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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 811-05476
LORD ABBETT GLOBAL FUND, INC.
-----------------------------
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
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(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
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Date of fiscal year end: 12/31
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Date of reporting period: 12/31/2004
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ITEM 1: REPORT TO SHAREHOLDERS.
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[LORD ABBETT LOGO]
2004
ANNUAL
REPORT
LORD ABBETT
GLOBAL EQUITY FUND
GLOBAL INCOME FUND
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
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LORD ABBETT GLOBAL FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31,2004
DEAR SHAREHOLDERS: We are pleased to provide you with this twelve-month overview
of the Lord Abbett Global Equity and Lord Abbett Global Income Fund's strategies
and performance for the fiscal year ended December 31, 2004. On this and the
following pages, we discuss the major factors that influenced performance.
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,
/s/ Robert S. Dow
ROBERT S. DOW
CHAIRMAN
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Q. WHAT WERE THE OVERALL MARKET CONDITIONS OF THE REPORTING PERIOD?
A. The economic recovery became increasingly well established during the year
and into the fourth quarter, with strong growth in developed countries and rapid
expansion in emerging markets, including Asia and Latin America. The United
States continued to drive global growth, with help from Asia. The recovery in
the euro area was more moderate as the euro strengthened against the U.S. dollar
in world markets, negatively affecting exports from European nations. Lack of
intervention either to weaken the euro or support the dollar kept currency
dynamics in play throughout the quarter.
Global equity markets recorded solid gains during the period, propelled by
the strongest global growth in over 20 years and strong foreign currencies. The
non-U.S. markets continued to outperform the U.S. market. This marks the third
year in a row that international stocks, as measured by the MSCI Europe,
Australasia, Far East (EAFE(R)) Index,(1) has outperformed the U.S. market, as
measured by the S&P 500 Index.(2)
In the United States, the Federal Reserve Board (the Fed) continued its
measured increase in interest rates, amid signs that inflation remained under
control, raising the fed funds rate twice in the fourth quarter to 2.25%. The
Bank of England, which had been the first to increase rates in November 2003,
left its key rate at 4.75% in the fourth quarter, after five successive
increases. The European Central Bank (ECB) and the Bank of Japan, however, kept
rates stable, as inflation in the euro region remained higher than the ECB's
target and Japan's economic growth faltered.
LORD ABBETT GLOBAL EQUITY FUND
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED DECEMBER 31, 2004?
A: For the fiscal year ended December 31, 2004, Lord Abbett Global Equity Fund
(the
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"Fund") returned 11.99%, reflecting performance at the Net Asset Value (NAV) of
Class A shares with all distributions reinvested, compared with its benchmark,
the MSCI(R) World Index,(3) which returned 15.25% over the same period.
Standardized Average Annual Total Returns, which reflect performance at the
maximum 5.75% sales charge applicable to Class A share investments and include
the reinvestment of all distributions are 1 Year: 5.57%; 5 Years: -2.08% and 10
Years: 3.50%. Class A shares purchased subject to a front-end sales charge have
no contingent deferred sales charge (CDSC). However, certain purchases of Class
A shares made without a front-end sales charge may be subject to a CDSC of 1.0%
if the shares are redeemed within 12 months of the purchase.
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 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 800-821-5129 OR REFERRING TO OUR
WEBSITE AT www.LordAbbett.com.
Q. WHAT WERE THE MOST SIGNIFICANT FACTORS AFFECTING PERFORMANCE?
A. The Fund's investment strategy, which was defensive over the first eight
months of the year, turned more bullish in the last quarter as it became clearer
that the United States and China had exited from the troublesome "soft patch" in
growth seen in the third quarter. Despite continuing weakness in the European
and Japanese economies in the latter part of the year, overall macroeconomic
factors were supportive of markets and the fund participated strongly in the
year-end rally. As the year ended, valuations remained attractive, dividend
yields high and corporate free cash flow was exceptionally strong in all regions
of the world.
The main sectors that detracted from the Fund's relative performance were
consumer discretionary, energy and healthcare. Stock selection in the consumer
discretionary sector significantly hurt performance. U.S. and U.K. media stocks
and American retail companies performed poorly over the year. Poor stock
selection and an underweight position in the energy sector both weighed on
performance during the year. A number of energy companies in emerging markets
such as China, Brazil and Russia performed poorly. The healthcare sector had a
difficult year and the Fund's large U.S. pharmaceutical holdings were the worst
performers in the sector.
Enhancing the Fund's relative return over the year were the information
technology, telecommunications services and consumer staples sectors. The
information technology sector on the
2
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whole did not perform well, but the Fund was underweight versus the index, which
minimized losses. However, stock selection was a large contributor to returns on
the back of stellar returns from a U.S. personal computer and multimedia player
manufacturer. Stock selection within the consumer discretionary sector aided the
Fund's performance. A number of European wireless and traditional phone
companies had strong returns for the year. The consumer staples sector enhanced
relative returns through good stock selection. Returns were led by a U.K.-based
food retailer, a number of non-U.S. tobacco companies and a U.S. soft drink
maker.
THE 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.
LORD ABBETT GLOBAL INCOME FUND
Q. HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED DECEMBER 31, 2004?
A. For the fiscal year ended December 31, 2004, the Fund returned 8.40%,
reflecting performance at the Net Asset Value (NAV) of Class A shares with all
distributions reinvested, compared with its benchmark, the Lehman Global
Aggregate Bond Index,(4) which returned 9.24% over the same period. Standardized
Average Annual Total Returns, which reflect performance at the maximum 4.75%
sales charge applicable to Class A share investments and include the
reinvestment of all distributions are 1 Year: 3.26%; 5 Years: 6.37% and 10
Years: 5.94%. Class A shares purchased subject to a front-end sales charge have
no contingent deferred sales charge (CDSC). However, certain purchases of Class
A shares made without a front-end sales charge may be subject to a CDSC of 1.0%
if the shares are redeemed within 12 months of the purchase.
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 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 800-821-5129 OR REFERRING TO OUR
WEBSITE AT www.LordAbbett.com.
Q. WHAT WERE THE MOST SIGNIFICANT FACTORS AFFECTING PERFORMANCE?
Contributing to performance in the period were portfolio holdings in
currencies, particularly in European currencies where the portfolio was
overweight the benchmark. A smaller overweight in Asian currencies also added to
performance. The portfolio continued to remain underweight the U.S. dollar,
3
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which weakened throughout the period against its major competitors.
Also adding to performance were holdings in sectors not included in the
benchmark: high-yield corporate bonds and emerging market sovereign bonds.
High-yield corporate bonds benefited from the improving environment for business
and stronger corporate earnings, which lowered perceptions of riskiness in the
sector, tightening yield spreads and boosting prices higher. The yield spread -
the difference between the yield of a corporate and a Treasury security - is an
important indicator of market sentiment. Narrower or tighter spreads show
improving sentiment as investors demand less incremental yield to compensate for
risks, and vice versa. Spreads also tightened in the emerging market sector, as
commodity-producing nations in particular reaped the benefits of high commodity
prices and credit fundamentals improved.
In the U.S. market, the portfolio continued to maintain an overweight at the
long end of the maturity curve, particularly in 30-year bonds, which also added
to performance as long-maturity bonds outperformed shorter maturities in the
quarter.
Detracting from performance was the portfolio's underweight in
investment-grade bonds, where spreads also tightened, although marginally. The
portfolio was also underweight the mortgage-backed securities of the Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation, as
regulatory bodies increased their scrutiny of accounting practice at both
mortgage lenders. As these securities seemingly weathered the crisis, spreads
tightened, detracting slightly from Fund performance.
THE 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.
THE PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUNDS, INCLUDING THE
FUNDS' INVESTMENT OBJECTIVES, RISKS, CHARGES AND ONGOING EXPENSES, THAT AN
INVESTOR SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS ON
THIS FUND OR ANY LORD ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT
PROFESSIONAL OR LORD ABBETT DISTRIBUTOR LLC AT 800-874-3733 OR VISIT
www.LordAbbett.com. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
(1) The MSCI Europe, Australasia and Far East (EAFE(R)) Index is an unmanaged
capitalization index representing the industry composition and a sampling of
small-, medium- and large- capitalization companies from the aforementioned
global markets. It is a Morgan Stanley International Index that includes stocks
traded on 21 exchanges in Europe, Australasia and the Far East. The index is
unmanaged, does not reflect the deduction of fees or expenses and is not
available for direct investment.
(2) 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. The index is unmanaged, does not reflect the
deduction of fees or expenses and is not available for direct investment.
(3) The MSCI(R) World Index is an unmanaged index that reflects the stock
markets of 22 countries, including the United States, Canada, Europe,
Australasia and the Far
4
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East, with values expressed in U.S. dollars. The index is unmanaged, does not
reflect the deduction of fees or expenses and is not available for direct
investment.
(4) The Lehman Global Aggregate Bond Index is a broad-based measure of the
global investment-grade, fixed-income markets. The three major components of
this index are the U.S. Aggregate, the Pan-European Aggregate and the
Asian-Pacific Aggregate Indices. The index also includes Eurodollar and Euro-Yen
corporate bonds, Canadian Government securities and USD investment grade 144A
securities. The index is unmanaged, does not reflect the deduction of fees or
expenses and is not available for direct investment.
IMPORTANT PERFORMANCE AND OTHER INFORMATION
The views of the Funds' management and the portfolio holdings described in this
report are as of December 31, 2004; 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 the Funds' Prospectus.
PERFORMANCE: BECAUSE OF ONGOING MARKET VOLATILITY, FUND PERFORMANCE MAY BE
SUBJECT TO SUBSTANTIAL FLUCTUATION. 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 the Funds' 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.
5
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GLOBAL EQUITY FUND
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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(R)) World Index,
assuming reinvestment of all dividends and distributions. The performance of the
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.
[CHART]
<Table>
<Caption>
THE FUND (CLASS A SHARES) THE FUND (CLASS A SHARES) AT MAXIMUM MSCI(R)
AT NET ASSET VALUE OFFERING PRICE(1) WORLD INDEX(2)
12/31/94 $ 10,000 $ 9,425 $ 10,000
12/31/95 $ 10,919 $ 10,291 $ 12,132
12/31/96 $ 11,833 $ 11,153 $ 13,830
12/31/97 $ 12,778 $ 12,044 $ 16,075
12/31/98 $ 13,937 $ 13,136 $ 20,062
12/31/99 $ 15,661 $ 14,761 $ 25,145
12/31/2000 $ 16,410 $ 15,466 $ 21,897
12/31/2001 $ 12,669 $ 11,940 $ 18,279
12/31/2002 $ 10,568 $ 9,960 $ 14,708
12/31/2003 $ 13,356 $ 12,588 $ 19,673
12/31/2004 $ 14,957 $ 14,097 $ 22,673
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED DECEMBER 31, 2004
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
CLASS A(3) 5.57% -2.08% 3.50% --
CLASS B(4) 7.29% -1.72% -- 2.71%
CLASS C(5) 11.28% -1.58% -- 2.73%
CLASS Y(6) -- -- -- 11.57%
</Table>
(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 percent change in net asset value, after
deduction of the maximum initial sales charge of 5.75% applicable to Class A
shares, with all distributions reinvested for the periods shown ending December
31, 2004, is calculated using the SEC-required uniform method to compute such
return.
(4) Class B shares were first offered on August 1, 1996. Performance reflects
the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of
the class.
