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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
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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: 6/30/2005
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ITEM 1: REPORT TO SHAREHOLDERS.
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[LORD ABBETT LOGO]
2005
SEMIANNUAL
REPORT
LORD ABBETT
GLOBAL EQUITY FUND
GLOBAL INCOME FUND
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
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LORD ABBETT GLOBAL FUND
SEMIANNUAL REPORT
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of Lord
Abbett Global Equity Fund's and Lord Abbett Global Income Fund's strategies and
performance for the six-month period ended June 30, 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: Global economic growth rates were uneven during the reporting period, with
some countries and regions showing solid progress and others taking a step or
two backward. On the positive side, the growing availability of consumer credit
in emerging European countries, particularly Poland, helped finance a
consumption boom in that region. China also remained a potent factor in the
global economic picture, as Chinese exports soared and the nation recorded its
third-largest monthly trade surplus in June. In addition, Latin America
generally exceeded growth expectations, reflecting sound macroeconomic policies
in some countries and stronger oil revenues in others.
The picture elsewhere was less favorable. The Japanese economy remained
sluggish, as weaker global demand for some technology products undercut exports
and domestic demand remained weak. Except for the fast pace of economic growth
in emerging European countries, growth in the eurozone in general proved
disappointing. Economic activity contracted in Germany, Italy, Portugal, and
Greece, where business and consumer confidence generally have been weak. Italy's
sovereign debt was put on negative outlook by major credit-rating agencies for a
possible downgrade, and credit spreads among the weaker eurozone issuers
widened.
In May 2005, French and Dutch voters rejected the proposed constitution for
the European Union (EU), creating political turmoil in the region. The euro,
which had already started to decline against the U.S. dollar in the face of
sluggish regional growth, fell to a nine-month low.
While global growth was uneven, inflation remained benign overall and
corporate cash flows were strong. The expectation of stronger net exports
provided a positive backdrop that supported overseas equities. Foreign
1
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equity markets, led by Europe and the United Kingdom, continued to perform
strongly over the second half of the period when measured in local currency
terms. Although U.S. dollar strength eroded some of the stock gains, the major
European markets managed to rally between 3 percent and 7 percent. Small- and
mid-cap companies continued to provide some of the strongest performance.
LORD ABBETT GLOBAL EQUITY FUND
Q: HOW DID THE FUND PERFORM OVER THE SIX-MONTH PERIOD ENDED JUNE 30, 2005?
A: For the six-month period ended June 30, 2005, the fund returned -2.1 percent,
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,(1) which returned -0.4 percent over the same period. STANDARDIZED AVERAGE
ANNUAL TOTAL RETURNS, WHICH REFLECT PERFORMANCE AT THE MAXIMUM 5.75 PERCENT
SALES CHARGE APPLICABLE TO CLASS A SHARE INVESTMENTS AND INCLUDE THE
REINVESTMENT OF ALL DISTRIBUTIONS, ARE: 1 YEAR: 1.50 PERCENT; 5 YEARS: -4.85
PERCENT, AND 10 YEARS: 3.21 PERCENT. 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 percent if the shares are redeemed within 12 months of
the purchase. Certain expenses of the fund have been reimbursed by Lord Abbett;
without such reimbursement of expenses, the fund's returns would have been
lower.
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 in the industrials sector was the greatest detractor to fund
performance relative to the benchmark for the six-month period ended June 30,
2005. Although European construction holdings produced strong returns, their
contribution was offset by poor performance by U.S. industrial companies and a
global transport holding. Stock selection in the financials sector also hurt
performance relative to the benchmark. While the fund benefited from its
investment in emerging market banks, U.S. consumer banks disappointed investors.
Strong stock selection in the consumer discretionary sector was the
2
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largest contributor to positive relative returns for the six-month period
ended June 30, 2005. The consumer discretionary sector includes stocks within
the consumer durables, apparel, media, hotel, and leisure industries. A
Japanese electronic retailer and a fast-growing Spanish television station
led sector performance. The fund also was helped by solid holdings in the
information technology sector, including three U.S. companies, and a
Taiwanese semiconductor 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.
LORD ABBETT GLOBAL INCOME FUND
Q: HOW DID THE FUND PERFORM OVER THE SIX-MONTH PERIOD ENDED JUNE 30, 2005?
A: For the six-month period ended June 30, 2005, the fund returned -3.4 percent,
reflecting performance at the net asset value (NAV) of Class A shares with all
distributions reinvested, compared with its benchmark, the Lehman Brothers
Global Aggregate Bond Index,(2) which returned -2.5 percent over the same
period. STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS, WHICH REFLECT PERFORMANCE AT
THE MAXIMUM 4.75 PERCENT SALES CHARGE APPLICABLE TO CLASS A SHARE INVESTMENTS
AND INCLUDE THE REINVESTMENT OF ALL DISTRIBUTIONS, ARE: 1 YEAR: 1.34 PERCENT; 5
YEARS: 5.98 PERCENT, AND 10 YEARS: 4.38 PERCENT. 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 percent if the shares are redeemed
within 12 months of the purchase. Certain expenses of the fund have been
reimbursed by Lord Abbett; without such reimbursement of expenses, the fund's
returns would have been lower.
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: Positions in currencies and high-yield and emerging market bonds detracted
from performance relative to the benchmark in first quarter 2005, but added to
performance relative to the benchmark in the second quarter.
3
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In particular, in first quarter 2005, the portfolio's overweight in the
euro detracted from performance as the currency weakened against its major
competitors, reflecting the disappointing economic picture in the eurozone.
The portfolio's overweight in emerging market debt and high-yield bonds in
general suffered, as investors exited both sectors on fears that more
aggressive rate hikes by the Federal Reserve Board (the Fed) would reduce
global liquidity. Neither sector is represented in the fund's benchmark.
In second quarter 2005, the portfolio was overweight the U.S. dollar and
underweight the euro -- a position that contributed to performance as the dollar
strengthened in world markets. In addition to the unfavorable referendum on the
EU constitution, which pushed the euro lower in world markets, the yields of
both short- and long-term bonds were more attractive (higher) in the United
States than in Europe, providing additional support for the U.S. dollar.
Meanwhile, the quality of sovereign credits in some emerging markets
strengthened, adding to performance.
Contributing to performance relative to the benchmark, for the six-month
period ended June 30, 2005, was the portfolio's overweight in long-maturity
bonds versus short-term bonds as the yield curve(3) continued to flatten. Also
in the six-month period ended June 30, 2005, the portfolio's overweight in
German and French sovereign bonds added to performance as the weakening economic
picture (i.e., no signs of inflation) in both nations supported bond valuations.
Detracting from performance relative to the benchmark in the six-month
period ended June 30, 2005, was the portfolio's slight underweight in United
Kingdom interest rates, as bond prices were supported by growing evidence of a
weakening in consumer spending and investor expectations shifted to a possible
lowering of interest rates by the Bank of England.
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.
A PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT A FUND, INCLUDING ITS
INVESTMENT OBJECTIVES, RISKS, CHARGES, AND ONGOING EXPENSES, THAT AN INVESTOR
SHOULD CAREFULLY CONSIDER BEFORE INVESTING. TO OBTAIN A PROSPECTUS ON ANY LORD
ABBETT MUTUAL FUND, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR LORD ABBETT
DISTRIBUTOR LLC AT 800-874-3733 OR VISIT OUR WEBSITE AT www.LordAbbett.com. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
4
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(1) 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 East, with values expressed in U.S. dollars.
(2) The Lehman Brothers 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 U.S. dollar
investment-grade 144A securities.
Indices are unmanaged, do not reflect the deduction of fees or expenses, and are
not available for direct investment.
(3) When the difference between short- and long-term rates is diminishing, the
yield curve is said to be flattening. A yield curve is obtained by plotting the
yields of bonds with maturities ranging from the shortest to the longest
available. The resulting curve is a graphic representation of short-term
interest versus long-term interest rates.
IMPORTANT PERFORMANCE AND OTHER INFORMATION
The views of the funds' management and the portfolio holdings described in this
report are as of June 30, 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 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' prospectuses.
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' prospectuses.
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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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 (January 1, 2005 through June 30,
2005).
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 1/1/05 - 6/30/05" 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
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 5.0% 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 5.0% hypothetical example with the 5.0%
hypothetical examples that appear in the shareholder reports of the other funds.
