<Page>
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 811-10371
LORD ABBETT BLEND TRUST
-----------------------
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
---------------------------------------
(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
----------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
--------------
Date of fiscal year end: 7/31
----
Date of reporting period: 1/31/2005
---------
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ITEM 1: REPORT TO SHAREHOLDERS.
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[LORD ABBETT LOGO]
2005
SEMI-
ANNUAL
REPORT
LORD ABBETT
SMALL-CAP BLEND FUND
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2005
<Page>
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LORD ABBETT SMALL-CAP BLEND FUND
SEMI-ANNUAL REPORT
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of the Lord
Abbett Small-Cap Blend Fund's (the Fund) strategies and performance for the
six-month period ended January 31, 2005. 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 U.S. economy showed mixed signs during the six-month period from July 31,
2004 through January 31, 2005. After slowing during a summer "soft patch," the
economy regained some traction in the third quarter of 2004. Despite indicators
of renewed economic strength, however, stocks finished the third quarter down
slightly. One of the key drivers of stocks during most of the summer seemed to
be the direction of oil prices, with stocks falling as oil prices rose. This
negative correlation lasted until mid-August when crude oil broke through the
$45 per barrel price level. From mid-August through mid-September, stocks
benefited from declining gasoline prices at the pump, a favorable turn of events
for consumers. Equities gathered momentum until a string of hurricanes on the
Gulf Coast forced production disruptions at one of the nation's largest
oil-refining facilities, causing oil prices to rise again as the quarter ended.
The combination of declining gasoline prices during much of the third
quarter and the addition of 300,000-400,000 jobs, while lower than expected,
contributed to a pick up in consumer spending in the third quarter.
Third-quarter unemployment declined to 5.4%. On August 10, 2004, the Federal
Reserve Board (the Fed) raised the fed funds rate from 1.25% to 1.50%. (The fed
funds rate is the rate charged by the Fed to banks needing overnight loans to
meet reserve requirements.) This was followed by another increase to 1.75% on
September 21. Two additional increases in November and December brought the Fed
Funds Rate to 2.25% by year-end.
In the final quarter of the year, employment increased. The Consumer Price
Index (CPI) increased 0.5% in October and 0.1% in November followed by a
decrease of 0.4% in December. The CPI is a commonly used measure of inflation,
which reflects changes in the prices paid by urban consumers for a
representative basket of goods and services. The S&P 500 Index(1) gained 1.5%
1
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in October, 4.0% in November and 3.4% in December. For 2004 as a whole, the S&P
500 Index(1) reported a gain of 10.9%.
In January 2005, the Consumer Confidence Index rose 0.7%. Based on a
representative sample of 5,000 households, the Index measures consumer
confidence about current business, employment and economic conditions as well as
their expectations for the same six months hence. Employment increased by
146,000 in January and the unemployment rate decreased to 5.2%, while the S&P
500 Index(1) declined 2.4%.
Q: HOW DID THE FUND PERFORM OVER THE SIX-MONTH PERIOD ENDED JANUARY 31, 2005?
A: For the six-month period ended January 31, 2005, the Fund returned 16.8%,
reflecting performance at the Net Asset Value (NAV) of Class A shares with all
distributions reinvested, compared with its benchmark, the Russell 2000(R)
Index,(2) which returned 13.9% 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: 10.12% and Since Inception (6/26/01): 13.99%. 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: Stock selection within the producer durables sector was the greatest
contributor to performance relative to the benchmark for the six-month period
ended January 31, 2005. Producer durables include industrials and capital goods
used in the production of other goods such as industrial buildings, machinery
and equipment. Two homebuilder holdings delivered very strong earnings. As
interest rates continued at record lows, homebuilders still benefited from high
demand. Within the technology sector, stock selection, and to a lesser extent an
underweight position within the sector, helped performance. A maker of computer
hard
2
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disk drives outperformed based on strong consumer product sales. Another strong
holding, a company that makes software for filtering internet content, took
advantage of a growing desire among employers to manage their employees' access
to non-business related internet websites in the workplace.
Selection of stocks within the consumer discretionary sector was the
largest detractor to relative performance. The consumer discretionary sector
includes stocks within the consumer durables, apparel, media, hotel and leisure
industries. These stocks tend to move with the economy. A slot machine
manufacturer disappointed due to company-specific difficulties, as well as a
delay in the rollout of gaming properties in new jurisdictions throughout the
United States. In addition, stock selection within the financial services sector
hurt performance, as regulatory scrutiny of the insurance industry as a whole
dampened performance of a portfolio holding of an insurance brokerage company.
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 FUND, INCLUDING THE
FUND'S 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 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.