(5) Class C Shares were first offered on July 15, 1996 and made available to the
public on August 1, 1996. The 1% CDSC for Class C shares normally applies before
the first anniversary of the purchase date. Performance began on August 1, 1996
and is at net asset value.
(6) Class Y shares were first offered on October 19, 2004. Performance is at net
asset value.
6
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GLOBAL INCOME FUND
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INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the Lehman Global Aggregate Bond Index, assuming reinvestment of
all dividends and distributions. The performance of the 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.
[CHART]
<Table>
<Caption>
THE FUND (CLASS A SHARES) THE FUND (CLASS A SHARES) AT MAXIMUM LEHMAN GLOBAL
AT NET ASSET VALUE OFFERING PRICE(1) AGGREGATE BOND INDEX(2)
12/31/94 $ 10,000 $ 9,525 $ 10,000
12/31/95 $ 11,786 $ 11,226 $ 11,965
12/31/96 $ 12,507 $ 11,913 $ 12,553
12/31/97 $ 13,036 $ 12,417 $ 13,027
12/31/98 $ 14,442 $ 13,756 $ 14,815
12/31/99 $ 13,074 $ 12,453 $ 14,048
12/31/2000 $ 13,069 $ 12,448 $ 14,495
12/31/2001 $ 13,313 $ 12,681 $ 14,722
12/31/2002 $ 15,297 $ 14,570 $ 17,153
12/31/2003 $ 17,253 $ 16,434 $ 19,296
12/31/2004 $ 18,703 $ 17,814 $ 21,079
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED DECEMBER 31, 2004
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS INCEPTION
CLASS A(3) 3.26% 6.37% 5.94% --
CLASS B(4) 3.58% 6.63% -- 4.94%
CLASS C(5) 7.59% 6.77% -- 5.13%
CLASS P(6) 7.34% 7.08% -- 5.01%
CLASS Y(7) -- -- -- 5.79%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 4.75%.
(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 percent change in net asset value, after
deduction of the maximum initial sales charge of 4.75% applicable to Class A
shares, with all dividends and distributions reinvested for the periods shown
ending December 31, 2004, is calculated using the SEC-required uniform method to
compute such return.
(4) Class B shares were first offered on August 1, 1996. Performance reflects
the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of
the class.
(5) Class C shares were first offered on July 15,1996. 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 P shares were first offered on March 4, 1999. Performance is at net
asset value.
(7) Class Y shares were first offered on October 19, 2004. Performance is at net
asset value.
7
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EXPENSE EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges 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 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 (July 1, 2004 through December 31,
2004).
ACTUAL EXPENSES
For each class of the Fund, the first line of the table 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
entitled "Expenses Paid During the Period 7/1/04 - 12/31/04" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of the Fund, the second line of the table on the following
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 the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
8
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GLOBAL EQUITY FUND
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Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE PERIOD+
----------- ----------- -----------
7/1/04 -
7/1/04 12/31/04 12/31/04
----------- ----------- -----------
CLASS A
Actual $ 1,000.00 $ 1,100.10 $ 10.93
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.73 $ 10.48
CLASS B
Actual $ 1,000.00 $ 1,096.60 $ 14.28
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,011.51 $ 13.70
CLASS C
Actual $ 1,000.00 $ 1,096.50 $ 14.28
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,011.51 $ 13.70
CLASS Y*
Actual $ 1,000.00 $ 1,115.70 $ 9.09
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,016.54 $ 8.67
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense ratio
for such class (2.07% for Class A, 2.71% for Classes B and C, and 1.71% for
Class Y) multiplied by the average account value over the period, multiplied
by 184/366 (to reflect one-half year period).
* Commencement of offering of class shares was on October 19, 2004.
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PORTFOLIO HOLDINGS PRESENTED BY SECTOR
DECEMBER 31, 2004
<Table>
<Caption>
SECTOR %*
Consumer Discretionary 8.96%
Consumer Staples 9.70%
Energy 7.24%
Financials 21.46%
Health Care 8.95%
Industrials 13.74%
Information Technology 11.09%
Materials 8.00%
Short-Term Investment 2.50%
Telecommunication Services 7.25%
Utilities 1.11%
Total 100.00%
</Table>
* Represents percent of total investments.
9
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GLOBAL INCOME FUND
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Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges. Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE PERIOD+
----------- ----------- -----------
7/1/04 -
7/1/04 12/31/04 12/31/04
----------- ----------- -----------
CLASS A
Actual $ 1,000.00 $ 1,101.70 $ 7.34
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.15 $ 7.05
CLASS B
Actual $ 1,000.00 $ 1,096.70 $ 10.70
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.93 $ 10.28
CLASS C
Actual $ 1,000.00 $ 1,096.70 $ 10.70
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.93 $ 10.28
CLASS P
Actual $ 1,000.00 $ 1,091.30 $ 7.83
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.65 $ 7.56
CLASS Y*
Actual $ 1,000.00 $ 1,057.90 $ 5.33
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,019.96 $ 5.23
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense ratio
for such class (1.39% for Class A, 2.03% for Classes B and C, 1.49% for Class
P and 1.03% for Class Y) multiplied by the average account value over the
period, multiplied by 184/366 (to reflect one-half year period).
* Commencement of offering of class shares was on October 19, 2004.
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
DECEMBER 31, 2004
<Table>
<Caption>
SECTOR %*
Agency 5.51%
Banking 7.51%
Basic Industry .97%
Capital Goods .17%
Communications .07%
Consumer Non-Cyclical .47%
Energy .16%
Finance & Investment 22.54%
Foreign Sovereign 28.73%
Government Guaranteed 8.41%
Media .66%
Mortgage Backed 2.99%
Services Cyclical .20%
Services Non-Cyclical .49%
Short-Term Investment 5.32%
Sovereign 12.45%
Supranational 1.10%
Technology & Electronics .18%
Telecommunications .98%
Utilities 1.09%
Total 100.00%
</Table>
* Represents percent of total investments.
10
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SCHEDULE OF INVESTMENTS
GLOBAL EQUITY FUND DECEMBER 31, 2004
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- --------------------------------------------------------------------------------
COMMON STOCK 96.39%
AUSTRALIA 1.16%
Qantas Airways Ltd. 152,585 $ 444
Zinifex Ltd.* 234,596 430
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TOTAL 874
---------------
AUSTRIA 1.85%
Bank Austria Creditanstalt 7,215 652
Erste Bank Der Oesterreichische
Sparkasse Ag 3,058 163
Telekom Austria Ag 30,587 580
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TOTAL 1,395
---------------
BERMUDA 0.96%
Tyco Int'l., Ltd. 20,300 726
---------------
BRAZIL 0.43%
Companhia De Bebidas Das
Americas Adr 11,400 323
---------------
CANADA 0.38%
Opti Canada, Inc.* 17,800 289
---------------
CZECH REPUBLIC 0.65%
Komercni Banka AS 3,342 490
---------------
DENMARK 0.47%
Tele Danmark AS 8,300 351
---------------
FINLAND 1.14%
Nokia Oyj 13,400 211
Stora Enso Oyj-R Shares 21,000 322
Upm-Kymmene Oyj 14,700 327
---------------
TOTAL 860
---------------
FRANCE 4.98%
Air France-KLM 12,600 240
AXA 13,610 336
BNP Paribas S.A. 4,465 324
Credit Agricole S.A. 15,400 465
France Telecom S.A. 7,958 263
Lafarge S.A. 5,118 $ 494
Sanofi-Aventis 2,745 219
Schneider Electric S.A. 6,295 438
Thomson 15,153 401
Total S.A. 1,479 323
Vinci S.A. 1,873 252
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TOTAL 3,755
---------------
GERMANY 1.36%
BASF AG 9,475 683
Deutsche Telekom AG
Registered Shares* 15,113 342
---------------
TOTAL 1,025
---------------
HONG KONG 2.05%
Bank of East Asia, Ltd. (The) 79,900 248
Cheung Kong (Holdings) Ltd. 17,200 172
China Mobile (Hong Kong) Ltd. 144,000 488
China Unicom Ltd. 206,000 163
Texwinca Holdings Ltd. 500,500 473
---------------
TOTAL 1,544
---------------
HUNGARY 0.22%
Gedeon Richter Rt. 1,325 166
---------------
INDIA 0.45%
Reliance Industries Ltd. 27,500 338
---------------
ISRAEL 0.47%
Teva Pharmaceutical Industries
Ltd. ADR 11,800 352
---------------
ITALY 2.06%
Enel S.P.A. 33,773 332
Saipem S.P.A. 22,022 265
Telecom Italia S.P.A. 128,329 417
Telecom Italia (RNC) S.P.A. 131,051 536
---------------
TOTAL 1,550
---------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL EQUITY FUND DECEMBER 31, 2004
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- --------------------------------------------------------------------------------
JAPAN 9.06%
Bank of Yokohama Ltd. (The) 55,000 $ 347
Credit Saison Co. Ltd. 12,400 451
East Japan Railway Co. 56 311
Fanuc Ltd. 4,000 262
HOYA Corp. 3,700 418
INPEX Corp.* 39 197
Japan Tobacco Inc. 42 480
Konica Minolta
Holdings, Inc. 25,500 338
Lawson, Inc. 14,700 542
Mitsubishi Tokyo Financial
Group, Inc. 31 315
OBIC Co., Ltd. 1,300 258
ORIX Corp. 3,734 507
Sumitomo Corp. 68,000 587
Sumitomo Electric
Industries, Ltd. 39,012 424
Taiyo Yuden Co., Ltd. 29,000 337
Takefuji Corp. 10,470 708
Yamanouchi
Pharmaceutical Co., Ltd. 8,800 343
---------------
TOTAL 6,825
---------------
NETHERLANDS 1.42%
IHC Caland N.V. 7,916 503
ING Groep N.V. CVA 18,900 572
---------------
TOTAL 1,075
---------------
SINGAPORE 0.58%
DBS Group Holdings Ltd. 44,600 440
---------------
SOUTH KOREA 0.44%
Samsung Electronics
Co., Ltd. 771 336
---------------
SPAIN 1.51%
ACS, Actividades de Construccion
Y Servicios, S.A. 26,537 606
Gestevision Telecinco S.A.* 25,919 $ 535
---------------
TOTAL 1,141
---------------
SWEDEN 0.72%
Skandia Forsakrings AB 108,500 540
---------------
SWITZERLAND 2.12%
Nestle S.A. Registered Shares 1,140 298
Novartis AG Registered Shares 12,363 623
UBS AG Registered Shares 8,071 677
---------------
TOTAL 1,598
---------------
TAIWAN 1.18%
Chinatrust Financial Holding
Co., Ltd. 305,000 365
Mediatek, Inc. 43,533 297
Siliconware Precision Industries
Co., Ltd. 276,000 228
---------------
TOTAL 890
---------------
THAILAND 0.38%
Thai Oil Public Co. Ltd.* 216,200 284
---------------
TURKEY 0.63%
Turkiye Garanti Bankasi A.S.
