | | | (45,048,149 | ) |
Net unrealized security gain (loss) | | $ | (111,864,865 | ) | | $ | 150,443,776 | | | $ | 88,679,126 | |
| | | | | | | | | | | | |
| | | |
| | | International
Dividend Income Fund | | | International
Opportunities Fund | | | Large Cap Value
Fund | |
Tax cost | | $ | 254,360,169 | | | $ | 257,694,881 | | | $ | 44,273,142 | |
Gross unrealized gain | | | 30,611,311 | | | | 39,035,114 | | | | 4,870,876 | |
Gross unrealized loss | | | (2,016,355 | ) | | | (8,467,435 | ) | | | (1,702,661 | ) |
Net unrealized security gain | | $ | 28,594,956 | | | $ | 30,567,679 | | | $ | 3,168,215 | |
| | | | |
| |
| | | Value
Opportunities Fund | |
Tax cost | | $ | 497,366,094 | |
Gross unrealized gain | | | 57,326,469 | |
Gross unrealized loss | | | (14,543,388 | ) |
Net unrealized security gain | | $ | 42,783,081 | |
The difference between book-basis and tax-basis unrealized gains (losses) is attributable to the tax treatment of certain securities and wash sales.
Permanent items identified during the fiscal year ended October 31, 2009 have been reclassified among the components of net assets based on their tax basis treatment as follows:
| | | | | | | | | | | | |
| | | Undistributed
(Distributions
in Excess of)
Net Investment
Income | | | Accumulated
Net Realized
Loss | | | Paid-in
Capital | |
Alpha Strategy Fund | | $ | 1,221,349 | | | $ | 1,490 | | | $ | (1,222,839 | ) |
Fundamental Equity Fund | | | (3,087 | ) | | | 3,087 | | | | – | |
International Core Equity Fund | | | (3,101,015 | ) | | | 3,101,015 | | | | – | |
International Dividend Income Fund | | | (37,776 | ) | | | 67,108 | | | | (29,332 | ) |
International Opportunities Fund | | | (851,274 | ) | | | 765,556 | | | | 85,718 | |
Large Cap Value Fund | | | (16 | ) | | | 16 | | | | – | |
Value Opportunities Fund | | | 1,477,413 | | | | (15,096 | ) | | | (1,462,317 | ) |
128
Notes to Financial Statements (continued)
The permanent differences are attributable to the tax treatment of net investment losses, certain distributions paid and received, certain expenses, foreign currency transactions, and certain securities.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments) for the fiscal year ended October 31, 2009 were as follows:
| | | | | | |
| | | Purchases | | Sales |
Alpha Strategy Fund | | $ | 44,960,314 | | $ | 31,866,074 |
Fundamental Equity Fund | | | 1,949,723,453 | | | 1,941,333,468 |
International Core Equity Fund | | | 1,002,134,861 | | | 1,111,256,848 |
International Dividend Income Fund | | | 291,448,657 | | | 158,361,810 |
International Opportunities Fund | | | 253,498,910 | | | 259,431,722 |
Large Cap Value Fund | | | 46,130,991 | | | 45,143,199 |
Value Opportunities Fund | | | 441,660,362 | | | 260,016,482 |
There were no purchases or sales of U.S. Government securities for the fiscal year ended October 31, 2009.
6. TRUSTEES’ REMUNERATION
The Trust’s officers and the two Trustees who are associated with Lord Abbett do not receive any compensation from the Trust for serving in such capacities. Outside Trustees’ 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 outside Trustees under which outside Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, Trustees’ 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 Trustees’ fees on the Statement of Operations and in Trustees’ 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.
7. EXPENSE REDUCTIONS
The Trust has entered into an arrangement with its transfer agent whereby credits realized as a result of uninvested cash balances are used to reduce a portion of each Fund’s expenses.
8. LINE OF CREDIT
Fundamental Equity Fund, International Core Equity Fund, International Dividend Income Fund, International Opportunities Fund, Large Cap Value Fund and Value Opportunities Fund and certain other funds managed by Lord Abbett have available an unsecured revolving credit facility (“Facility”) from State Street Bank and Trust Company (“SSB”), to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Facility is renewed annually under terms that depend on market conditions at the time of the renewal. Accordingly, effective December 4, 2009, the amount available under the Facility remains $200,000,000 and the annual fee to maintain the Facility (of which each participating fund pays its pro rata share based on the net assets of each participating fund) was changed from .125% (.08% prior to December 5, 2008) of the amount available under the Facility to .15%. This amount is included in Other Expenses on the Funds’ Statement of Operations. In connection with the
129
Notes to Financial Statements (continued)
renewal, the Funds paid an upfront commitment fee of .05% on December 4, 2009. Any borrowings under this Facility will bear interest at current market rates as set forth in the credit agreement. As of October 31, 2009, there were no loans outstanding pursuant to this Facility nor was the Facility utilized at any time during the fiscal year ended October 31, 2009.
9. CUSTODIAN AND ACCOUNTING AGENT
SSB is the Trust’s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating each Fund’s NAV.
10. TRANSACTIONS WITH AFFILIATED ISSUERS
An affiliated issuer is one in which the Fund has ownership of at least 5% of the outstanding voting securities of the underlying issuer at any point during the fiscal year or any company which is under common ownership or control. The Alpha Strategy Fund had the following transactions with affiliated issuers during the fiscal year ended October 31, 2009:
| | | | | | | | | | | | | | | | | | | |
| Affiliated Issuer | | Balance of Shares
Held at
10/31/2008 | | Gross
Additions | | Gross Sales | | | Balance of Shares
Held at
10/31/2009 | | Value at
10/31/2009 | | Net Realized Gain (Loss) 11/1/2008 to
10/31/2009 | | | Dividend Income 11/1/2008 to 10/31/2009 |
Lord Abbett Developing Growth Fund – Class I | | 7,012,452 | | 1,104,582 | | (960,539 | ) | | 7,156,495 | | $ | 103,268,220 | | $ | (4,874,645 | ) | | $ | – |
Lord Abbett Securities Trust – International Opportunities Fund – Class I | | 11,096,080 | | 630,318 | | (1,293,029 | ) | | 10,433,369 | | | 114,349,725 | | | (8,089,845 | ) | | | 1,051,673 |
Lord Abbett Securities Trust – Micro-Cap Growth Fund – Class I | | 4,545,186 | | 407,932 | | (615,758 | ) | | 4,337,360 | | | 50,530,246 | | | (4,104,049 | ) | | | – |
Lord Abbett Securities Trust – Micro-Cap Value Fund – Class I | | 2,538,118 | | 236,246 | | (17,809 | ) | | 2,756,555 | | | 52,319,416 | | | (246,583 | ) | | | – |
Lord Abbett Blend Trust – Small-Cap Blend Fund – Class I | | 3,695,378 | | 556,897 | | (93,417 | ) | | 4,158,858 | | | 52,110,494 | | | (757,544 | ) | | | – |
Lord Abbett Research Fund, Inc. –
Small-Cap Value Fund – Class I | | 4,101,950 | | 516,315 | | (185,086 | ) | | 4,433,179 | | | 103,559,065 | | | 717,767 | | | | 535,406 |
Lord Abbett Securities Trust – Value Opportunities Fund – Class I | | 4,388,245 | | 309,152 | | (276,529 | ) | | 4,420,868 | | | 51,768,361 | | | (1,573,740 | ) | | | 246,492 |
| | | | | | | | | | | | $ | 527,905,527 | | $ | (18,928,639 | ) | | $ | 1,833,571 |
11. INVESTMENT RISKS
Each Fund is subject to the general risks and considerations associated with equity investing. The value of an investment will fluctuate in response to movements in the equity securities markets in general and to the changing prospects of individual companies in which the Funds invest.
Large company value stocks, in which each of the Fundamental Equity Fund and Large Cap Value Fund invest, may perform differently than the market as a whole and other types of stocks, such as small company stocks and growth stocks. Small and mid-sized company stocks, in which Value Opportunities Fund invests, may also perform differently than the market as a whole and other types of stocks, such as large-company and growth stocks. This is because different types of stocks
130
Notes to Financial Statements (continued)
tend to shift in and out of favor depending on market and economic conditions. The market may fail to recognize the intrinsic value of a particular value stock for a long time. The small and mid-sized company stocks in which Value Opportunities Fund invests may be less able to weather economic shifts or other adverse developments than those of larger, more established companies. In addition, if a Fund’s assessment of a company’s value or prospects for exceeding earnings expectations or market conditions is wrong, the Funds could suffer losses or produce poor performance relative to other funds, even in a rising market.
In addition, although Fundamental Equity Fund invests a significant portion of its assets in large-cap company stocks, it also invests in mid-cap and small-cap company stocks which may be more volatile and less liquid than large-cap stocks.
International Core Equity Fund is subject to the risks of investing in foreign securities, the securities of large foreign companies, and derivatives. Foreign securities may pose greater risks than domestic securities, including greater price fluctuations and higher transaction costs. Foreign investments also may be affected by changes in currency rates or currency controls. The International Core Equity Fund is subject to the risks associated with derivatives, which may be different from and greater than the risks associated with investing directly in securities and other investments.
International Dividend Income Fund is also subject to the risks of investing in foreign securities, dividend yielding stocks, and derivatives. Foreign securities may pose greater risks than domestic securities, including price fluctuations and higher transaction costs. These risks are generally greater for securities issued by companies in emerging market companies. Dividend paying stocks may be sensitive to changes in market interest rates, and the prices of such stocks may decline as rates rise. The International Dividend Income Fund may be subject to the volatility of stocks that have high dividends per share due to recent decreases in their share prices. The International Dividend Income Fund may invest a significant portion of its assets in small and mid-sized companies that may be less able to weather economic shifts or other adverse developments than larger, more established companies. The International Dividend Income Fund is subject to the risks associated with derivatives, which may be different from and greater than the risks associated with investing directly in securities and other investments.
International Opportunities Fund is also subject to the risks of investing in foreign securities, the securities of small-cap companies, and derivatives. Foreign securities may pose greater risks than domestic securities, including greater price fluctuations and higher transaction costs. Foreign investments also may be affected by changes in currency rates or currency controls. Investing in small-cap companies generally involves greater risks than investing in the stocks of large-cap companies, including more volatility and less liquidity. The International Opportunities Fund is subject to the risks associated with derivatives, which may be different from and greater than the risks associated with investing directly in securities and other investments.
Alpha Strategy Fund’s investments are concentrated in the Underlying Funds and, as a result, the Fund’s performance is directly related to their performance and subject to their risks, including those associated with foreign investments and small-cap companies.
Due to their investments in multinational companies, Fundamental Equity Fund, Large Cap Value Fund, and Alpha Strategy Fund may experience increased market, liquidity, currency, political, information and other risks.
These factors can affect each Fund’s performance.
131
Notes to Financial Statements (continued)
12. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest were as follows:
| | | | | | | | | | | | | | |
| ALPHA STRATEGY FUND | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 6,134,543 | | | $ | 90,088,436 | | | 8,988,358 | | | $ | 204,341,792 | |
Converted from Class B* | | 201,504 | | | | 2,916,309 | | | 219,865 | | | | 4,840,112 | |
Reinvestment of distributions | | 1,321,508 | | | | 17,034,232 | | | 938,987 | | | | 23,700,040 | |
Shares reacquired | | (6,957,086 | ) | | | (94,605,166 | ) | | (5,043,740 | ) | | | (106,371,679 | ) |
Increase | | 700,469 | | | $ | 15,433,811 | | | 5,103,470 | | | $ | 126,510,265 | |
| | | | |
| Class B Shares | | | | | | | | | | | | |
Shares sold | | 381,441 | | | $ | 5,314,140 | | | 650,273 | | | $ | 14,389,021 | |
Reinvestment of distributions | | 162,722 | | | | 2,007,994 | | | 153,584 | | | | 3,739,773 | |
Shares reacquired | | (513,232 | ) | | | (6,983,338 | ) | | (562,271 | ) | | | (11,862,745 | ) |
Converted to Class A* | | (211,115 | ) | | | (2,916,309 | ) | | (228,529 | ) | | | (4,840,112 | ) |
Increase (decrease) | | (180,184 | ) | | $ | (2,577,513 | ) | | 13,057 | | | $ | 1,425,937 | |
| | | | |
| Class C Shares | | | | | | | | | | | | |
Shares sold | | 2,828,222 | | | $ | 39,855,844 | | | 4,479,390 | | | $ | 98,051,930 | |
Reinvestment of distributions | | 561,079 | | | | 6,873,183 | | | 375,199 | | | | 9,076,051 | |
Shares reacquired | | (2,395,699 | ) | | | (32,485,453 | ) | | (1,824,657 | ) | | | (37,074,457 | ) |
Increase | | 993,602 | | | $ | 14,243,574 | | | 3,029,932 | | | $ | 70,053,524 | |
| | | | |
| Class F Shares | | | | | | | | | | | | |
Shares sold | | 1,914,446 | | | $ | 24,255,190 | | | 478,414 | | | $ | 10,692,426 | |
Reinvestment of distributions | | 37,363 | | | | 480,117 | | | 33 | | | | 837 | |
Shares reacquired | | (662,384 | ) | | | (9,619,910 | ) | | (39,431 | ) | | | (732,148 | ) |
Increase | | 1,289,425 | | | $ | 15,115,397 | | | 439,016 | | | $ | 9,961,115 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 232,220 | | | $ | 3,715,597 | | | 488,148 | | | $ | 10,742,537 | |
Reinvestment of distributions | | 53,659 | | | | 693,275 | | | 7,041 | | | | 178,279 | |
Shares reacquired | | (134,927 | ) | | | (1,968,504 | ) | | (28,201 | ) | | | (631,830 | ) |
Increase | | 150,952 | | | $ | 2,440,368 | | | 466,988 | | | $ | 10,288,986 | |
| | | | |
| Class R2 Shares | | | | | | | | | | | | |
Shares sold | | 62,872 | | | $ | 894,155 | | | 49,064 | | | $ | 1,079,640 | |
Reinvestment of distributions | | 78 | | | | 997 | | | 33 | | | | 825 | |
Shares reacquired | | (15,592 | ) | | | (249,563 | ) | | (13,122 | ) | | | (238,007 | ) |
Increase | | 47,358 | | | $ | 645,589 | | | 35,975 | | | $ | 842,458 | |
| | | | |
| Class R3 Shares | | | | | | | | | | | | |
Shares sold | | 357,956 | | | $ | 5,358,592 | | | 304,689 | | | $ | 6,531,861 | |
Reinvestment of distributions | | 10,919 | | | | 139,986 | | | 34 | | | | 862 | |
Shares reacquired | | (215,600 | ) | | | (3,209,208 | ) | | (50,784 | ) | | | (1,029,325 | ) |
Increase | | 153,275 | | | $ | 2,289,370 | | | 253,939 | | | $ | 5,503,398 | |
| * | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
132
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | |
| FUNDAMENTAL EQUITY FUND | | | | | | | | | | | | |
| | | For the Year Ended
October 31, 2009 | | | For the Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 51,399,510 | | | $ | 443,253,427 | | | 33,955,750 | | | $ | 384,056,521 | |
Converted from Class B* | | 1,479,090 | | | | 12,747,878 | | | 527,913 | | | | 5,979,951 | |
Reinvestment of distributions | | 1,370,253 | | | | 10,208,081 | | | 13,985,343 | | | | 168,103,818 | |
Shares reacquired | | (59,197,714 | ) | | | (505,806,639 | ) | | (51,160,589 | ) | | | (547,823,282 | ) |
Increase (decrease) | | (4,948,861 | ) | | $ | (39,597,253 | ) | | (2,691,583 | ) | | $ | 10,317,008 | |
| | | | |
| Class B Shares | | | | | | | | | | | | |
Shares sold | | 3,133,740 | | | $ | 26,257,342 | | | 2,507,015 | | | $ | 27,234,069 | |
Reinvestment of distributions | | – | | | | – | | | 1,441,864 | | | | 16,710,966 | |
Shares reacquired | | (4,715,040 | ) | | | (39,245,458 | ) | | (4,755,729 | ) | | | (51,215,447 | ) |
Converted to Class A* | | (1,537,256 | ) | | | (12,747,878 | ) | | (549,254 | ) | | | (5,979,951 | ) |
Decrease | | (3,118,556 | ) | | $ | (25,735,994 | ) | | (1,356,104 | ) | | $ | (13,250,363 | ) |
| | | | |
| Class C Shares | | | | | | | | | | | | |
Shares sold | | 12,872,299 | | | $ | 107,883,035 | | | 9,787,600 | | | $ | 106,365,110 | |
Reinvestment of distributions | | – | | | | – | | | 2,848,051 | | | | 32,867,556 | |
Shares reacquired | | (11,634,515 | ) | | | (95,242,571 | ) | | (11,810,732 | ) | | | (126,124,050 | ) |
Increase | | 1,237,784 | | | $ | 12,640,464 | | | 824,919 | | | $ | 13,108,616 | |
| | | | |
| Class F Shares | | | | | | | | | | | | |
Shares sold | | 7,622,241 | | | $ | 61,747,840 | | | 1,199,999 | | | $ | 13,767,219 | |
Reinvestment of distributions | | 10,116 | | | | 74,957 | | | 65 | | | | 777 | |
Shares reacquired | | (1,243,011 | ) | | | (11,396,340 | ) | | (184,027 | ) | | | (1,794,302 | ) |
Increase | | 6,389,346 | | | $ | 50,426,457 | | | 1,016,037 | | | $ | 11,973,694 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 4,172,835 | | | $ | 38,457,362 | | | 1,914,899 | | | $ | 22,477,598 | |