(2) The Russell 2000(R) Index measures the performance of the 2,000 smallest
companies in the Russell 3000(R) Index, which represents approximately 8% of the
total market capitalization of the Russell 3000(R) Index. 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 Fund's management and the portfolio holdings described in this
report are as of January 31, 2005; 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 Fund. 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 Fund, please see the Fund's 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 Fund offers additional classes of
shares with distinct pricing options. For a full description of the differences
in pricing alternatives, please see the Fund's Prospectus.
MUTUAL FUNDS ARE NOT INSURED BY THE FDIC, ARE NOT DEPOSITS OR OTHER OBLIGATIONS
OF, OR GUARANTEED BY BANKS, AND ARE SUBJECT TO INVESTMENT RISKS INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
3
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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 (August 1, 2004 through January 31,
2005).
ACTUAL EXPENSES
For each class of the Fund, the first line of the table on the following
page provides information about actual account values and actual expenses. You
may use the information in this line, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled "Expenses Paid During the Period 8/1/04 - 1/31/05" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of the Fund, the second line of the table on the following
page provides information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio and an assumed rate of return
of 5% per year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
4
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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+
------------ ------------ ------------
8/14/04 -
8/1/04 1/31/05 1/31/05
------------ ------------ ------------
CLASS A
Actual $ 1,000.00 $ 1,167.90 $ 8.14
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.69 $ 7.58
CLASS B
Actual $ 1,000.00 $ 1,164.70 $ 11.57
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.52 $ 10.76
CLASS C
Actual $ 1,000.00 $ 1,164.00 $ 11.56
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.52 $ 10.76
CLASS P
Actual $ 1,000.00 $ 1,167.90 $ 8.80
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.09 $ 8.19
CLASS Y
Actual $ 1,000.00 $ 1,169.70 $ 6.62
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,019.11 $ 6.16
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.49% for Class A, 2.12% for Classes B and C, 1.61%
for Class P and 1.21% for Class Y) multiplied by the average account value
over the period, multiplied by 184/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
JANUARY 31, 2005
<Table>
<Caption>
SECTOR %*
Auto & Transportation 3.45%
Consumer Discretionary 19.63%
Consumer Staples 2.82%
Financial Services 13.43%
Healthcare 19.52%
Materials & Processing 9.95%
Other Energy 8.30%
Producer Durables 13.81%
Short-Term Investment 4.01%
Technology 5.08%
Total 100.00%
</Table>
* Represents percent of total investments.
5
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)
JANUARY 31, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- -------------------------------------------------------------------------------
COMMON STOCKS 94.89%
AIR TRANSPORTATION 0.25%
Pinnacle Airlines Corp.* 100,590 $ 1,212
----------
AUTO COMPONENTS 1.47%
Wabash National Corp.* 280,450 7,118
----------
AUTO PARTS: AFTER MARKET 0.11%
Aftermarket Technology
Corp.* 37,749 553
----------
BANKS: OUTSIDE NEW YORK CITY 1.03%
Hanmi Financial Corp. 70,279 2,497
Privatebancorp, Inc. 76,100 2,489
----------
TOTAL 4,986
----------
BIOTECHNOLOGY RESEARCH & PRODUCTION 1.70%
Enzon Pharmaceuticals,
Inc.* 639,244 8,246
----------
BUILDING: HEATING & PLUMBING 0.08%
AAON, Inc.* 26,513 384
----------
BUILDING: MATERIALS 3.12%
Watsco, Inc. 438,050 15,161
----------
BUILDING: MISCELLANEOUS 1.51%
Drew Industries, Inc.* 196,100 7,330
----------
BUILDING: ROOFING & WALLBOARD 3.47%
Beacon Roofing Supply,
Inc.* 191,600 3,832
ElkCorp 322,200 13,043
----------
TOTAL 16,875
----------
CASINOS & GAMBLING 1.37%
Alliance Gaming Corp.* 665,700 6,637
----------
COAL 3.07%
Massey Energy Co. 393,300 14,918
----------
COMMUNICATIONS & MEDIA 0.71%
Entravision
Communications Corp.* 429,700 $ 3,438
----------
COMPUTER SERVICES SOFTWARE &
SYSTEMS 2.46%
Hummingbird Ltd.*(a) 30,387 732
Lionbridge Technologies,
Inc.* 224,028 1,407
Websense, Inc.* 182,800 9,817
----------
TOTAL 11,956
----------
COMPUTER TECHNOLOGY 2.56%
RadiSys Corp.* 137,500 2,399
Stratasys, Inc.* 271,259 9,264
Western Digital Corp.* 72,000 775
----------
TOTAL 12,438
----------
CONSUMER ELECTRONICS 3.03%
Take-Two Interactive
Software, Inc.* 276,599 9,750