ADR* 100,000 316
Turkiye Is Bankasi (Isbank) GDR
Registered Shares 28,300 156
---------------
TOTAL 472
---------------
UNITED KINGDOM 8.61%
BP plc 22,769 222
British Aerospace North America plc 122,393 542
Cadbury Schweppes plc 54,003 503
Diageo plc 12,766 182
Glaxosmithkline plc 11,409 268
HSBC Holdings plc 24,089 406
National Grid Transco plc 51,873 494
Prudential plc 70,023 609
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL EQUITY FUND DECEMBER 31, 2004
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- --------------------------------------------------------------------------------
Reed Elsevier plc 58,957 $ 544
Royal Bank of Scotland Group plc 15,149 509
Tesco plc 66,780 412
Tullow Oil plc 91,098 267
Virgin Mobile Holdings (UK) plc* 60,492 264
Vodafone Group plc 318,849 865
William Morrison Supermarkets plc 100,140 398
---------------
TOTAL 6,485
---------------
UNITED STATES 51.11%
Adobe Systems Inc. 2,500 157
Alcoa, Inc. 13,300 418
American Express Co. 4,800 271
American Int'l. Group, Inc. 9,500 624
Amgen, Inc.* 3,200 205
Apple Computer, Inc.* 3,800 245
Archer-Daniels-Midland Co. 7,900 176
Baker Hughes, Inc. 12,900 550
Bank of America Corp. 9,150 430
Bank of New York Co., Inc. (The) 14,700 491
Baxter Int'l., Inc. 14,000 484
Bristol-Myers Squibb Co. 8,800 225
Cardinal Health, Inc. 8,100 471
CIGNA Corp. 4,100 334
Cisco Systems, Inc.* 15,300 295
Citigroup, Inc. 17,000 819
Clear Channel Communications,
Inc. 13,900 466
Clorox Co. (The) 8,100 477
Comcast Corp. Class A* 20,400 670
Corning, Inc.* 22,600 266
CSX Corp. 9,300 373
CVS Corp. 4,900 221
Deere & Co. 14,700 1,094
Dell, Inc.* 5,200 219
E.I. du Pont de Nemours & Co. 11,000 $ 540
Eaton Corp. 8,200 593
eBay, INC.* 3,300 384
Eli Lilly & Co. 2,400 136
EMC Corp.* 61,000 907
Emerson Electric Co. 4,500 315
Exxon Mobil Corp. 36,500 1,871
Federal National Mortgage Assoc. 1,300 93
Gap, Inc. (The) 24,000 507
Genentech, Inc.* 3,000 163
General Electric Co. 30,400 1,110
Gillette Co. 9,100 407
H.J. Heinz Co. 5,200 203
Hartford Financial Group, Inc. 3,700 256
Illinois Tool Works, Inc. 3,900 361
Intel Corp. 13,640 319
International Paper Co. 22,200 932
Johnson & Johnson 4,900 311
Jpmorgan Chase & Co. 26,032 1,016
Kellogg Co. 8,500 380
Kraft Foods, Inc. Class A 18,535 660
Kroger Co.* 16,500 289
Medimmune, Inc.* 4,600 125
Mellon Financial Corp. 18,800 585
Merck & Co., Inc. 9,200 296
Merrill Lynch & Co., Inc. 8,300 496
Microsoft Corp. 25,800 689
Monsanto Co. 7,800 433
Motorola, Inc. 51,100 879
Newmont Mining Corp. 10,600 471
NIKE, Inc. Class B 4,800 435
Parker Hannifin Corp. 4,900 371
Pepsico, Inc. 13,900 726
Pfizer, Inc. 21,800 586
Praxair, Inc. 12,900 570
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
GLOBAL EQUITY FUND DECEMBER 31, 2004
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- --------------------------------------------------------------------------------
Procter & Gamble Co. (The) 5,200 $ 286
QUALCOMM, Inc. 5,400 229
SBC Communications, Inc. 13,600 350
Schering-plough Corp. 20,800 434
Schlumberger Ltd.(a) 9,300 623
Solectron Corp.* 62,900 335
Target Corp. 7,200 374
Teradyne, Inc.* 9,000 154
Tribune Co. 11,000 464
U.S. Bancorp 6,600 207
Union Pacific Corp. 6,400 430
United Parcel Service, Inc.
CLASS B 5,000 427
UnitedHealth Group, Inc. 2,200 194
VERITAS Software Corp.* 6,400 183
Verizon Communications, Inc. 19,300 782
Viacom, Inc. Class B 14,600 531
Wachovia Corp. 10,200 537
Wal-Mart Stores, Inc. 5,000 264
Walt Disney Co. (The) 32,100 892
Waste Management, Inc. 11,100 332
Wells Fargo & Co. 6,400 398
Wyeth 17,100 728
Xerox Corp.* 42,200 718
Yahoo!, Inc.* 6,400 241
---------------
TOTAL 38,509
---------------
TOTAL COMMON STOCKS
(Cost $65,358,258) 72,633
===============
<Caption>
PRINCIPAL U.S. $
AMOUNT VALUE
INVESTMENTS (000) (000)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 2.48%
REPURCHASE AGREEMENT 2.48%
Repurchase Agreement dated 12/31/2004,
1.80% due 1/3/2005 with State Street
Bank & Trust Co. collateralized by
$1,475,000 of United States Treasury
Notes at 3.375% due 1/15/2007; value:
$1,909,979; proceeds: $1,866,893 (Cost
$1,866,613) $ 1,867 $ 1,867
===============
TOTAL INVESTMENTS IN SECURITIES
98.87%
(Cost $67,224,871) 74,500
===============
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES 1.13% 851
---------------
NET ASSETS 100.00% $ 75,351
===============
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
ADR American Depository Receipt.
GDR Global Depository Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
SCHEDULE OF INVESTMENTS
GLOBAL INCOME FUND DECEMBER 31, 2004
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 96.12%
FOREIGN NOTES & BONDS 63.40%
ARGENTINA 0.06%
Republic of Argentina 2.008%# 8/3/2012 USD 50 $ 42,793
---------------
AUSTRALIA 0.18%
Australian Government(a) 7.50% 7/15/2005 AUD 158 125,340
---------------
BRAZIL 0.43%
Republic of Brazil, Federal 8.875% 10/14/2019 USD 50 52,825
Republic of Brazil, Federal 10.50% 7/14/2014 USD 200 237,500
---------------
TOTAL 290,325
---------------
CANADA 1.29%
Government of Canada(a) 5.50% 6/1/2010 CAD 577 520,704
Potash Corp. of Saskatchewan 7.75% 5/31/2011 USD 65 76,667
Shaw Communications, Inc.(a) 7.50% 11/20/2013 CAD 200 178,899
Telus Corp. 8.00% 6/1/2011 USD 85 100,861
---------------
TOTAL 877,131
---------------
DENMARK 0.50%
Kingdom of Denmark(a) 4.00% 8/15/2008 DKK 1,800 341,247
---------------
ECUADOR 0.01%
Republic of Ecuador+ 8.00%# 8/15/2030 USD 10 8,675
---------------
FRANCE 6.80%
France Telecom S.A. 9.25% 3/1/2031 USD 185 251,526
French Treasury Note(a) 3.50% 7/12/2009 EUR 2,400 3,333,828
French Treasury Note(a) 4.50% 7/12/2006 EUR 735 1,030,811
---------------
TOTAL 4,616,165
---------------
GERMANY 23.27%
Aries Vermoegensverwaltungs Gmbh+ 9.60% 10/25/2014 USD 55 67,925
Bundesrepublik Deutschland(a) 4.25% 2/18/2005 EUR 495 674,460
Bundesrepublik Deutschland(a) 4.25% 2/15/2008 EUR 1,633 2,319,160
Bundesrepublik Deutschland(a) 4.25% 1/4/2014 EUR 1,250 1,783,196
Bundesrepublik Deutschland(a) 4.75% 7/4/2028 EUR 39 57,010
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2004
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------------------
Bundesrepublik Deutschland(a) 4.75% 7/4/2034 EUR 1,010 $ 1,479,443
Bundesrepublik Deutschland(a) 5.00% 2/17/2006 EUR 2,205 3,085,618
Bundesrepublik Deutschland(a) 5.25% 1/4/2011 EUR 969 1,461,874
Bundesrepublik Deutschland(a) 5.375% 1/4/2010 EUR 250 375,818
Kreditanstalt fur Wiederaufbau(a) 4.25% 7/4/2014 EUR 2,300 3,275,032
Kreditanstalt fur Wiederaufbau(a) 5.625% 11/27/2007 EUR 835 1,223,912
---------------
TOTAL 15,803,448
---------------
GREECE 0.64%
Hellenic Republic(a) 5.25% 5/18/2012 EUR 290 437,590
---------------
ITALY 1.19%
Buoni Poliennali del Tesoro(a) 6.00% 5/1/2031 EUR 475 807,664
---------------
JAPAN 11.97%
Japan-58 (20 Year Issue)(a) 1.90% 9/20/2022 JPY 36,000 350,799
Japan-190 (10 Year Issue)(a) 2.90% 12/20/2006 JPY 172,000 1,771,622
Japan-199 (10 Year Issue)(a) 2.20% 12/20/2007 JPY 73,000 753,709
Japan-230 (10 Year Issue)(a) 1.60% 3/21/2011 JPY 196,950 2,013,831
Japan-237 (10 Year Issue)(a) 1.50% 3/20/2012 JPY 66,900 675,360
Japan-264 (10 Year Issue)(a) 1.50% 9/20/2014 JPY 65,000 640,525
Japan Finance Corp. Municipal Enterprises(a) 1.55% 2/21/2012 JPY 191,000 1,928,069
---------------
TOTAL 8,133,915
---------------
LUXEMBOURG 0.47%
Telecom Italia Capital S.A.+ 4.00% 1/15/2010 USD 100 98,159
Telecom Italia Capital S.A. 5.25% 11/15/2013 USD 215 217,690
---------------
TOTAL 315,849
---------------
MEXICO 0.20%
United Mexican States 6.75% 9/27/2034 USD 135 133,650
---------------
NETHERLANDS 6.06%
Netherlands Government(a) 3.00% 7/15/2006 EUR 3,000 4,114,469
---------------
OTHER 5.88%
European Investment Bank(a) 2.125% 9/20/2007 JPY 74,000 760,205
European Investment Bank(a) 3.00% 9/20/2006 JPY 186,000 1,903,488
European Investment Bank(a) 6.25% 12/7/2008 GBP 657 1,326,847
---------------
TOTAL 3,990,540
---------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2004
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------------------
PERU 0.44%
Republic of Peru(a) 7.50% 10/14/2014 EUR 200 $ 301,446
---------------
POLAND 0.08%
Republic of Poland 5.25% 1/15/2014 USD 55 56,856
---------------
ROMANIA 0.62%
Romania Government(a) 10.625% 6/27/2008 EUR 250 417,922
---------------
RUSSIA 0.10%
Russian Federation+ 5.00%# 3/31/2030 USD 65 67,275
---------------
SOUTH AFRICA 0.12%
Republic of South Africa 6.50% 6/2/2014 USD 75 82,312
---------------
SWEDEN 0.61%
Swedish Government(a) 8.00% 8/15/2007 SEK 2,425 412,635
---------------
UNITED KINGDOM 2.48%
United Kingdom Treasury(a) 4.00% 3/7/2009 GBP 111 209,238
United Kingdom Treasury(a) 5.00% 9/7/2014 GBP 87 173,200
United Kingdom Treasury(a) 6.00% 12/7/2028 GBP 300 706,302
United Kingdom Treasury(a) 9.00% 7/12/2011 GBP 249 598,588
---------------
TOTAL 1,687,328
---------------
TOTAL FOREIGN NOTES & BONDS
(Cost $36,215,144) 43,064,575
===============
UNITED STATES NOTES & BONDS 32.72%
Amerada Hess Corp. 7.875% 10/1/2029 USD 50 59,336
American Standard Cos., Inc. 7.625% 2/15/2010 USD 100 114,450
AT&T Broadband Corp. 9.455% 11/15/2022 USD 100 138,650
Comed Transitional Funding 1998-1 A5 5.44% 3/25/2007 USD 74 74,495
Corn Products Int'l., Inc. 8.45% 8/15/2009 USD 125 145,137
Corning, Inc. 5.90% 3/15/2014 USD 30 30,217
Cox Communications, Inc.+ 5.45% 12/15/2014 USD 50 50,093
CS First Boston 1998-C2 A1 5.96% 11/11/2030 USD 567 580,536
CS First Boston Mortgage 2004-C5 A4 4.829% 11/15/2037 USD 195 194,628
Dun & Bradstreet Corp. (The) 6.625% 3/15/2006 USD 237 243,309
Federal Home Loan Mortgage Corp. 6.50% TBA USD 1,230 1,290,731
Federal Home Loan Mortgage Corp.(a) 4.75% 1/15/2013 EUR 151 220,576
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2004
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. A22363 5.00% 5/1/2034 USD 315 $ 312,771
Federal Home Loan Mortgage Corp. B13801 4.50% 4/1/2019 USD 635 633,673
Federal Home Loan Mortgage Corp. B15140 4.50% 6/1/2019 USD 217 216,375
Federal Home Loan Mortgage Corp. B15593 5.50% 7/1/2019 USD 170 175,560
Federal Home Loan Mortgage Corp. B15776 5.00% 7/1/2019 USD 260 263,745
Federal Home Loan Mortgage Corp. C63990 7.00% 2/1/2032 USD 180 190,924
Federal Home Loan Mortgage Corp. G01658 5.00% 2/1/2034 USD 314 312,716
Federal National Mortgage Assoc. 4.75% 2/21/2013 USD 3,041 3,027,708
Federal National Mortgage Assoc. 5.50% 5/1/2034 USD 397 403,519
Ford Motor Credit Corp. 6.875% 2/1/2006 USD 1,045 1,076,837
Fort James Corp. 6.875% 9/15/2007 USD 210 224,175
General Electric Co. 5.00% 2/1/2013 USD 224 230,196
General Mills, Inc. 5.125% 2/15/2007 USD 100 102,723
General Motors Corp. 8.00% 11/1/2031 USD 125 128,845
GMAC Commercial Mortgage Securities, Inc.