Reinvestment of distributions | | 85,145 | | | | 636,029 | | | 349,412 | | | | 4,217,399 | |
Shares reacquired | | (550,619 | ) | | | (4,802,063 | ) | | (51,910 | ) | | | (564,486 | ) |
Increase | | 3,707,361 | | | $ | 34,291,328 | | | 2,212,401 | | | $ | 26,130,511 | |
| | | | |
| Class P Shares | | | | | | | | | | | | |
Shares sold | | 911,554 | | | $ | 7,936,373 | | | 956,857 | | | $ | 10,720,787 | |
Reinvestment of distributions | | 19,795 | | | | 146,090 | | | 301,128 | | | | 3,580,406 | |
Shares reacquired | | (781,451 | ) | | | (6,822,834 | ) | | (2,024,675 | ) | | | (22,873,615 | ) |
Increase (decrease) | | 149,898 | | | $ | 1,259,629 | | | (766,690 | ) | | $ | (8,572,422 | ) |
| | | | |
| Class R2 Shares | | | | | | | | | | | | |
Shares sold | | 96,391 | | | $ | 894,082 | | | 49,447 | | | $ | 511,903 | |
Reinvestment of distributions | | 39 | | | | 286 | | | 64 | | | | 765 | |
Shares reacquired | | (12,619 | ) | | | (118,199 | ) | | (14,061 | ) | | | (142,304 | ) |
Increase | | 83,811 | | | $ | 776,169 | | | 35,450 | | | $ | 370,364 | |
| | | | |
| Class R3 Shares | | | | | | | | | | | | |
Shares sold | | 2,010,749 | | | $ | 17,782,233 | | | 1,874,780 | | | $ | 20,629,489 | |
Reinvestment of distributions | | 12,467 | | | | 92,509 | | | 64 | | | | 767 | |
Shares reacquired | | (771,110 | ) | | | (6,842,432 | ) | | (253,786 | ) | | | (2,705,060 | ) |
Increase | | 1,252,106 | | | $ | 11,032,310 | | | 1,621,058 | | | $ | 17,925,196 | |
| * | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
133
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | |
| INTERNATIONAL CORE EQUITY FUND | | | | | | | | | | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 11,457,512 | | | $ | 104,342,340 | | | 13,630,730 | | | $ | 197,559,218 | |
Converted from Class B* | | 157,022 | | | | 1,442,178 | | | 83,289 | | | | 1,140,720 | |
Reinvestment of distributions | | 1,435,494 | | | | 12,345,339 | | | 6,280,951 | | | | 95,156,404 | |
Shares reacquired | | (22,505,710 | ) | | | (194,870,294 | ) | | (18,248,751 | ) | | | (230,284,525 | ) |
Increase (decrease) | | (9,455,682 | ) | | $ | (76,740,437 | ) | | 1,746,219 | | | $ | 63,571,817 | |
| | | | |
| Class B Shares | | | | | | | | | | | | |
Shares sold | | 753,091 | | | $ | 6,903,792 | | | 1,123,303 | | | $ | 15,990,444 | |
Reinvestment of distributions | | 54,865 | | | | 466,907 | | | 426,117 | | | | 6,357,988 | |
Shares reacquired | | (1,361,208 | ) | | | (11,606,108 | ) | | (1,399,645 | ) | | | (17,621,966 | ) |
Converted to Class A* | | (159,207 | ) | | | (1,442,178 | ) | | (84,790 | ) | | | (1,140,720 | ) |
Increase (decrease) | | (712,459 | ) | | $ | (5,677,587 | ) | | 64,985 | | | $ | 3,585,746 | |
| | | | |
| Class C Shares | | | | | | | | | | | | |
Shares sold | | 1,655,820 | | | $ | 14,870,289 | | | 2,816,309 | | | $ | 40,040,252 | |
Reinvestment of distributions | | 106,613 | | | | 908,341 | | | 960,413 | | | | 14,339,002 | |
Shares reacquired | | (3,430,021 | ) | | | (29,297,488 | ) | | (4,581,185 | ) | | | (57,677,352 | ) |
Decrease | | (1,667,588 | ) | | $ | (13,518,858 | ) | | (804,463 | ) | | $ | (3,298,098 | ) |
| | | | |
| Class F Shares | | | | | | | | | | | | |
Shares sold | | 1,159,160 | | | $ | 8,775,635 | | | 239,513 | | | $ | 3,311,379 | |
Reinvestment of distributions | | 5,971 | | | | 51,055 | | | 64 | | | | 969 | |
Shares reacquired | | (573,057 | ) | | | (5,447,736 | ) | | (24,680 | ) | | | (267,458 | ) |
Increase | | 592,074 | | | $ | 3,378,954 | | | 214,897 | | | $ | 3,044,890 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 2,470,983 | | | $ | 19,382,783 | | | 3,498,123 | | | $ | 50,290,975 | |
Reinvestment of distributions | | 429,596 | | | | 3,707,412 | | | 1,655,006 | | | | 25,238,835 | |
Shares reacquired | | (1,047,383 | ) | | | (10,590,728 | ) | | (6,175,522 | ) | | | (86,559,276 | ) |
Increase (decrease) | | 1,853,196 | | | $ | 12,499,467 | | | (1,022,393 | ) | | $ | (11,029,466 | ) |
| | | | |
| Class P Shares | | | | | | | | | | | | |
Shares sold | | 75,967 | | | $ | 710,294 | | | 212,684 | | | $ | 3,447,362 | |
Reinvestment of distributions | | 1,231 | | | | 10,525 | | | 1,396 | | | | 21,042 | |
Shares reacquired | | (44,791 | ) | | | (398,248 | ) | | (92,961 | ) | | | (1,268,126 | ) |
Increase | | 32,407 | | | $ | 322,571 | | | 121,119 | | | $ | 2,200,278 | |
| | | | |
| Class R2 Shares | | | | | | | | | | | | |
Shares sold | | 1.507 | | | $ | 11 | | | – | | | $ | – | |
Reinvestment of distributions | | 19.000 | | | | 163 | | | 63.921 | | | | 965 | |
Increase | | 20.507 | | | $ | 174 | | | 63.921 | | | $ | 965 | |
| | | | |
| Class R3 Shares | | | | | | | | | | | | |
Shares sold | | 82,929 | | | $ | 814,089 | | | 82,290 | | | $ | 1,086,165 | |
Reinvestment of distributions | | 1,950 | | | | 16,631 | | | 64 | | | | 966 | |
Shares reacquired | | (15,683 | ) | | | (144,601 | ) | | (22,482 | ) | | | (278,692 | ) |
Increase | | 69,196 | | | $ | 686,119 | | | 59,872 | | | $ | 808,439 | |
| * | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
134
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | |
| INTERNATIONAL DIVIDEND INCOME FUND | | | | | | | | | | |
| | | Year Ended October 31, 2009 | | | Period Ended
October 31, 2008† | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 6,187,695 | | | $ | 40,072,677 | | | 1,598,558 | | | $ | 13,679,823 | |
Reinvestment of distributions | | 143,508 | | | | 963,469 | | | 12,526 | | | | 106,226 | |
Shares reacquired | | (1,337,852 | ) | | | (8,943,114 | ) | | (168,058 | ) | | | (1,248,254 | ) |
Increase | | 4,993,351 | | | $ | 32,093,032 | | | 1,443,026 | | | $ | 12,537,795 | |
| | | | |
| Class C Shares | | | | | | | | | | | | |
Shares sold | | 563,447 | | | $ | 4,186,021 | | | 28,159 | | | $ | 193,766 | |
Reinvestment of distributions | | 4,915 | | | | 34,075 | | | 104 | | | | 881 | |
Shares reacquired | | (62,292 | ) | | | (425,344 | ) | | – | | | | – | |
Increase | | 506,070 | | | $ | 3,794,752 | | | 28,263 | | | $ | 194,647 | |
| | | | |
| Class F Shares | | | | | | | | | | | | |
Shares sold | | 211,331 | | | $ | 1,760,333 | | | 4,376 | | | $ | 40,015 | |
Reinvestment of distributions | | 612 | | | | 4,508 | | | 71 | | | | 604 | |
Shares reacquired | | (1,178 | ) | | | (9,830 | ) | | – | | | | – | |
Increase | | 210,765 | | | $ | 1,755,011 | | | 4,447 | | | $ | 40,619 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 13,777,377 | | | $ | 100,789,931 | | | 13,071,912 | | | $ | 129,127,228 | |
Reinvestment of distributions | | 738,695 | | | | 5,046,126 | | | 212,963 | | | | 1,805,924 | |
Shares reacquired | | (381,653 | ) | | | (2,410,691 | ) | | (32,336 | ) | | | (318,823 | ) |
Increase | | 14,134,419 | | | $ | 103,425,366 | | | 13,252,539 | | | $ | 130,614,329 | |
| | | | |
| Class R2 Shares | | | | | | | | | | | | |
Shares sold | | 2 | | | $ | 12 | | | 1,001 | | | $ | 10,015 | |
Reinvestment of distributions | | 36 | | | | 238 | | | 15 | | | | 124 | |
Increase | | 38 | | | $ | 250 | | | 1,016 | | | $ | 10,139 | |
| | | | |
| Class R3 Shares | | | | | | | | | | | | |
Shares sold | | – | | | $ | – | | | 1,001 | | | $ | 10,015 | |
Reinvestment of distributions | | 38 | | | | 244 | | | 15 | | | | 127 | |
Increase | | 38 | | | $ | 244 | | | 1,016 | | | $ | 10,142 | |
| † | For the period June 23, 2008 (commencement of investment operations) to October 31, 2008. |
135
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | |
| INTERNATIONAL OPPORTUNITIES FUND | | | | | | | | | | | | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 2,016,527 | | | $ | 17,839,415 | | | 1,831,975 | | | $ | 24,728,396 | |
Converted from Class B* | | 116,385 | | | | 948,224 | | | 114,183 | | | | 1,484,252 | |
Reinvestment of distributions | | 68,847 | | | | 445,448 | | | 1,425,383 | | | | 21,822,603 | |
Shares reacquired | | (2,892,248 | ) | | | (23,136,675 | ) | | (4,208,791 | ) | | | (54,129,328 | ) |
Decrease | | (690,489 | ) | | $ | (3,903,588 | ) | | (837,250 | ) | | $ | (6,094,077 | ) |
| | | | |
| Class B Shares | | | | | | | | | | | | |
Shares sold | | 301,394 | | | $ | 2,374,060 | | | 360,881 | | | $ | 4,615,651 | |
Reinvestment of distributions | | – | | | | – | | | 310,602 | | | | 4,540,278 | |
Shares reacquired | | (549,813 | ) | | | (4,098,210 | ) | | (780,572 | ) | | | (9,426,856 | ) |
Converted to Class A* | | (122,032 | ) | | | (948,224 | ) | | (119,942 | ) | | | (1,484,252 | ) |
Decrease | | (370,451 | ) | | $ | (2,672,374 | ) | | (229,031 | ) | | $ | (1,755,179 | ) |
| | | | |
| Class C Shares | | | | | | | | | | | | |
Shares sold | | 608,125 | | | $ | 4,998,326 | | | 539,176 | | | $ | 6,694,006 | |
Reinvestment of distributions | | – | | | | – | | | 321,173 | | | | 4,669,000 | |
Shares reacquired | | (690,038 | ) | | | (5,285,044 | ) | | (938,774 | ) | | | (11,106,697 | ) |
Increase (decrease) | | (81,913 | ) | | $ | (286,718 | ) | | (78,425 | ) | | $ | 256,309 | |
| | | | |
| Class F Shares | | | | | | | | | | | | |
Shares sold | | 38,933 | | | $ | 237,490 | | | 54,233 | | | $ | 639,342 | |
Reinvestment of distributions | | 236 | | | | 1,515 | | | 80 | | | | 1,224 | |
Shares reacquired | | (19,804 | ) | | | (142,238 | ) | | (38,174 | ) | | | (428,484 | ) |
Increase | | 19,365 | | | $ | 96,767 | | | 16,139 | | | $ | 212,082 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 1,233,439 | | | $ | 9,367,655 | | | 6,906,152 | | | $ | 91,742,605 | |
Reinvestment of distributions | | 217,249 | | | | 1,433,868 | | | 1,175,589 | | | | 18,421,481 | |
Shares reacquired | | (1,614,453 | ) | | | (12,294,449 | ) | | (1,361,662 | ) | | | (21,937,288 | ) |
Increase (decrease) | | (163,765 | ) | | $ | (1,492,926 | ) | | (6,720,079 | ) | | $ | 88,226,798 | |
| | | | |
| Class P Shares | | | | | | | | | | | | |
Shares sold | | 33,557 | | | $ | 270,694 | | | 88,196 | | | $ | 1,244,376 | |
Reinvestment of distributions | | 121 | | | | 797 | | | 15,855 | | | | 245,279 | |
Shares reacquired | | (75,045 | ) | | | (567,443 | ) | | (82,046 | ) | | | (984,365 | ) |
Increase (decrease) | | (41,367 | ) | | $ | (295,952 | ) | | 22,005 | | | $ | 505,290 | |
| | | | |
| Class R2 Shares | | | | | | | | | | | | |
Shares sold | | 4,260 | | | $ | 34,443 | | | 3,641 | | | $ | 54,915 | |
Reinvestment of distributions | | 21 | | | | 136 | | | 80 | | | | 1,219 | |
Shares reacquired | | (1 | ) | | | (12 | ) | | – | | | | – | |
Increase | | 4,280 | | | $ | 34,567 | | | 3,721 | | | $ | 56,134 | |
| | | | |
| Class R3 Shares | | | | | | | | | | | | |
Shares sold | | 55,046 | | | $ | 528,609 | | | 2,945 | | | $ | 28,137 | |
Reinvestment of distributions | | 43 | | | | 272 | | | 80 | | | | 1,220 | |
Shares reacquired | | (4,092 | ) | | | (39,454 | ) | | (508 | ) | | | (6,222 | ) |
Increase | | 50,997 | | | $ | 489,427 | | | 2,517 | | | $ | 23,135 | |
| * | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
136
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | |
| LARGE CAP VALUE FUND | | | | | | | | | | | | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 2,270,537 | | | $ | 16,742,122 | | | 1,095,769 | | | $ | 11,691,510 | |
Converted from Class B* | | 46,132 | | | | 268,277 | | | 6,451 | | | | 75,254 | |
Reinvestment of distributions | | 48,015 | | | | 307,292 | | | 323,433 | | | | 3,907,048 | |
Shares reacquired | | (1,656,869 | ) | | | (12,156,670 | ) | | (792,396 | ) | | | (8,478,304 | ) |
Increase | | 707,815 | | | $ | 5,161,021 | | | 633,257 | | | $ | 7,195,508 | |
|
| Class B Shares | |
Shares sold | | 184,946 | | | $ | 1,351,414 | | | 122,702 | | | $ | 1,334,394 | |
Reinvestment of distributions | | 2,798 | | | | 17,715 | | | 37,772 | | | | 449,487 | |
Shares reacquired | | (146,028 | ) | | | (1,099,097 | ) | | (110,644 | ) | | | (1,178,722 | ) |
Converted to Class A* | | (46,722 | ) | | | (268,277 | ) | | (6,564 | ) | | | (75,254 | ) |
Increase (decrease) | | (5,006 | ) | | $ | 1,755 | | | 43,266 | | | $ | 529,905 | |
|
| Class C Shares | |
Shares sold | | 465,416 | | | $ | 3,393,055 | | | 279,734 | | | $ | 3,035,973 | |
Reinvestment of distributions | | 5,005 | | | | 31,685 | | | 61,434 | | | | 731,641 | |
Shares reacquired | | (317,027 | ) | | | (2,267,552 | ) | | (264,799 | ) | | | (2,913,010 | ) |
Increase | | 153,394 | | | $ | 1,157,188 | | | 76,369 | | | $ | 854,604 | |
|
| Class F Shares | |
Shares sold | | 47,940 | | | $ | 273,729 | | | 2,748 | | | $ | 30,102 | |
Reinvestment of distributions | | 85 | | | | 541 | | | 122 | | | | 1,471 | |
Shares reacquired | | (27,622 | ) | | | (213,638 | ) | | (342 | ) | | | (2,859 | ) |
Increase | | 20,403 | | | $ | 60,632 | | | 2,528 | | | $ | 28,714 | |
|
| Class I Shares | |
Shares sold | | 93,820 | | | $ | 726,442 | | | 583,088 | | | $ | 6,960,243 | |
Reinvestment of distributions | | 50,216 | | | | 322,389 | | | 193,213 | | | | 2,343,670 | |
Shares reacquired | | (863,890 | ) | | | (6,919,474 | ) | | (202,366 | ) | | | (2,654,815 | ) |
Increase (decrease) | | (719,854 | ) | | $ | (5,870,643 | ) | | 573,935 | | | $ | 6,649,098 | |
|
| Class P Shares | |
Shares sold | | 3,017 | | | $ | 20,017 | | | – | | | $ | – | |
Reinvestment of distributions | | 26 | | | | 165 | | | 198 | | | | 2,402 | |
Shares reacquired | | (3,017 | ) | | | (20,181 | ) | | – | | | | – | |
Increase | | 26 | | | $ | 1 | | | 198 | | | $ | 2,402 | |
| * | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
137
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | |
| VALUE OPPORTUNITIES FUND | | | | | | | | | | | | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 15,033,434 | | | $ | 155,146,021 | | | 6,283,749 | | | $ | 77,513,951 | |
Converted from Class B* | | 104,115 | | | | 1,125,952 | | | 7,897 | | | | 97,466 | |
Reinvestment of distributions | | 20,748 | | | | 168,887 | | | 347,900 | | | | 4,543,577 | |
Shares reacquired | | (5,556,148 | ) | | | (51,508,434 | ) | | (4,925,239 | ) | | | (59,363,070 | ) |
Increase | | 9,602,149 | | | $ | 104,932,426 | | | 1,714,307 | | | $ | 22,791,924 | |
|
| Class B Shares | |
Shares sold | | 612,819 | | | $ | 6,159,989 | | | 780,006 | | | $ | 9,542,674 | |
Reinvestment of distributions | | – | | | | – | | | 31,873 | | | | 411,162 | |
Shares reacquired | | (323,362 | ) | | | (3,154,107 | ) | | (379,679 | ) | | | (4,617,429 | ) |
Converted to Class A* | | (106,295 | ) | | | (1,125,952 | ) | | (8,013 | ) | | | (97,466 | ) |
Increase | | 183,162 | | | $ | 1,879,930 | | | 424,187 | | | $ | 5,238,941 | |
|
| Class C Shares | |
Shares sold | | 3,237,174 | | | $ | 32,445,721 | | | 1,911,403 | | | $ | 23,418,539 | |
Reinvestment of distributions | | – | | | | – | | | 117,129 | | | | 1,510,958 | |
Shares reacquired | | (1,269,100 | ) | | | (12,041,955 | ) | | (1,227,457 | ) | | | (14,492,884 | ) |
Increase | | 1,968,074 | | | $ | 20,403,766 | | | 801,075 | | | $ | 10,436,613 | |
|
| Class F Shares | |
Shares sold | | 4,946,349 | | | $ | 46,706,575 | | | 478,671 | | | $ | 5,866,758 | |
Reinvestment of distributions | | 3,577 | | | | 28,977 | | | 30 | | | | 389 | |
Shares reacquired | | (916,410 | ) | | | (9,301,234 | ) | | (60,018 | ) | | | (644,064 | ) |
Increase | | 4,033,516 | | | $ | 37,434,318 | | | 418,683 | | | $ | 5,223,083 | |
|
| Class I Shares | |
Shares sold | | 3,415,208 | | | $ | 35,612,849 | | | 4,257,083 | | | $ | 54,578,011 | |
Reinvestment of distributions | | 52,227 | | | | 425,647 | | | 189,880 | | | | 2,487,429 | |
Shares reacquired | | (539,840 | ) | | | (4,773,253 | ) | | (821,326 | ) | | | (9,097,062 | ) |
Increase | | 2,927,595 | | | $ | 31,265,243 | | | 3,625,637 | | | $ | 47,968,378 | |
|
| Class P Shares | |
Shares sold | | 70,542 | | | $ | 694,038 | | | 130,190 | | | $ | 1,683,576 | |
Reinvestment of distributions | | – | | | | – | | | 13,467 | | | | 175,471 | |
Shares reacquired | | (68,051 | ) | | | (640,707 | ) | | (185,451 | ) | | | (2,007,725 | ) |
Increase (decrease) | | 2,491 | | | $ | 53,331 | | | (41,794 | ) | | $ | (148,678 | ) |
|
| Class R2 Shares | |
Shares sold | | 128,459 | | | $ | 1,311,975 | | | 45,949 | | | $ | 568,783 | |
Reinvestment of distributions | | – | | | | – | | | 29 | | | | 377 | |
Shares reacquired | | (5,322 | ) | | | (58,898 | ) | | (43,364 | ) | | | (421,400 | ) |
Increase | | 123,137 | | | $ | 1,253,077 | | | 2,614 | | | $ | 147,760 | |
|
| Class R3 Shares | |
Shares sold | | 261,097 | | | $ | 2,701,307 | | | 234,232 | | | $ | 2,781,128 | |
Reinvestment of distributions | | 163 | | | | 1,323 | | | 788 | | | | 10,258 | |
Shares reacquired | | (79,938 | ) | | | (811,157 | ) | | (52,052 | ) | | | (623,534 | ) |
Increase | | 181,322 | | | $ | 1,891,473 | | | 182,968 | | | $ | 2,167,852 | |
| * | Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. |
138
Notes to Financial Statements (concluded)
13. SUBSEQUENT EVENTS
In accordance with the provisions set forth in ASC Topic 855 (formerly SFAS 165), Subsequent Events, adopted by the Funds as of October 31, 2009, management has evaluated subsequent events existing in the Funds’ financial statements through December 30, 2009. Management has determined that there were no material subsequent events that would require recognition or additional disclosure in the Funds’ financial statements through this date.