Universal Electronics Inc.* 294,140 4,989
----------
TOTAL 14,739
----------
DIVERSIFIED FINANCIAL SERVICES 2.52%
Texas United Bancshares,
Inc. 72,000 1,343
U.S.I. Holdings Corp.* 962,839 10,880
----------
TOTAL 12,223
----------
DIVERSIFIED MANUFACTURING 1.40%
Hexcel Corp.* 462,600 6,814
----------
DRUGS & PHARMACEUTICALS 5.42%
Kos Pharmaceuticals, Inc.* 104,474 3,450
Noven Pharmaceuticals, Inc.* 326,418 5,946
Par Pharmaceutical Cos.,
Inc.* 200,500 7,599
QLT Inc.*(a) 458,500 7,414
Taro Pharmaceutical
Industries Ltd.*(a) 64,700 1,943
----------
TOTAL 26,352
----------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
JANUARY 31, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- -------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT & COMPONENTS 0.96%
Genlyte Group Inc. (The)* 58,500 $ 4,681
----------
ELECTRONICS: INSTRUMENTS GAUGES &
METERS 2.15%
Measurement Specialties,
Inc.* 407,400 10,466
----------
ELECTRONICS: MEDICAL SYSTEMS 3.50%
Analogic Corp. 159,268 6,532
CTI Molecular Imaging,
Inc.* 227,764 3,355
Tripath Imaging, Inc.* 522,600 4,520
Zoll Medical Corp.* 79,400 2,588
----------
TOTAL 16,995
----------
FOODS 2.78%
Hain Celestial Group, Inc
(The)* 261,700 5,266
J & J Snack Foods Corp. 171,278 8,264
----------
TOTAL 13,530
----------
HEALTHCARE FACILITIES 2.88%
ICON Plc ADR* 186,375 6,545
LCA-Vision, Inc. 280,326 7,471
----------
TOTAL 14,016
----------
HOMEBUILDING 6.03%
Centex Corp. 159,400 9,773
Meritage Homes Corp.* 22,800 1,474
Ryland Group, Inc. 278,500 18,066
----------
TOTAL 29,313
----------
HOUSEHOLD FURNISHINGS 3.86%
Select Comfort Corp.* 958,445 18,757
----------
IDENTIFICATION CONTROL & FILTER DEVICES 1.23%
X-Rite, Inc. 391,232 5,958
----------
INSURANCE: MULTI-LINE 2.78%
Hilb, Rogal & Hobbs Co. 380,400 13,527
----------
INSURANCE: PROPERTY-CASUALTY 5.28%
HCC Insurance Holdings, Inc. 402,700 $ 13,237
Ohio Casualty Corp.* 540,392 12,423
----------
TOTAL 25,660
----------
MACHINERY: CONSTRUCTION & HANDLING 0.44%
Astec Industries, Inc.* 124,974 2,160
----------
MACHINERY: INDUSTRIAL/SPECIALTY 2.83%
Actuant Corp. Class A* 263,400 13,763
----------
MACHINERY: OIL WELL EQUIPMENT &
SERVICES 3.28%
Key Energy Services, Inc.* 202,400 2,512
Pride Int'l., Inc.* 573,000 13,402
----------
TOTAL 15,914
----------
MEDICAL & DENTAL INSTRUMENTS &
SUPPLIES 4.50%
Bio-Rad Laboratories,
Inc.* 110,300 6,485
Closure Medical Corp.* 90,544 1,796
Icu Medical, Inc.* 286,038 7,534
SurModics, Inc.* 81,118 2,383
Theragenics Corp.* 917,300 3,660
----------
TOTAL 21,858
----------
MEDICAL SERVICES 1.30%
Option Care, Inc. 364,225 6,297
----------
OIL: CRUDE PRODUCERS 1.86%
Grey Wolf, Inc.* 1,708,500 9,055
----------
RADIO & TV BROADCASTERS 1.77%
Regent Communications,
Inc.* 1,638,631 8,611
----------
REAL ESTATE 0.25%
First Acceptance Corp.* 129,900 1,209
----------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONCLUDED)
JANUARY 31, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- -------------------------------------------------------------------------------
RENTAL & LEASING SERVICES: CONSUMER 1.29%
Dollar Thrifty Automotive
Group, Inc.* 201,200 $ 6,279
----------
RESTAURANTS 2.13%
Dave & Buster's, Inc.* 360,200 6,761
Ruby Tuesday, Inc. 141,200 3,592
----------
TOTAL 10,353
----------
RETAIL 1.93%
Global Imaging Systems,
Inc.* 161,110 5,766
Goody's Family Clothing,
Inc. 386,383 3,597
----------
TOTAL 9,363
----------
SAVINGS & LOAN 1.67%
Brookline Bancorp, Inc. 508,865 8,137
----------
SERVICES: COMMERCIAL 3.30%
First Consulting Group,
Inc.* 556,997 3,158
SM&A*(b) 1,506,137 12,863
----------
TOTAL 16,021
----------
TRANSPORTATION MISCELLANEOUS 0.89%
Vitran Corp. Inc.*(a) 289,300 4,299
----------
TRUCKERS 0.70%
Rush Enterprises, Inc
Class A* 222,800 3,391
----------
WHOLESALERS 0.02%
LKQ Corp.* 6,600 110
----------
TOTAL COMMON STOCKS
(Cost $403,452,608) 461,103
==========
<Caption>
PRINCIPAL
AMOUNT VALUE
INVESTMENTS (000) (000)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 3.96%
REPURCHASE AGREEMENT 3.96%
Repurchase Agreement
dated 1/31/2005
1.80% due 2/1/2005
with State Street
Bank & Trust Co
Collateralized by
$17,845,000 of Federal
National Mortgage
Assoc. at 7.125%
due 3/15/2007;
value: $19,651,806;
proceeds: $19,262,861
(Cost $19,261,898) $ 19,262 $ 19,262
----------
TOTAL INVESTMENTS IN
SECURITIES 98.85%
(Cost $422,714,506) 480,365
==========
OTHER ASSETS IN EXCESS OF
LIABILITIES 1.15% 5,587
----------
NET ASSETS 100.00% $ 485,952
==========
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
(b) Affiliated issuer (holding represents 5% or more of the underlying isser's
outstanding voting shares). See Note 10.
ADR American Depository Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<Page>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JANUARY 31, 2005
<Table>
ASSETS:
Investments in unaffiliated issuers, at value (Cost $408,817,689) $ 467,502,532
Investment in affiliated issuer, at value (Cost $13,896,817) 12,862,410
Receivables:
Interest and dividends 158,656
Investment securities sold 4,971,482
Capital shares sold 5,964,009
Prepaid expenses and other assets 87,641
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS 491,546,730
- ------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 4,273,377
Capital shares reacquired 517,570
Management fee 289,872
12b-1 distribution fees 278,648
Fund administration 26,447
Trustees' fees 2,023
Accrued expenses and other liabilities 206,444
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 5,594,381
================================================================================================
NET ASSETS $ 485,952,349
================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 422,042,219
Accumulated net investment loss (2,366,460)
Accumulated net realized gain on investments 8,626,154
Net unrealized appreciation on investments 57,650,436
- ------------------------------------------------------------------------------------------------
NET ASSETS $ 485,952,349
================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 277,390,328
Class B Shares $ 63,343,811
Class C Shares $ 125,491,285
Class P Shares $ 859,885
Class Y Shares $ 18,867,040
OUTSTANDING SHARES BY CLASS
(UNLIMITED NUMBER OF AUTHORIZED SHARES OF BENEFICIAL INTEREST):
Class A Shares 18,109,717
Class B Shares 4,218,617
Class C Shares 8,364,563
Class P Shares 55,929
Class Y Shares 1,221,656
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 15.32
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) $ 16.25
Class B Shares-Net asset value $ 15.02
Class C Shares-Net asset value $ 15.00
Class P Shares-Net asset value $ 15.37
Class Y Shares-Net asset value $ 15.44
================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<Page>
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JANUARY 31, 2005
<Table>
INVESTMENT INCOME:
Dividends $ 632,675
Interest 149,343
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 782,018
- ------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 1,360,492
12b-1 distribution plan-Class A 376,428
12b-1 distribution plan-Class B 265,905
12b-1 distribution plan-Class C 447,098
12b-1 distribution plan-Class P 770
Shareholder servicing 493,757
Professional 35,455
Reports to shareholders 32,767
Fund administration 72,559
Custody 31,803
Trustees' fees 3,327
Registration 26,961
Other 3,473
- ------------------------------------------------------------------------------------------------
Gross expenses 3,150,795
Expense reductions (2,646)
- ------------------------------------------------------------------------------------------------
NET EXPENSES 3,148,149
- ------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (2,366,131)
================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments in unaffiliated issuers 12,851,763
Net realized gain (loss) on investment in affiliated issuer (299)
Net change in unrealized appreciation (depreciation) on investments 47,872,630
================================================================================================
NET REALIZED AND UNREALIZED GAIN 60,724,094
================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 58,357,963
================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX MONTHS
ENDED JANUARY 31, 2005 FOR THE YEAR ENDED
INCREASE IN NET ASSETS (UNAUDITED) JULY 31, 2004
OPERATIONS:
Net investment income (loss) $ (2,366,131) $ (2,707,538)
Net realized gain (loss) on investments 12,851,464 36,260,284
Net change in unrealized appreciation (depreciation) on investments 47,872,630 (2,171,628)
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 58,357,963 31,381,118
======================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain
Class A (19,844,848) (1,707,862)
Class B (5,011,171) (450,381)
Class C (8,647,402) (548,153)
Class P (36,167) (25)
Class Y (862,999) (73,076)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (34,402,587) (2,779,497)
======================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 183,918,918 175,002,209
Reinvestment of distributions 27,702,366 2,267,482
Cost of shares reacquired (27,619,407) (32,151,979)
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS 184,001,877 145,117,712
======================================================================================================================
NET INCREASE IN NET ASSETS 207,957,253 173,719,333
======================================================================================================================
NET ASSETS:
Beginning of period 277,995,096 104,275,763