2003-C1 A2 4.079% 5/10/2036 USD 705 679,868
Goldman Sachs Group, Inc. (The) 6.875% 1/15/2011 USD 245 276,749
Harrah's Operating Co., Inc. 8.00% 2/1/2011 USD 85 98,845
Household Finance Corp. 7.00% 5/15/2012 USD 150 171,547
Int'l. Flavors & Fragrances, Inc. 6.45% 5/15/2006 USD 75 78,015
JPMorgan Chase Commercial Securities Corp.
2004-CB8 A4 4.404% 1/12/2039 USD 355 344,794
Kansas City Power & Light Co. 7.125% 12/15/2005 USD 500 518,110
KB Home 5.875% 1/15/2015 USD 40 39,800
Kfw Int'l. Finance Inc.(a) 6.00% 12/7/2028 GBP 162 361,192
LB-UBS Commercial Mortgage Trust
2003-C1 A4 4.394% 3/15/2032 USD 310 304,688
LB-UBS Commercial Mortgage Trust
2003-C8 A3 4.83% 11/15/2027 USD 80 81,628
Lubrizol Corp. (The) 5.50% 10/1/2014 USD 100 100,777
Markwest Energy Partners L.P.+ 6.875% 11/1/2014 USD 50 51,000
MBNA Master Credit Card Trust 2000-A 7.35% 7/16/2007 USD 510 513,208
MBNA Master Credit Card Trust 2000-C 2.5625%# 7/15/200 USD 340 340,282
Morgan Stanley Capital 2004-HQ3 A4 4.80% 1/13/2041 USD 930 932,739
New ASAT Finance Ltd.+ 9.25% 2/1/2011 USD 100 91,250
Phelps Dodge Corp. 8.75% 6/1/2011 USD 45 54,937
Quest Diagnostics, Inc. 7.50% 7/12/2011 USD 125 144,459
Rockwood Specialties Group, Inc.+(a) 7.625% 11/15/2014 EUR 150 210,259
Scholastic Corp. 5.75% 1/15/2007 USD 75 77,776
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2004
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ----------------------------------------------------------------------------------------------------------------
Sprint Capital Corp. 8.375% 3/15/2012 USD 100 $ 121,985
Time Warner, Inc. 6.125% 4/15/2006 USD 50 51,789
Time Warner, Inc. 7.625% 4/15/2031 USD 120 145,628
U.S. Treasury Bond 5.25% 2/15/2029 USD 1,789 1,877,192
U.S. Treasury Note 3.50% 12/15/2009 USD 393 391,219
U.S. Treasury Note 4.00% 6/15/2009 USD 648 660,530
U.S. Treasury Note 4.875% 2/15/2012 USD 1,664 1,759,291
U.S. Treasury Strips Zero Coupon 8/15/2020 USD 1,182 547,441
Unitedhealth Group Inc. 3.375% 8/15/2007 USD 119 118,161
Ventas Realty L.P./Ventas Capital Corp.+ 6.625% 10/15/2014 USD 75 77,062
Verizon Global Funding Corp. 7.25% 12/1/2010 USD 90 103,238
Wachovia Bank Commercial Mortgage
2003-C5 A2 3.989% 6/15/2035 USD 480 458,586
---------------
TOTAL UNITED STATES NOTES & BONDS
(Cost $21,611,428) 22,225,970
===============
TOTAL LONG-TERM INVESTMENTS (Cost $57,826,572) 65,290,545
===============
SHORT-TERM INVESTMENT 5.40%
REPURCHASE AGREEMENT 5.40%
Repurchase Agreement dated 12/31/2004,
1.80% due 1/3/2005 with State Street
Bank & Trust Co. collateralized by
$2,890,000 of United States Treasury
Notes at 3.375% due 1/15/2007; value:
$3,742,264; proceeds: $3,666,654
(Cost $3,666,104) USD 3,666 3,666,104
===============
TOTAL INVESTMENTS IN SECURITIES 101.52%
(Cost $61,492,676) 68,956,649
===============
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS (1.52%) (1,030,309)
---------------
NET ASSETS 100.00% $ 67,926,340
===============
</Table>
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers.
# Variable rate security. The interest rate represents the rate at December
31, 2004.
(a) Investment in non-U.S. dollar denominated securities (61.43% of total
investments). The remaining securities (38.57% of total investments) are
invested in U.S. dollar denominated securities.
TBA To be announced. Security on a forward commiment basis with an approximate
principal and maturity date. Actual principal and maturity will be
determined upon settlement when the specific mortgage pools are assigned.
AUD Australian Dollar
CAD Canadian Dollar
DKK Danish Krone
EUR Euro
GBP British Pound
JPY Japanese Yen
SEK Swedish Krona
USD U.S. Dollar
SEE NOTES TO FINANCIAL STATEMENTS.
19
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
GLOBAL INCOME FUND DECEMBER 31, 2004
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AS OF DECEMBER 31, 2004:
<Table>
<Caption>
FORWARD U.S. $ COST ON U.S. $
FOREIGN CURRENCY EXPIRATION FOREIGN ORIGINATION CURRENT UNREALIZED UNREALIZED
PURCHASE CONTRACTS DATE CURRENCY DATE VALUE APPRECIATION DEPRECIATION
- ------------------ ---------- ------------ -------------- ----------- ------------ ------------
CLP 3/7/2005 582,450,000 $ 1,000,000 $ 1,047,558 $ 47,558 $ -
EUR 2/3/2005 1,750,000 2,232,212 2,369,560 137,348 -
INR 2/22/2005 44,980,000 1,000,000 1,034,977 34,977 -
----------- ----------- ------------ ------------
TOTAL FORWARD FOREIGN CURRENCY
PURCHASE CONTRACTS $ 4,232,212 $ 4,452,095 $ 219,883 $ -
=========== =========== ============ ============
<Caption>
FORWARD U.S. $ COST U.S. $
FOREIGN CURRENCY EXPIRATION FOREIGN ON ORIGINATION CURRENT UNREALIZED UNREALIZED
SALE CONTRACTS DATE CURRENCY DATE VALUE APPRECIATION DEPRECIATION
- ------------------ ---------- ------------ -------------- ----------- ------------ ------------
CLP 3/7/2005 582,450,000 $ 995,641 $ 1,047,558 $ - $ 51,917
EUR 2/3/2005 1,750,000 2,232,956 2,369,560 - 136,604
INR 2/22/2005 44,980,000 1,001,782 1,034,977 - 33,195
----------- ----------- ------------ ------------
TOTAL FORWARD FOREIGN CURRENCY SALE CONTRACTS $ 4,230,379 $ 4,452,095 $ - $ 221,716
=========== =========== ============ ============
</Table>
Abbreviations:
- --------------
CLP Chilean Peso
EUR Euro
INR Indian Rupee
SEE NOTES TO FINANCIAL STATEMENTS.