139
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Lord Abbett Securities Trust:
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Lord Abbett Fundamental Equity Fund (formerly Lord Abbett All Value Fund), Lord Abbett Alpha Strategy Fund, Lord Abbett International Core Equity Fund, Lord Abbett International Dividend Income Fund, Lord Abbett International Opportunities Fund, Lord Abbett Large-Cap Value Fund, and Lord Abbett Value Opportunities Fund, seven of the portfolios constituting the Lord Abbett Securities Trust (the “Trust”) as of October 31, 2009, the related statements of operations for the year then ended, and the statements of changes in net assets and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Trust’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 Trust 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 Trust’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 October 31, 2009, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Lord Abbett Fundamental Equity Fund, Lord Abbett Alpha Strategy Fund, Lord Abbett International Core Equity Fund, Lord Abbett International Dividend Income Fund, Lord Abbett International Opportunities Fund, Lord Abbett Large-Cap Value Fund, and Lord Abbett Value Opportunities Fund of the Lord Abbett Securities Trust as of October 31, 2009, the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
December 30, 2009
140
Investments in Underlying Funds (unaudited)
Alpha Strategy Fund invests in Underlying Funds managed by Lord Abbett. As of October 31, 2009, Alpha Strategy Fund’s long-term investments were allocated among the Underlying Funds as follows:
| | |
| Underlying Fund Name | | % of Investments |
Lord Abbett Developing Growth Fund, Inc. – Class I | | 19.56% |
Lord Abbett Securities Trust – International Opportunities Fund – Class I | | 21.66% |
Lord Abbett Securities Trust – Micro-Cap Growth Fund – Class I | | 9.57% |
Lord Abbett Securities Trust – Micro-Cap Value Fund – Class I | | 9.91% |
Lord Abbett Blend Trust – Small-Cap Blend Fund – Class I | | 9.87% |
Lord Abbett Research Fund, Inc. – Small-Cap Value Fund – Class I | | 19.62% |
Lord Abbett Securities Trust – Value Opportunities Fund – Class I | | 9.81% |
The Ten Largest Holdings and the Holdings by Sector, as of October 31, 2009, for each Underlying Fund are presented below. Each Underlying Fund’s annual and semiannual reports, which are sent to shareholders and filed with the SEC, contain information about the Fund’s portfolio holdings, including a complete schedule of holdings. A complete schedule of holdings for each Underlying Fund is also filed with the SEC on the Form N-Q as of the end of each respective Underlying Fund’s first and third quarters. In addition, on or about the first day of the second month following each calendar quarter-end, each Fund makes publicly available a complete schedule of its portfolio holdings as of the last day of each such quarter. The information for the most recently ended calendar quarter may be viewed at www.lordabbett.com or requested at no charge by calling Lord Abbett at 888-522-2388.
Lord Abbett Developing Growth Fund, Inc.
| | |
| Ten Largest Holdings | | % of Investments |
SuccessFactors, Inc. | | 1.92% |
VistaPrint NV | | 1.81% |
EnerNOC, Inc. | | 1.77% |
Netflix, Inc. | | 1.63% |
Insulet Corp. | | 1.63% |
Alexion Pharmaceuticals, Inc. | | 1.62% |
lululemon athletica, Inc. | | 1.59% |
Concur Technologies, Inc. | | 1.55% |
NetLogic Microsystems, Inc. | | 1.55% |
Lumber Liquidators, Inc. | | 1.54% |
| | |
| Holdings by Sector* | | % of Investments |
Consumer Discretionary | | 22.63% |
Energy | | 6.35% |
Financial Services | | 8.18% |
Healthcare | | 18.79% |
Materials & Processing | | 0.39% |
Producer Durables | | 11.57% |
Technology | | 27.55% |
Utilities | | 0.44% |
Short-Term Investment | | 4.10% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
141
Investments in Underlying Funds (unaudited)(continued)
Lord Abbett Securities Trust – International Opportunities Fund
| | |
| Ten Largest Holdings | | % of Investments |
Davide Campari-Milano SpA | | 1.64% |
REXLot Holdings Ltd. | | 1.57% |
Babcock International Group plc | | 1.57% |
Ebro Puleva SA | | 1.56% |
easyJet plc | | 1.54% |
Schroders plc | | 1.51% |
Megaworld Corp. | | 1.45% |
Prosegur Compania de Seguridad SA Registered Shares | | 1.45% |
Symrise GmbH & Co. AG | | 1.44% |
Cobham plc | | 1.40% |
| |
| Holdings by Sector* | | % of Investments |
Basic Materials | | 6.25% |
Consumer Cyclical | | 22.93% |
Consumer Non-Cyclical | | 8.79% |
Diversified Financials | | 5.17% |
Energy | | 5.59% |
Healthcare | | 7.63% |
Industrial Goods & Services | | 17.17% |
Non-Property Financials | | 6.70% |
Property & Property Services | | 3.39% |
Technology | | 4.35% |
Telecommunications | | 0.50% |
Transportation | | 2.62% |
Utilities | | 5.16% |
Short-Term Investment | | 3.75% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
Lord Abbett Securities Trust – Micro-Cap Growth Fund
| | |
| Ten Largest Holdings | | % of Investments |
Insulet Corp. | | 2.60% |
EnerNOC, Inc. | | 2.10% |
DexCom, Inc. | | 1.76% |
Orion Marine Group, Inc. | | 1.72% |
Clean Energy Fuels Corp. | | 1.68% |
Lumber Liquidators, Inc. | | 1.64% |
Endologix, Inc. | | 1.62% |
Compellent Technologies, Inc. | | 1.57% |
Volcom, Inc. | | 1.57% |
Knot, Inc. (The) | | 1.55% |
142
Investments in Underlying Funds (unaudited)(continued)
| | |
| Holdings by Sector* | | % of Investments |
Consumer Discretionary | | 19.61% |
Consumer Staples | | 2.25% |
Energy | | 5.78% |
Financial Services | | 3.59% |
Healthcare | | 22.25% |
Materials & Processing | | 1.97% |
Producer Durables | | 14.07% |
Technology | | 24.21% |
Utilities | | 1.44% |
Short-Term Investment | | 4.83% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
Lord Abbett Securities Trust – Micro-Cap Value Fund
| | |
| Ten Largest Holdings | | % of Investments |
Overhill Farms, Inc. | | 3.53% |
Medical Action Industries, Inc. | | 3.26% |
American Dental Partners, Inc. | | 2.28% |
Radiant Systems, Inc. | | 2.26% |
Odyssey HealthCare, Inc. | | 2.26% |
Bowne & Co., Inc. | | 2.22% |
Rimage Corp. | | 1.96% |
Chesapeake Utilities Corp. | | 1.94% |
Great Lakes Dredge & Dock Co. | | 1.68% |
American Physicians Service Group, Inc. | | 1.65% |
| |
| Holdings by Sector* | | % of Investments |
Consumer Discretionary | | 11.80% |
Consumer Staples | | 4.65% |
Energy | | 2.55% |
Financial Services | | 8.54% |
Healthcare | | 14.09% |
Materials & Processing | | 5.07% |
Other Energy | | 0.48% |
Producer Durables | | 29.64% |
Technology | | 13.82% |
Utilities | | 2.44% |
Short-Term Investment | | 6.92% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
143
Investments in Underlying Funds (unaudited)(continued)
Lord Abbett Blend Trust – Small-Cap Blend Fund
| | |
| Ten Largest Holdings | | % of Investments |
HCC Insurance Holdings, Inc. | | 2.78% |
Watsco, Inc. | | 2.70% |
Solera Holdings, Inc. | | 2.69% |
Sykes Enterprises, Inc. | | 2.68% |
FTI Consulting, Inc. | | 2.24% |
ICON plc ADR | | 2.13% |
EXCO Resources, Inc. | | 2.08% |
Global Payments, Inc. | | 2.04% |
Comstock Resources, Inc. | | 2.02% |
OptionsXpress Holdings, Inc. | | 1.92% |
| |
| Holdings by Sector* | | % of Investments |
Consumer Discretionary | | 11.47% |
Consumer Staples | | 3.04% |
Energy | | 6.49% |
Financial Services | | 13.58% |
Healthcare | | 14.49% |
Materials & Processing | | 9.36% |
Producer Durables | | 27.69% |
Technology | | 11.00% |
Short-Term Investment | | 2.88% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
Lord Abbett Research Fund, Inc. – Small-Cap Value Fund
| | |
| Ten Largest Holdings | | % of Investments |
Hexcel Corp. | | 2.14% |
Curtiss-Wright Corp. | | 2.11% |
Reliance Steel & Aluminum Co. | | 1.77% |
NBTY, Inc. | | 1.72% |
Fossil, Inc. | | 1.71% |
Baldor Electric Co. | | 1.70% |
Financial Federal Corp. | | 1.60% |
Kirby Corp. | | 1.49% |
Bristow Group, Inc. | | 1.46% |
Chicago Bridge & Iron Co. NV NY Registered Shares | | 1.46% |
144
Investments in Underlying Funds (unaudited)(concluded)
| | |
| Holdings by Sector* | | % of Investments |
Consumer Discretionary | | 9.89% |
Consumer Staples | | 3.44% |
Energy | | 5.60% |
Financial Services | | 16.87% |
Healthcare | | 7.93% |
Materials & Processing | | 16.03% |
Producer Durables | | 27.66% |
Technology | | 7.42% |
Utilities | | 3.11% |
Short-Term Investment | | 2.05% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
Lord Abbett Securities Trust – Value Opportunities Fund
| | |
| Ten Largest Holdings | | % of Investments |
PartnerRe Ltd. | | 2.19% |
NBTY, Inc. | | 1.98% |
Comerica, Inc. | | 1.96% |
Fossil, Inc. | | 1.70% |
Sapient Corp. | | 1.68% |
Albemarle Corp. | | 1.63% |
Lazard Ltd. Class A | | 1.55% |
Alliance Data Systems Corp. | | 1.50% |
Diebold, Inc. | | 1.43% |
Humana, Inc. | | 1.41% |
| | |
| Holdings by Sector* | | % of Investments |
Consumer Discretionary | | 10.75% |
Consumer Staples | | 4.28% |
Energy | | 6.06% |
Financial Services | | 20.97% |
Healthcare | | 10.34% |
Materials & Processing | | 7.06% |
Producer Durables | | 17.25% |
Technology | | 12.55% |
Utilities | | 2.80% |
Short-Term Investment | | 7.94% |
Total | | 100.00% |
| * | A sector may comprise several industries. |
145
Basic Information About Management
The Board of Trustees (the “Board”) is responsible for the management of the business and affairs of the Trust in accordance with the laws of the State of Delaware. The Board appoints officers who are responsible for the day-to-day operations of the Trust and who execute policies authorized by the Board. The Board also approves an investment adviser to the Trust and continues to monitor the cost and quality of the services provided by the investment adviser, and annually considers whether to renew the contract with the adviser. Generally, each Trustee holds office until his/her successor is elected and qualified or until his/her earlier resignation or removal, as provided in the Trust’s organizational documents.
Lord, Abbett & Co. LLC (“Lord Abbett”), a Delaware limited liability company, is the Trust’s investment adviser.
Interested Trustees
The following Trustees are partners of Lord Abbett and are “interested persons” of the Trust as defined in the Act. Mr. Dow and Ms. Foster are officers, directors, or trustees of each of the 14 Lord Abbett-sponsored funds, which consist of 53 portfolios or series.
| | | | | | |
Name, Address and
Year of Birth | | Current Position and
Length of Service
with Trust | | Principal Occupation
During Past Five Years | | Other Directorships |
| | | |
Robert S. Dow Lord, Abbett & Co. LLC 90 Hudson Street Jersey City, NJ 07302 (1945) | | Trustee since 1993 and Chairman since 1996 | | Senior Partner (since 2007), Chief Executive Officer (since 1996) and was formerly Managing Partner (1996 - 2007), joined Lord Abbett in 1972. | | N/A |
| | | |
Daria L. Foster Lord, Abbett & Co. LLC 90 Hudson Street Jersey City, NJ 07302 (1954) | | Trustee since 2006 | | Managing Partner (since 2007), and was formerly Director of Marketing and Client Service, joined Lord Abbett in 1990. | | N/A |
Independent Trustees
The following independent or outside Trustees (“Independent Trustees”) are also directors or trustees of each of the 14 Lord Abbett-sponsored funds, which consist of 53 portfolios or series.
| | | | | | |
Name, Address and
Year of Birth | | Current Position and
Length of Service
with Trust | | Principal Occupation
During Past Five Years | | Other Directorships |
| | | |
E. Thayer Bigelow Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1941) | | Trustee since 1994 | | Managing General Partner, Bigelow Media, LLC (since 2000); Senior Adviser, Time Warner Inc. (1998 - 2000). | | Currently serves as director of Crane Co. (since 1984), Huttig Building Products Inc. (since 1998) and R.H. Donnelley Inc. (since 2009). |
| | | |
William H.T. Bush Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1938) | | Trustee since 1998 | | Co-founder and Chairman of the Board of the financial advisory firm of Bush-O’Donnell & Company (since 1986). | | Currently serves as director of WellPoint, Inc., a health benefits company (since 2002). |
146
Basic Information About Management (continued)
| | | | | | |
Name, Address and
Year of Birth | | Current Position and
Length of Service
with Trust | | Principal Occupation
During Past Five Years | | Other Directorships |
| | | |
Robert B. Calhoun, Jr. Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1942) | | Trustee since 1998 | | Senior Advisor of Monitor Clipper Partners, a private equity investment fund (since 1997); President of Clipper Asset Management Corp. (1991 - 2009). | | N/A |
| | | |
Julie A. Hill Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1946) | | Trustee since 2004 | | Owner and CEO of The Hill Company, a business consulting firm (since 1998). | | Currently serves as director of WellPoint, Inc., a health benefits company (since 1994) and Lend Lease Corporation Limited (since 2005). |
| | | |
Franklin W. Hobbs Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | | Trustee since 2001 | | Advisor of One Equity Partners, a private equity firm (since 2004). | | Currently serves as a director and Chairman of the Board of GMAC Inc., a financial services firm (since 2009) and as a director of Molson Coors Brewing Company (since 2002). |
| | | |
Thomas J. Neff Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1937) | | Trustee since 1993 | | Chairman of Spencer Stuart (U.S.), an executive search consulting firm (since 1996). | | Currently serves as director of Ace, Ltd. (since 1997) and Hewitt Associates, Inc. (since 2004). |
| | | |
James L.L. Tullis Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | | Trustee since 2006 | | CEO of Tullis-Dickerson and Co. Inc., a venture capital management firm (since 1990). | | Currently serves as director of Crane Co. (since 1998). |
Officers
None of the officers listed below have received compensation from the Trust. All of the officers of the Trust may also be officers of the other Lord Abbett-sponsored funds and maintain offices at 90 Hudson Street, Jersey City, NJ 07302. Unless otherwise indicated, the titles and positions listed under the “Principal Occupation” column indicate the officer’s position(s) and title(s) with Lord Abbett.