6
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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+
----- ----- -----------
1/1/05 -
1/1/05 6/30/05 6/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 978.70 $ 7.65
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.06 $ 7.80
CLASS B
Actual $ 1,000.00 $ 975.10 $ 10.82
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,013.84 $ 11.03
CLASS C
Actual $ 1,000.00 $ 975.10 $ 10.82
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,013.84 $ 11.03
CLASS Y
Actual $ 1,000.00 $ 980.40 $ 5.94
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.79 $ 6.05
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.56% for Class A, 2.21% for Classes B and C, and 1.21%
for Class Y) multiplied by the average account value over the period,
multiplied by 181/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
JUNE 30, 2005
<Table>
<Caption>
SECTOR %*
Consumer Discretionary 7.69%
Consumer Staples 11.33%
Energy 8.05%
Financials 17.67%
Healthcare 18.07%
Industrials 13.94%
Information Technology 8.72%
Materials 5.99%
Short-Term Investment 0.08%
Telecommunication Services 5.81%
Utilities 2.65%
Total 100.00%
</Table>
* Represents percent of total investments.
7
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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+
----- ----- -----------
1/1/05 -
1/1/05 6/30/05 6/30/05
------ ------- -------
CLASS A
Actual $ 1,000.00 $ 966.00 $ 6.34
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.35 $ 6.51
CLASS B
Actual $ 1,000.00 $ 963.20 $ 9.49
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.12 $ 9.74
CLASS C
Actual $ 1,000.00 $ 963.20 $ 9.49
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.12 $ 9.74
CLASS P
Actual $ 1,000.00 $ 968.40 $ 6.83
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.85 $ 7.00
CLASS Y
Actual $ 1,000.00 $ 969.00 $ 4.64
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.08 $ 4.76
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.30% for Class A, 1.95% for Classes B and C, 1.40% for
Class P and .95% for Class Y) multiplied by the average account value over
the period, multiplied by 181/365 (to reflect one-half year period).
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PORTFOLIO HOLDINGS PRESENTED BY SECTOR
JUNE 30, 2005
<Table>
<Caption>
SECTOR %*
Agency 7.46%
Asset Backed 1.04%
Banking 6.53%
Basic Industry 0.95%
Consumer Non-Cyclical 0.34%
Energy 0.17%
Finance & Investment 16.93%
Foreign Sovereign - Europe 21.79%
Foreign Sovereign - Ex-Europe 7.57%
Government Guaranteed 10.21%
Media 0.55%
Mortgage Backed 6.33%
Services Cyclical 0.15%
Services Non-Cyclical 0.26%
Short-Term Investment 4.52%
Sovereign 12.23%
Supranational 0.96%
Technology & Electronics 0.16%
Telecommunications 0.84%
Utilities 1.01%
Total 100.00%
</Table>
* Represents percent of total investments.
8
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SCHEDULE OF INVESTMENTS (UNAUDITED)
GLOBAL EQUITY FUND JUNE 30, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------
COMMON STOCK 97.50%
AUSTRALIA 0.39%
Qantas Airways Ltd. 114,877 $ 295
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AUSTRIA 1.19%
Bank Austria
Creditanstalt 2,606 272
Telekom Austria AG 32,709 636
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TOTAL 908
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BERMUDA 0.26%
Tyco Int'l. Ltd. 6,900 201
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CANADA 1.45%
Barrick Gold Corp. 8,500 213
Canadian National
Railway Co. 5,100 294
Opti Canada, Inc.* 17,800 389
Potash Corp. of
Saskatchewan Inc. 2,200 210
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TOTAL 1,106
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FINLAND 0.22%
Stora Enso Oyj Registered
Shares 13,100 168
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FRANCE 5.07%
AXA 18,079 452
BNP Paribas S.A. 7,705 529
France Telecom S.A. 12,150 355
Lafarge S.A. 5,864 535
Lagardere S.C.A. 5,000 371
PSA Peugeot Citroen S.A. 4,632 274
Sanofi-Aventis 6,249 513
Schneider Electric S.A. 3,498 264
TOTAL S.A. 1,534 361
VINCI S.A. 2,561 213
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TOTAL 3,867
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GERMANY 1.83%
Deutsche Bank AG
Registered 4,376 $ 343
Fresenius Medical Care AG 7,945 680
METRO AG 3,495 173
Siemens AG 2,810 205
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TOTAL 1,401
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GREECE 1.22%
National Bank of
Greece S.A. 19,405 659
Public Power Corp. S.A. 10,800 270
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TOTAL 929
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HONG KONG 1.74%
Bank of East Asia, Ltd. 86,500 255
China Mobile
(Hong Kong) Ltd. 102,000 380
China Unicom Ltd. 300,000 253
China Unicom Ltd. ADR 20,700 173
Texwinca Holdings Ltd. 322,500 268
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TOTAL 1,329
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HUNGARY 0.75%
Richter Gedeon Rt. 3,903 574
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INDIA 0.79%
Reliance Industries Ltd. 40,673 601
------------
IRELAND 1.66%
DEPFA BANK plc 39,886 639
Irish Life & Permanent
plc 35,900 629
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TOTAL 1,268
------------
ITALY 1.50%
Enel S.p.A. 37,659 328
Mediaset S.p.A. 22,689 268
Saipem S.p.A. 27,252 367
Telecom Italia S.p.A. 69,234 180
------------
TOTAL 1,143
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
9
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SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL EQUITY FUND JUNE 30, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------
JAPAN 8.99%
Astellas Pharma Inc. 12,700 $ 434
Don Quijote Co., Ltd. 4,600 251
East Japan Railway Co. 63 324
Fanuc Ltd. 4,400 280
Hoya Corp. 3,900 450
Inpex Corp. 50 283
Japan Tobacco Inc. 13 173
Jupiter Telecommunications
Co., Ltd.* 647 547
Mitsubishi Tokyo Financial
Group, Inc. 20 170
Mizuho Financial
Group, Inc. 76 344
Murata Manufacturing
Co., Ltd. 5,300 270
Nitto Denko Corp. 6,106 350
ORIX Corp. 2,934 440
Sony Corp. 6,800 234
Sumitomo Corp. 64,000 513
Sumitomo Electric
Industries, Ltd. 42,012 430
Taiyo Yuden Co., Ltd. 31,000 344
Takefuji Corp. 8,360 565
Yamada Denki Co., Ltd. 7,997 460
------------
TOTAL 6,862
------------
NETHERLANDS 1.60%
ING Groep N.V. CVA 22,039 623
SBM Offshore N.V. 8,684 596
------------
TOTAL 1,219
------------
SOUTH AFRICA 0.50%
Sappi Ltd. 34,500 383
------------
SOUTH KOREA 0.47%
Samsung Electronics
Co., Ltd. 755 361
------------
SPAIN 1.04%
ACS, Actividades de
Construccion y
Servicios, S.A. 16,005 $ 448
Gestevision Telecinco, S.A. 14,867 348
------------
TOTAL 796
------------
SWEDEN 0.58%
AB Volvo Class B 6,900 281
Skandia Forsakrings AB 30,000 165
------------
TOTAL 446
------------
SWITZERLAND 3.91%
Nestle S.A. Registered
Shares 2,298 588
Novartis AG ADR 16,600 788
Novartis AG Registered
Shares 12,212 582
Serono S.A. 418 267
UBS AG Registered Shares 9,700 757
------------
TOTAL 2,982
------------
TAIWAN 1.16%
AU Optronics Corp. ADR* 10,200 173
Chinatrust Financial
Holding Co., Ltd. 305,000 332
Mediatek Inc. 43,533 377
------------
TOTAL 882
------------
THAILAND 0.65%