20
<Page>
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2004
<Table>
<Caption>
GLOBAL GLOBAL
EQUITY FUND INCOME FUND
ASSETS:
Investments in securities, at cost $ 67,224,871 $ 61,492,676
- ---------------------------------------------------------------------------------------------------------------------
Investments in securities, at value $ 74,499,651 $ 68,956,649
Foreign cash, at value (cost $1,317,602 and $31,728, respectively) 1,331,210 32,175
Receivables:
Interest and dividends 103,389 1,071,641
Investment securities sold 162,166 917,427
Capital shares sold 172,405 200,737
Appreciation on forward foreign currency exchange contracts - 219,883
Prepaid expenses and other assets 2,851 3,664
- ---------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 76,271,672 71,402,176
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 664,729 2,777,077
Capital shares reacquired 18,668 97,250
Management fee 46,372 28,358
12b-1 distribution fees 33,012 32,962
Fund administration 2,488 2,277
Directors' fees 28,514 53,902
Depreciation on forward foreign currency exchange contracts - 221,716
Dividends payable - 184,014
Accrued expenses and other liabilities 127,241 78,280
- ---------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 921,024 3,475,836
=====================================================================================================================
NET ASSETS $ 75,350,648 $ 67,926,340
=====================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 69,116,947 $ 66,854,198
Undistributed (distributions in excess of) net investment income (28,515) 2,051,222
Accumulated net realized loss on investments, futures contracts
and foreign currency related transactions (1,028,099) (8,501,740)
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 7,290,315 7,522,660
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 75,350,648 $ 67,926,340
=====================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 59,915,380 $ 55,821,437
Class B Shares $ 7,817,463 $ 5,290,711
Class C Shares $ 7,157,984 $ 6,234,617
Class P Shares - $ 2,216
Class Y Shares $ 459,821 $ 577,359
OUTSTANDING SHARES BY CLASS:
Class A Shares (430 million, and 415 million shares of common stock
authorized respectively, $.001 par value) 5,098,939 7,290,360
Class B Shares (15 million, and 30 million shares of common stock
authorized respectively, $.001 par value) 695,746 689,781
Class C Shares (20 million, and 20 million shares of common stock
authorized respectively, $.001 par value) 636,175 813,017
Class P Shares (20 million, and 20 million shares of common stock
authorized respectively, $.001 par value) - 292
Class Y Shares (15 million, and 15 million shares of common stock
authorized respectively, $.001 par value) 39,098 75,374
NETASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE (NET ASSETS DIVIDED BY
OUTSTANDING SHARES):
Class A Shares-Net asset value $ 11.75 $ 7.66
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75% and 4.75%, respectively) $ 12.47 $ 8.04
Class B Shares-Net asset value $ 11.24 $ 7.67
Class C Shares-Net asset value $ 11.25 $ 7.67
Class P Shares-Net asset value - $ 7.59
Class Y Shares-Net asset value $ 11.76 $ 7.66
=====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<Page>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
<Table>
<Caption>
GLOBAL GLOBAL
EQUITY FUND INCOME FUND
INVESTMENT INCOME:
Dividends $ 1,325,579 $ -
Interest 15,835 2,462,463
Securities lending-net 25,833 388
Foreign withholding tax (79,248) (1,614)
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 1,287,999 2,461,237
- ---------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 495,600 328,232
12b-1 distribution plan-Class A 195,881 196,455
12b-1 distribution plan-Class B 66,929 45,475
12b-1 distribution plan-Class C 53,011 56,979
12b-1 distribution plan-Class P - 4,107
Shareholder servicing 361,603 152,003
Professional 51,242 52,958
Reports to shareholders 30,997 36,098
Fund administration 26,432 26,259
Custody 64,450 28,928
Directors' fees 1,186 1,267
Registration 43,775 52,143
Other 43,819 4,835
- ---------------------------------------------------------------------------------------------------------------------
Gross expenses 1,434,925 985,739
Expense reductions (590) (698)
- ---------------------------------------------------------------------------------------------------------------------
NET EXPENSES 1,434,335 985,041
- ---------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (146,336) 1,476,196
- ---------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments, futures contracts, and foreign
currency related transactions 11,046,654 3,591,532
Net change in unrealized appreciation (depreciation) on investments
and translation of assets and liabilities denominated in foreign
currencies (3,011,423) 7,486
=====================================================================================================================
NET REALIZED AND UNREALIZED GAIN 8,035,231 3,599,018
=====================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,888,895 $ 5,075,214
=====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 2004
<Table>
<Caption>
GLOBAL GLOBAL
INCREASE IN NET ASSETS EQUITY FUND INCOME FUND
OPERATIONS:
Net investment income (loss) $ (146,336) $ 1,476,196
Net realized gain on investments, futures contracts, and foreign
currency related transactions 11,046,654 3,591,532
Net change in unrealized appreciation (depreciation) on
investments and translation of assets and liabilities denominated
in foreign currencies (3,011,423) 7,486
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 7,888,895 5,075,214
=====================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (92,395) (2,736,170)
Class B - (207,059)
Class C - (255,610)
Class P - (34,759)
Class Y - (10,279)
- ---------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (92,395) (3,243,877)
=====================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 17,724,658 13,390,292
Reinvestment of distributions 88,463 2,598,512
Cost of shares reacquired (13,230,915) (17,114,699)
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 4,582,206 (1,125,895)
=====================================================================================================================
NET INCREASE IN NET ASSETS 12,378,706 705,442
=====================================================================================================================
NET ASSETS:
Beginning of year 62,971,942 67,220,898
- ---------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 75,350,648 $ 67,926,340
=====================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ (28,515) $ 2,051,222
=====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
YEAR ENDED DECEMBER 31, 2004
<Table>
<Caption>
GLOBAL GLOBAL
INCREASE IN NET ASSETS EQUITY FUND INCOME FUND
OPERATIONS:
Net investment income $ 169,237 $ 1,521,208
Net realized gain on investments and foreign currency related
transactions 42,937 3,652,218
Net change in unrealized appreciation (depreciation) on
investments and translation of assets and liabilities
denominated in foreign currencies 11,618,358 2,529,292
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 11,830,532 7,702,718
=====================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (85,217) (2,661,889)
Class B - (147,508)
Class C - (174,027)
Class P - (76,223)
- ---------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (85,217) (3,059,647)
=====================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 20,725,470 16,224,299
Reinvestment of distributions 81,162 2,443,699
Cost of shares reacquired (13,748,707) (18,421,931)
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 7,057,925 246,067
=====================================================================================================================
NET INCREASE IN NET ASSETS 18,803,240 4,889,138
=====================================================================================================================
NET ASSETS:
Beginning of year 44,168,702 62,331,760
- ---------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 62,971,942 $ 67,220,898
=====================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME $ 63,233 $ 1,000,291
=====================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<Page>
FINANCIAL HIGHLIGHTS
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 10.51 $ 8.33 $ 10.02 $ 12.98 $ 13.82
========== ========== ========== ========== ==========
Investment operations:
Net investment income (loss)(b) (.01) .04 .03 (.02) (.05)
Net realized and unrealized gain (loss) 1.27 2.16 (1.69) (2.94) .65
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.26 2.20 (1.66) (2.96) .60
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.02) (.02) (.03) - -
Net realized gain - - - - (1.44)
---------- ---------- ---------- ---------- ----------
Total distributions (.02) (.02) (.03) - (1.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.75 $ 10.51 $ 8.33 $ 10.02 $ 12.98
========== ========== ========== ========== ==========
Total Return(c) 11.99% 26.38% (16.58)% (22.80)% 4.78%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 2.05% 1.95% 2.29% 1.99% 1.78%
Expenses, excluding expense
reductions 2.05% 1.95% 2.29% 2.01% 1.79%
Net investment income (loss) (.11)% .45% .30% (.19)% (.34)%
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 59,915 $ 52,828 $ 37,555 $ 47,016 $ 64,288
Portfolio turnover rate 170.93% 56.26% 43.52% 97.27% 41.21%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 10.10 $ 8.04 $ 9.70 $ 12.65 $ 13.60
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(b) (.08) (.02) (.03) (.09) (.14)
Net realized and unrealized gain (loss) 1.22 2.08 (1.63) (2.86) .63
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.14 2.06 (1.66) (2.95) .49
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain - - - - (1.44)
---------- ---------- ---------- ---------- ----------
Total distributions - - - - (1.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.24 $ 10.10 $ 8.04 $ 9.70 $ 12.65
========== ========== ========== ========== ==========
Total Return(c) 11.29% 25.62% (17.11)% (23.32)% 4.12%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 2.69% 2.61% 2.92% 2.62% 2.40%
Expenses, excluding expense
reductions 2.69% 2.61% 2.92% 2.64% 2.41%
Net investment loss (.75)% (.21)% (.33)% (.82)% (.92)%
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 7,818 $ 6,033 $ 4,208 $ 4,568 $ 5,615
Portfolio turnover rate 170.93% 56.26% 43.52% 97.27% 41.21%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 10.11 $ 8.06 $ 9.73 $ 12.69 $ 13.63
========== ========== ========== ========== ==========
Investment operations:
Net investment loss(b) (.08) (.02) (.03) (.08) (.14)
Net realized and unrealized gain (loss) 1.22 2.07 (1.64) (2.88) .64
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.14 2.05 (1.67) (2.96) .50
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net realized gain - - - - (1.44)
---------- ---------- ---------- ---------- ----------
Total distributions - - - - (1.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 11.25 $ 10.11 $ 8.06 $ 9.73 $ 12.69
========== ========== ========== ========== ==========
Total Return(c) 11.28% 25.59% (17.16)% (23.33)% 4.19%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 2.69% 2.61% 2.92% 2.62% 2.40%
Expenses, excluding expense
reductions 2.69% 2.61% 2.92% 2.64% 2.41%
Net investment loss (.75)% (.29)% (.33)% (.78)% (.94)%
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 7,158 $ 4,111 $ 2,406 $ 2,262 $ 3,027
Portfolio turnover rate 170.93% 56.26% 43.52% 97.27% 41.21%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
GLOBAL EQUITY FUND
<Table>
<Caption>
10/19/2004(a)
TO
12/31/2004
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.54
==============
Investment operations:
Net investment income -(e)
Net realized and unrealized gain 1.22
--------------
Total from investment operations 1.22
--------------
NET ASSET VALUE, END OF PERIOD $ 11.76
==============
Total Return(c) 11.57%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense reductions .33%(d)
Expenses, excluding expense reductions .33%(d)
Net investment income .02%(d)
<Caption>
10/20/2004(a)
TO
SUPPLEMENTAL DATA: 12/31/2004
- ------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 460
Portfolio turnover rate 170.93%
======================================================================================================
</Table>
(a) Commencement of offering of class shares.
(b) Calculated using average shares outstanding during the year.
(c) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(d) Not annualized.
(e) Amount is less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<Page>
FINANCIAL HIGHLIGHTS
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.43 $ 6.91 $ 6.35 $ 6.65 $ 7.16
========== ========== ========== ========== ==========
Investment operations:
Net investment income(b) .17(e) .18 .20 .25(e) .23
Net realized and unrealized gain (loss) .43 .68 .72 (.12) (.25)
---------- ---------- ---------- ---------- ----------
Total from investment operations .60 .86 .92 .13 (.02)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.37) (.34) (.25) (.40) -
Paid-in capital - - (.11) (.03) (.49)
---------- ---------- ---------- ---------- ----------
Total distributions (.37) (.34) (.36) (.43) (.49)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 7.66 $ 7.43 $ 6.91 $ 6.35 $ 6.65
========== ========== ========== ========== ==========
Total Return(c) 8.40% 12.79% 14.90% 1.87% (.03)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.40% 1.35% 1.44% 1.25% 1.25%
Expenses, excluding expense
reductions 1.40% 1.35% 1.44% 1.29% 1.31%
Net investment income 2.33% 2.43% 3.09% 3.85% 3.42%
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 55,821 $ 56,386 $ 55,419 $ 52,449 $ 62,592
Portfolio turnover rate 260.11% 239.18% 216.16% 393.95% 406.50%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.45 $ 6.92 $ 6.37 $ 6.67 $ 7.17
========== ========== ========== ========== ==========
Investment operations:
Net investment income(b) .12(e) .13 .16 .21(e) .19
Net realized and unrealized gain (loss) .43 .70 .71 (.12) (.25)
---------- ---------- ---------- ---------- ----------
Total from investment operations .55 .83 .87 .09 (.06)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.33) (.30) (.22) (.36) -
Paid-in capital - - (.10) (.03) (.44)
---------- ---------- ---------- ---------- ----------
Total distributions (.33) (.30) (.32) (.39) (.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.67
========== ========== ========== ========== ==========
Total Return(c) 7.58% 12.22% 14.04% 1.28% (.44)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 2.04% 1.99% 2.06% 1.88% 1.86%
Expenses, excluding expense
reductions 2.04% 1.99% 2.06% 1.92% 1.92%
Net investment income 1.69% 1.79% 2.42% 3.20% 2.79%
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 5,291 $ 3,719 $ 2,842 $ 1,519 $ 1,317
Portfolio turnover rate 260.11% 239.18% 216.16% 393.95% 406.50%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.45 $ 6.92 $ 6.37 $ 6.66 $ 7.17
========== ========== ========== ========== ==========
Investment operations:
Net investment income(b) .12(e) .13 .17 .21(e) .19
Net realized and unrealized gain (loss) .43 .70 .71 (.11) (.26)
---------- ---------- ---------- ---------- ----------
Total from investment operations .55 .83 .88 .10 (.07)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.33) (.30) (.23) (.36) -
Paid-in capital - - (.10) (.03) (.44)
---------- ---------- ---------- ---------- ----------
Total distributions (.33) (.30) (.33) (.39) (.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.66
========== ========== ========== ========== ==========
Total Return(c) 7.59% 12.29% 14.19% 1.34% (.73)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 2.04% 1.99% 1.94% 1.84% 1.90%
Expenses, excluding expense
reductions 2.04% 1.99% 1.94% 1.88% 1.96%
Net investment income 1.69% 1.79% 2.56% 3.23% 2.77%
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 6,235 $ 5,212 $ 2,989 $ 2,152 $ 1,852
Portfolio turnover rate 260.11% 239.18% 216.16% 393.95% 406.50%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.39 $ 6.87 $ 6.32 $ 6.62 $ 7.16
========== ========== ========== ========== ==========
Investment operations:
Net investment income(b) .16(e) .17 .20 .24(e) .22
Net realized and unrealized gain (loss) .36 .69 .71 (.11) (.28)
---------- ---------- ---------- ---------- ----------
Total from investment operations .52 .86 .91 .13 (.06)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (.32) (.34) (.25) (.40) -
Paid-in capital - - (.11) (.03) (.48)
---------- ---------- ---------- ---------- ----------
Total distributions (.32) (.34) (.36) (.43) (.48)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 7.59 $ 7.39 $ 6.87 $ 6.32 $ 6.62
========== ========== ========== ========== ==========
Total Return(c) 7.34% 12.78% 14.82% 1.84% (.57)%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions 1.49% 1.44% 1.51% 1.33% 1.31%(d)
Expenses, excluding expense
reductions 1.49% 1.44% 1.51% 1.37% 1.37%(d)
Net investment income 2.24% 2.34% 2.96% 3.69% 3.34%(d)
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------------
SUPPLEMENTAL DATA: 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 2 $ 1,904 $ 1,082 $ 526 $ 229
Portfolio turnover rate 260.11% 239.18% 216.16% 393.95% 406.50%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
10/19/2004(a)
TO
12/31/2004
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.38
==============
Investment operations
Net investment income(b) .04(e)
Net realized and unrealized gain .37
--------------
Total from investment operations .41
--------------
Distributions to shareholders from:
Net investment income (.13)
--------------
Total distributions (.13)
--------------
NET ASSET VALUE, END OF PERIOD $ 7.66
==============
Total Return(c) 5.79%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense reductions .21%(d)
Expenses, excluding expense reductions .21%(d)
Net investment income .57%(d)
<Caption>
10/20/2004(a)
TO
SUPPLEMENTAL DATA: 12/31/2004
- ------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 577
Portfolio turnover rate 260.11%
======================================================================================================
</Table>
(a) Commencement of offering of class shares.