| | | | | | |
Name and Year of Birth | | Current Position
with Trust | | Length of Service of Current Position | | Principal Occupation During Past Five Years |
| | | |
Robert S. Dow (1945) | | Chief Executive Officer and Chairman | | Elected in 1996 | | Senior Partner (since 2007), Chief Executive Officer (since 1996) and was formerly Managing Partner (1996 - 2007), joined Lord Abbett in 1972. |
147
Basic Information About Management (continued)
| | | | | | |
Name and Year of Birth | | Current Position
with Trust | | Length of Service of Current Position | | Principal Occupation During Past Five Years |
| | | |
Daria L. Foster (1954) | | President | | Elected in 2006 | | Managing Partner (since 2007) and was formerly Director of Marketing and Client Service, joined Lord Abbett in 1990. |
| | | |
Robert P. Fetch (1953) | | Executive Vice President | | Elected in 1999 | | Partner and Director, joined Lord Abbett in 1995. |
| | | |
Daniel H. Frascarelli (1954) | | Executive Vice President | | Elected in 2009 | | Partner and Director, joined Lord Abbett in 1990. |
| | | |
Robert I. Gerber (1954) | | Executive Vice President | | Elected in 2005 | | Partner and Chief Investment Officer (since 2007), joined Lord Abbett in 1997 as Director of Taxable Fixed Income Management. |
| | | |
Gerard S. E. Heffernan, Jr. (1963) | | Executive Vice President | | Elected in 1999 | | Partner and Director, joined Lord Abbett in 1998. |
| | | |
Todd D. Jacobson (1966) | | Executive Vice President | | Elected in 2003 | | Portfolio Manager, joined Lord Abbett in 2003. |
| | | |
Vincent J. McBride (1964) | | Executive Vice President | | Elected in 2003 | | Partner and Director, joined Lord Abbett in 2003. |
| | | |
F. Thomas O’Halloran, III (1955) | | Executive Vice President | | Elected in 2003 | | Partner and Director, joined Lord Abbett in 2001. |
| | | |
Harold E. Sharon (1960) | | Executive Vice President | | Elected in 2003 | | Partner and Director, joined Lord Abbett in 2003. |
| | | |
Christopher J. Towle (1957) | | Executive Vice President | | Elected in 2005 | | Partner and Director, joined Lord Abbett in 1987. |
| | | |
Stacy P. Allen (1967) | | Vice President | | Elected in 2009 | | Chief Administrative Officer (since 2009), was formerly a Client Portfolio Manager (2006 - 2008) and Director of Institutional Mutual Funds (2003 - 2006), joined Lord Abbett in 2003. |
| | | |
James W. Bernaiche (1956) | | Chief Compliance Officer | | Elected in 2004 | | Partner and Chief Compliance Officer, joined Lord Abbett in 2001. |
| | | |
Joan A. Binstock (1954) | | Chief Financial Officer and Vice President | | Elected in 1999 | | Partner and Chief Operations Officer, joined Lord Abbett in 1999. |
148
Basic Information About Management (concluded)
| | | | | | |
Name and Year of Birth | | Current Position
with Trust | | Length of Service of Current Position | | Principal Occupation During Past Five Years |
| | | |
John K. Forst (1960) | | Vice President and Assistant Secretary | | Elected in 2005 | | Deputy General Counsel, joined Lord Abbett in 2004. |
| | | |
Anthony W. Hipple (1964) | | Vice President | | Elected in 2006 | | Portfolio Manager, joined Lord Abbett in 2002. |
| | | |
Lawrence H. Kaplan (1957) | | Vice President and Secretary | | Elected in 1997 | | Partner and General Counsel, joined Lord Abbett in 1997. |
| | | |
Deepak Khanna (1963) | | Vice President | | Elected in 2008 | | Portfolio Manager, returned to Lord Abbett in 2007 from Jennison Associates LLC (2005 - 2007). Mr. Khanna’s former experience at Lord Abbett included Senior Research Analyst – other investment strategies (2000 - 2005). |
| | | |
Thomas B. Maher (1967) | | Vice President | | Elected in 2008 | | Portfolio Manager, joined Lord Abbett in 2003. |
| | | |
Justin C. Maurer (1969) | | Vice President | | Elected in 2008 | | Partner and Portfolio Manager, joined Lord Abbett in 2001. |
| | | |
A. Edward Oberhaus, III (1959) | | Vice President | | Elected in 1993 | | Partner and Director, joined Lord Abbett in 1983. |
| | | |
Thomas R. Phillips (1960) | | Vice President and Assistant Secretary | | Elected in 2008 | | Deputy General Counsel, joined Lord Abbett in 2006 and was formerly an attorney at Morgan, Lewis & Bockius LLP. |
| | | |
Lawrence B. Stoller (1963) | | Vice President and Assistant Secretary | | Elected in 2007 | | Senior Deputy General Counsel, joined Lord Abbett in 2007 and was formerly an Executive Vice President and General Counsel at Cohen & Steers Capital Management, Inc. (1999 - 2007). |
| | | |
Bernard J. Grzelak (1971) | | Treasurer | | Elected in 2003 | | Partner and Director of Fund Administration, joined Lord Abbett in 2003. |
Please call 888-522-2388 for a copy of the statement of additional information (SAI), which contains further information about the Trust’s Trustees. It is available free upon request.
149
Householding
The Trust has adopted a policy that allows it to send only one copy of each 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 each Fund’s portfolio securities, and information on how Lord Abbett voted each 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 Funds are required to file their complete schedules of portfolio holdings with the SEC for their 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 (i) 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); (ii) sending your request and duplicating fee to the SEC’s Public Reference Section, Washington, DC 20549-1520; or (iii) sending your request electronically, after paying a duplicating fee, to publicinfo@sec.gov.
Tax Information
The percentages below reflect the portion of ordinary income distributions that are eligible for the corporate dividend received deduction (DRD) and qualified dividend income (QDI) for individual shareholders:
| | | | | | |
| Fund Name | | DRD | | | QDI | |
Alpha Strategy Fund | | 100 | % | | 100 | % |
Fundamental Equity | | 100 | | | 100 | |
International Core Equity Fund | | 0 | | | 100 | |
International Dividend Income Fund | | 0 | | | 100 | |
International Opportunities Fund | | 0 | | | 100 | |
Large Cap Value Fund | | 0 | | | 100 | |
Value Opportunities Fund | | 100 | | | 100 | |
150
Additionally, of the distribution paid to shareholders during the fiscal year ended October 31, 2009, the following amounts represent short-term and long-term capital gains:
| | | | | |
| Fund Name | | Short-Term
Capital Gains | | Long-Term
Capital Gains |
Alpha Strategy Fund | | – | | $ | 31,893,275 |
The International Core Equity, the International Dividend Income and the International Opportunities Fund intend to pass through foreign source income and foreign taxes as follows:
| | | | | | |
| Fund Name | | Foreign Source
Income | | Foreign
Taxes |
International Core Equity Fund | | $ | 21,168,876 | | $ | 1,462,096 |
International Dividend Income Fund | | | 8,932,170 | | | 597,357 |
International Opportunities Fund | | | 5,719,278 | | | 421,864 |
151
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 Securities Trust
Lord Abbett Alpha Strategy Fund
Lord Abbett Fundamental Equity Fund
Lord Abbett International Core Equity Fund
Lord Abbett International Dividend Income Fund
Lord Abbett International Opportunities Fund
Lord Abbett Large-Cap Value Fund
Lord Abbett Value Opportunities Fund
LST-2-1009
(12/09)
2009
LORD ABBETT
ANNUAL
REPORT 
Lord Abbett
Micro Cap Growth Fund
Micro Cap Value Fund
For the fiscal year ended October 31, 2009
Lord Abbett Micro Cap Growth Fund
and Micro Cap Value Fund Annual Report
For the fiscal year ended October 31, 2009
From left to right: Robert S. Dow, Director and Chairman of the Lord Abbett Funds; E. Thayer Bigelow, Independent Lead Director of the Lord Abbett Funds; and Daria L. Foster, Director and President of the Lord Abbett Funds.
Dear Shareholders: We are pleased to provide you with this overview of Lord Abbett Micro Cap Growth Fund’s and Lord Abbett Micro Cap Value Fund’s performance for the fiscal year ended October 31, 2009. On this page and the following pages, we discuss the major factors that influenced performance. For detailed and more timely information about the Funds, please visit our Website at www.lordabbett.com, where you also can access the quarterly commentaries by the Funds’ portfolio managers.
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,
Robert S. Dow
Chairman
Q: What were the overall market conditions during the fiscal year ended October 31, 2009?
A: After taking a beating during much of the first half of the fiscal year ended October 31, 2009, the equity markets (as represented by the S&P 500® Index1) began to trend upward during the balance of the period, recovering some of their previous losses. The fiscal year ended with the S&P 500 Index up 9.80%.
Mid cap stocks (as defined by the Russell MidCap® Index2) generally outperformed small cap stocks (as measured by the Russell 2000® Index3) and large cap stocks (as measured by the Russell 1000® Index4). Growth stocks (as represented by the Russell 3000® Growth Index5) outperformed value stocks (as represented by the Russell 3000® Value Index6) for the fiscal year. Overall, most equity asset classes and investing styles trended higher throughout the 12-month fiscal period.
1
Lord Abbett Micro Cap Growth Fund
Q: How did the Micro Cap Growth Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 24.81%, reflecting performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the Russell Microcap® Growth Index,7 which returned 15.48% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant contributors to the Fund’s performance relative to its benchmark for the 12-month period were the technology, energy, and consumer discretionary sectors.
Among the individual holdings that contributed to performance were energy holding EnerNoc, Inc. (the Fund’s number-one contributor), a developer of power solutions; technology holding Aruba Networks, Inc., a provider of mobility solutions that enable secure access to wireline and wireless network information; and consumer discretionary holding Home Inns & Hotel Management, Inc., an operator of budget hotels in the People’s Republic of China.
The most significant detractors from the Fund’s performance relative to its benchmark for the 12-month period were the healthcare, materials and processing, and consumer staples sectors.
Among the individual holdings that detracted from performance were healthcare holdings CardioNet, Inc. (the Fund’s number-one detractor), a provider of ambulatory outpatient solutions for monitoring health information, and Hansen Medical, Inc. a developer of medical robotics for catheters; and technology holding Blue Coat Systems, Inc., a provider of Web security solutions.
Lord Abbett Micro Cap Value Fund
Q: How did the Micro Cap Value Fund perform during the fiscal year ended October 31, 2009?
A: The Fund returned 9.62%, reflecting performance at the net asset value (NAV) of Class A shares with all distributions reinvested, compared to its benchmark, the Russell Microcap® Value Index,8 which returned -3.67% over the same period.
Q: What were the most significant factors affecting performance?
A: The most significant contributors to Fund performance relative to its benchmark for the 12-month period were the financial services sector (owing to an underweight position), the producer durables sector, and the technology sector.
Among the individual holdings that contributed to performance were consumer discretionary holding Central Garden & Pet Company (the Fund’s number-one contributor), a supplier of consumer lawn and garden and pet supply products; technology holding Radiant
2
Systems, Inc., a provider of enterprise-wide technology systems to the restaurant industry; and materials and processing holding Orion Marine Group, Inc., a provider of marine construction services.
The most significant detractors from Fund performance relative to its benchmark for the 12-month period were the healthcare sector, and the materials and processing sector (owing to an underweight position).
Among the individual holdings that detracted from performance were financial services holding Metro Bancorp Inc. (the Fund’s number-one detractor), a Central Pennsylvania bank holding company; producer durables holding LMI Aerospace, Inc., a provider of close tolerance aluminum and specialty alloy components for the aerospace industry; and healthcare holding Skilled Healthcare Group, Inc., an operator of nursing and assisted-living homes in California, Texas, Kansas, and Nevada.
Each Fund’s portfolio is actively managed and, therefore, its holdings and weightings of a particular issuer or particular sector as a percentage of portfolio assets are subject to change. Sectors may include many industries.
1 The S&P 500® Index is widely regarded as the standard for measuring large-cap U.S. stock market performance and includes a representative sample of leading companies in leading industries.
2 The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 31% of the total market capitalization of the Russell 1000 Index.
3 The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 1000 Index.
4 The Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index.
5 The Russell 3000® Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000 Growth or the Russell 2000 Growth indexes.
6 The Russell 3000® Value Index measures the performance of those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000® Value or the Russell 2000® Value indexes.
7 The Russell Microcap® Growth Index measures the performance of the microcap growth segment of the U.S. equity market. It includes those Russell Microcap Index companies with higher price-to-book ratios and higher forecasted growth values.
8 The Russell Microcap® Value Index measures the performance of the microcap value segment of the U.S. equity market. It includes those Russell Microcap Index companies with lower price-to-book ratios and lower forecasted growth values.
Unless otherwise indicated, indexes are unmanaged and reflect total returns with all distributions reinvested, but do not reflect the deduction of fees, expenses, or taxes, and are not available for direct investment.
Important Performance and Other Information
Performance data quoted reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance quoted. The investment return and principal value of an investment in a fund will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month-end by calling Lord Abbett at 888-522-2388 or referring to our Website at www.lordabbett.com.
3
Except where noted, comparative Fund performance does not account for the deduction of sales charges, and would be different if sales charges were included. Each Fund offers two classes of shares with distinct pricing options. For a full description of the differences in pricing alternatives, please see each Fund’s prospectus.
Note: Fees and expense waivers are currently in effect for both Funds. Had waivers not been in effect, performance would have been lower. See the Funds’ prospectuses for a history of fees waived and expenses assumed. Existing expense waivers may be revised or terminated at any time.
The views of each Fund’s management and the portfolio holdings described in this report are as of October 31, 2009; these views and portfolio holdings may have changed subsequent to this date, and they do not guarantee the future performance of the markets or the Funds. Information provided in this report should not be considered a recommendation to purchase or sell securities.
A Note about Risk: See Notes to Financial Statements for a discussion of investment risks. For a more detailed discussion of the risks associated with the Funds, please see each Fund’s prospectus.
Mutual funds are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, banks, and are subject to investment risks including possible loss of principal amount invested.
4
Micro Cap Growth Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class I shares with the same investment in the Russell 2000® Growth Index, the Russell Microcap® Index, and the Russell Microcap Growth Index, assuming reinvestment of all dividends and distributions. The performance of the other class will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such class. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
The Russell Microcap Growth Index and the Russell Microcap Index have no historical performance prior to July 3, 2000. Therefore, the ending value for these indexes was not calculated for the same period as the Fund. The Russell 2000 Growth Index is calculated using the same period as the Fund.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | | | |
| | | 1 Year | | 5 Years | | 10 Years | | Life of Class |
Class A3 | | 17.67% | | 5.15% | | – | | 1.23% |
Class I4 | | 25.13% | | 6.67% | | 5.93% | | – |
1 Performance for each unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance.
2 The Fund changed its standardized performance benchmark from the Russell 2000® Growth Index to the Russell Microcap® Growth Index to provide a more accurate market comparison against the Fund’s objective. Since the Russell Microcap Growth Index and the Russell Microcap Index commenced on July 3, 2000, the Fund will continue to show the Russell 2000 Growth Index as an additional historical performance benchmark.
3 Class A shares commenced operations on May 1, 2000. Total return, which is the percent change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Performance is at net asset value.
5
Micro Cap Value Fund
Investment Comparison
Below is a comparison of a $10,000 investment in Class I shares with the same investment in the Russell 2000® Value Index, the Russell Microcap® Index, and the Russell Microcap Value Index, assuming reinvestment of all dividends and distributions. The performance of the other class will be greater than or less than the performance shown in the graph below due to different sales loads and expenses applicable to such class. The graph and performance table below do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
The Russell Microcap Value Index and the Russell Microcap Index have no historical performance prior to July 3, 2000. Therefore, the ending value for these indexes was not calculated for the same period as the Fund. The Russell 2000 Value Index is calculated using the same period as the Fund.
Average Annual Total Returns at Maximum Applicable
Sales Charge for the Periods Ended October 31, 2009
| | | | | | | | |
| | | 1 Year | | 5 Years | | 10 Years | | Life of Class |
Class A3 | | 3.34% | | 3.33% | | – | | 12.28% |
Class I4 | | 9.90% | | 4.82% | | 15.02% | | – |
1 Performance for each unmanaged index does not reflect transaction costs, management fees or sales charges. The performance of each index is not necessarily representative of the Fund’s performance.
2 The Fund changed its standardized performance benchmark from the Russell 2000® Value Index to the Russell Microcap® Value Index to provide a more accurate market comparison against the Fund’s objective. Since the Russell Microcap Value Index and the Russell Microcap Index commenced on July 3, 2000, the Fund will continue to show the Russell 2000 Value Index as an additional historical performance benchmark.
3 Class A shares commenced operations on May 1, 2000. Total return, which is the percent change in net asset value, after deduction of the maximum initial sales charge of 5.75% applicable to Class A shares, with all dividends and distributions reinvested for the periods shown ended October 31, 2009, is calculated using the SEC-required uniform method to compute such return.
4 Performance is at net asset value.
6
Expense Examples
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments (these charges vary among the share classes); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees (these charges vary among the share classes); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (May 1, 2009 through October 31, 2009).