Thai Oil Co., Ltd. 325,000 499
------------
TURKEY 0.43%
Turkiye Garanti Bankasi
A.S. ADR* 76,000 327
------------
UNITED KINGDOM 10.77%
AstraZeneca plc 8,503 352
BAE SYSTEMS plc 119,861 616
BP plc 25,604 267
British American
Tobacco plc 22,734 438
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
10
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SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL EQUITY FUND JUNE 30, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------
Cadbury Schweppes plc 44,609 $ 426
Diageo plc 13,812 204
Diageo plc ADR 4,300 255
GlaxoSmithKline plc 6,881 167
GlaxoSmithKline plc ADR 10,000 485
HSBC Holdings plc 29,095 464
National Grid Transco plc 41,765 405
O2 plc* 241,202 589
Prudential plc 62,142 552
Royal Bank of Scotland
Group plc (The) 21,062 636
Smiths Group plc 23,451 386
Tesco plc 44,826 256
Tullow Oil plc 91,098 304
Vodafone Group plc 248,727 606
Wm Morrison
Supermarkets plc 90,597 302
WPP Group plc 49,998 515
------------
TOTAL 8,225
------------
UNITED STATES 49.33%
Abbott Laboratories 2,900 142
Adobe Systems, Inc. 4,800 137
Aflac Inc. 4,900 212
Ameren Corp. 3,800 210
American Express Co. 2,800 149
American Int'l. Group, Inc. 6,900 401
Automatic Data
Processing, Inc. 9,800 411
Baker Hughes, Inc. 9,000 461
Bank of America Corp. 11,150 509
Bank of New York Co.,
Inc. (The) 15,300 440
Baxter Int'l., Inc. 17,800 660
Bristol-Myers Squibb Co. 20,100 502
Campbell Soup Co. 10,900 335
Cardinal Health, Inc. 3,700 213
Caterpillar Inc. 3,500 334
Celgene Corp.* 12,500 510
Charles River
Laboratories Int'l., Inc.* 8,400 $ 405
Chevron Corp. 9,500 531
CIGNA Corp. 3,300 353
Citigroup, Inc. 13,500 624
Clorox Co. 4,100 229
Colgate-Palmolive Co. 12,500 624
Comcast Corp. Class A* 19,500 584
ConocoPhillips 4,100 236
Corning, Inc.* 13,800 229
CVS Corp. 14,700 427
Deere & Co. 8,100 530
Dell Inc.* 6,000 237
E.I. du Pont de
Nemours & Co. 7,000 301
EMC Corp.* 9,100 125
Emerson Electric Co. 5,500 344
Exxon Mobil Corp. 19,000 1,092
Federal Home Loan
Mortgage Corp. 1,500 98
Fluor Corp. 4,400 253
General Dynamics Corp. 5,700 624
General Electric Co. 41,700 1,445
Genzyme Corp.* 6,400 385
Gilead Sciences, Inc.* 9,300 409
Gillette Co. (The) 9,700 491
H.J. Heinz Co. 6,500 230
Hartford Financial Group,
Inc. (The) 5,400 404
Hewlett-Packard Co. 17,600 414
Honeywell Int'l., Inc. 7,000 257
ImClone Systems Inc.* 6,600 205
Intel Corp. 8,240 215
International Business
Machines Corp. 2,900 215
International Paper Co. 16,100 486
Johnson & Johnson 12,700 826
JPMorgan Chase & Co. 12,532 443
Kimberly-Clark Corp. 5,000 313
Kraft Foods Inc. Class A 23,235 739
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONCLUDED)
GLOBAL EQUITY FUND JUNE 30, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ------------------------------------------------------------
Kroger Co. (The)* 18,400 $ 350
MedImmune, Inc.* 7,300 195
Medtronic, Inc. 5,500 285
Mellon Financial Corp. 7,400 212
Merck & Co., Inc. 9,900 305
Microsoft Corp. 41,300 1,026
Monsanto Co. 4,600 289
Motorola, Inc. 38,800 709
Newell Rubbermaid Inc. 8,900 212
Newmont Mining Corp. 13,400 523
NIKE, Inc. Class B 4,800 416
Oracle Corp.* 13,700 181
PacifiCare Health System,
Inc.* 4,100 293
Parker Hannifin Corp. 7,500 465
PepsiCo, Inc. 13,300 717
Pfizer Inc. 39,000 1,076
PG&E Corp. 8,300 312
Praxair, Inc. 8,700 405
Procter & Gamble Co.
(The) 11,600 612
Progress Energy, Inc. 5,400 244
QUALCOMM Inc. 3,000 99
Raytheon Co. 4,600 180
SBC Communications, Inc. 21,500 511
Schering-Plough Corp. 20,100 383
Schlumberger Ltd.(a) 8,000 608
Southern Co. 6,000 208
Sprint FON Group 10,400 261
Texas Instruments Inc. 6,100 171
Tribune Co. 6,400 225
Union Pacific Corp. 5,900 382
United Parcel Service,
Inc. Class B 5,500 380
Verizon Communications,
Inc. 11,200 387
Viacom, Inc. Class B 6,800 218
Wachovia Corp. 6,200 308
Wal-Mart Stores, Inc. 11,500 554
Walt Disney Co. (The) 21,300 536
Waste Management, Inc. 15,300 $ 434
WellPoint, Inc.* 4,500 313
Wells Fargo & Co. 3,400 209
Wyeth 19,400 863
Xerox Corp.* 25,700 355
Zimmer Holdings, Inc.* 3,900 297
------------
TOTAL 37,658
------------
TOTAL COMMON STOCKS
(Cost $71,510,631) 74,430
============
<Caption>
PRINCIPAL
AMOUNT
(000)
---------
SHORT-TERM INVESTMENT 0.07%
REPURCHASE AGREEMENT 0.07%
Repurchase Agreement
dated 6/30/2005,
2.45% due 7/1/2005
with State Street
Bank & Trust Co.
collateralized by
$60,000 of Federal
National Mortgage
Assoc. at zero coupon
due 7/11/2005;
value: $59,925;
proceeds: $56,150
(Cost $56,146) $ 56 56
============
TOTAL INVESTMENTS IN
SECURITIES 97.57%
(Cost $71,566,777) 74,486
============
FOREIGN CASH AND
OTHER ASSETS IN EXCESS
OF LIABILITIES 2.43% 1,856
------------
NET ASSETS 100.00% $ 76,342
============
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
ADR American Depository Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)
GLOBAL INCOME FUND JUNE 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 100.57%
FOREIGN NOTES & BONDS 60.27%
ARGENTINA 0.06%
Republic of Argentina 3.00%# 4/30/2013 USD 55 $ 44,504
------------
AUSTRALIA 0.89%
Australian Government(a) 5.25% 8/15/2010 AUD 628 481,302
Australian Government(a) 6.25% 4/15/2015 AUD 166 137,423
------------
TOTAL 618,725
------------
BULGARIA 0.18%
Republic of Bulgaria+ 8.25% 1/15/2015 USD 100 126,125
------------
CANADA 0.63%
Potash Corp. of Saskatchewan 7.75% 5/31/2011 USD 140 162,639
Shaw Communications, Inc.(a) 7.50% 11/20/2013 CAD 200 177,442
Telus Corp. 8.00% 6/1/2011 USD 85 99,527
------------
TOTAL 439,608
------------
CAYMAN ISLANDS 0.12%
New ASAT Finance Ltd. 9.25% 2/1/2011 USD 100 84,000
------------
DENMARK 1.27%
Kingdom of Denmark(a) 4.00% 8/15/2008 DKK 1,800 308,183
Kingdom of Denmark(a) 4.00% 11/15/2010 DKK 3,300 575,719
------------
TOTAL 883,902
------------
FINLAND 0.96%
Finnish Government(a) 4.25% 7/4/2015 EUR 500 665,454
------------
FRANCE 7.39%
France Telecom S.A. 8.75% 3/1/2031 USD 95 132,865
French Treasury Note(a) 3.50% 7/12/2009 EUR 2,400 3,030,879
French Treasury Note(a) 4.50% 7/12/2006 EUR 735 911,530
Republic of France(a) 4.75% 4/25/2035 EUR 452 651,238
Republic of France(a) 5.00% 4/25/2012 EUR 291 400,268
------------
TOTAL 5,126,780
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL INCOME FUND JUNE 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------------------
GERMANY 18.29%
Bundesrepublik Deutschland(a) 3.75% 1/4/2015 EUR 530 $ 675,957
Bundesrepublik Deutschland(a) 4.25% 2/15/2008 EUR 1,711 2,183,404
Bundesrepublik Deutschland(a) 4.75% 7/4/2028 EUR 39 55,222
Bundesrepublik Deutschland(a) 4.75% 7/4/2034 EUR 1,420 2,051,089
Bundesrepublik Deutschland(a) 5.00% 2/17/2006 EUR 1,565 1,927,756
Bundesrepublik Deutschland(a) 5.25% 1/4/2011 EUR 969 1,332,588
Bundesrepublik Deutschland(a) 5.375% 1/4/2010 EUR 250 340,286
Kreditanstalt fur Wiederaufbau(a) 4.25% 7/4/2014 EUR 2,300 3,037,859
Kreditanstalt fur Wiederaufbau(a) 5.625% 11/27/2007 EUR 835 1,089,873
------------
TOTAL 12,694,034
------------
JAPAN 11.66%
Japan-17 (30 Year Issue)(a) 2.40% 12/20/2034 JPY 37,000 345,730
Japan-58 (20 Year Issue)(a) 1.90% 9/20/2022 JPY 36,000 336,917
Japan-199 (10 Year Issue)(a) 2.20% 12/20/2007 JPY 113,000 1,072,074
Japan-230 (10 Year Issue)(a) 1.60% 3/21/2011 JPY 196,950 1,884,723