- ----------------------------------------------------------------------------------------------------------------------
END OF PERIOD $ 485,952,349 $ 277,995,096
======================================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (2,366,460) $ (329)
======================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
(UNAUDITED) 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.37 $ 11.71 $ 9.18 $ 10.45 $ 10.00
=========== =========== =========== =========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations:
Net investment loss(a) (.08) (.16) (.12) (.12) (.07)
Net realized and unrealized gain (loss) 2.42 3.07 2.65 (1.15) .46
----------- ----------- ----------- ----------- ------------
Total from investment operations 2.34 2.91 2.53 (1.27) .39
----------- ----------- ----------- ----------- ------------
Distributions to shareholders from:
Net realized gain (1.39) (.25) - -(g) -
----------- ----------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 15.32 $ 14.37 $ 11.71 $ 9.18 $ 10.45
=========== =========== =========== =========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 16.79%(c) 24.96% 27.56% (12.11)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and expense
reductions .75%(c) 1.55% 1.71% 1.66% .69%(c)
Expenses, excluding waiver and expense
reductions .75%(c) 1.55% 1.89% 2.41% .81%(c)
Net investment loss (.53)%(c) (1.12)% (1.30)% (1.09)% (.67)%(c)
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 7/31/2001
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 277,390 $ 162,651 $ 59,717 $ 29,962 $ 2,214
Portfolio turnover rate 32.24% 84.91% 68.48% 47.69% 5.86%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
(UNAUDITED) 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.15 $ 11.56 $ 9.12 $ 10.45 $ 10.00
=========== =========== =========== =========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations:
Net investment loss(a) (.12) (.24) (.18) (.18) (.07)
Net realized and unrealized gain (loss) 2.38 3.02 2.62 (1.15) .46
----------- ----------- ----------- ----------- ------------
Total from investment operations 2.26 2.78 2.44 (1.33) .39
----------- ----------- ----------- ----------- ------------
Distributions to shareholders from:
Net realized gain (1.39) (.19) - -(g) -
----------- ----------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 15.02 $ 14.15 $ 11.56 $ 9.12 $ 10.45
=========== =========== =========== =========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 16.47%(c) 24.19% 26.75% (12.68)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and expense
reductions 1.07%(c) 2.18% 2.33% 2.27% .75%(c)
Expenses, excluding waiver and expense
reductions 1.07%(c) 2.18% 2.51% 3.02% .87%(c)
Net investment loss (.85)%(c) (1.75)% (1.92)% (1.70)% (.76)%(c)
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 7/31/2001
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 63,344 $ 45,384 $ 21,518 $ 12,013 $ 283
Portfolio turnover rate 32.24% 84.91% 68.48% 47.69% 5.86%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
(UNAUDITED) 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.14 $ 11.56 $ 9.12 $ 10.45 $ 10.00
=========== =========== =========== =========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations:
Net investment loss(a) (.12) (.24) (.18) (.18) (.07)
Net realized and unrealized gain (loss) 2.37 3.02 2.62 (1.15) .46
----------- ----------- ----------- ----------- ------------
Total from investment operations 2.25 2.78 2.44 (1.33) .39
----------- ----------- ----------- ----------- ------------
Distributions to shareholders from:
Net realized gain (1.39) (.20) - -(g) -
----------- ----------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 15.00 $ 14.14 $ 11.56 $ 9.12 $ 10.45
=========== =========== =========== =========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 16.40%(c) 24.18% 26.75% (12.68)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and expense
reductions 1.07%(c) 2.18% 2.33% 2.27% .75%(c)
Expenses, excluding waiver and expense
reductions 1.07%(c) 2.18% 2.51% 3.02% .87%(c)
Net investment loss (.85)%(c) (1.75)% (1.92)% (1.70)% (.76)%(c)
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 7/31/2001
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 125,491 $ 64,447 $ 23,039 $ 10,432 $ 468
Portfolio turnover rate 32.24% 84.91% 68.48% 47.69% 5.86%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
(UNAUDITED) 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.42 $ 11.73 $ 9.19 $ 10.45 $ 10.00
=========== =========== =========== =========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations:
Net investment loss(a) (.09) (.37) (.10) (.12) (.07)
Net realized and unrealized gain (loss) 2.43 3.28 2.64 (1.14) .46
----------- ----------- ----------- ----------- ------------