Actual Expenses
For each class of each Fund, the first line of the tables on the following pages 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 the Period 5/1/09 – 10/31/09” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
For each class of each Fund, the second line of the tables on the following pages 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 each 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 each 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.
7
Micro Cap Growth Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,199.20 | | $ | 11.59 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,014.70 | | $ | 10.61 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,199.80 | | $ | 10.26 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.88 | | $ | 9.40 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (2.09% for Class A and 1.85% for Class I) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | |
| Sector* | | %** | |
Consumer Discretionary | | 19.61% | |
Consumer Staples | | 2.25% | |
Energy | | 5.78% | |
Financial Services | | 3.59% | |
Healthcare | | 22.25% | |
Materials & Processing | | 1.97% | |
Producer Durables | | 14.07% | |
Technology | | 24.21% | |
Utilities | | 1.44% | |
Short-Term Investment | | 4.83% | |
Total | | 100.00% | |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
8
Micro Cap Value Fund
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 (loads). 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† |
| | | 5/1/09 | | 10/31/09 | | 5/1/09 -
10/31/09 |
Class A | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,178.30 | | $ | 11.53 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,014.63 | | $ | 10.66 |
Class I | | | | | | | | | |
Actual | | $ | 1,000.00 | | $ | 1,179.60 | | $ | 10.16 |
Hypothetical (5% Return Before Expenses) | | $ | 1,000.00 | | $ | 1,015.89 | | $ | 9.40 |
| † | | For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (2.10% for Class A and 1.85% for Class I) multiplied by the average account value over the period, multiplied by 184/365 (to reflect one-half year period). |
Portfolio Holdings Presented by Sector
October 31, 2009
| | | |
| Sector* | | %** | |
Consumer Discretionary | | 11.80% | |
Consumer Staples | | 4.65% | |
Energy | | 2.55% | |
Financial Services | | 8.54% | |
Healthcare | | 14.09% | |
Materials & Processing | | 5.07% | |
Other Energy | | 0.48% | |
Producer Durables | | 29.64% | |
Technology | | 13.82% | |
Utilities | | 2.44% | |
Short-Term Investment | | 6.92% | |
Total | | 100.00% | |
| * | | A sector may comprise several industries. |
| ** | | Represents percent of total investments. |
9
Schedule of Investments
MICRO CAP GROWTH FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| COMMON STOCKS 96.69% | | | | | |
| | |
| Advertising Agencies 0.85% | | | | | |
| Constant Contact, Inc.* | | 32,972 | | $ | 546 |
| | | | | |
| | |
| Alternative Energy 3.84% | | | | | |
| Clean Energy Fuels Corp.* | | 95,022 | | | 1,102 |
| EnerNOC, Inc.* | | 47,789 | | | 1,373 |
| | | | | |
| Total | | | | | 2,475 |
| | | | | |
|
| Asset Management & Custodian 0.64% |
| JMP Group, Inc. | | 49,300 | | | 415 |
| | | | | |
| | |
| Auto Parts 0.74% | | | | | |
| Wonder Auto Technology, Inc. (China)*(a) | | 36,800 | | | 476 |
| | | | | |
| | |
| Banks: Diversified 0.88% | | | | | |
| Texas Capital Bancshares, Inc.* | | 39,000 | | | 568 |
| | | | | |
|
| Beverage: Brewers & Distillers 0.55% |
| Boston Beer Co., Inc. (The) Class A* | | 9,300 | | | 353 |
| | | | | |
| | |
| Beverage: Soft Drinks 1.01% | | | | | |
| Peet’s Coffee & Tea, Inc.* | | 19,100 | | | 649 |
| | | | | |
| | |
| Biotechnology 3.33% | | | | | |
| Allos Therapeutics, Inc.* | | 55,100 | | | 311 |
| Cypress Bioscience, Inc.* | | 68,000 | | | 418 |
| Genomic Health, Inc.* | | 24,200 | | | 449 |
| Vanda Pharmaceuticals, Inc.* | | 51,884 | | | 529 |
| ViroPharma, Inc.* | | 58,300 | | | 440 |
| | | | | |
| Total | | | | | 2,147 |
| | | | | |
| | |
| Chemical: Diversified 0.62% | | | | | |
| ChemSpec International Ltd. ADR* | | 54,405 | | | 399 |
| | | | | |
| | |
| Commercial Services 3.78% | | | | | |
| 51job, Inc. ADR* | | 63,596 | | | 948 |
| Kforce, Inc.* | | 74,607 | | | 875 |
| | | | | | |
| Investments | | Shares | | Value
(000) | |
| TrueBlue, Inc.* | | 50,700 | | $ | 613 | |
| | | | | | |
| Total | | | | | 2,436 | |
| | | | | | |
| |
| Commercial Vehicles & Parts 1.29% | | | | |
| Westport Innovations, Inc. (Canada)*(a) | | 85,044 | | | 832 | |
| | | | | | |
| |
| Communications Technology 1.77% | | | | |
| Anaren, Inc.* | | 35,000 | | | 512 | |
| ShoreTel, Inc.* | | 95,200 | | | 625 | |
| | | | | | |
| Total | | | | | 1,137 | |
| | | | | | |
|
| Computer Services, Software & Systems 13.25% | |
| 3PAR, Inc.* | | 70,407 | | | 663 | |
| CommVault Systems, Inc.* | | 35,500 | | | 699 | |
| Compellent Technologies, Inc.* | | 56,100 | | | 1,029 | |
| GSI Commerce, Inc.* | | 16 | | | – | (b) |
| Interactive Intelligence, Inc.* | | 46,300 | | | 776 | |
| OpenTable, Inc.* | | 32,481 | | | 801 | |
| Perficient, Inc.* | | 69,200 | | | 563 | |
| PROS Holdings, Inc.* | | 80,000 | | | 719 | |
| RightNow Technologies, Inc.* | | 46,507 | | | 710 | |
| Synchronoss Technologies, Inc.* | | 70,187 | | | 801 | |
| Taleo Corp. Class A* | | 46,500 | | | 1,011 | |
| Ultimate Software Group, Inc. (The)* | | 29,700 | | | 758 | |
| | | | | | |
| Total | | | | | 8,530 | |
| | | | | | |
| |
| Computer Technology 2.18% | | | | |
| Netezza Corp.* | | 85,013 | | | 786 | |
| VanceInfo Technologies, Inc. ADR* | | 40,772 | | | 616 | |
| | | | | | |
| Total | | | | | 1,402 | |
| | | | | | |
| | |
| Construction 1.75% | | | | | | |
| Orion Marine Group, Inc.* | | 59,244 | | | 1,128 | |
| | | | | | |
|
| Consumer Services: Miscellaneous 1.58% | |
| Knot, Inc. (The)* | | 95,328 | | | 1,017 | |
| | | | | | |
See Notes to Financial Statements.
10
Schedule of Investments (continued)
MICRO CAP GROWTH FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| Diversified Financial Services 2.11% |
| Broadpoint Gleacher Securities Group, Inc.* | | 108,247 | | $ | 690 |
| Evercore Partners, Inc. Class A | | 20,579 | | | 672 |
| | | | | |
| Total | | | | | 1,362 |
| | | | | |
|
| Diversified Materials & Processing 0.76% |
| Koppers Holdings, Inc. | | 18,657 | | | 487 |
| | | | | |
| | |
| Diversified Retail 2.33% | | | | | |
| Shutterfly, Inc.* | | 56,300 | | | 794 |
| Vitacost.com, Inc.* | | 71,500 | | | 709 |
| | | | | |
| Total | | | | | 1,503 |
| | | | | |
| | |
| Education Services 0.85% | | | | | |
| ChinaCast Education Corp. (China)*(a) | | 65,200 | | | 406 |
| K12, Inc.* | | 8,712 | | | 140 |
| | | | | |
| Total | | | | | 546 |
| | | | | |
| | |
| Electronics 1.52% | | | | | |
| IPG Photonics Corp.* | | 71,436 | | | 976 |
| | | | | |
|
| Engineering & Contracting Services 1.10% |
| MYR Group, Inc.* | | 41,137 | | | 707 |
| | | | | |
| | |
| Entertainment 1.26% | | | | | |
| Imax Corp. (Canada)*(a) | | 79,105 | | | 815 |
| | | | | |
| | |
| Foods 0.73% | | | | | |
| China-Biotics, Inc. (China)*(a) | | 40,300 | | | 467 |
| | | | | |
| |
| Healthcare Services 2.76% | | | |
| Addus HomeCare Corp.* | | 68,900 | | | 630 |
| IPC The Hospitalist Co., Inc.* | | 27,606 | | | 836 |
| Phase Forward, Inc.* | | 23,901 | | | 313 |
| | | | | |
| Total | | | | | 1,779 |
| | | | | |
| | |
| Hotel/Motel 0.74% | | | | | |
| Home Inns & Hotels Management, Inc. ADR* | | 17,962 | | | 477 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Machinery: Engines 0.92% | | | |
| Harbin Electric, Inc. (China)*(a) | | 37,241 | | $ | 593 |
| | | | | |
| |
| Machinery: Industrial 3.03% | | | |
| Chart Industries, Inc.* | | 32,079 | | | 635 |
| Colfax Corp.* | | 56,903 | | | 619 |
| Duoyuan Global Water, Inc. ADR* | | 21,236 | | | 696 |
| | | | | |
| Total | | | | | 1,950 |
| | | | | |
|
| Medical & Dental Instruments & Supplies 7.63% |
| ATS Medical, Inc.* | | 111,600 | | | 300 |
| Cardiovascular Systems, Inc.* | | 70,500 | | | 345 |
| Conceptus, Inc.* | | 27,800 | | | 488 |
| Endologix, Inc.* | | 222,000 | | | 1,057 |
| Insulet Corp.* | | 153,000 | | | 1,698 |
| MAKO Surgical Corp.* | | 75,000 | | | 679 |
| Orthovita, Inc.* | | 99,200 | | | 347 |
| | | | | |
| Total | | | | | 4,914 |
| | | | | |
| |
| Medical Equipment 5.34% | | | |
| Cyberonics, Inc.* | | 39,500 | | | 571 |
| DexCom, Inc.* | | 167,472 | | | 1,149 |
| NxStage Medical, Inc.* | | 162,529 | | | 907 |
| Somanetics Corp.* | | 54,500 | | | 815 |
| | | | | |
| Total | | | | | 3,442 |
| | | | | |
| | |
| Medical Services 1.26% | | | | | |
| Bio-Reference Laboratories, Inc.* | | 25,051 | | | 810 |
| | | | | |
| |
| Metal Fabricating 0.63% | | | |
| RBC Bearings, Inc.* | | 18,728 | | | 403 |
| | | | | |
| |
| Oil: Crude Producers 1.08% | | | |
| Carrizo Oil & Gas, Inc.* | | 30,000 | | | 695 |
| | | | | |
|
| Oil Well Equipment & Services 0.95% |
| Natural Gas Services Group, Inc.* | | 36,300 | | | 612 |
| | | | | |
See Notes to Financial Statements.
11
Schedule of Investments (continued)
MICRO CAP GROWTH FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| Pharmaceuticals 2.28% | | | | | |
| Eurand NV (Netherlands)*(a) | | 67,579 | | $ | 893 |
| Optimer Pharmaceuticals, Inc.* | | 49,500 | | | 572 |
| | | | | |
| Total | | | | | 1,465 |
| | | | | |
|
| Power Transmission Equipment 1.10% |
| Maxwell Technologies, Inc.* | | 39,649 | | | 711 |
| | | | | |
|
| Production Technology Equipment 2.11% |
| Kulicke & Soffa Industries, Inc.* | | 125,700 | | | 585 |
| Veeco Instruments, Inc.* | | 31,800 | | | 774 |
| | | | | |
| Total | | | | | 1,359 |
| | | | | |
| | |
| Restaurants 3.00% | | | | | |
| BJ’s Restaurants, Inc.* | | 27,548 | | | 440 |
| Buffalo Wild Wings, Inc.* | | 19,500 | | | 800 |
| California Pizza Kitchen, Inc.* | | 29,700 | | | 386 |
| McCormick & Schmick’s Seafood Restaurants, Inc.* | | 50,661 | | | 305 |
| | | | | |
| Total | | | | | 1,931 |
| | | | | |
|
| Scientific Instruments: Control & Filter 0.28% |
| Energy Recovery, Inc.* | | 32,246 | | | 180 |
| | | | | |
|
| Scientific Instruments: Gauges & Meters 1.04% |
| SmartHeat, Inc. (China)*(a) | | 74,700 | | | 668 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Semiconductors & Components 3.37% |
| ANADIGICS, Inc.* | | 132,681 | | $ | 426 |
| Cavium Networks, Inc.* | | 29,260 | | | 555 |
| Monolithic Power Systems, Inc.* | | 20,900 | | | 418 |
| Renesola Ltd. ADR* | | 209,600 | | | 771 |
| | | | | |
| Total | | | | | 2,170 |
| | | | | |
| | |
| Specialty Retail 6.97% | | | | | |
| America’s Car-Mart, Inc.* | | 44,700 | | | 927 |
| hhgregg, Inc.* | | 59,700 | | | 984 |
| Lumber Liquidators, Inc.* | | 50,400 | | | 1,071 |
| Monro Muffler Brake, Inc. | | 22,600 | | | 700 |
| Zumiez, Inc.* | | 59,963 | | | 808 |
| | | | | |
| Total | | | | | 4,490 |
| | | | | |
|
| Telecommunications Equipment 0.41% |
| DragonWave, Inc. (Canada)*(a) | | 33,400 | | | 266 |
| | | | | |
| |
| Textiles Apparel & Shoes 1.60% | | | |
| Volcom, Inc.* | | 61,900 | | | 1,028 |
| | | | | |
|
| Utilities: Gas Distributors 1.47% |
| China Natural Gas, Inc. (China)*(a) | | 80,400 | | | 945 |
| | | | | |
Total Common Stocks
(cost $55,623,004) | | | | | 62,261 |
| | | | | |
See Notes to Financial Statements.
12
Schedule of Investments (concluded)
MICRO CAP GROWTH FUND October 31, 2009
| | | | | | | |
| Investments | | Principal
Amount
(000) | | Value
(000) | |
| SHORT-TERM INVESTMENT 4.91% | |
| |
| Repurchase Agreement | | | | |
| Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $3,230,000 of U.S. Treasury Bill at 0.10% due 12/24/2009; value: $3,229,677; proceeds: $3,161,572 (cost $3,161,570) | | $ | 3,162 | | $ | 3,162 | |
| | | | | | | |
Total Investments in Securities 101.60%
(cost $58,784,574) | | | | | | 65,423 | |
| | | | | | | |
| Liabilities in Excess of Other Assets (1.60%) | | | | | | (1,028 | ) |
| | | | | | | |
| Net Assets 100.00% | | | | | $ | 64,395 | |
| | | | | | | |
| ADR | | American Depositary Receipt. |
| * | | Non-income producing security. |
| (a) | | Foreign security traded in U.S. dollars. |
| (b) | | Amount is less than $1,000. |
See Notes to Financial Statements.
13
Schedule of Investments
MICRO CAP VALUE FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| COMMON STOCKS 94.60% | | | |
| | |
| Auto Parts 1.32% | | | | | |
| Amerigon, Inc.* | | 165,468 | | $ | 1,064 |
| | | | | |
| |
| Banks: Diversified 4.03% | | | |
| Bryn Mawr Bank Corp. | | 42,582 | | | 681 |
| Centerstate Banks, Inc. | | 120,600 | | | 908 |
| Metro Bancorp, Inc.* | | 54,777 | | | 648 |
| Southwest Bancorp, Inc. | | 103,023 | | | 1,014 |
| | | | | |
| Total | | | | | 3,251 |
| | | | | |
|
| Banks: Savings, Thrift & Mortgage Lending 0.66% |
| Territorial Bancorp, Inc.* | | 32,100 | | | 529 |
| | | | | |
|
| Beverage: Brewers & Distillers 1.15% |
| Boston Beer Co., Inc. (The) Class A* | | 24,332 | | | 925 |
| | | | | |
| |
| Biotechnology 1.12% | | | |
| Cypress Bioscience, Inc.* | | 147,300 | | | 904 |
| | | | | |
| |
| Chemical: Diversified 1.42% | | | |
| KMG Chemicals, Inc. | | 21,305 | | | 262 |
| LSB Industries, Inc.* | | 71,400 | | | 885 |
| | | | | |
| Total | | | | | 1,147 |
| | | | | |
| |
| Chemical: Specialty 2.35% | | | |
| Balchem Corp. | | 37,100 | | | 1,024 |
| Quaker Chemical Corp. | | 42,394 | | | 873 |
| | | | | |
| Total | | | | | 1,897 |
| | | | | |
| |
| Commercial Services 6.38% | | | |
| Barrett Business Services, Inc. | | 81,700 | | | 948 |
| COMSYS IT Partners, Inc.* | | 112,200 | | | 769 |
| Exponent, Inc.* | | 44,839 | | | 1,166 |
| ICF International, Inc.* | | 28,500 | | | 817 |
| Kforce, Inc.* | | 73,400 | | | 861 |
| Standard Parking Corp.* | | 33,600 | | | 591 |
| | | | | |
| Total | | | | | 5,152 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Commercial Services: Rental & Leasing 2.40% |
| Marlin Business Services Corp.* | | 140,191 | | $ | 941 |
| McGrath RentCorp | | 50,200 | | | 992 |
| | | | | |
| Total | | | | | 1,933 |
| | | | | |
|
| Commercial Vehicles & Parts 1.46% |
| Modine Manufacturing Co. | | 114,700 | | | 1,181 |
| | | | | |
|
| Communications Technology 1.65% |
| Anaren, Inc.* | | 65,000 | | | 950 |
| Bel Fuse, Inc. Class B | | 20,871 | | | 378 |
| | | | | |
| Total | | | | | 1,328 |
| | | | | |
|
| Computer Services, Software & Systems 5.59% |
| INX, Inc.* | | 91,700 | | | 616 |
| Mercury Computer Systems, Inc.* | | 81,300 | | | 870 |
| Radiant Systems, Inc.* | | 188,427 | | | 1,854 |
| TechTeam Global, Inc.* | | 149,159 | | | 1,168 |
| | | | | |
| Total | | | | | 4,508 |
| | | | | |
| |
| Computer Technology 1.99% | | | |
| Rimage Corp.* | | 87,400 | | | 1,608 |
| | | | | |
| | |
| Construction 3.68% | | | | | |
| Great Lakes Dredge & Dock Co. | | 224,925 | | | 1,379 |
| Orion Marine Group, Inc.* | | 41,700 | | | 794 |
| Sterling Construction Co., Inc.* | | 49,400 | | | 797 |
| | | | | |
| Total | | | | | 2,970 |
| | | | | |
| |
| Diversified Financial Services 1.69% | | | |
| American Physicians Service Group, Inc. | | 56,131 | | | 1,351 |
| FBR Capital Markets Corp.* | | 2,351 | | | 14 |
| | | | | |
| Total | | | | | 1,365 |
| | | | | |
|
| Diversified Manufacturing Operations 0.52% |
| A. M. Castle & Co. | | 36,900 | | | 416 |
| | | | | |
See Notes to Financial Statements.