Japan-237 (10 Year Issue)(a) 1.50% 3/20/2012 JPY 109,900 1,045,229
Japan-264 (10 Year Issue)(a) 1.50% 9/20/2014 JPY 169,000 1,582,310
Japan Finance Corp. Municipal Enterprises(a) 1.55% 2/21/2012 JPY 191,000 1,825,151
------------
TOTAL 8,092,134
------------
LUXEMBOURG 0.22%
Telecom Italia Capital S.A. 6.375% 11/15/2033 USD 145 156,012
------------
NETHERLANDS 5.29%
Netherlands Government(a) 3.00% 7/15/2006 EUR 3,000 3,668,228
------------
OTHER 5.31%
European Investment Bank, MTN(a) 3.00% 9/20/2006 JPY 186,000 1,736,213
European Investment Bank, MTN(a) 2.125% 9/20/2007 JPY 74,000 698,064
European Investment Bank, MTN(a) 6.25% 12/7/2008 GBP 657 1,252,300
------------
TOTAL 3,686,577
------------
POLAND 0.31%
Poland Government(a) 6.00% 5/24/2009 PLN 675 211,631
------------
ROMANIA 0.53%
Romania Government(a) 10.625% 6/27/2008 EUR 250 370,682
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL INCOME FUND JUNE 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------------------
RUSSIA 0.11%
Russian Federation+ 5.00%# 3/31/2030 USD 65 $ 73,125
------------
SOUTH AFRICA 0.12%
Republic of South Africa 6.50% 6/2/2014 USD 75 83,906
------------
SPAIN 4.00%
Spanish Government(a) 4.00% 1/31/2010 EUR 1,475 1,903,598
Spanish Government(a) 4.40% 1/31/2015 EUR 650 869,616
------------
TOTAL 2,773,214
------------
SWEDEN 0.40%
Swedish Government(a) 4.50% 8/12/2015 SEK 1,900 275,593
------------
UNITED KINGDOM 2.53%
United Kingdom Treasury(a) 4.00% 3/7/2009 GBP 316 565,789
United Kingdom Treasury(a) 5.00% 9/7/2014 GBP 265 505,276
United Kingdom Treasury(a) 6.00% 12/7/2028 GBP 300 681,472
------------
TOTAL 1,752,537
------------
TOTAL FOREIGN NOTES & BONDS (Cost $39,399,248) 41,826,771
============
UNITED STATES NOTES & BONDS 40.30%
UNITED STATES 40.30%
Amerada Hess Corp. 7.875% 10/1/2029 USD 100 126,735
AT&T Corp. 9.455% 11/15/2022 USD 100 141,814
Banc of America Commercial
Mortgage Inc. Series 2004-2 Class A1 2.764% 11/10/2038 USD 333 324,016
Corn Products Int'l., Inc. 8.45% 8/15/2009 USD 65 73,243
Corning, Inc. 5.90% 3/15/2014 USD 30 30,980
Cox Communications, Inc. 5.45% 12/15/2014 USD 50 51,128
Credit Suisse First Boston
Series 1998-C2 Class A1 5.96% 11/11/2030 USD 251 253,734
Dun & Bradstreet Corp. (The) 6.625% 3/15/2006 USD 237 241,055
Federal Home Loan Mortgage Corp. 5.00% TBA USD 600 598,875
Federal Home Loan Mortgage Corp.(a) 4.75% 1/15/2013 EUR 151 203,969
Federal Home Loan Mortgage Corp. B13801 4.50% 4/1/2019 USD 587 584,601
Federal Home Loan Mortgage Corp. B15140 4.50% 6/1/2019 USD 207 206,296
Federal Home Loan Mortgage Corp. B15593 5.50% 7/1/2019 USD 153 157,525
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL INCOME FUND JUNE 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. B15776 5.00% 7/1/2019 USD 243 $ 245,732
Federal Home Loan Mortgage Corp. C63990 7.00% 2/1/2032 USD 155 163,723
Federal Home Loan Mortgage Corp. G18001 4.50% 7/1/2019 USD 615 612,946
Federal National Mortgage Assoc. 4.50% TBA USD 250 248,906
Federal National Mortgage Assoc. 4.547%# 12/1/2034 USD 419 420,465
Federal National Mortgage Assoc. 4.74% 4/1/2015 USD 250 254,930
Federal National Mortgage Assoc. 4.75% 2/21/2013 USD 1,892 1,892,946
Federal National Mortgage Assoc. 5.50% 2/1/2035 USD 592 601,053
Federal National Mortgage Assoc. 5.50% 11/1/2034 USD 335 339,819
Federal National Mortgage Assoc. 5.50% TBA USD 2,074 2,102,518
Federal National Mortgage Assoc. 6.50% TBA USD 1,640 1,696,375
Federal National Mortgage Assoc. 6.625% 11/15/2010 USD 921 1,035,768
Ford Motor Credit Co. 6.875% 2/1/2006 USD 1,045 1,055,591
Fort James Corp. 6.875% 9/15/2007 USD 210 219,450
General Electric Capital Corp. 4.125% 3/4/2008 USD 100 100,174
General Electric Co. 5.00% 2/1/2013 USD 224 231,645
General Mills, Inc. 5.125% 2/15/2007 USD 100 101,598
GMAC Commercial Mortgage Securities,
Inc. Series 2003-C1 Class A2 4.079% 5/10/2036 USD 705 689,431
Goldman Sachs Group, Inc. (The) 6.125% 2/15/2033 USD 86 94,345
Harrah's Operating Co., Inc. 8.00% 2/1/2011 USD 60 68,877
Household Finance Corp. 7.00% 5/15/2012 USD 150 170,392
Int'l. Flavors & Frag., Inc. 6.45% 5/15/2006 USD 75 76,372
Kansas City Power & Light Co. 7.125% 12/15/2005 USD 500 507,482
KB Home 5.875% 1/15/2015 USD 40 39,886
KFW Int'l. Finance, Inc.(a) 6.00% 12/7/2028 GBP 162 354,228
LB-UBS Commercial Mortgage Trust
Series 2003-C1 Class A4 4.394% 3/15/2032 USD 330 328,411
LB-UBS Commercial Mortgage Trust
Series 2003-C8 Class A3 4.83% 11/15/2027 USD 80 81,902
LB-UBS Commercial Mortgage Trust
Series 2004-C1 Class A1 2.964% 1/15/2029 USD 595 580,019
Lubrizol Corp. (The) 5.50% 10/1/2014 USD 55 56,825
Merrill Lynch Mortgage Trust
Series 2005-MKB2 Class A1 4.446% 9/12/2042 USD 484 487,057
Morgan Stanley Capital I
Series 2003-IQ6 Class A4 4.97% 12/15/2041 USD 300 309,397
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL INCOME FUND JUNE 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- --------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I
Series 2004-HQ3 Class A4 4.80% 1/13/2041 USD 930 $ 947,636
Nissan Auto Recievables Owner Trust
Series 2005-B Class A3 3.99% 7/15/2009 USD 760 760,582
Phelps Dodge Corp. 9.50% 6/1/2031 USD 30 44,003
Rockwood Specialties Group, Inc.+(a) 7.625% 11/15/2014 EUR 150 183,792
Scholastic Corp. 5.75% 1/15/2007 USD 75 76,612
Sprint Capital Corp. 8.375% 3/15/2012 USD 100 120,441
Sprint Capital Corp. 8.75% 3/15/2032 USD 32 44,571
Time Warner, Inc. 6.125% 4/15/2006 USD 50 50,792
Time Warner, Inc. 7.625% 4/15/2031 USD 80 100,228
U.S. Treasury Bond 5.25% 2/15/2029 USD 1,507 1,724,044
U.S. Treasury Note 3.50% 12/15/2009 USD 581 575,712
U.S. Treasury Note 3.625% 4/30/2007 USD 803 802,812
U.S. Treasury Note 4.25% 8/15/2013 USD 1,414 1,449,793
U.S. Treasury Note 4.875% 2/15/2012 USD 288 305,955
U.S. Treasury Note 5.00% 8/15/2011 USD 158 168,498
UnitedHealth Group, Inc. 3.375% 8/15/2007 USD 119 117,336
Ventas Realty L.P./Ventas Capital Corp. 6.625% 10/15/2014 USD 75 75,750
Verizon Global Funding Corp. 7.25% 12/1/2010 USD 90 102,131
Wachovia Bank Commercial Mortgage
Series 2003-C5 Class A2 3.989% 6/15/2035 USD 1,190 1,153,641
Wachovia Bank Commercial Mortgage
Series 2005-C17 Class A1 4.43% 3/15/2042 USD 971 978,910
Weyerhaeuser Co. 7.375% 3/15/2032 USD 23 27,066
------------
TOTAL UNITED STATES NOTES & BONDS (Cost $27,482,061) 27,972,539
============
TOTAL LONG-TERM INVESTMENTS (Cost $66,881,309) 69,799,310
============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
GLOBAL INCOME FUND JUNE 30, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
CURRENCY US $
INVESTMENTS (000) VALUE
- --------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 4.76%
REPURCHASE AGREEMENT 4.76%
Repurchase Agreement dated 6/30/2005,
2.45% due 7/1/2005 with State Street
Bank & Trust Co. collateralized by
$3,375,000 of Federal National Mortgage
Assoc. at zero coupon due 7/11/2005;
value: $3,370,781; proceeds: $3,304,807
(Cost $3,304,582) USD 3,305 $ 3,304,582
============
TOTAL INVESTMENTS IN SECURITIES 105.33% (Cost $70,185,891) 73,103,892
============
LIABILITIES IN EXCESS OF FOREIGN CASH AND OTHER ASSETS (5.33%) (3,699,643)
------------
NET ASSETS 100.00% $ 69,404,249
============
</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 instituional buyers.