(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.
(d) Not annualized.
(e) Interest expense is less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Global Fund, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "Act") as an open-end management investment company,
incorporated under Maryland law on February 23, 1988. The Company consists of
the following two portfolios ("Funds") and their respective classes: Equity
Series ("Global Equity Fund"), Class A, B, C, P, and Y shares; and Income Series
("Global Income Fund"), Class A, B, C, P, and Y shares. As of the date of this
report, no P shares have been issued for Global Equity Fund. Global Equity Fund
is diversified as defined under the Act. Global Income Fund is non-diversified.
Global Equity Fund's investment objective is long-term growth of capital and
income consistent with reasonable risk. The production of current income is a
secondary consideration. Global Income Fund's investment objective is high
current income consistent with reasonable risk. Capital appreciation is a
secondary consideration. 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
the Class B, C, P, and Y shares, although there may be a contingent deferred
sales charge ("CDSC") as follows: certain redemptions of Class A shares made
within 24 months (12 months if shares were purchased on or after November 1,
2004) following certain purchases made without a sales charge; 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 convert to Class A
shares on the eighth anniversary of an original purchase of Class B shares.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
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 traded on any recognized U.S. or non-U.S.
exchange or on NASDAQ, Inc. 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. The Fund may rely on an independent fair
valuation service in adjusting the valuations of foreign securities.
Unlisted equity securities are valued at 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 electronic
data processing techniques. Exchange-traded options and futures contracts
are valued at the last sales price in the market where they are principally
traded. If no sale has occurred, the mean between the most recently quoted
bid and asked prices is used. 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 Directors.
34
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. 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.
(d) FEDERAL 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 Federal income tax provision is
required.
(e) EXPENSES-Expenses incurred by the Company that do not specifically relate to
an individual Fund are generally allocated to the Funds within the Company
on a pro rata basis. 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 and P shares bear all
expenses and fees relating to their respective 12b-1 Distribution Plans.
(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 the Funds' records at the rate prevailing when earned or recorded. Asset
and liability accounts that are denominated in foreign currencies are
adjusted to reflect current exchange rates. The resultant exchange gains and
losses are included in Net Realized and Unrealized Gain (Loss) on the
Statements of Operations. The Funds do not isolate that 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.
(g) FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS-The Funds 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 and to lock in the U.S. dollar cost of firm purchase and sale
commitments for securities denominated in foreign currencies. Global Income
Fund also may use these transactions as an efficient way to gain exposure to
short-term interest rates in a particular country instead of investing in
securities denominated in the country's currency. 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
the Statements 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 Gain (Loss) on Investments, Futures Contracts and Foreign
Currency Related Transactions on the Statements of Operations.
35
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(h) FUTURES CONTRACTS-Futures contracts are marked to market daily and the
variation margin is recorded as an unrealized gain (loss). When a contract
is closed, a realized gain (loss) is recorded equal to the difference
between the opening and closing value of the contract. Generally, open
futures contracts are marked to market for Federal income tax purposes at
fiscal year-end. As of December 31, 2004, there are no open futures
contracts.
(i) SECURITIES LENDING-Each Fund may lend its securities to member banks of the
Federal Reserve System and to registered broker/dealers approved by the
Company. The loans are collateralized at all times by cash and/or U.S.
Government securities in an amount at least equal to 102% of the market
value of the domestic securities loaned (105% in the case of foreign
securities loaned) as determined at the close of business on the preceding
business day. The dividend and interest income earned on the securities
loaned is accounted for in the same manner as other dividend and interest
income. Lending portfolio securities could result in a loss or delay in
recovering the Company's securities if the borrower defaults.
(j) REPURCHASE AGREEMENTS-Each Fund may enter into repurchase agreements with
respect to securities. A repurchase agreement is a transaction in which the
Fund acquires a security and simultaneously commits to resell that security
to the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. The Fund requires at all times that the repurchase
agreement be collateralized by cash, or by securities of the U.S.
Government, its agencies, its instrumentalities, or U.S. Government
sponsored enterprises having a value equal to, or in excess of, the value of
the repurchase agreement (including accrued interest). If the seller of the
agreement defaults on its obligation to repurchase the underlying securities
at a time when the value of those securities has declined, the Fund may
incur a loss upon disposition of the securities.
(k) MORTGAGE DOLLAR ROLLS-Global Income Fund may sell mortgage-backed securities
for delivery in the current month and simultaneously contract to repurchase
substantially similar (same type, coupon and maturity) securities on a
specific future date. Effective June 2004, such transactions are treated as
financing transactions for financial reporting purposes. During the roll
period, the Fund loses the right to receive principal (including prepayments
of principal) and interest paid on the securities sold. However, the Fund
may benefit from the interest earned on the cash proceeds of the securities
sold until the settlement date of the forward purchase. The Fund will hold
and maintain in a segregated account until the settlement date cash or
liquid securities in an amount equal to the forward purchase price.
(l) REDEMPTION FEES-Global Equity Fund may impose a 2.00% redemption fee of the
NAV of the shares being redeemed or exchanged within ten business days or
less after such shares were acquired. This does not include shares acquired
through the reinvestment of dividends or other distributions or certain
automatic or systematic investment, exchange or withdrawal plans. The fees
are retained by the Fund and are included as Paid-in Capital on the
Statements of Asset and Liabilities and are included in Net Proceeds from
Sales of Shares on the Fund's Statement of Changes in Net Assets. During the
year ended December 31, 2004, the Fund collected $817 of redemption fees.
36
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE
The Company has a management agreement with Lord, Abbett & Co. LLC ("Lord
Abbett") pursuant to which Lord Abbett supplies the Company with investment
management services and executive and other personnel, pays the remuneration of
officers, provides office space and pays for ordinary and necessary office and
clerical expenses relating to research and statistical work and supervision of
the Company's investment portfolios.
The management fee is based on average daily net assets at the following annual
rates:
<Table>
Global Equity Fund .75%
Global Income Fund .50%
</Table>
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.
12b-1 DISTRIBUTION PLANS
Each Fund has adopted a distribution plan with respect to one or more classes of
shares pursuant to Rule 12b-1 of the Act, which provides for the payment of
ongoing distribution and service fees to Lord Abbett Distributor LLC
("Distributor"), an affiliate of Lord Abbett. The fees are accrued daily at
annual rates based upon average daily net assets as follows:
<Table>
<Caption>
FEE CLASS A CLASS B CLASS C CLASS P
- ----------------------------------------------------------------------------------
Service .25% .25% .25% .20%
Distribution .10%(1) .75% .75% .25%
</Table>
(1) In addition, until September 30, 2004, each Fund paid a one-time
distribution fee of up to 1.00% on certain qualifying purchases of Class A
shares. Effective October 1, 2004, the Distributor commenced payment of
such one-time distribution fee. The unamortized balance of these prepaid
distribution fees as of September 30, 2004 was as follows:
<Table>
<Caption>
UNAMORTIZED
BALANCE
- --------------------------------------------
Global Equity Fund $ 4,799
Global Income Fund -
</Table>
This amount will continue to be amortized by Global Equity Fund, generally over
a two-year period. The amount of CDSC collected by the Funds during the fiscal
year ended December 31, 2004 was as follows:
<Table>
<Caption>
CDSC
COLLECTED
- --------------------------------------------
Global Equity Fund $ 394
Global Income Fund 2,986
</Table>
COMMISSIONS
Distributor received the following commissions on sales of Class A shares of the
Funds, after concessions were paid to authorized dealers, for the year ended
December 31, 2004:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- -----------------------------------------------------------------------------------
Global Equity Fund $ 49,798 $ 266,660
Global Income Fund 18,094 89,725
</Table>
One Director and certain of the Company's officers have an interest in Lord
Abbett.
37
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARD
Dividends from net investment income, if any, are declared and paid
semi-annually for Global Equity Fund, and declared daily and paid monthly for
Global Income 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 amount 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 and net realized
capital gains for tax purposes are reported as a tax return of capital.
The tax character of distributions paid during the fiscal years ended December
31, 2004 and 2003 are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/2004 12/31/2003 12/31/2004 12/31/2003
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 92,395 $ 85,217 $ 3,243,877 $ 3,059,647
- --------------------------------------------------------------------------------
Total distributions paid $ 92,395 $ 85,217 $ 3,243,877 $ 3,059,647
================================================================================
</Table>
As of December 31, 2004, the components of accumulated earnings (losses) on a
tax basis are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
Undistributed ordinary
income - net $ - $ 2,105,868
Capital loss carryforwards* (577,394) (7,887,959)
Temporary differences (28,515) (53,902)
Unrealized gains - net 6,839,610 6,908,135
- --------------------------------------------------------------------------------
Total accumulated earnings - net $ 6,233,701 $ 1,072,142
================================================================================
</Table>
* As of December 31, 2004, the capital loss carryforward amounts, along with the
related expiration dates, are as follows:
<Table>
<Caption>
2005 2007 2008 2010 TOTAL
- -----------------------------------------------------------------------------------------------
Global Equity Fund $ - $ - $ - $ 577,394 $ 577,394
Global Income Fund 680,831 1,473,226 2,677,712 3,056,190 7,887,959
</Table>
As of December 31, 2004, the Funds' aggregate unrealized security gains and
losses based on cost for U.S. Federal income tax purposes are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
- ---------------------------------------------------------------------------------
Tax cost $ 67,675,576 $ 62,106,457
- ---------------------------------------------------------------------------------
Gross unrealized gain 8,291,157 6,886,660
Gross unrealized loss (1,467,082) (36,468)
- ---------------------------------------------------------------------------------
Net unrealized security gain $ 6,824,075 $ 6,850,192
=================================================================================
</Table>
38
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attributable to wash sales and other temporary tax adjustments.