14
Schedule of Investments (continued)
MICRO CAP VALUE FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| Diversified Retail 3.34% | | | | | |
| Central Garden & Pet Co.* | | 64,353 | | $ | 638 |
| PetMed Express, Inc. | | 74,200 | | | 1,164 |
| Rush Enterprises, Inc. Class B* | | 97,350 | | | 891 |
| | | | | |
| Total | | | | | 2,693 |
| | | | | |
| |
| Electronic Components 0.88% | | | |
| Methode Electronics, Inc. | | 98,500 | | | 714 |
| | | | | |
| | |
| Electronics 1.28% | | | | | |
| II-VI, Inc.* | | 39,000 | | | 1,032 |
| | | | | |
|
| Engineering & Contracting Services 2.44% |
| Michael Baker Corp.* | | 32,126 | | | 1,147 |
| MYR Group, Inc.* | | 47,800 | | | 821 |
| | | | | |
| Total | | | | | 1,968 |
| | | | | |
| | |
| Foods 3.58% | | | | | |
| Overhill Farms, Inc.* | | 529,557 | | | 2,891 |
| | | | | |
|
| Forms & Bulk Printing Services 3.82% |
| Bowne & Co., Inc. | | 278,259 | | | 1,817 |
| Multi-Color Corp. | | 95,432 | | | 1,266 |
| | | | | |
| Total | | | | | 3,083 |
| | | | | |
|
| Healthcare Management Services 3.44% |
| American Dental Partners, Inc.* | | 157,627 | | | 1,874 |
| Healthspring, Inc.* | | 63,184 | | | 905 |
| | | | | |
| Total | | | | | 2,779 |
| | | | | |
| | |
| Healthcare Services 3.58% | | | | | |
| Addus HomeCare Corp.* | | 106,800 | | | 977 |
| Odyssey HealthCare, Inc.* | | 133,000 | | | 1,854 |
| Psychemedics Corp. | | 10,667 | | | 58 |
| | | | | |
| Total | | | | | 2,889 |
| | | | | |
|
| Insurance: Property-Casualty 2.30% |
| Donegal Group, Inc. Class A | | 83,033 | | | 1,212 |
| Radian Group, Inc. | | 111,200 | | | 644 |
| | | | | |
| Total | | | | | 1,856 |
| | | | | |
| | | | | |
| Investments | | Shares | | Value
(000) |
| Luxury Items 0.43% | | | | | |
| Movado Group, Inc. | | 33,500 | | $ | 351 |
| | | | | |
| |
| Machinery: Industrial 1.56% | | | |
| EnPro Industries, Inc.* | | 33,700 | | | 761 |
| Tennant Co. | | 18,800 | | | 501 |
| | | | | |
| Total | | | | | 1,262 |
| | | | | |
|
| Machinery: Oil Well Equipment & Services 0.48% |
| Tesco Corp. (Canada)*(a) | | 45,000 | | | 391 |
| | | | | |
|
| Medical & Dental Instruments & Supplies 3.31% |
| Medical Action Industries, Inc.* | | 244,298 | | | 2,673 |
| | | | | |
| | |
| Medical Equipment 2.87% | | | | | |
| Affymetrix, Inc.* | | 135,100 | | | 707 |
| Somanetics Corp.* | | 75,200 | | | 1,124 |
| TomoTherapy, Inc.* | | 145,400 | | | 483 |
| | | | | |
| Total | | | | | 2,314 |
| | | | | |
| | |
| Metal Fabricating 0.95% | | | | | |
| RBC Bearings, Inc.* | | 35,800 | | | 770 |
| | | | | |
| |
| Office Supplies & Equipment 0.85% | | | |
| Electronics for Imaging, Inc.* | | 58,700 | | | 685 |
| | | | | |
| | |
| Oil: Crude Producers 1.06% | | | | | |
| Approach Resources, Inc.* | | 110,700 | | | 859 |
| | | | | |
|
| Oil Well Equipment & Services 1.53% |
| Boots & Coots, Inc.* | | 453,100 | | | 630 |
| Pioneer Drilling Co.* | | 90,286 | | | 604 |
| | | | | |
| Total | | | | | 1,234 |
| | | | | |
| | |
| Railroad Equipment 1.03% | | | | | |
| Portec Rail Products, Inc. | | 95,200 | | | 829 |
| | | | | |
| | |
| Restaurants 2.54% | | | | | |
| Benihana, Inc. Class A* | | 116,800 | | | 565 |
See Notes to Financial Statements.
15
Schedule of Investments (concluded)
MICRO CAP VALUE FUND October 31, 2009
| | | | | |
| Investments | | Shares | | Value
(000) |
| Restaurants (continued) | | | | | |
Red Robin Gourmet Burgers, Inc.* | | 26,000 | | $ | 435 |
| Rubio’s Restaurants, Inc.* | | 144,319 | | | 1,052 |
| | | | | |
| Total | | | | | 2,052 |
| | | | | |
|
| Scientific Instruments: Control & Filter 1.22% |
| Flanders Corp.* | | 195,500 | | | 985 |
| | | | | |
|
| Scientific Instruments: Pollution Control 2.87% |
| Metalico, Inc.* | | 171,119 | | | 691 |
| Perma-Fix Environmental Services, Inc.* | | 173,522 | | | 410 |
| Team, Inc.* | | 75,100 | | | 1,219 |
| | | | | |
| Total | | | | | 2,320 |
| | | | | |
|
| Semiconductors & Components 1.63% |
| Techwell, Inc.* | | 127,100 | | | 1,319 |
| | | | | |
| | |
| Specialty Retail 2.46% | | | | | |
| America’s Car-Mart, Inc.* | | 37,900 | | | 786 |
| Monro Muffler Brake, Inc. | | 38,750 | | | 1,201 |
| | | | | |
| Total | | | | | 1,987 |
| | | | | |
| | |
| Steel 0.43% | | | | | |
Universal Stainless & Alloy Products, Inc.* | | 22,900 | | | 346 |
| | | | | |
| |
| Technology: Miscellaneous 1.02% | | | |
| CTS Corp. | | 92,100 | | | 825 |
| | | | | |
| |
| Textiles Apparel & Shoes 0.85% | | | |
| FGX International Holdings Ltd.* | | 51,700 | | | 682 |
| | | | | |
| | |
| Toys 1.06% | | | | | |
| RC2 Corp.* | | 65,300 | | | 853 |
| | | | | |
| | |
| Truckers 1.90% | | | | | |
| Celadon Group, Inc.* | | 66,700 | | | 651 |
| Marten Transport Ltd.* | | 50,303 | | | 882 |
| | | | | |
| Total | | | | | 1,533 |
| | | | | |
| | | | | | | |
| Investments | | Shares | | Value
(000) | |
| Utilities: Gas Distributors 1.98% | | | | |
| Chesapeake Utilities Corp. | | | 50,300 | | $ | 1,594 | |
| | | | | | | |
| | |
| Utilities: Water 0.50% | | | | | | | |
| Connecticut Water Service, Inc. | | | 18,200 | | | 406 | |
| | | | | | | |
Total Common Stocks
(cost $76,367,019) | | | | | | 76,353 | |
| | | | | | | |
| | |
| | | Principal
Amount
(000) | | | |
| SHORT-TERM INVESTMENT 7.03% | | | | |
| | |
| Repurchase Agreement | | | | | | | |
| Repurchase Agreement dated 10/30/2009, 0.01% due 11/2/2009 with State Street Bank & Trust Co. collateralized by $5,790,000 of U.S. Treasury Bill at 0.10% due 12/24/2009; value: $5,789,421; proceeds: $5,672,176 (cost $5,672,172) | | $ | 5,672 | | | 5,672 | |
| | | | | | | |
| Total Investments in Securities 101.63% (cost $82,039,191) | | | | | | 82,025 | |
| | | | | | | |
| Liabilities in Excess of Other Assets (1.63%) | | | | | | (1,318 | ) |
| | | | | | | |
| Net Assets 100.00% | | | | | $ | 80,707 | |
| | | | | | | |
| * | | Non-income producing security. |
| (a) | | Foreign security traded in U.S. dollars. |
See Notes to Financial Statements.
16
This page is intentionally left blank.
17
Statements of Assets and Liabilities
October 31, 2009
| | | | | | | | |
| | | Micro Cap
Growth Fund | | | Micro Cap
Value Fund | |
ASSETS: | | | | | | | | |
Investments in securities, at cost | | $ | 58,784,574 | | | $ | 82,039,191 | |
Investments in securities, at value | | $ | 65,422,901 | | | $ | 82,025,033 | |
Receivables: | | | | | | | | |
Dividends | | | — | | | | 11,247 | |
Investment securities sold | | | — | | | | 89,788 | |
Capital shares sold | | | 10,000 | | | | 10,959 | |
From advisor (See Note 3) | | | 4,931 | | | | — | |
Prepaid expenses and other assets | | | 5,660 | | | | 13,350 | |
Total assets | | | 65,443,492 | | | | 82,150,377 | |
LIABILITIES: | | | | | | | | |
Payables: | | | | | | | | |
Investment securities purchased | | | 890,875 | | | | 1,260,245 | |
Capital shares reacquired | | | 3,649 | | | | 3,643 | |
Management fee | | | 85,746 | | | | 103,145 | |
12b-1 distribution fees | | | 2,554 | | | | 5,489 | |
Fund administration | | | 2,287 | | | | 2,751 | |
Trustees’ fees | | | 4,847 | | | | 6,768 | |
To affiliate (See Note 3) | | | 10,661 | | | | 11,400 | |
Accrued expenses and other liabilities | | | 48,308 | | | | 49,860 | |
Total liabilities | | | 1,048,927 | | | | 1,443,301 | |
NET ASSETS | | $ | 64,394,565 | | | $ | 80,707,076 | |
COMPOSITION OF NET ASSETS: | | | | | | | | |
Paid-in capital | | $ | 75,470,881 | | | $ | 102,918,584 | |
Accumulated net investment loss | | | (4,847 | ) | | | (6,768 | ) |
Accumulated net realized loss on investments | | | (17,709,796 | ) | | | (22,190,582 | ) |
Net unrealized appreciation (depreciation) on investments | | | 6,638,327 | | | | (14,158 | ) |
Net Assets | | $ | 64,394,565 | | | $ | 80,707,076 | |
Net assets by class: | | | | | | | | |
Class A Shares | | $ | 10,421,258 | | | $ | 22,730,441 | |
Class I Shares | | $ | 53,973,307 | | | $ | 57,976,635 | |
Outstanding shares by class (unlimited number of authorized shares of beneficial interest): | | | | | | | | |
Class A Shares | | | 920,867 | | | | 1,223,996 | |
Class I Shares | | | 4,634,521 | | | | 3,053,921 | |
Net asset value, offering and redemption price per share
(Net assets divided by outstanding shares): | | | | | | | | |
Class A Shares-Net asset value | | | $11.32 | | | | $18.57 | |
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) | | | $12.01 | | | | $19.70 | |
Class I Shares-Net asset value | | | $11.65 | | | | $18.98 | |
See Notes to Financial Statements.
18
Statements of Operations
For the Year Ended October 31, 2009
| | | | | | | | |
| | | Micro Cap
Growth Fund | | | Micro Cap
Value Fund | |
Investment income: | | | | | | | | |
Dividends | | $ | 54,704 | | | $ | 650,149 | |
Interest | | | 230 | | | | 354 | |
Total investment income | | | 54,934 | | | | 650,503 | |
Expenses: | | | | | | | | |
Management fee | | | 849,388 | | | | 1,023,561 | |
12b-1 distribution plan-Class A | | | 23,475 | | | | 49,848 | |
Shareholder servicing | | | 15,485 | | | | 21,931 | |
Professional | | | 37,200 | | | | 37,482 | |
Reports to shareholders | | | 14,357 | | | | 14,184 | |
Fund administration | | | 22,650 | | | | 27,295 | |
Custody | | | 7,218 | | | | 6,544 | |
Trustees’ fees | | | 3,183 | | | | 3,853 | |
Registration | | | 22,815 | | | | 23,648 | |
Subsidy (See Note 3) | | | 187,391 | | | | 182,384 | |
Other | | | 2,323 | | | | 2,684 | |
Gross expenses | | | 1,185,485 | | | | 1,393,414 | |
Expense reductions (See Note 7) | | | (194 | ) | | | (230 | ) |
Expenses reimbursed by advisor (See Note 3) | | | (114,221 | ) | | | (80,945 | ) |
Net expenses | | | 1,071,070 | | | | 1,312,239 | |
Net investment loss | | | (1,016,136 | ) | | | (661,736 | ) |
Net realized and unrealized gain (loss): | | | | | | | | |
Net realized loss on investments | | | (3,650,855 | ) | | | (16,175,437 | ) |
Net change in unrealized depreciation on investments | | | 18,755,544 | | | | 24,647,555 | |
Net realized and unrealized gain | | | 15,104,689 | | | | 8,472,118 | |
Net Increase in Net Assets Resulting From Operations | | $ | 14,088,553 | | | $ | 7,810,382 | |
See Notes to Financial Statements.
19
Statements of Changes in Net Assets
| | | | | | | | |
| | | Micro Cap Growth Fund | |
| INCREASE (DECREASE) IN NET ASSETS | | For the Year Ended
October 31, 2009 | | | For the Year Ended
October 31, 2008 | |
Operations: | | | | | | | | |
Net investment loss | | $ | (1,016,136 | ) | | $ | (1,102,504 | ) |
Net realized loss on investments | | | (3,650,855 | ) | | | (13,930,109 | ) |
Net change in unrealized appreciation/depreciation on investments | | | 18,755,544 | | | | (23,143,767 | ) |
Net increase (decrease) in net assets resulting from operations | | | 14,088,553 | | | | (38,176,380 | ) |
Distributions to shareholders from: | | | | | | | | |
Net realized gain | | | | | | | | |
Class A | | | – | | | | (195,277 | ) |
Class I | | | – | | | | (1,104,441 | ) |
Total distributions to shareholders | | | – | | | | (1,299,718 | ) |
Capital share transactions (See Note 11): | | | | | | | | |
Net proceeds from sales of shares | | | 7,375,201 | | | | 26,755,338 | |
Reinvestment of distributions | | | – | | | | 1,299,607 | |
Cost of shares reacquired | | | (6,669,129 | ) | | | (5,324,160 | ) |
Net increase in net assets resulting from capital share transactions | | | 706,072 | | | | 22,730,785 | |
Net increase (decrease) in net assets | | | 14,794,625 | | | | (16,745,313 | ) |
NET ASSETS: | | | | | | | | |
Beginning of year | | $ | 49,599,940 | | | $ | 66,345,253 | |
End of year | | $ | 64,394,565 | | | $ | 49,599,940 | |
Accumulated net investment loss | | $ | (4,847 | ) | | $ | (2,842 | ) |
See Notes to Financial Statements.
20
Statements of Changes in Net Assets (concluded)
| | | | | | | | |
| | | Micro Cap Value Fund | |
| INCREASE (DECREASE) IN NET ASSETS | | For the Year Ended
October 31, 2009 | | | For the Year Ended
October 31, 2008 | |
Operations: | | | | | | | | |
Net investment loss | | $ | (661,736 | ) | | $ | (653,248 | ) |
Net realized loss on investments | | | (16,175,437 | ) | | | (6,117,155 | ) |
Net change in unrealized appreciation/depreciation on investments | | | 24,647,555 | | | | (29,859,546 | ) |
Net increase (decrease) in net assets resulting from operations | | | 7,810,382 | | | | (36,629,949 | ) |
Distributions to shareholders from: | | | | | | | | |
Net realized gain | | | | | | | | |
Class A | | | – | | | | (1,797,707 | ) |
Class I | | | – | | | | (3,981,689 | ) |
Total distributions to shareholders | | | – | | | | (5,779,396 | ) |
Capital share transactions (See Note 11): | | | | | | | | |
Net proceeds from sales of shares | | | 9,326,467 | | | | 27,823,082 | |
Reinvestment of distributions | | | – | | | | 5,779,387 | |
Cost of shares reacquired | | | (1,834,711 | ) | | | (9,012,702 | ) |
Net increase in net assets resulting from capital share transactions | | | 7,491,756 | | | | 24,589,767 | |
Net increase (decrease) in net assets | | | 15,302,138 | | | | (17,819,578 | ) |
NET ASSETS: | | | | | | | | |
Beginning of year | | $ | 65,404,938 | | | $ | 83,224,516 | |
End of year | | $ | 80,707,076 | | | $ | 65,404,938 | |
Accumulated net investment loss | | $ | (6,768 | ) | | $ | (4,381 | ) |
See Notes to Financial Statements.