# Variable rate security. The interest rate represents the rate at June 30,
2005.
(a) Investment in non-U.S. dollar denominated securities (56.91% of total
investments). The remaining securities (43.09% of total investments) are
invested in U.S. dollar denominated securities.
TBA To be announced. Security on a forward commitment 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
MXN Mexican Peso
PLN Polish Zloty
SEK Swedish Krona
USD U.S. Dollar
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONCLUDED)
GLOBAL INCOME FUND JUNE 30, 2005
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AS OF JUNE 30, 2005:
- ------------------------------------------------------------
<Table>
<Caption>
FORWARD U.S. $ COST U.S. $
FOREIGN CURRENCY EXPIRATION FOREIGN ON ORIGINATION CURRENT UNREALIZED
PURCHASE CONTRACTS DATE CURRENCY DATE VALUE APPRECIATION
- ------------------ ---------- -------- -------------- --------- ------------
CAD 9/26/05 663,454 $ 537,493 $ 542,693 $ 5,200
---------- --------- ------------
Total Forward Foreign Currency Purchase Contracts $ 537,493 $ 542,693 $ 5,200
========== ========= ============
<Caption>
FORWARD U.S. $ COST U.S. $
FOREIGN CURRENCY EXPIRATION FOREIGN ON ORIGINATION CURRENT UNREALIZED
SALE CONTRACTS DATE CURRENCY DATE VALUE APPRECIATION
- ---------------- ---------- --------- -------------- ----------- ------------
AUD 9/26/05 695,172 $ 537,493 $ 526,491 $ 11,002
EUR 7/7/05 2,000,000 2,567,600 2,420,865 146,735
EUR 8/9/05 1,000,000 1,291,760 1,211,848 79,912
EUR 9/6/05 600,000 735,000 727,943 7,057
----------- ----------- ------------
Total Forward Foreign Currency Sale Contracts $ 5,131,853 $ 4,887,147 $ 244,706
=========== =========== ===========
</Table>
ABBREVIATIONS:
AUD Australian Dollar
CAD Canadian Dollar
EUR Euro
SEE NOTES TO FINANCIAL STATEMENTS.
19
<Page>
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2005
<Table>
<Caption>
GLOBAL GLOBAL
EQUITY FUND INCOME FUND
ASSETS:
Investment in securities, at cost $ 71,566,777 $ 70,185,891
- ----------------------------------------------------------------------------------------------------------------------
Investment in securities, at value $ 74,485,892 $ 73,103,892
Foreign cash, at value (cost $2,055,667 and $720,924, respectively) 2,044,603 689,343
Receivables:
Interest and dividends 135,100 1,099,279
Investment securities sold 1,096,749 4,367,323
Capital shares sold 111,013 231,858
From advisor 17,036 1,840
Appreciation on forward foreign currency exchange contracts - 249,906
Prepaid expenses and other assets 31,454 36,733
- ----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 77,921,847 79,780,174
- ----------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 1,310,780 9,896,169
Capital shares reacquired 62,508 99,875
Management fees 46,546 28,433
12b-1 distribution fees 32,059 35,741
Fund administration 2,498 2,283
Directors' fees 30,340 55,665
Dividends payable - 187,125
Accrued expenses and other liabilities 95,544 70,634
- ----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,580,275 10,375,925
======================================================================================================================
NET ASSETS $ 76,341,572 $ 69,404,249
======================================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 71,810,737 $ 71,966,001
Undistributed net investment income 230,301 1,526,248
Accumulated net realized gain (loss) on investments, futures
contracts, and foreign currency related transactions 1,393,171 (7,182,684)
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 2,907,363 3,094,684
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 76,341,572 $ 69,404,249
======================================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 60,112,967 $ 55,339,727
Class B Shares $ 8,004,007 $ 5,357,369
Class C Shares $ 7,816,678 $ 8,144,668
Class P Shares $ - $ 2,078
Class Y Shares $ 407,920 $ 560,407
OUTSTANDING SHARES BY CLASS:
Class A Shares (430 million, and 415 million shares of common stock
authorized respectively, $.001 par value) 5,228,803 7,619,362
Class B Shares (15 million, and 30 million shares of common stock
authorized respectively, $.001 par value) 730,418 736,840
Class C Shares (20 million, and 20 million shares of common stock
authorized respectively, $.001 par value) 712,366 1,120,009
Class P Shares (20 million and 20 million shares of common stock
authorized respectively, $.001 par value) - 287
Class Y Shares (15 million and 15 million shares of common stock
authorized respectively, $.001 par value) 35,389 77,124
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 11.50 $ 7.26
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75% and 4.75%, respectively) $ 12.20 $ 7.62
Class B Shares-Net asset value $ 10.96 $ 7.27
Class C Shares-Net asset value $ 10.97 $ 7.27
Class P Shares-Net asset value - $ 7.24
Class Y Shares-Net asset value $ 11.53 $ 7.27
======================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<Page>
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
<Table>
<Caption>
GLOBAL GLOBAL
EQUITY FUND INCOME FUND
INVESTMENT INCOME:
Dividends $ 937,137 $ -
Interest 23,397 1,238,088
Securities lending-net 59 -
Foreign withholding tax (67,914) -
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 892,679 1,238,088
- ----------------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 280,640 171,116
12b-1 distribution plan-Class A 104,714 95,877
12b-1 distribution plan-Class B 39,180 26,969
12b-1 distribution plan-Class C 37,403 38,506
12b-1 distribution plan-Class P - 5
Shareholder servicing 186,476 69,657
Professional 19,854 25,867
Reports to shareholders 9,337 21,934
Fund administration 14,968 13,689
Custody 31,026 14,920
Directors' fees 2,503 2,350
Registration 7,568 8,665
Other 1,488 467
- ----------------------------------------------------------------------------------------------------------------------
Gross expenses 735,157 490,022
Expense reductions (See Note 7) (682) (796)
Expenses assumed by advisor (See Note 3) (100,612) (2,582)
- ----------------------------------------------------------------------------------------------------------------------
NET EXPENSES 633,863 486,644
- ----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 258,816 751,444
- ----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments, futures contracts, and
foreign currency related transactions 2,421,270 1,319,056
Net change in unrealized appreciation (depreciation) on investments
and translation of assets and liabilities denominated in foreign
currencies (4,382,952) (4,427,976)
======================================================================================================================
NET REALIZED AND UNREALIZED LOSS (1,961,682) (3,108,920)
======================================================================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,702,866) $ (2,357,476)
======================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
<Table>
<Caption>
GLOBAL GLOBAL
INCREASE IN NET ASSETS EQUITY FUND INCOME FUND
OPERATIONS:
Net investment income $ 258,816 $ 751,444
Net realized gain (loss) on investments, futures contracts, and
foreign currency related transactions 2,421,270 1,319,056
Net change in unrealized appreciation (depreciation) on investments
and translation of assets and liabilities denominated in foreign
currencies (4,382,952) (4,427,976)
- ----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (1,702,866) (2,357,476)
======================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A - (1,051,154)
Class B - (89,107)
Class C - (124,362)
Class P - (29)
Class Y - (11,766)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS - (1,276,418)
======================================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 9,389,501 13,596,706
Reinvestment of distributions - 1,040,673
Cost of shares reacquired (6,695,711) (9,525,576)
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS 2,693,790 5,111,803
======================================================================================================================
NET INCREASE IN NET ASSETS 990,924 1,477,909
======================================================================================================================
NET ASSETS:
Beginning of period 75,350,648 67,926,340
- ----------------------------------------------------------------------------------------------------------------------
END OF PERIOD $ 76,341,572 $ 69,404,249
======================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME $ 230,301 $ 1,526,248
======================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE 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>
FINANCIAL HIGHLIGHTS
GLOBAL EQUITY FUND
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 11.75 $ 10.51 $ 8.33 $ 10.02 $ 12.98 $ 13.82
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income (loss)(b) .05 (.01) .04 .03 (.02) (.05)
Net realized and
unrealized gain (loss) (.30) 1.27 2.16 (1.69) (2.94) .65
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.25) 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 PERIOD $ 11.50 $ 11.75 $ 10.51 $ 8.33 $ 10.02 $ 12.98
========= ========= ========= ========= ========= =========
Total Return(c) (2.13)%(d) 11.99% 26.38% (16.58)% (22.80)% 4.78%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed .78%(d) 2.05% 1.95% 2.29% 1.99% 1.78%
Expenses, excluding expense
reductions and expenses
assumed .91%(d) 2.05% 1.95% 2.29% 2.01% 1.79%
Net investment income (loss) .41%(d) (.11)% .45% .30% (.19)% (.34)%
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 60,113 $ 59,915 $ 52,828 $ 37,555 $ 47,016 $ 64,288
Portfolio turnover rate 52.91% 170.93% 56.26% 43.52% 97.27% 41.21%
===============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL EQUITY FUND