Total from investment operations 2.34 2.91 2.54 (1.26) .39
----------- ----------- ----------- ----------- ------------
Distributions to shareholders from:
Net realized gain (1.39) (.22) - -(g) -
----------- ----------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 15.37 $ 14.42 $ 11.73 $ 9.19 $ 10.45
=========== =========== =========== =========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 16.79%(c) 24.97% 27.64% (12.01)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and expense
reductions .81%(c) 1.63%+ 1.78%+ 1.72% .70%(c)
Expenses, excluding waiver and expense
reductions .81%(c) 1.63%+ 1.96%+ 2.47% .82%(c)
Net investment loss (.59)%(c) (1.20)%+ (1.37)%+ (1.15)% (.68)%(c)
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 7/31/2001
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 860 $ 218 $ 1 $ 1 $ 1
Portfolio turnover rate 32.24% 84.91% 68.48% 47.69% 5.86%
=============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
(UNAUDITED) 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.45 $ 11.75 $ 9.20 $ 10.45 $ 10.00
=========== =========== =========== =========== ============
Unrealized appreciation on investments .06
------------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
============
Investment operations:
Net investment loss(a) (.05) (.10) (.11) (.10) (.07)
Net realized and unrealized gain (loss) 2.43 3.07 2.66 (1.15) .46
----------- ----------- ----------- ----------- ------------
Total from investment operations 2.38 2.97 2.55 (1.25) .39
----------- ----------- ----------- ----------- ------------
Distributions to shareholders from:
Net realized gain (1.39) (.27) - -(g) -
----------- ----------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 15.44 $ 14.45 $ 11.75 $ 9.20 $ 10.45
=========== =========== =========== =========== ============
Total Return(b)(e) .60%(c)
Total Return(b) 16.97%(c) 25.45% 27.72% (11.92)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including waiver and expense
reductions .61%(c) 1.18%+ 1.33%+ 1.27% .66%(c)
Expenses, excluding waiver and expense
reductions .61%(c) 1.18%+ 1.51%+ 2.02% .78%(c)
Net investment loss (.36)%(c) (.75)%+ (.92)%+ (.70)% (.63)%(c)
<Caption>
SIX MONTHS
ENDED YEAR ENDED 7/31 6/18/2001(d)
1/31/2005 ----------------------------------------- TO
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 7/31/2001
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 18,867 $ 5,295 $ 1 $ 1 $ 1
Portfolio turnover rate 32.24% 84.91% 68.48% 47.69% 5.86%
=============================================================================================================================
</Table>
+ The ratios have been determined on a Fund basis.
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of investment operations; SEC effective date on June 26, 2001;
Fund shares became available to the public is July 2, 2001.
(e) Total return is for the period 6/18/01 through 6/26/01.
(f) Total return is for the period 6/26/01 through 7/31/01.
(g) Amount represents less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
Lord Abbett Blend Trust (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act") as an open-end management company, organized as a
Delaware Business Trust on May 1, 2001. The Trust has one series, Lord Abbett
Small-Cap Blend Fund (the "Fund"). The Securities and Exchange Commission
declared the registration of the Fund and its shares effective on June 26, 2001
and each class of shares became available to the public on July 2, 2001. The
Fund is diversified under the Act
The Fund's investment objective is to seek long-term growth of capital by
investing primarily in stocks of small companies. The Fund offers five classes
of shares: Classes A, B, C, P and Y, each with 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 Classes 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 the 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. Unlisted equity securities are valued at the last quoted sale price
or, if no sale price is available, at the mean between the most recently
quoted bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Trustees. Short-term securities with
60 days or less remaining to maturity are valued using the amortized cost
method, which approximates current market value.
(b) SECURITY TRANSACTIONS-Security transactions are recorded as of the date
that the securities are purchased or sold (trade date). Realized gains and
losses on sales of portfolio securities are calculated using the
identified-cost method. Realized and unrealized gains (losses) are
allocated to each class of shares based upon the relative proportion of net
assets at the beginning of the day.
(c) INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. 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.