21
Financial Highlights
MICRO CAP GROWTH FUND
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 9.07 | | | $17.36 | | | $14.18 | | | $14.24 | | | $11.88 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.19 | ) | | (.24 | ) | | (.26 | ) | | (.24 | ) | | (.25 | ) |
| | | | | |
Net increase from payment by an affiliate for net loss realized on disposal of investments
purchased/sold in error | | – | | | – | | | – | (b) | | – | | | – | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.44 | | | (7.71 | ) | | 5.83 | | | 2.05 | | | 2.96 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.25 | | | (7.95 | ) | | 5.57 | | | 1.81 | | | 2.71 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net realized gain | | – | | | (.34 | ) | | (2.39 | ) | | (1.87 | ) | | (.35 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.32 | | | $9.07 | | | $17.36 | | | $14.18 | | | $14.24 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 24.81 | % | | (46.57 | )% | | 45.19 | %(d) | | 14.29 | % | | 23.21 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 2.09 | % | | 2.09 | % | | 2.10 | % | | 2.10 | % | | 2.10 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 2.09 | % | | 2.09 | % | | 2.09 | % | | 2.10 | % | | 2.10 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.30 | % | | 2.23 | % | | 2.48 | % | | 3.26 | % | | 2.51 | % |
| | | | | |
Net investment loss | | (1.99 | )% | | (1.88 | )% | | (1.76 | )% | | (1.83 | )% | | (1.92 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $10,421 | | | $5,264 | | | $9,882 | | | $5,445 | | | $5,938 | |
| | | | | |
Portfolio turnover rate | | 147.34 | % | | 173.93 | % | | 205.25 | % | | 222.48 | % | | 64.79 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
| (d) | | The effect of payment by an affiliate for violation of an investment restriction on total return is less than .01%. |
See Notes to Financial Statements.
22
Financial Highlights (concluded)
MICRO CAP GROWTH FUND
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $ 9.31 | | | $17.76 | | | $14.43 | | | $14.43 | | | $12.00 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.17 | ) | | (.22 | ) | | (.24 | ) | | (.22 | ) | | (.22 | ) |
| | | | | |
Net increase from payment by an affiliate for net loss realized on disposal of investments
purchased/sold in error | | – | | | – | | | – | (b) | | – | | | – | |
| | | | | |
Net realized and unrealized gain (loss) | | 2.51 | | | (7.89 | ) | | 5.96 | | | 2.09 | | | 3.00 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 2.34 | | | (8.11 | ) | | 5.72 | | | 1.87 | | | 2.78 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net realized gain | | – | | | (.34 | ) | | (2.39 | ) | | (1.87 | ) | | (.35 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $11.65 | | | $ 9.31 | | | $17.76 | | | $14.43 | | | $14.43 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(c) | | 25.13 | % | | (46.41 | )% | | 45.49 | %(d) | | 14.56 | % | | 23.57 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 1.85 | % | | 1.84 | % | | 1.85 | % | | 1.85 | % | | 1.85 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 1.85 | % | | 1.84 | % | | 1.84 | % | | 1.85 | % | | 1.85 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.05 | % | | 1.98 | % | | 2.04 | % | | 3.04 | % | | 2.25 | % |
| | | | | |
Net investment loss | | (1.75 | )% | | (1.64 | )% | | (1.52 | )% | | (1.59 | )% | | (1.67 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $53,973 | | | $44,336 | | | $56,463 | | | $1,699 | | | $1,221 | |
| | | | | |
Portfolio turnover rate | | 147.34 | % | | 173.93 | % | | 205.25 | % | | 222.48 | % | | 64.79 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Amount is less than $.01. |
| (c) | | Total return assumes the reinvestment of all distributions. |
| (d) | | The effect of payment by an affiliate for violation of an investment restriction on total return is less than .01%. |
See Notes to Financial Statements.
23
Financial Highlights
MICRO CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class A Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $16.94 | | | $28.90 | | | $28.67 | | | $26.96 | | | $23.89 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.19 | ) | | (.22 | ) | | (.28 | ) | | (.34 | ) | | (.32 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 1.82 | | | (9.79 | ) | | 4.89 | | | 5.18 | | | 6.12 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.63 | | | (10.01 | ) | | 4.61 | | | 4.84 | | | 5.80 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net realized gain | | – | | | (1.95 | ) | | (4.38 | ) | | (3.13 | ) | | (2.73 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $18.57 | | | $16.94 | | | $28.90 | | | $28.67 | | | $26.96 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 9.62 | % | | (36.82 | )% | | 18.84 | % | | 20.09 | % | | 26.45 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions and including expenses reimbursed | | 2.10 | % | | 2.09 | % | | 2.09 | % | | 2.10 | % | | 2.10 | % |
| | | | | |
Expenses, including expense reductions and expenses reimbursed | | 2.10 | % | | 2.08 | % | | 2.09 | % | | 2.10 | % | | 2.10 | % |
| | | | | |
Expenses, excluding expense reductions and expenses reimbursed | | 2.22 | % | | 2.14 | % | | 2.20 | % | | 2.45 | % | | 2.35 | % |
| | | | | |
Net investment loss | | (1.14 | )% | | (.95 | )% | | (1.05 | )% | | (1.29 | )% | | (1.30 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $22,730 | | | $17,522 | | | $25,561 | | | $18,156 | | | $15,384 | |
| | | | | |
Portfolio turnover rate | | 42.27 | % | | 56.70 | % | | 37.11 | % | | 50.45 | % | | 34.59 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
24
Financial Highlights (concluded)
MICRO CAP VALUE FUND
| | | | | | | | | | | | | | | |
| | | Class I Shares | |
| | | Year Ended 10/31 | |
| | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Per Share Operating Performance | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | $17.27 | | | $29.36 | | | $28.99 | | | $27.17 | | | $24.00 | |
| | | | | | | | | | | | | | | |
| | | | | |
Investment operations: | | | | | | | | | | | | | | | |
| | | | | |
Net investment loss(a) | | (.15 | ) | | (.16 | ) | | (.20 | ) | | (.28 | ) | | (.26 | ) |
| | | | | |
Net realized and unrealized gain (loss) | | 1.86 | | | (9.98 | ) | | 4.95 | | | 5.23 | | | 6.16 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | 1.71 | | | (10.14 | ) | | 4.75 | | | 4.95 | | | 5.90 | |
| | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders from: | | | | | | | | | | | | | | | |
| | | | | |
Net realized gain | | – | | | (1.95 | ) | | (4.38 | ) | | (3.13 | ) | | (2.73 | ) |
| | | | | | | | | | | | | | | |
Net asset value, end of year | | $18.98 | | | $17.27 | | | $29.36 | | | $28.99 | | | $27.17 | |
| | | | | | | | | | | | | | | |
| | | | | |
Total Return(b) | | 9.90 | % | | (36.68 | )% | | 19.16 | % | | 20.38 | % | | 26.78 | % |
| | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | | | | |
| | | | | |
Expenses, excluding expense reductions
and including expenses reimbursed | | 1.85 | % | | 1.84 | % | | 1.83 | % | | 1.85 | % | | 1.85 | % |
| | | | | |
Expenses, including expense reductions
and expenses reimbursed | | 1.85 | % | | 1.83 | % | | 1.83 | % | | 1.85 | % | | 1.85 | % |
| | | | | |
Expenses, excluding expense reductions
and expenses reimbursed | | 1.97 | % | | 1.89 | % | | 1.93 | % | | 2.20 | % | | 2.11 | % |
| | | | | |
Net investment loss | | (.90 | )% | | (.70 | )% | | (.71 | )% | | (1.05 | )% | | (1.06 | )% |
| | | | | |
| Supplemental Data: | | | | | | | | | | | | | | | |
Net assets, end of year (000) | | $57,977 | | | $47,883 | | | $57,664 | | | $3,872 | | | $3,627 | |
| | | | | |
Portfolio turnover rate | | 42.27 | % | | 56.70 | % | | 37.11 | % | | 50.45 | % | | 34.59 | % |
| (a) | | Calculated using average shares outstanding during the year. |
| (b) | | Total return assumes the reinvestment of all distributions. |
See Notes to Financial Statements.
25
Notes to Financial Statements
1. ORGANIZATION
Lord Abbett Securities Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company and was organized as a Delaware statutory trust on February 26, 1993. The Trust currently consists of nine funds. This report covers the following two funds (separately, a “Fund” and collectively, the “Funds”) and their respective classes. Lord Abbett Micro-Cap Growth Fund (“Micro Cap Growth Fund”), Class A and I shares and Lord Abbett Micro-Cap Value Fund (“Micro Cap Value Fund”), Class A and I shares. The investment objective of both Micro Cap Growth Fund and Micro Cap Value Fund is long-term capital appreciation.
Each class of shares has different expenses and dividends. A front-end sales charge is normally added to the net asset value (“NAV”) for Class A shares. A contingent deferred sales charge (“CDSC”) may apply to certain redemptions of Class A shares purchased without a sales charge and redeemed before the first day of the month in which the one-year anniversary of the purchase falls (subject to certain exceptions). Class I shares are not subject to any sales charges.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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–Securities actively traded on any recognized U.S. or non-U.S. exchange or on The NASDAQ Stock Market LLC are valued at the last sale price or official closing price on the exchange or system on which they are principally traded. Events occurring after the close of trading on non-U.S. exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange LLC. Each Fund may rely on an independent fair valuation service in adjusting the valuations of foreign securities. Unlisted equity securities are valued at the last quoted sale price or, if no sale price is available, at the mean between the most recently quoted bid and asked prices. Securities for which market quotations are not readily available are valued at fair value as determined by management and approved in good faith by the Board of Trustees. Short-term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates current market value. |
| (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. Realized and unrealized gains (losses) are allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day. |
| (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. Investment income is allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day. |
26
Notes to Financial Statements (continued)
| (d) | | Income Taxes–It is the policy of each 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. |
Each 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 each Fund’s U.S. federal tax returns remains open for the fiscal years ended October 31, 2006 through October 31, 2009. The statutes of limitations on the Trust’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.
| (e) | | Expenses–Expenses incurred by the Trust that do not specifically relate to an individual fund are generally allocated to the funds within the Trust on a pro rata basis by relative net assets. 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 A, B, C, F, P, R2 and R3 shares bear their class-specific share of all expenses and fees relating to each Fund’s 12b-1 Distribution Plan. |
| (f) | | Repurchase Agreements–Each 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. Each 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 value of these securities has declined, a Fund may incur a loss upon disposition of the securities. |
| (g) | | Fair Value Measurements–Each Fund adopted Financial Accounting Standards Board, Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (formerly SFAS 157), effective November 1, 2008. In accordance with ASC 820, fair value is defined as the price that each Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820 established a three-tier hierarchy 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 of inputs is summarized in the three broad Levels listed below: |
| | • | | Level 1 – 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 |
27
Notes to Financial Statements (continued)
| | • | | Level 3 – significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of October 31, 2009 in valuing each Fund’s investments carried at value:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Micro Cap Growth Fund | | Micro Cap Value Fund |
| Investment Type* | | Level 1 (000) | | Level 2 (000) | | Level 3 (000) | | Total (000) | | Level 1 (000) | | Level 2 (000) | | Level 3 (000) | | Total (000) |
Common Stock | | $ | 62,261 | | $ | – | | $ | – | | $ | 62,261 | | $ | 76,353 | | $ | – | | $ | – | | $ | 76,353 |
Repurchase Agreement | | | – | | | 3,162 | | | – | | | 3,162 | | | – | | | 5,672 | | | – | | | 5,672 |
Total | | $ | 62,261 | | $ | 3,162 | | $ | – | | $ | 65,423 | | $ | 76,353 | | $ | 5,672 | | $ | – | | $ | 82,025 |
| * | See Schedule of Investments for values in each industry. |
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Management Fee
The Trust has a management agreement with Lord, Abbett & Co. LLC (“Lord Abbett”), pursuant to which Lord Abbett supplies each 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 each Fund’s investment portfolio.
The management fee is based on each Fund’s average daily net assets at an annual rate of 1.50%.
Lord Abbett provides certain administrative services to each Fund pursuant to an Administrative Services Agreement at an annual rate of .04% of each Fund’s average daily net assets.
For the period November 1, 2008 through February 28, 2009, Lord Abbett contractually agreed to reimburse each Fund to the extent necessary so that each class’ total annual operating expenses did not exceed the rates below. Effective March 1, 2009, Lord Abbett voluntarily agreed to reimburse each Fund to the extent necessary so that each class’ total annual operating expenses do not exceed the following:
| | |
| Class | | % of Average Daily Net Assets |
A | | 2.10% |
I | | 1.85% |
Lord Abbett may discontinue the voluntary reimbursement or change the level of its voluntary reimbursement at any time.
The Funds, along with certain other funds managed by Lord Abbett (collectively, the “Underlying Funds”), have entered into a Servicing Arrangement with Lord Abbett Alpha Strategy Fund (the “Alpha Strategy Fund”) of the Trust, pursuant to which each Underlying Fund pays a portion of the expenses (excluding management fees and distribution and service fees) of Alpha Strategy Fund in proportion to the average daily value of Underlying Fund shares owned by Alpha Strategy Fund. Amounts paid pursuant to the Servicing Arrangement are included in Subsidy expense on each Fund’s Statement of Operations and Payable to affiliate on each Fund’s Statement of Assets and Liabilities.
28
Notes to Financial Statements (continued)
As of October 31, 2009, the percentages of the Micro Cap Growth Fund’s and Micro Cap Value Fund’s outstanding shares owned by Alpha Strategy Fund were 78.07% and 64.44%, respectively.
12b-1 Distribution Plan
Each Fund has adopted a distribution plan with respect to Class A 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 fees are accrued daily at annual rates based upon each Fund’s average daily net assets attributable to Class A at an annual rate of .25%.
Class I does not have a distribution plan.
Two Trustees and certain of the Trust’s officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS
Dividends from net investment income, if any, are declared and paid at least annually. Taxable net realized gains from investment transactions, reduced by capital loss carryforwards, if any, are declared and distributed to shareholders at least annually. The capital loss carryforward amount, if any, is available to offset future net capital gains. Dividends and distributions to shareholders are recorded on the ex-dividend date. The amounts of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. These book/tax differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets based on their federal tax basis treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profits for tax purposes, are reported as a tax return of capital.
The tax character of distributions paid during the fiscal years ended October 31, 2009 and 2008 was as follows:
| | | | | | | | | | | | |
| | | Micro Cap Growth Fund | | Micro Cap Value Fund |
| | | Year Ended 10/31/09 | | Year Ended 10/31/08 | | Year Ended 10/31/09 | | Year Ended 10/31/08 |
Distributions paid from: | | | | | | | | | | | | |
Ordinary income | | $ | – | | $ | 1,108,968 | | $ | – | | $ | 1,524,520 |
Net long-term capital gains | | | – | | | 190,750 | | | – | | | 4,254,876 |
Total distributions paid | | $ | – | | $ | 1,299,718 | | $ | – | | $ | 5,779,396 |
29
Notes to Financial Statements (continued)
As of October 31, 2009, the components of accumulated losses on a tax-basis were as follows:
| | | | | | | | |
| | | Micro Cap Growth Fund | | | Micro Cap Value Fund | |
Capital loss carryforwards* | | $ | (17,324,692 | ) | | $ | (22,075,842 | ) |
Temporary differences | | | (4,847 | ) | | | (6,768 | ) |
Unrealized gains (losses) – net | | | 6,253,223 | | | | (128,898 | ) |
Total accumulated losses – net | | $ | (11,076,316 | ) | | $ | (22,211,508 | ) |
| * | As of October 31, 2009 the capital loss carryforwards, along with the related expiration dates, were as follows: |
| | | | | | | | | |
| | | 2016 | | 2017 | | Total |
Micro Cap Growth Fund | | $ | 13,362,204 | | $ | 3,962,488 | | $ | 17,324,692 |
Micro Cap Value Fund | | | 6,079,744 | | | 15,996,098 | | | 22,075,842 |
As of October 31, 2009, the aggregate unrealized security gains and losses based on cost for U.S. federal income tax purposes were as follows:
| | | | | | | | |
| | | Micro Cap Growth Fund | | | Micro Cap Value Fund | |
Tax cost | | $ | 59,169,678 | | | $ | 82,153,931 | |
Gross unrealized gain | | | 9,961,490 | | | | 9,724,401 | |
Gross unrealized loss | | | (3,708,267 | ) | | | (9,853,299 | ) |
Net unrealized security gain (loss) | | $ | 6,253,223 | | | $ | (128,898 | ) |
The difference between book-basis and tax-basis unrealized gains (losses) is attributable to the tax treatment of certain securities and wash sales.
Permanent items identified during the fiscal year ended October 31, 2009, have been reclassified among the components of net assets based on their tax basis treatment as follows:
| | | | | | | | | | |
| | | Accumulated Net
Investment Loss | | Accumulated Net
Realized Loss | | Paid-in
Capital | |
Micro Cap Growth Fund | | $ | 1,014,131 | | $ | – | | $ | (1,014,131 | ) |
Micro Cap Value Fund | | | 659,349 | | | 15,121 | | | (674,470 | ) |
The permanent differences are attributable to the tax treatment of certain securities and net operating losses.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments) for the fiscal year ended October 31, 2009 were as follows:
| | | | | | |
| | | Purchases | | Sales |
Micro Cap Growth Fund | | $ | 81,635,075 | | $ | 82,367,817 |
Micro Cap Value Fund | | | 32,192,906 | | | 27,811,256 |
There were no purchases or sales of U.S. Government securities for the fiscal year ended October 31, 2009.
6. TRUSTEES’ REMUNERATION
The Trust’s officers and the two Trustees who are associated with Lord Abbett do not receive any compensation from the Trust for serving in such capacities. Outside Trustees’ fees are allocated
30
Notes to Financial Statements (continued)
among all Lord Abbett-sponsored funds based on the net assets of each fund. There is an equity-based plan available to all outside Trustees under which outside Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, Trustees’ 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 Trustees’ fees on the Statement of Operations and in Trustees’ 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.