Permanent items identified during the year ended December 31, 2004 have been
reclassified among the components of net assets based on their tax basis
treatment as follows:
<Table>
<Caption>
UNDISTRIBUTED
(DISTRIBUTIONS
IN EXCESS OF) ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME LOSS CAPITAL
- --------------------------------------------------------------------------------
Global Equity Fund $ 146,983 $ 111,796 $ (258,779)
Global Income Fund 2,818,612 121,705 (2,940,317)
</Table>
The permanent differences are primarily attributable to the net operating loss,
the tax treatment of currency gain (loss), the expiration of capital loss
carryforwards and the tax treatment of amortization.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended December 31, 2004 are as follows:
<Table>
<Caption>
U.S. NON-U.S. U.S. NON-U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES* PURCHASES SALES* SALES
- ------------------------------------------------------------------------------------------
Global Equity Fund $ - $ 113,242,052 $ - $ 110,290,115
Global Income Fund 129,803,285 43,169,519 133,705,078 43,608,898
</Table>
* Includes U.S. Government sponsored enterprises securities.
In connection with the securities lending program, State Street Bank & Trust
("SSB") received fees from Global Equity Fund and Global Income Fund of $11,071
and $166, respectively, for the year ended December 31, 2004, which is netted
against Securities Lending Income on the Statements of Operations. As of
December 31, 2004, there are no securities on loan.
At their October 21, 2004 meeting, the Board of Directors voted to discontinue,
as soon as practicable, the Funds' participation in the SSB securities lending
program.
6. DIRECTORS' REMUNERATION
The Company's officers and the one Director who are associated with Lord Abbett
do not receive any compensation from the Company for serving in such capacities.
Outside Directors' fees are allocated among all Lord Abbett-sponsored funds
based on the net assets of each fund. There is an equity based plan available to
all outside Directors under which outside Directors must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of
Directors' fees. The deferred amounts are treated as though equivalent dollar
amounts had been invested proportionately in the funds. Such amounts and
earnings accrued thereon are included in Directors' Fees on the Statements of
Operations and in Directors' Fees Payable on the Statements of Assets and
Liabilities and are not deductible for U.S. Federal income tax purposes until
such amounts are paid.
39
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. EXPENSE REDUCTIONS
The Company has entered into arrangements with its transfer agent and custodian
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of the Funds' expenses.
8. LINE OF CREDIT
Global Equity Fund, along with certain other funds managed by Lord Abbett, has
available a $200,000,000 unsecured revolving credit facility ("Facility") from a
consortium of banks, to be used for temporary or emergency purposes as an
additional source of liquidity to fund redemptions of investor shares. Any
borrowings under this Facility will bear interest at current market rates as
defined in the agreement. For the period January 1, 2004 through December 9,
2004, the fee for this Facility was at an annual rate of .09%. Effective
December 10, 2004, the Facility was renewed at an annual rate of .08%. At
December 31, 2004, there were no loans outstanding pursuant to this Facility nor
was the Facility utilized at any time during the fiscal year ended December 31,
2004.
9. CUSTODIAN AND ACCOUNTING AGENT
SSB is the Company's custodian and accounting agent. SSB performs custodian,
accounting and recordkeeping functions relating to portfolio transactions and
calculating each Fund's NAV.
10. INVESTMENT RISKS
Global Equity 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 stock market in general and to the changing prospects of
individual companies in which Global Equity Fund invests. Although certain
companies in which Global Equity Fund may invest may exhibit earnings and
revenue growth above the market trend, the stocks of these companies may be more
volatile and may drop in value if earnings and revenue growth do not meet
expectations.
Global Income Fund is subject to the general risks and considerations associated
with investing in fixed income securities. The value of an investment will
change as interest rates fluctuate and in response to market movements. When
interest rates rise, the prices of fixed income securities are likely to
decline; when rates fall, such prices tend to rise. Longer-term securities are
usually more sensitive to interest rate changes. The mortgage-related securities
in which Global Income Fund may invest, including those of such Government
sponsored enterprises as Federal Home Loan Mortgage Corporation and Federal
National Mortgage Association, may be particularly sensitive to changes in
prevailing interest rates due to prepayment risk. There is also the risk that an
issuer of a fixed income security will fail to make timely payments of principal
or interest to Global Income Fund, a risk that is greater with high yield bonds
(sometimes called "junk bonds") in which Global Income Fund may invest. Some
issuers, particularly of high yield bonds, may default as to principal and/or
interest payments after Global Income Fund purchases its securities. A default,
or concerns in the market about an increase in risk of default, may result in
losses to the Fund. High yield bonds are subject to greater price fluctuations,
as well as other risks.
Both Funds are subject to the risks of investing in securities that are issued
by non-U.S. entities. Foreign securities may pose greater risks than domestic
securities, including greater price
40
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fluctuation, less government regulation, and higher transaction costs. Foreign
investments also may be affected by changes in currency rates or currency
controls. With respect to foreign currency transactions in which the Funds may
engage, there is no guarantee that these transactions will be successful. They
may lower a fund's return or result in significant losses.
These factors can affect each Fund's performance.
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of capital stock are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
- ---------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 1,076,592 $ 11,492,396 1,847,467 $ 17,227,079
Reinvestment of distributions 8,498 88,463 7,926 81,162
Shares reacquired (1,010,748) (10,777,785) (1,341,247) (11,889,867)
- ---------------------------------------------------------------------------------------------------------------------
Increase 74,342 $ 803,074 514,146 $ 5,418,374
- ---------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 243,992 $ 2,497,616 209,706 $ 1,851,658
Shares reacquired (145,640) (1,479,850) (135,772) (1,186,100)
- ---------------------------------------------------------------------------------------------------------------------
Increase 98,352 $ 1,017,766 73,934 $ 665,558
- ---------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 325,101 $ 3,320,284 183,026 $ 1,646,733
Shares reacquired (95,402) (973,280) (75,083) (672,740)
- ---------------------------------------------------------------------------------------------------------------------
Increase 229,699 $ 2,347,004 107,943 $ 973,993
- ---------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PERIOD ENDED
CLASS Y SHARES DECEMBER 31, 2004*
- ---------------------------------------------------------
Shares sold 39,098 $ 414,362
Shares reacquired - -
- ---------------------------------------------------------
Increase 39,098 $ 414,362
- ---------------------------------------------------------
</Table>
* For the period October 19, 2004 (commencement of offering of class shares) to
December 31, 2004.
41
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
<Table>
<Caption>
GLOBAL INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
- ---------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 1,076,914 $ 7,962,694 1,170,464 $ 8,359,557
Reinvestment of distributions 305,978 2,261,192 307,572 2,190,320
Shares reacquired (1,679,359) (12,333,405) (1,915,454) (13,622,012)
- ---------------------------------------------------------------------------------------------------------------------
Decrease (296,467) $ (2,109,519) (437,418) $ (3,072,135)
- ---------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 342,255 $ 2,538,197 461,706 $ 3,273,220
Reinvestment of distributions 19,544 144,926 17,910 128,030
Shares reacquired (171,329) (1,260,647) (390,810) (2,741,178)
- ---------------------------------------------------------------------------------------------------------------------
Increase 190,470 $ 1,422,476 88,806 $ 660,072
- ---------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 278,191 $ 2,064,447 406,649 $ 2,925,997
Reinvestment of distributions 24,797 183,832 17,506 125,347
Shares reacquired (189,877) (1,412,365) (155,874) (1,105,614)
- ---------------------------------------------------------------------------------------------------------------------
Increase 113,111 $ 835,914 268,281 $ 1,945,730
- ---------------------------------------------------------------------------------------------------------------------
CLASS P SHARES
- ---------------------------------------------------------------------------------------------------------------------
Shares sold 37,132 $ 273,672 234,202 $ 1,665,525
Reinvestment of distributions -(a) 3 -(a) 2
Shares reaquired (294,610) (2,109,470) (134,029) (953,127)
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) (257,478) $ (1,835,795) 100,173 $ 712,400
- ---------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PERIOD ENDED
CLASS Y SHARES DECEMBER 31, 2004*
- ---------------------------------------------------------
Shares sold 74,088 $ 551,282
Reinvestment of distributions 1,126 8,559
Shares reacquired 160 1,188
- ---------------------------------------------------------
Increase 75,374 $ 561,029
- ---------------------------------------------------------
</Table>
* For the period October 19, 2004 (commencement of offering of class shares)
to December 31, 2004.
(a) Amount represents less than 1 share.
12. SUBSEQUENT EVENT
For the fiscal year ending December 31, 2005, Lord Abbett has contractually
agreed to reimburse each Fund to the extent necessary so that each class' total
annual operating expenses do not exceed the following annual rates:
GLOBAL EQUITY FUND
<Table>
<Caption>
CLASS % OF AVERAGE DAILY NET ASSETS
- ---------------------------------------------
A 1.60%
B 2.25%
C 2.25%
Y 1.25%
</Table>
GLOBAL INCOME FUND
<Table>
<Caption>
CLASS % OF AVERAGE DAILY NET ASSETS
- ---------------------------------------------
A 1.30%
B 1.95%
C 1.95%
P 1.40%
Y 0.95%
</Table>
42
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT GLOBAL FUND, INC.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments of Lord Abbett Global Fund, Inc. - Income Series
and Equity Series (the "Funds") as of December 31, 2004, and the related
statements of operations for the year then ended, 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
Funds' 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 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. An audit
includes 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 Funds'
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 December 31, 2004 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 Lord
Abbett Global Fund, Inc. - Income Series and Equity Series as of December 31,
2004, the results of their operations, 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
February 22, 2005
43
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Directors (the "Board") is responsible for the management of the
business and affairs of the Company in accordance with the laws of the State of
Maryland. The Board appoints officers who are responsible for the day-to-day
operations of the Company and who execute policies authorized by the Board. The
Board also approves an investment adviser to each Fund 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 Director holds office until his/her successor is elected and qualified or
until his/her earlier resignation or removal, as provided in the Company's
organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Funds' investment adviser.
INTERESTED DIRECTOR
The following Director is the Managing Partner of Lord Abbett and is an
"interested person" as defined in the Act. Mr. Dow is also an officer, director,
or trustee of each of the fourteen Lord Abbett-sponsored funds, which consist of
50 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH WITH COMPANY DURING PAST FIVE YEARS DIRECTORSHIPS
- --------------------- --------------------------------------------------------------------
ROBERT S. DOW Director since Managing Partner and N/A
Lord, Abbett & Co. LLC 1995; Chief Investment
90 Hudson Street Chairman since Officer of Lord Abbett
Jersey City, NJ 1996 since 1996.