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 11.24 $ 10.10 $ 8.04 $ 9.70 $ 12.65 $ 13.60
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income (loss)(b) .01 (.08) (.02) (.03) (.09) (.14)
Net realized and
unrealized gain (loss) (.29) 1.22 2.08 (1.63) (2.86) .63
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.28) 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 PERIOD $ 10.96 $ 11.24 $ 10.10 $ 8.04 $ 9.70 $ 12.65
========= ========= ========= ========= ========= =========
Total Return(c) (2.49)%(d) 11.29% 25.62% (17.11)% (23.32)% 4.12%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed 1.10%(d) 2.69% 2.61% 2.92% 2.62% 2.40%
Expenses, excluding expense
reductions and expenses
assumed 1.23%(d) 2.69% 2.61% 2.92% 2.64% 2.41%
Net investment income (loss) .09%(d) (.75)% (.21)% (.33)% (.82)% (.92)%
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 8,004 $ 7,818 $ 6,033 $ 4,208 $ 4,568 $ 5,615
Portfolio turnover rate 52.91% 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>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 11.25 $ 10.11 $ 8.06 $ 9.73 $ 12.69 $ 13.63
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income (loss)(b) .01 (.08) (.02) (.03) (.08) (.14)
Net realized and
unrealized gain (loss) (.29) 1.22 2.07 (1.64) (2.88) .64
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.28) 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 PERIOD $ 10.97 $ 11.25 $ 10.11 $ 8.06 $ 9.73 $ 12.69
========= ========= ========= ========= ========= =========
Total Return(c) (2.49)%(d) 11.28% 25.59% (17.16)% (23.33)% 4.19%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed 1.10%(d) 2.69% 2.61% 2.92% 2.62% 2.40%
Expenses, excluding expense
reductions and expenses
assumed 1.23%(d) 2.69% 2.61% 2.92% 2.64% 2.41%
Net investment income (loss) .09%(d) (.75)% (.29)% (.33)% (.78)% (.94)%
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 7,817 $ 7,158 $ 4,111 $ 2,406 $ 2,262 $ 3,027
Portfolio turnover rate 52.91% 170.93% 56.26% 43.52% 97.27% 41.21%
===============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
GLOBAL EQUITY FUND
<Table>
<Caption>
SIX MONTHS
ENDED 10/19/2004(a)
6/30/2005 TO
(UNAUDITED) 12/31/2004
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.76 $ 10.54
=========== =============
Investment operations:
Net investment income(b) .06 -(e)
Net realized and unrealized gain (loss) (.29) 1.22
----------- -------------
Total from investment operations (.23) 1.22
----------- -------------
NET ASSET VALUE, END OF PERIOD $ 11.53 $ 11.76
=========== =============
Total Return(c) (1.96)%(d) 11.57%(d)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense reductions and expenses assumed .60%(d) .33%(d)
Expenses, excluding expense reductions and expenses assumed .73%(d) .33%(d)
Net investment income .56%(d) .02%(d)
<Caption>
SIX MONTHS
ENDED 10/19/2004(a)
6/30/2005 TO
SUPPLEMENTAL DATA: (UNAUDITED) 12/31/2004
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 408 $ 460
Portfolio turnover rate 52.91% 170.93%
==============================================================================================================
</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) Amount is less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<Page>
FINANCIAL HIGHLIGHTS
GLOBAL INCOME FUND
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 7.66 $ 7.43 $ 6.91 $ 6.35 $ 6.65 $ 7.16
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income(b) .09 .17(e) .18 .20 .25(e) .23
Net realized and
unrealized gain (loss) (.35) .43 .68 .72 (.12) (.25)
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.26) .60 .86 .92 .13 (.02)
--------- --------- --------- --------- --------- ---------
Distributions to
shareholders from:
Net investment income (.14) (.37) (.34) (.25) (.40) -
Paid-in capital - - - (.11) (.03) (.49)
--------- --------- --------- --------- --------- ---------
Total distributions (.14) (.37) (.34) (.36) (.43) (.49)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 7.26 $ 7.66 $ 7.43 $ 6.91 $ 6.35 $ 6.65
========= ========= ========= ========= ========= =========
Total Return(c) (3.40)%(d) 8.40% 12.79% 14.90% 1.87% (.03)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed .64%(d) 1.40% 1.35% 1.44% 1.25% 1.25%
Expenses, excluding expense
reductions and expenses
assumed .65%(d) 1.40% 1.35% 1.44% 1.29% 1.31%
Net investment income 1.15%(d) 2.33% 2.43% 3.09% 3.85% 3.42%
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 55,340 $ 55,821 $ 56,386 $ 55,419 $ 52,449 $ 62,592
Portfolio turnover rate 89.40% 260.11% 239.18% 216.16% 393.95% 406.50%
===============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING
OF PERIOD $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.67 $ 7.17
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income(b) .06 .12(e) .13 .16 .21(e) .19
Net realized and unrealized
gain (loss) (.34) .43 .70 .71 (.12) (.25)
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.28) .55 .83 .87 .09 (.06)
--------- --------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.12) (.33) (.30) (.22) (.36) -
Paid-in capital - - - (.10) (.03) (.44)
--------- --------- --------- --------- --------- ---------
Total distributions (.12) (.33) (.30) (.32) (.39) (.44)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 7.27 $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.67
========= ========= ========= ========= ========= =========
Total Return(c) (3.68)%(d) 7.58% 12.22% 14.04% 1.28% (.44)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed .97%(d) 2.04% 1.99% 2.06% 1.88% 1.86%
Expenses, excluding expense
reductions and expenses
assumed .97%(d) 2.04% 1.99% 2.06% 1.92% 1.92%
Net investment income .84%(d) 1.69% 1.79% 2.42% 3.20% 2.79%
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 5,357 $ 5,291 $ 3,719 $ 2,842 $ 1,519 $ 1,317
Portfolio turnover rate 89.40% 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>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING
OF PERIOD $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.66 $ 7.17
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income(b) .06 .12(e) .13 .17 .21(e) .19
Net realized and unrealized
gain (loss) (.34) .43 .70 .71 (.11) (.26)
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.28) .55 .83 .88 .10 (.07)
--------- --------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.12) (.33) (.30) (.23) (.36) -
Paid-in capital - - - (.10) (.03) (.44)
--------- --------- --------- --------- --------- ---------
Total distributions (.12) (.33) (.30) (.33) (.39) (.44)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 7.27 $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.66
========= ========= ========= ========= ========= =========
Total Return(c) (3.68)%(d) 7.59% 12.29% 14.19% 1.34% (.73)%
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed .97%(d) 2.04% 1.99% 1.94% 1.84% 1.90%
Expenses, excluding expense
reductions and expenses
assumed .97%(d) 2.04% 1.99% 1.94% 1.88% 1.96%
Net investment income .82%(d) 1.69% 1.79% 2.56% 3.23% 2.77%
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 8,145 $ 6,235 $ 5,212 $ 2,989 $ 2,152 $ 1,852
Portfolio turnover rate 89.40% 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>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING
OF PERIOD $ 7.59 $ 7.39 $ 6.87 $ 6.32 $ 6.62 $ 7.16
========= ========= ========= ========= ========= =========
Investment operations:
Net investment income(b) .08 .16(e) .17 .20 .24(e) .22
Net realized and unrealized
gain (loss) (.32) .36 .69 .71 (.11) (.28)
--------- --------- --------- --------- --------- ---------
Total from investment
operations (.24) .52 .86 .91 .13 (.06)
--------- --------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.11) (.32) (.34) (.25) (.40) -
Paid-in capital - - - (.11) (.03) (.48)
--------- --------- --------- --------- --------- ---------
Total distributions (.11) (.32) (.34) (.36) (.43) (.48)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 7.24 $ 7.59 $ 7.39 $ 6.87 $ 6.32 $ 6.62
========= ========= ========= ========= ========= =========
Total Return(c) (3.16)%(d) 7.34% 12.78% 14.82% 1.84% (.57)%(d)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions and expenses
assumed .66%(d) 1.49% 1.44% 1.51% 1.33% 1.31%(d)
Expenses, excluding expense
reductions and expenses
assumed .66%(d) 1.49% 1.44% 1.51% 1.37% 1.37%(d)
Net investment income 1.11%(d) 2.24% 2.34% 2.96% 3.69% 3.34%(d)
<Caption>
SIX MONTHS
ENDED YEAR ENDED 12/31
6/30/2005 -------------------------------------------------------------
SUPPLEMENTAL DATA: (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 2 $ 2 $ 1,904 $ 1,082 $ 526 $ 229
Portfolio turnover rate 89.40% 260.11% 239.18% 216.16% 393.95% 406.50%
===============================================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
GLOBAL INCOME FUND
<Table>
<Caption>
SIX MONTHS
ENDED 10/19/2004(a)
6/30/2005 TO
(UNAUDITED) 12/31/2004
PER SHARE OPERATING PERFORMANCE (CLASS Y SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 7.66 $ 7.38
========== ==========
Investment operations:
Net investment income(b) .10 .04(e)
Net realized and unrealized gain (loss) (.33) .37
---------- ----------
Total from investment operations (.23) .41
---------- ----------
Distributions to shareholders from:
Net investment income (.16) (.13)
---------- ----------
Total distributions (.16) (.13)
---------- ----------
NET ASSET VALUE, END OF PERIOD $ 7.27 $ 7.66
========== ==========
Total Return(c) (3.10)%(d) 5.79%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense reductions and expenses assumed .47%(d) .21%(d)
Expenses, excluding expense reductions and expenses assumed .48%(d) .21%(d)
Net investment income 1.32%(d) .57%(d)
<Caption>
SIX MONTHS
ENDED 10/19/2004(a)
6/30/2005 TO
SUPPLEMENTAL DATA: (UNAUDITED) 12/31/2004
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 560 $ 577
Portfolio turnover rate 89.40% 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.