17
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
(d) FEDERAL TAXES-It is the policy of the Fund to meet the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all taxable income and
capital gains to its shareholders. Therefore, no Federal income tax
provision is required.
(e) EXPENSES-Expenses, excluding class specific expenses, are allocated to each
class of shares based upon the relative proportion of net assets at the
beginning of the day. Classes A, B, C, and P shares bear all expenses and
fees relating to their respective 12b-1 Distribution Plans.
(f) REPURCHASE AGREEMENTS-The 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 these securities has declined, the
Fund may incur a loss upon disposition of the securities.
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE
The Trust has a management agreement with Lord, Abbett & Co. LLC ("Lord Abbett")
pursuant to which Lord Abbett supplies the Fund 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 Fund's
investment portfolio.
The management fee is based on average daily net assets at an annual rate of
..75%.
Lord Abbett provides certain administrative services to the Fund pursuant to an
Administrative Services Agreement at an annual rate of .04% of the Fund's
average daily net assets.
12b-1 DISTRIBUTION PLANS
The 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) Until October 1, 2004, the 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 prepaid distribution fees as of September
30, 2004 was $63,750. This amount will continue to be amortized by the
Fund, generally over a two-year period. The amount of CDSC collected by the
Fund during the six months ended January 31, 2005 was $1,757.
Class Y does not have a distribution plan.
18
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
COMMISSIONS
Distributor received the following commissions on sales of Class A shares of the
Fund, after concessions were paid to authorized dealers, for the six months
ended January 31, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- --------------------------------
$ 307,926 $ 1,737,887
</Table>
One Trustee and certain of the Trust's officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARD
Dividends from net investment income, if any, are declared and paid at least
annually. Taxable net realized gains from investment transactions, reduced by
capital loss carryforwards, if any, are declared and distributed to shareholders
at least annually. The capital loss carryforward amount, if any, is available to
offset future net capital gains. Dividends and distributions to shareholders are
recorded on the ex-dividend date. The 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 for tax purposes are reported as
a tax return of capital.
As of January 31, 2005, the Fund's aggregate unrealized security gains and
losses based on cost for U.S. Federal income tax purposes are as follows:
<Table>
Tax cost $ 423,161,961
- ----------------------------------------------------
Gross unrealized gain 63,996,550
Gross unrealized loss (6,793,569)
- ----------------------------------------------------
Net unrealized security gain $ 57,202,981
====================================================
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attributable to wash sales and other temporary tax adjustments.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended January 31, 2005 are as follows:
<Table>
<Caption>
PURCHASES SALES
- ----------------------------------
$ 251,225,826 $ 111,593,958
</Table>
There were no purchases or sales of U.S. Government securities for the six
months ended January 31, 2005.
6. TRUSTEES' REMUNERATION
The Trust's officers and the one Trustee who are associated with Lord Abbett do
not receive any compensation from the Trust for serving in such capacities.
Outside Trustees' fees are allocated
19
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
among all Lord Abbett-sponsored funds based on the net assets of each fund.
There is an equity based plan available to all outside Trustees under which
outside Trustees must defer receipt of a portion of, and may elect to defer
receipt of an additional portion of Trustees' fees. The deferred amounts are
treated as though equivalent dollar amounts have been invested proportionately
in the funds. Such amounts and earnings accrued thereon are included in
Trustees' Fees on the Statement of Operations and in Trustees' Fees Payable on
the Statement of Assets and Liabilities and are not deductible for U.S. Federal
income tax purposes until such amounts are paid.
7. EXPENSE REDUCTIONS
The Fund has entered into arrangements with its transfer agent and custodian
whereby credits realized as a result of uninvested cash balances are used to
reduce a portion of the Fund's expenses.
8. LINE OF CREDIT
The 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 August 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 January 31, 2005, there were
no loans outstanding pursuant to this Facility nor was the Facility utilized at
any time during the six months ended January 31, 2005.
9. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank & Trust Company ("SSB") is the Fund's custodian and accounting
agent. SSB performs custodian, accounting and recordkeeping functions relating
to portfolio transactions and calculating the Fund's NAV.