Date of Birth: 3/8/1945
</Table>
----------
INDEPENDENT DIRECTORS
The following independent or outside Directors are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 50 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH WITH COMPANY DURING PAST FIVE YEARS DIRECTORSHIPS
- --------------------- --------------------------------------------------------------------
E. THAYER BIGELOW Director since Managing General Currently serves as
Emmerling 1994 Partner, Bigelow director of Adelphia
Communications Media, LLC (since Communications, Inc.,
41 Madison Ave. 2000); Senior Adviser, Crane Co., and Huttig
Suite 3810 Time Warner Inc. (1998 Building Products
New York, NY - 2000); Acting Chief Inc.
Date of Birth: 10/22/1941 Executive Officer of
Courtroom Television
Network (1997 - 1998);
President and Chief
Executive Officer of
Time Warner Cable
Programming, Inc.
(1991 - 1997).
WILLIAM H.T. BUSH Director since Co-founder and Currently serves as
Bush-O'Donnell & Co., Inc. 1998 Chairman of the Board director of Wellpoint
101 South Hanley Road of the financial Health Networks Inc.
Suite 1250 advisory firm of (since 2002), and
St. Louis, MO Bush-O'Donnell & Engineered Support
Date of Birth: 7/14/1938 Company (since 1986). Systems, Inc. (since
2000).
</Table>
44
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
DATE OF BIRTH WITH COMPANY DURING PAST FIVE YEARS DIRECTORSHIPS
- --------------------- --------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Director since Managing Director of Currently serves as
Monitor Clipper Partners 1998 Monitor Clipper director of Avondale,
Two Canal Park Partners (since1997) Inc. and Interstate
Cambridge, MA and President of Bakeries Corp.
Date of Birth: 10/25/1942 Clipper Asset
Management Corp.
(since 1991), both
private equity
investment funds.
JULIE A. HILL Director since Owner and CEO of the Currently serves as
1280 Bison 2004 Hillsdale Companies, a director of Wellpoint
Newport Coast, CA business consulting Health Networks Inc.;
Date of Birth: 7/16/1946 firm (since 1998); Resources Connection
Founder, President and Inc; and Holcim (US)
Owner of the Inc. (parent company
Hiram-Hill Holcim Ltd.)
and Hillsdale
Development Companies
(1998 - 2000).
FRANKLIN W. HOBBS Director since Former Chief Executive Currently serves as
One Equity Partners 2000 Officer of Houlihan director of Adolph
320 Park Avenue Lokey Howard & Zukin, Coors Company.
New York, NY an investment bank
Date of Birth: 7/30/1947 (January 2002 - April
2003); Chairman of
Warburg Dillon Read
(1999 - 2001); Global
Head of Corporate
Finance of SBC Warburg
Dillon Read (1997 -
1999); Chief Executive
Officer of Dillon,
Read & Co. (1994 -
1997).
C. ALAN MACDONALD Director since Retired - General Currently serves as
P.O. Box 4393 1988 Business and director H.J. Baker
Greenwich, CT Governance Consulting (since 2003).
Date of Birth: 5/19/1933 (since 1992); formerly
President and CEO of
Nestle Foods.
THOMAS J. NEFF Director since Chairman of Spencer Currently serves as
Spencer Stuart 1988 Stuart (U.S.), an director of Ace, Ltd.
277 Park Avenue executive search (since 1997) and
New York, NY consulting firm (since Hewitt Associates,
Date of Birth: 10/2/1937 1996); President of Inc.
Spencer Stuart (1979 -
1996).
</Table>
45
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
None of the officers listed below have received compensation from the Company.
All the officers of the Company may also be officers of the other Lord
Abbett-sponsored funds and maintain offices at 90 Hudson Street, Jersey City, NJ
07302.
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
(DATE OF BIRTH) WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Elected in 1995 Managing Partner and Chief Investment
(3/8/1945) Officer and Officer of Lord Abbett (since 1996).
President
ZANE E. BROWN Executive Vice Elected in 1993 Partner and Director of
(12/9/1951) President Fixed Income Management, joined Lord
Abbett in 1992.
ROBERT I. GERBER Executive Vice Elected in 2001 Partner and Director of
(5/29/1954) President Taxable Fixed Income Management,
joined Lord Abbett in 1997.
ROBERT G. MORRIS Executive Vice Elected in 1995 Partner and Director of
(11/6/1944) President Equity Investments, joined Lord Abbett
in 1991.
ELI M. SALZMANN Executive Vice Elected in 2004 Partner and Director of
(3/24/1964) President Institutional Equity Investments,
joined Lord Abbett in 1997.
HAROLD E. SHARON Executive Vice Elected in 2003 Investment Manager and Director,
(9/23/1960) President International Core Equity Management,
joined Lord Abbett in 2003; formerly
Financial Industry Consultant for
Venture Capitalist (2001 - 2003); prior
thereto Managing Director of Warburg
Pincus Asset Management and Credit
Suisse Asset Management.
TRACIE E. AHERN Vice President Elected in 1999 Partner and Director of
(1/12/1968) Portfolio Accounting and Operations,
joined Lord Abbett in 1999.
JAMES BERNAICHE Chief Compliance Elected in 2004 Chief Compliance Officer, joined Lord
(7/28/1956) Officer Abbett in 2001; formerly Chief
Compliance Officer with Credit Suisse
Asset Management.
JOAN A. BINSTOCK Chief Financial Elected in 1999 Partner and Chief Operations Officer,
(3/4/1954) Officer and Vice joined Lord Abbett in 1999.
President
DANIEL E. CARPER Vice President Elected in 1988 Partner, joined Lord Abbett in 1979.
(1/22/1952)
</Table>
46
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
(DATE OF BIRTH) WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
PAUL A. HILSTAD Vice President and Elected in 1995 Partner and General Counsel,
(12/13/1942) Secretary joined Lord Abbett in 1995.
LAWRENCE H. KAPLAN Vice President and Elected in 1997 Partner and Deputy General
(1/16/1957) Assistant Secretary Counsel, joined Lord Abbett
in 1997.
JERALD LANZOTTI Vice President Elected in 1997 Partner and Fixed Income
(6/12/1967) Investment Manager,
joined Lord Abbett in 1996.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of
(12/21/1959) Equity Trading, joined Lord
Abbett in 1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2001 Assistant General Counsel,
(11/12/1957) Assistant Secretary joined Lord Abbett in 1999;
formerly Assistant General
Counsel of Prudential
Investments (1998 - 1999);
prior thereto Counsel of
Drinker, Biddle & Reath LLP,
a law firm.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund
(6/12/1971) Administration, joined Lord
Abbett in 2003; formerly
Vice President, Lazard
Asset Management LLC;
prior thereto Manager of
Deloitte & Touche LLP.
</Table>
Please call 888-522-2388 for a copy of the Statement of Additional Information
(SAI), which contains further information about the Company's Directors. It is
available free upon request.
47
<Page>
HOUSEHOLDING
The Company has adopted a policy that allows it to send only one copy of the
Funds' Prospectus, proxy material, annual report and semi-annual 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 800-821-5129 or send a written request with your name, the name of your fund
or funds and your account number or numbers to Lord Abbett Family of Funds, P.O.
Box 219336, Kansas City, MO 64121.
PROXY VOTING POLICIES, PROCEDURES AND RECORDS
A description of the policies and procedures that Lord Abbett uses to vote
proxies related to the Funds' portfolio securities, and information on how Lord
Abbett voted each Fund's proxies during the 12-month period ended June 30, 2004
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 Company is required to file each Fund's complete schedule of portfolio
holdings with the SEC for its first and third fiscal quarters on Form N-Q for
fiscal quarters ending on or after July 9, 2004. Once filed, the Form N-Q will
be available without charge, upon request on the SEC's website at www.sec.gov
and may be available by calling Lord Abbett at 800-821-5129. 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 a duplicating
fee to the SEC's Public Reference Room, Washington, DC 20549-0102; or (iii)
sending your request electronically to publicinfo@sec.gov.
TAX INFORMATION
All of the ordinary income distribution paid by the Global Equity Fund during
fiscal 2004 is qualifying dividend income. For corporate shareholders, all of
the Global Equity Fund's ordinary income distribution qualified for the
dividends received deduction.
48
<Page>
[LORD ABBETT(R) LOGO]
<Table>
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 Global Fund,Inc.
Lord Abbett Mutual Fund shares are distributed by Equity Series LAGF-2-1204
LORD ABBETT DISTRIBUTOR LLC Income Series (2/05)
</Table>
<Page>
ITEM 2: CODE OF ETHICS.
(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 December 31, 2004 (the "Period").
(b) Not applicable.
(c) The Registrant has not amended the Code of Ethics as described in
Form N-CSR during the Period.
(d) The Registrant has not granted any waiver, including an implicit
waiver, from a provision of the Code of Ethics as described in Form
N-CSR during the Period.
(e) Not applicable.
(f) See Item 11(a) 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 800-821-5129.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Directors has determined that each of the
following independent Directors who are members of the audit
committee are audit committee financial experts: E. Thayer Bigelow,
Robert B. Calhoun, and Franklin W. Hobbs. 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 December 31, 2004 and
2003 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:
<Page>
<Table>
<Caption>
FISCAL YEAR ENDED:
2004 2003
Audit Fees {a} $ 73,000 $ 70,000
Audit-Related Fees {b} 22 30
---------- ----------
Total audit and audit-related fees 73,022 70,030
---------- ----------
Tax Fees {c} 14,129 14,132
All Other Fees {d} - 0 - 37
---------- ----------
Total Fees $ 87,151 $ 84,199
---------- ----------
</Table>
- ----------
{a} Consists of fees for audits of the Registrant's annual financial
statements.
{b} Consists of the Registrant's proportionate share of fees for
performing certain agreed-upon procedures regarding compliance with the
provisions of Rule 17a-7 of the Investment Company Act of 1940 and
related Board approved procedures.
{c} Fees for the fiscal year ended December 31, 2004 and 2003 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.
{d} Fees for the year ended December 31, 2003 consist of the
Registrant's proportionate share of fees for testing of Anti-Money
Laundering Compliance.
(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.
<Page>
(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 December 31, 2004 and 2003 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2004 2003
All Other Fees {a} $ 120,650 $ 96,900
</Table>
- ----------
{a} Fees for the fiscal years ended December 31, 2004 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"). Fees for the fiscal years
ended December 31, 2003 consist of fees of $76,900 for the SAS 70 Report
and $20,000 for special tax services for Global Equity Fund.
The aggregate non-audit fees billed by Deloitte for services rendered to
entities under the common control of Lord Abbett (i.e., Lord Abbett Distributor
LLC, the Registrant's principal underwriter) for the fiscal years ended December
31, 2004 and 2003 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2004 2003
All Other Fees {b} $ - 0 - $ 11,378
</Table>
- ----------
{b} Fees for the fiscal year ended December 31, 2003 represent fees for
testing of Anti-Money Laundering Compliance.
(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.
<Page>
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS.
NOT APPLICABLE.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable
ITEM10: CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the Registrant's disclosure controls
and procedures (as defined in Rule 30a-2(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 significant 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
Registrant's last fiscal half-year that have materially affected,
or are reasonably likely to materially affect, the Registrant's
internal control over financial reporting.
ITEM 11: EXHIBITS.
(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 Act (17 CFR 270.30a-2) is attached hereto as a part of
EX-99.CERT.
<Page>
(a)(3) 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 attached hereto as a part of
EX-99.906CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities and 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 GLOBAL FUND, INC.
/s/ Robert S. Dow
---------------------------------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
---------------------------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: February 14, 2005
<Page>
Pursuant to the requirements of the Securities and 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.
LORD ABBETT GLOBAL FUND, INC.
/s/ Robert S. Dow
---------------------------------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
---------------------------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: February 14, 2005