32
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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"), Classes A, B, C, P, and Y shares; and Income
Series ("Global Income Fund"), Classes 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 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 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
certain estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) INVESTMENT VALUATION-Securities 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 occuring 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. Each 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 sale 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
33
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
Directors. 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 of its 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
generally 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) FOREIGN TRANSACTIONS-The books and records of the Funds are maintained in
U.S. dollars and transactions denominated in foreign currencies are recorded
in each Fund's records at the rate 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 Gain (Loss) on Investments and Foreign
Currency Related Transactions on each Fund's Statements of Operations. Each
Fund does 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. 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 and Foreign Currency
Related Transactions on the Statement of Operations.
(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 June 30, 2005, there were no open futures contracts.
34
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
(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. At their
October 21, 2004 meeting, the Board of Directors voted to discontinue, as
soon as practicable, each Fund's securities lending program.
(j) REPURCHASE AGREEMENTS-The Funds 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. Each Fund requires at all times that the repurchase
agreement be collateralized by cash, or by securities of the U.S.
Government, its agencies, its instrumentalities, or U.S. Government
sponsored enterprises having a value equal to, or in excess of, the value of
the repurchase agreement (including accrued interest). If the seller of the
agreement defaults on its obligation to repurchase the underlying securities
at a time when the value of 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. 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-Until April 1, 2005, Global Equity Fund imposed 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 did not
include shares acquired through the reinvestment of dividends or other
distributions or certain automatic or systematic investment, exchange or
withdrawal plans. The fees were retained by the Fund and included as Paid-in
Capital on the Statement of Asset and Liabilities. During the six months
ended June 30, 2005, the Fund collected $216 of redemption fees.
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES
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
35
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
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>
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 2.55%
C 2.55%
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>
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) Until October 1, 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 distribution fees as of June 30, 2005
was as follows:
<Table>
<Caption>
UNAMORTIZED
BALANCE
------------------------------------------
Global Equity Fund $ 1,759
Global Income Fund -
</Table>
These amounts 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 six
months ended June 30, 2005 was as follows:
<Table>
<Caption>
CDSC
COLLECTED
------------------------------------------
Global Equity Fund $ 38
Global Income Fund -
</Table>
Class Y does not have a distribution plan.
36
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
COMMISSIONS
Distributor received the following commissions on sales of Class A shares of the
Funds after concessions were paid to authorized dealers for the six months ended
June 30, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- ------------------------------------------------------------------------------
Global Equity Fund $ 26,062 $ 140,684
Global Income Fund 26,000 125,755
</Table>
One Director and certain of the Company officers have an interest in Lord
Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARD
Dividends from net investment income, if any, are declared and paid semiannually
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 for tax purposes are reported as
a tax return of capital.
The tax character of distributions paid during the six months ended June 30,
2005 and the fiscal year ended December 31, 2004 are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
- -----------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED 6/30/2005 YEAR ENDED ENDED 6/30/2005 YEAR ENDED
(UNAUDITED) 12/31/2004 (UNAUDITED) 12/31/2004
- -----------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ - $ 92,395 $ 1,276,418 $ 3,243,877
- -----------------------------------------------------------------------------------------
Total distributions paid $ - $ 92,395 $ 1,276,418 3,243,877
=========================================================================================
</Table>
As of December 31, 2004, the capital loss carryforwards 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 June 30, 2005, 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 $ 72,017,482 $ 70,799,672
- ----------------------------------------------------------------------------------------
Gross unrealized gain 4,422,037 2,831,236
Gross unrealized loss (1,953,627) (527,016)
- ----------------------------------------------------------------------------------------
Net unrealized security gain $ 2,468,410 $ 2,304,220
========================================================================================
</Table>
37
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
The difference between book-basis and tax-basis unrealized gains 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 June 30, 2005 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 $ - $ 42,082,776 $ - $ 38,426,828
Global Income Fund 47,502,293 22,698,505 41,341,296 19,701,538
</Table>
* Includes U.S. Government sponsored enterprises securities.
In connection with the securities lending program, State Street Bank & Trust
Company ("SSB") received fees for the Global Equity Fund of $25 for the six
months ended June 30, 2005, which are netted against Securities Lending Income
on the Statement of Operations. As of June 30, 2005, there were no securities on
loan.
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.
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 are used to
reduce a portion of each Fund's expenses.
8. LINE OF CREDIT
Global Equity Fund and Global Income 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. The fee for this Facility is
at an annual rate of 0.08%. At June 30, 2005, there were no loans outstanding
pursuant to this Facility nor was the Facility utilized at any time during the
six months ended June 30, 2005.
38
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
9. CUSTODIAN AND ACCOUNTING AGENT
SSB is the Company's custodian and accounting agent. SSB performs custodial,
accounting and recordkeeping functions relating to portfolio transactions and
calculating each Fund's NAV.
10. INVESTMENT RISKS
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 additional 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 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.
39
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of capital stock are as follows:
GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
- ------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------
Shares sold 537,569 $ 6,207,387 1,076,592 $ 11,492,396
Reinvestment of distributions - - 8,498 88,463
Shares reacquired (407,705) (4,701,757) (1,010,748) (10,777,785)
- ------------------------------------------------------------------------------------------------
Increase 129,864 $ 1,505,630 74,342 $ 803,074
- ------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 116,491 $ 1,286,660 243,992 $ 2,497,616
Shares reacquired (81,819) (900,992) (145,640) (1,479,850)
- ------------------------------------------------------------------------------------------------
Increase 34,672 $ 385,668 98,352 $ 1,017,766
- ------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 170,150 $ 1,879,975 325,101 $ 3,320,284
Shares reacquired (93,958) (1,034,494) (95,402) (973,280)
- ------------------------------------------------------------------------------------------------
Increase 76,192 $ 845,481 229,699 $ 2,347,004
- ------------------------------------------------------------------------------------------------
<Caption>
PERIOD ENDED
DECEMBER 31, 2004*
- ------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 1,339 $ 15,479 39,098 $ 414,362
Shares reacquired (5,048) (58,468) - -
- ------------------------------------------------------------------------------------------------
Increase (decrease) (3,709) $ (42,989) 39,098 $ 414,362
- ------------------------------------------------------------------------------------------------
</Table>
* For the period October 19, 2004 (commencement of offering of class shares) to
December 31, 2004.