7. EXPENSE REDUCTIONS
The Trust has entered into an arrangement with its transfer agent whereby credits realized as a result of uninvested cash balances are used to reduce a portion of each Fund’s expenses.
8. LINE OF CREDIT
The Funds and certain other funds managed by Lord Abbett have available an unsecured revolving credit facility (“Facility”) from State Street Bank and Trust Company (“SSB”), to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Facility is renewed annually under terms that depend on market conditions at the time of the renewal. Accordingly, effective December 4, 2009, the amount available under the Facility remains $200,000,000 and the annual fee to maintain the Facility (of which each participating fund pays its pro rata share based on the net assets of each participating fund) was changed from .125% (.08% prior to December 5, 2008) of the amount available under the Facility to .15%. This amount is included in Other Expenses on the Funds’ Statement of Operations. In connection with the renewal, the Funds paid an upfront commitment fee of .05% on December 4, 2009. Any borrowings under this Facility will bear interest at current market rates as set forth in the credit agreement. As of October 31, 2009, there were no loans outstanding pursuant to this Facility nor was the Facility utilized at any time during the fiscal year ended October 31, 2009.
9. CUSTODIAN AND ACCOUNTING AGENT
SSB is the Trust’s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating each Fund’s NAV.
10. INVESTMENT RISKS
Each Fund is subject to the general risks and considerations associated with equity investing, as well as the particular risks associated with micro-cap and growth or value stocks. The value of an investment will fluctuate in response to movements in the equity securities market in general and to the changing prospects of individual companies in which the Funds invest. Micro-cap companies may be subject to greater risks and may be more sensitive to changes in economic conditions than larger, more established companies. There may be less liquidity in micro-cap company stocks, subjecting them to greater price fluctuations than larger company stocks. In the case of Micro Cap Growth Fund, the growth stocks in which it generally invests may add to the Fund’s volatility. In the case of the Micro Cap Value Fund, the intrinsic value of particular value stocks may not be recognized for a long time.
These factors can affect each Fund’s performance.
31
Notes to Financial Statements (concluded)
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest were as follows:
| | | | | | | | | | | | | | |
| MICRO CAP GROWTH FUND | | | | | | | | | | | | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 468,196 | | | $ | 3,392,456 | | | 172,478 | | | $ | 2,485,190 | |
Reinvestment of distributions | | – | | | | – | | | 12,942 | | | | 195,166 | |
Shares reacquired | | (127,911 | ) | | | (1,268,408 | ) | | (174,184 | ) | | | (2,493,666 | ) |
Increase | | 340,285 | | | $ | 2,124,048 | | | 11,236 | | | $ | 186,690 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 518,054 | | | $ | 3,982,745 | | | 1,781,415 | | | $ | 24,270,148 | |
Reinvestment of distributions | | – | | | | – | | | 71,531 | | | | 1,104,441 | |
Shares reacquired | | (647,396 | ) | | | (5,400,721 | ) | | (267,651 | ) | | | (2,830,494 | ) |
Increase (decrease) | | (129,342 | ) | | $ | (1,417,976 | ) | | 1,585,295 | | | $ | 22,544,095 | |
| | | | |
| MICRO CAP VALUE FUND | | | | | | | | | | | | |
| | | Year Ended
October 31, 2009 | | | Year Ended
October 31, 2008 | |
| Class A Shares | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | 250,316 | | | $ | 3,540,920 | | | 252,134 | | | $ | 6,171,305 | |
Reinvestment of distributions | | – | | | | – | | | 71,650 | | | | 1,797,698 | |
Shares reacquired | | (60,906 | ) | | | (942,184 | ) | | (173,549 | ) | | | (4,119,019 | ) |
Increase | | 189,410 | | | $ | 2,598,736 | | | 150,235 | | | $ | 3,849,984 | |
| | | | |
| Class I Shares | | | | | | | | | | | | |
Shares sold | | 336,054 | | | $ | 5,785,547 | | | 885,106 | | | $ | 21,651,777 | |
Reinvestment of distributions | | – | | | | – | | | 156,022 | | | | 3,981,689 | |
Shares reacquired | | (54,793 | ) | | | (892,527 | ) | | (232,275 | ) | | | (4,893,683 | ) |
Increase | | 281,261 | | | $ | 4,893,020 | | | 808,853 | | | $ | 20,739,783 | |
12. SUBSEQUENT EVENTS
In accordance with the provisions set forth in ASC Topic 855 (formerly SFAS 165), Subsequent Events, adopted by the Funds as of October 31, 2009, management has evaluated subsequent events existing in the Funds’ financial statements through December 30, 2009. Management has determined that there were no material subsequent events that would require recognition or additional disclosure in the Funds’ financial statements through this date.
32
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Lord Abbett Securities Trust:
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Lord Abbett Micro-Cap Growth Fund and Lord Abbett Micro-Cap Value Fund, two of the portfolios constituting the Lord Abbett Securities Trust (the “Trust”) as of October 31, 2009, and the related statements 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 Trust’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 Trust 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 Trust’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 October 31, 2009, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Lord Abbett Micro-Cap Growth Fund and Lord Abbett Micro-Cap Value Fund of the Lord Abbett Securities Trust as of October 31, 2009, the results of their operations for the year then ended, the changes in their 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
December 30, 2009
33
Basic Information About Management
The Board of Trustees (the “Board”) is responsible for the management of the business and affairs of the Trust in accordance with the laws of the State of Delaware. The Board appoints officers who are responsible for the day-to-day operations of the Trust and who execute policies authorized by the Board. The Board also approves an investment adviser to the Trust and continues to monitor the cost and quality of the services provided by the investment adviser, and annually considers whether to renew the contract with the adviser. Generally, each Trustee holds office until his/her successor is elected and qualified or until his/her earlier resignation or removal, as provided in the Trust’s organizational documents.
Lord, Abbett & Co. LLC (“Lord Abbett”), a Delaware limited liability company, is the Trust’s investment adviser.
Interested Trustees
The following Trustees are partners of Lord Abbett and are “interested persons” of the Trust as defined in the Act. Mr. Dow and Ms. Foster are officers, directors, or trustees of each of the 14 Lord Abbett-sponsored funds, which consist of 53 portfolios or series.
| | | | | | |
Name, Address and Year of Birth | | Current Position and
Length of Service
with Trust | | Principal Occupation During Past Five Years | | Other Directorships |
| | | |
Robert S. Dow Lord, Abbett & Co. LLC 90 Hudson Street Jersey City, NJ 07302 (1945) | | Trustee since 1993 and Chairman since 1996 | | Senior Partner (since 2007), Chief Executive Officer (since 1996) and was formerly Managing Partner (1996 – 2007), joined Lord Abbett in 1972. | | N/A |
| | | |
Daria L. Foster Lord, Abbett & Co. LLC 90 Hudson Street Jersey City, NJ 07302 (1954) | | Trustee since 2006 | | Managing Partner (since 2007), and was formerly Director of Marketing and Client Service, joined Lord Abbett in 1990. | | N/A |
Independent Trustees
The following independent or outside Trustees (“Independent Trustees”) are also directors or trustees of each of the 14 Lord Abbett-sponsored funds, which consist of 53 portfolios or series.
| | | | | | |
Name, Address and Year of Birth | | Current Position and
Length of Service
with Trust | | Principal Occupation During Past Five Years | | Other Directorships |
| | | |
E. Thayer Bigelow Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1941) | | Trustee since 1994 | | Managing General Partner, Bigelow Media, LLC (since 2000); Senior Adviser, Time Warner Inc. (1998 – 2000). | | Currently serves as director of Crane Co. (since 1984), Huttig Building Products Inc. (since 1998) and R.H. Donnelley Inc. (since 2009). |
34
Basic Information About Management (continued)
| | | | | | |
Name, Address and
Year of Birth | | Current Position and
Length of Service
with Trust | | Principal Occupation
During Past Five Years | | Other
Directorships |
| | | |
William H.T. Bush Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1938) | | Trustee since 1998 | | Co-founder and Chairman of the Board of the financial advisory firm of Bush–O’Donnell & Company (since 1986). | | Currently serves as director of WellPoint, Inc., a health benefits company (since 2002). |
| | | |
Robert B. Calhoun, Jr. Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1942) | | Trustee since 1998 | | Senior Advisor of Monitor Clipper Partners, a private equity investment fund (since 1997); President of Clipper Asset Management Corp. (1991 – 2009). | | N/A |
| | | |
Julie A. Hill
Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1946) | | Trustee since 2004 | | Owner and CEO of The Hill Company, a business consulting firm (since 1998). | | Currently serves as director of WellPoint, Inc., a health benefits company (since 1994) and Lend Lease Corporation Limited (since 2005). |
| | | |
Franklin W. Hobbs
Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | | Trustee since 2001 | | Advisor of One Equity Partners, a private equity firm (since 2004). | | Currently serves as a director and Chairman of the Board of GMAC Inc., a financial services firm (since 2009) and as a director of Molson Coors Brewing Company (since 2002). |
| | | |
Thomas J. Neff
Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1937) | | Trustee since 1993 | | Chairman of Spencer Stuart (U.S.), an executive search consulting firm (since 1996). | | Currently serves as director of Ace, Ltd. (since 1997) and Hewitt Associates, Inc. (since 2004). |
| | | |
James L.L. Tullis
Lord, Abbett & Co. LLC c/o Legal Dept. 90 Hudson Street Jersey City, NJ 07302 (1947) | | Trustee since 2006 | | CEO of Tullis-Dickerson and Co. Inc., a venture capital management firm (since 1990). | | Currently serves as director of Crane Co. (since 1998). |
35
Basic Information About Management (continued)
Officers
None of the officers listed below have received compensation from the Trust. All of the officers of the Trust may also be officers of the other Lord Abbett-sponsored funds and maintain offices at 90 Hudson Street, Jersey City, NJ 07302. Unless otherwise indicated, the titles and positions listed under the “Principal Occupation” column indicate the officer’s position(s) and title(s) with Lord Abbett.
| | | | | | |
Name and Year of Birth | | Current Position with
Trust | | Length of Service of Current Position | | Principal Occupation During Past Five Years |
| | | |
Robert S. Dow (1945) | | Chief Executive Officer and Chairman | | Elected in 1996 | | Senior Partner (since 2007), Chief Executive Officer (since 1996) and was formerly Managing Partner (1996 – 2007), joined Lord Abbett in 1972. |
| | | |
Daria L. Foster (1954) | | President | | Elected in 2006 | | Managing Partner (since 2007) and was formerly Director of Marketing and Client Service, joined Lord Abbett in 1990. |
| | | |
Robert P. Fetch (1953) | | Executive Vice President | | Elected in 1999 | | Partner and Director, joined Lord Abbett in 1995. |
| | | |
Daniel H. Frascarelli (1954) | | Executive Vice President | | Elected in 2009 | | Partner and Director, joined Lord Abbett in 1990. |
| | | |
Robert I. Gerber (1954) | | Executive Vice President | | Elected in 2005 | | Partner and Chief Investment Officer (since 2007), joined Lord Abbett in 1997 as Director of Taxable Fixed Income Management. |
| | | |
Gerard S. E. Heffernan, Jr. (1963) | | Executive Vice President | | Elected in 1999 | | Partner and Director, joined Lord Abbett in 1998. |
| | | |
Todd D. Jacobson (1966) | | Executive Vice President | | Elected in 2003 | | Portfolio Manager, joined Lord Abbett in 2003. |
| | | |
Vincent J. McBride (1964) | | Executive Vice President | | Elected in 2003 | | Partner and Director, joined Lord Abbett in 2003. |
| | | |
F. Thomas O’Halloran, III (1955) | | Executive Vice President | | Elected in 2003 | | Partner and Director, joined Lord Abbett in 2001. |
| | | |
Harold E. Sharon (1960) | | Executive Vice President | | Elected in 2003 | | Partner and Director, joined Lord Abbett in 2003. |
| | | |
Christopher J. Towle (1957) | | Executive Vice President | | Elected in 2005 | | Partner and Director, joined Lord Abbett in 1987. |
36
Basic Information About Management (continued)
| | | | | | |
Name and Year of Birth | | Current Position with
Trust | | Length of Service of Current Position | | Principal Occupation During Past Five Years |
| | | |
Stacy P. Allen (1967) | | Vice President | | Elected in 2009 | | Chief Administrative Officer (since 2009), was formerly a Client Portfolio Manager (2006 – 2008) and Director of Institutional Mutual Funds (2003 – 2006), joined Lord Abbett in 2003. |
| | | |
James W. Bernaiche (1956) | | Chief Compliance Officer | | Elected in 2004 | | Partner and Chief Compliance Officer, joined Lord Abbett in 2001. |
| | | |
Joan A. Binstock (1954) | | Chief Financial Officer and Vice President | | Elected in 1999 | | Partner and Chief Operations Officer, joined Lord Abbett in 1999. |
| | | |
John K. Forst (1960) | | Vice President and Assistant Secretary | | Elected in 2005 | | Deputy General Counsel, joined Lord Abbett in 2004. |
| | | |
Anthony W. Hipple (1964) | | Vice President | | Elected in 2006 | | Portfolio Manager, joined Lord Abbett in 2002. |
| | | |
Lawrence H. Kaplan (1957) | | Vice President and Secretary | | Elected in 1997 | | Partner and General Counsel, joined Lord Abbett in 1997. |
| | | |
Deepak Khanna (1963) | | Vice President | | Elected in 2008 | | Portfolio Manager, returned to Lord Abbett in 2007 from Jennison Associates LLC (2005 – 2007). Mr. Khanna’s former experience at Lord Abbett included Senior Research Analyst – other investment strategies (2000 – 2005). |
| | | |
Thomas B. Maher (1967) | | Vice President | | Elected in 2008 | | Portfolio Manager, joined Lord Abbett in 2003. |
| | | |
Justin C. Maurer (1969) | | Vice President | | Elected in 2008 | | Partner and Portfolio Manager, joined Lord Abbett in 2001. |
| | | |
A. Edward Oberhaus, III (1959) | | Vice President | | Elected in 1993 | | Partner and Director, joined Lord Abbett in 1983. |
| | | |
Thomas R. Phillips (1960) | | Vice President and Assistant Secretary | | Elected in 2008 | | Deputy General Counsel, joined Lord Abbett in 2006 and was formerly an attorney at Morgan, Lewis & Bockius LLP. |
37
Basic Information About Management (concluded)
| | | | | | |
Name and Year of Birth | | Current Position with
Trust | | Length of Service of Current Position | | Principal Occupation During Past Five Years |
| | | |
Lawrence B. Stoller (1963) | | Vice President and Assistant Secretary | | Elected in 2007 | | Senior Deputy General Counsel, joined Lord Abbett in 2007 and was formerly an Executive Vice President and General Counsel at Cohen & Steers Capital Management, Inc. (1999 – 2007). |
| | | |
Bernard J. Grzelak (1971) | | Treasurer | | Elected in 2003 | | Partner and Director of Fund Administration, joined Lord Abbett in 2003. |
Please call 888-522-2388 for a copy of the statement of additional information (SAI), which contains further information about the Trust’s Trustees. It is available free upon request.
38
Householding
The Trust has adopted a policy that allows it to send only one copy of each 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 each Fund’s portfolio securities, and information on how Lord Abbett voted each 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 Funds are required to file their complete schedules of portfolio holdings with the SEC for their 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 (i) 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); (ii) sending your request and duplicating fee to the SEC’s Public Reference Section, Washington, DC 20549-1520; or (iii) sending your request electronically, after paying a duplicating fee, to publicinfo@sec.gov.
39
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 Securities Trust
Micro-Cap Growth Fund
Micro-Cap Value Fund
LAMCVF-2-1009
(12/09)
| | (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 October 31, 2009 (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. The Registrant will provide a copy of the Code of Ethics to any person without charge, upon request. To obtain a copy, please call Lord Abbett at 888-522-2388. |
| Item 3: | Audit Committee Financial Expert. |
The Registrant’s board of trustees has determined that each of the following independent trustees who are members of the audit committee is an audit committee financial expert: E. Thayer Bigelow, Robert B. Calhoun Jr., Franklin W. Hobbs, and James L.L. Tullis. 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 September 30, 2009 and 2008 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: |
| | | 2009 | | 2008 |
Audit Fees {a} | | $326,500 | | $326,500 |
Audit-Related Fees | | - 0 - | | - 0 - |
Total audit and audit-related fees | | 326,500 | | 326,500 |
| | |
Tax Fees {b} | | 58,922 | | 58,897 |
All Other Fees | | - 0 - | | - 0 - |
| | |
Total Fees | | $385,422 | | $385,397 |
{a} Consists of fees for audits of the Registrant’s annual financial statements.
{b} Fees for the fiscal year ended October 30, 2009 and 2008 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 October 30, 2009 and 2008 were:
| | | | |
| | | Fiscal year ended: |
| | | 2009 | | 2008 |
All Other Fees {a} | | $161,385 | | $155,939 |
{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 (“SAS 70 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 October 30, 2009 and 2008 were:
| | | | |
| | | Fiscal year ended: |
| | | 2009 | | 2008 |
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.
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. |
| | (a)(1) | Amendments to Code of Ethics – Not applicable. |
| | (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 SECURITIES TRUST |
| |
| By: | | /s/ Robert S. Dow |
Robert S. Dow Chief Executive Officer and Chairman |
Date: December 22, 2009
| | |
| |
| By: | | /s/ Joan A. Binstock |
Joan A. Binstock Chief Financial Officer and Vice President |
Date: December 22, 2009
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/ Robert S. Dow |
| | Robert S. Dow Chief Executive Officer and Chairman |
Date: December 22, 2009
| | |
| |
| By: | | /s/ Joan A. Binstock |
| | Joan A. Binstock Chief Financial Officer and Vice President |
Date: December 22, 2009