10. TRANSACTIONS WITH AFFILIATED ISSUER
An affiliated issuer is one in which the Fund has ownership of at least 5% of
the outstanding voting shares of the underlying issuer at any time during the
fiscal year. The Fund had the following transactions with an affiliated issuer
during the six months ended January 31, 2005:
<Table>
<Caption>
REALIZED DIVIDEND
BALANCE OF BALANCE OF VALUE LOSS INCOME
SHARES HELD GROSS GROSS SHARES HELD AT 8/1/2004 8/1/2004
AFFILIATED ISSUER AT 7/31/2004 ADDITIONS SALES AT 1/31/2004 1/31/2005 TO 1/31/2005 TO 1/31/2005
- ------------------------------------------------------------------------------------------------------------------
SM&A 1,214,515 291,822 (200) 1,506,137 $ 12,862,410 $ (299) $ -
</Table>
11. INVESTMENT RISKS
The Fund is subject to the general risks and considerations associated with
equity investing as well as the particular risks associated with growth and
value stocks. 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 the Fund invests. Different types of stocks shift in and out
of favor
20
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONCLUDED)
depending on market and economic conditions. Growth stocks tend to be more
volatile than other stocks. The market may fail to recognize the intrinsic value
of particular value stocks for a long time. In addition, if the Fund's
assessment of a company's potential for growth or market conditions is wrong, it
could suffer losses or produce poor performance relative to other funds, even in
a rising market. The Fund invests primarily in small company stocks, which tend
to be more volatile and can be less liquid than large company stocks. Small
companies may also have more limited product lines, markets or financial
resources, and typically experience a higher risk of failure than large
companies.
These factors can affect the Fund's performance.
12. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest are as follows:
<Table>
<Caption>
SIX MONTHS ENDED
JANUARY 31,2005 YEAR ENDED
(UNAUDITED) JULY 31,2004
- ----------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
CLASS A SHARES
Shares sold 6,794,666 $ 100,653,878 7,516,857 $ 104,897,437
Reinvestment of distributions 1,199,789 17,469,392 112,438 1,503,302
Shares reacquired (1,203,326) (17,698,595) (1,409,642) (19,954,176)
- ----------------------------------------------------------------------------------------------------------
Increase 6,791,129 $ 100,424,675 6,219,653 $ 86,446,563
- ----------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 972,796 $ 14,175,132 1,681,290 $ 22,980,342
Reinvestment of distributions 285,838 4,084,619 27,311 361,047
Shares reacquired (246,471) (3,566,111) (362,759) (5,008,078)
- ----------------------------------------------------------------------------------------------------------
Increase 1,012,163 $ 14,693,640 1,345,842 $ 18,333,311
- ----------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 3,834,935 $ 55,892,676 3,059,464 $ 42,147,359
Reinvestment of distributions 386,587 5,520,460 24,983 330,033
Shares reacquired (413,567) (6,011,895) (520,096) (7,188,371)
- ----------------------------------------------------------------------------------------------------------
Increase 3,807,955 $ 55,401,241 2,564,351 $ 35,289,021
- ----------------------------------------------------------------------------------------------------------
CLASS P SHARES
Shares sold 45,670 $ 690,463 15,107 $ 218,867
Reinvestment of distributions 2,473 36,160 2 24
Shares reacquired (7,338) (110,069) (97) (1,353)
- ----------------------------------------------------------------------------------------------------------
Increase 40,805 $ 616,554 15,012 $ 217,538
- ----------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 830,391 $ 12,506,769 360,838 $ 4,758,204
Reinvestment of distributions 40,336 591,735 5,449 73,076
Shares reacquired (15,470) (232,737) -(a) (1)
- ----------------------------------------------------------------------------------------------------------
Increase 855,257 $ 12,865,767 366,287 $ 4,831,279
- ----------------------------------------------------------------------------------------------------------
</Table>
(a) Amount represents less than 1 share.
21
<Page>
HOUSEHOLDING
The Trust has adopted a policy that allows it to send only one copy of the
Fund's 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 Fund's portfolio securities, and information on as to how
Lord Abbett voted the 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 Trust is required to file its 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.
22
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[LORD ABBETT(R) LOGO]
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This report when not used for the general
information of shareholders of the Fund,is to Lord Abbett Blend Trust
be distributed only if preceded or accompanied Lord Abbett Small-Cap Blend Fund
a current Fund Prospectus.
LASCB-3-105
Lord Abbett Mutual Fund shares are distributed by (3/05)
LORD ABBETT DISTRIBUTOR LLC
</Table>
<Page>
ITEM 2: CODE OF ETHICS.
Not applicable
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4-8: PRINCIPAL ACCOUNTANT FEES AND SERVICES. [RESERVED]
Not applicable.
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-3(c) under the
Investment Company Act of 1940) as of a date within 90 days
prior to the filing date of this report, the Chief Executive
Officer and Chief Financial Officer of the Registrant have
concluded that such disclosure controls and procedures are
reasonably designed and effective to ensure that material
information relating to the Registrant, including its
consolidated subsidiaries, is made known to them by others
within those entities.
(b) There were no 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 second fiscal quarter that have
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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.
(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 BLEND TRUST
/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: March 22, 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 BLEND TRUST
/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: March 22, 2005