40
<Page>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONCLUDED)
GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
- ------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------
Shares sold 1,047,592 $ 7,773,977 1,076,914 $ 7,962,694
Reinvestment of distributions 117,858 878,891 305,978 2,261,192
Shares reacquired (836,448) (6,208,665) (1,679,359) (12,333,405)
- ------------------------------------------------------------------------------------------------
Increase (decrease) 329,002 $ 2,444,203 (296,467) $ (2,109,519)
- ------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 287,010 $ 2,131,120 342,255 $ 2,538,197
Reinvestment of distributions 8,189 61,109 19,544 144,926
Shares reacquired (248,140) (1,838,959) (171,329) (1,260,647)
- ------------------------------------------------------------------------------------------------
Increase 47,059 $ 353,270 190,470 $ 1,422,476
- ------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 493,844 $ 3,688,151 278,191 $ 2,064,447
Reinvestment of distributions 11,920 88,884 24,797 183,832
Shares reacquired (198,772) (1,475,709) (189,877) (1,412,365)
- ------------------------------------------------------------------------------------------------
Increase 306,992 $ 2,301,326 113,111 $ 835,914
- ------------------------------------------------------------------------------------------------
CLASS P SHARES
Shares sold 1 $ 7 37,132 $ 273,672
Reinvestment of distributions -(a) 1 -(a) 3
Shares reaquired (6) (43) (294,610) (2,109,470)
- ------------------------------------------------------------------------------------------------
Decrease (5) $ (35) (257,478) $ (1,835,795)
- ------------------------------------------------------------------------------------------------
<Caption>
PERIOD ENDED
DECEMBER 31, 2004**
- ------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 466 $ 3,451 74,088 $ 551,282
Reinvestment of distributions 1,580 11,788 1,126 8,559
Shares reacquired (296) (2,200) 160 1,188
- ------------------------------------------------------------------------------------------------
Increase 1,750 $ 13,039 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.
41
<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 semiannual report to
certain shareholders residing at the same "household." This reduces Fund
expenses, which benefits you and other shareholders. If you need additional
copies or do not want your mailings to be "householded," please call Lord Abbett
at 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 RECORD
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 six-month period ended
June 30, 2005, are available without charge, upon request, (i) by calling
888-522-2388; (ii) on Lord Abbett's website at www.LordAbbett.com; or (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 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. Copies of the filings are available without
charge, upon request on the SEC's website at www.sec.gov and may be available by
calling Lord Abbett at 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.
42
<Page>
APPROVAL OF ADVISORY CONTRACT
At a meeting on December 9, 2004, the Board, including all Directors who are not
interested persons of the Funds, considered whether to approve the continuation
of the existing management agreement between each of the Funds and Lord Abbett.
In addition to the materials the Board had reviewed throughout the course of the
year, the Board received materials relating to the management agreement before
the meeting and had the opportunity to ask questions and request further
information in connection with its consideration.
The materials received by the Board as to each Fund included, but were not
limited to, (1) information provided by Lipper Analytical Services, Inc.
regarding the investment performance of each Fund compared to the investment
performance of a group of funds with substantially similar investment objectives
(the "performance universe") and to the investment performance of an appropriate
securities index (if such an index existed), for various time periods each
ending September 30, 2004, (2) information on the effective management fee rates
and expense ratios for funds with similar objectives and similar size (the "peer
group"), (3) sales and redemption information for each Fund, (4) information
regarding Lord Abbett's financial condition, (5) an analysis of the relative
profitability of the management agreement to Lord Abbett, (6) information
regarding the distribution arrangements of each Fund, (7) information regarding
the personnel and other resources devoted by Lord Abbett to managing each Fund.
The specific considerations as to each Fund are discussed below.
GLOBAL EQUITY FUND
INVESTMENT MANAGEMENT SERVICES GENERALLY. The Board considered the investment
management services provided by Lord Abbett to the Fund, including investment
research, portfolio management, and trading. The Board noted that Lord Abbett
did not use brokerage commissions to purchase third-party research.
INVESTMENT PERFORMANCE AND COMPLIANCE. The Board reviewed the Fund's investment
performance as well as the performance of the performance universe of funds,
both in terms of total return and in terms of other statistical measures. The
Board noted that the performance of the Class A shares of the Fund was in the
fourth quintile of its performance universe in the nine-month period, in the
fifth quintile in the one-year period, in the second quintile in the three-year
period, in the first quintile in the five-year period, and in the fifth quintile
in the ten-year period. The Board also noted that the performance was above that
of the Lipper Large-Cap Global Core Index for the nine-month and three- and
five-year periods and below that of the Index for the one- and ten-year periods.
LORD ABBETT'S PERSONNEL AND METHODS. The Board considered the qualifications of
the personnel providing investment management services to each Fund, in light of
each Fund's investment objective and discipline. Among other things, the Board
considered the size and experience of Lord Abbett's investment management staff,
Lord Abbett's investment methodology and philosophy, and Lord Abbett's approach
to recruiting, training, and retaining investment management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board considered the nature, quality,
costs, and extent of administrative and other services performed by Lord Abbett
and Lord Abbett Distributor and the nature and extent of Lord Abbett supervision
of third party service providers, including the Fund's transfer agent and
custodian.
43
<Page>
EXPENSES. The Board considered the expense ratios of each class and the expense
ratios of peer groups. It also considered the amount and nature of the fees paid
by shareholders. The Board noted that the contractual management and
administrative services fees were approximately twelve basis points below the
median of the peer group, while the actual management and administrative
services fees were the same as the peer group. The Board noted that the total
expense ratio of Class A was approximately thirty-two basis points above the
median of the peer group and total expense ratios of Classes B and C were
approximately the same as the peer group. The Board also observed that transfer
agent and custodian expenses were higher than most of the peer group. The Board
noted that Lord Abbett proposed to implement a total expense cap for the Fund
that would reduce the total expense ratio of Class A to 1.60%, the total expense
ratios of Classes B and C to 2.25%, and the total expense ratio of Class Y at
1.25%. The Board noted that the total expense ratio of Class A would be
approximately nine basis points below the median of the peer group and the total
expense ratios of Classes B and C would be approximately forty basis points
below the median of the peer group.
PROFITABILITY. The Board considered the level of Lord Abbett's profits in
managing the Fund, including a review of Lord Abbett's methodology for
allocating its costs to its management of the Fund. The Board concluded that the
allocation methodology had a reasonable basis and was appropriate. It considered
the profits realized by Lord Abbett in connection with the operation of the Fund
and whether the amount of profit was fair for the management of the Fund. The
Board also considered the profits realized from other businesses of Lord Abbett,
which may benefit from or be related to the Fund's business. The Board
considered Lord Abbett's profit margins in comparison with available industry
data, both accounting for and ignoring marketing and distribution expenses, and
how those profit margins could affect Lord Abbett's ability to recruit and
retain investment personnel. The Board noted that Lord Abbett's profitability
had increased, in part due to an increase in assets under management.
ECONOMIES OF SCALE. The Board considered whether there had been any economies of
scale in managing the Fund, whether the Fund had appropriately benefited from
any such economies of scale, and whether there was potential for realization of
any further economies of scale.
OTHER BENEFITS TO LORD ABBETT. The Board considered the character and amount of
fees paid by the Fund and the Fund's shareholders to Lord Abbett and Lord Abbett
Distributor for services other than investment advisory services. The Board also
considered the revenues and profitability of Lord Abbett's investment advisory
business apart from its mutual fund business, and the intangible benefits
enjoyed by Lord Abbett by virtue of its relationship with the Fund.
ALTERNATIVE ARRANGEMENTS. The Board considered whether, instead of approving
continuation of the management agreement, employing one or more alternative
arrangements might be in the best interests of the Fund, such as continuing to
employ Lord Abbett, but on different terms.
In considering whether to approve the continuation of the management agreement,
the Board did not identify any single factor as paramount or controlling. This
summary does not discuss in detail all matters considered. After considering all
of the relevant factors, the Board unanimously found that continuation of the
existing management agreement was in the best interests of the Fund and its
shareholders and voted unanimously to approve the continuation of the management
agreement.
44
<Page>
GLOBAL INCOME FUND
INVESTMENT MANAGEMENT SERVICES GENERALLY. The Board considered the investment
management services provided by Lord Abbett to the Fund, including investment
research, portfolio management, and trading. The Board noted that Lord Abbett
did not use brokerage commissions to purchase third-party research.
INVESTMENT PERFORMANCE AND COMPLIANCE. The Board reviewed the Fund's investment
performance as well as the performance of the performance universe of funds,
both in terms of total return and in terms of other statistical measures. The
Board noted that the performance of the Class A shares of the Fund was in the
fourth quintile of its performance universe for the nine-month period, in the
third quintile for the one- and three-year periods, and in the fourth quintile
for the five- and ten-year periods. The Board also noted that the performance
was below that of the Lipper Global Income Funds Index for all of the periods.
LORD ABBETT'S PERSONNEL AND METHODS. The Board considered the qualifications of
the personnel providing investment management services to each Fund, in light of
each Fund's investment objective and discipline. Among other things, the Board
considered the size and experience of Lord Abbett's investment management staff,
Lord Abbett's investment methodology and philosophy, and Lord Abbett's approach
to recruiting, training, and retaining investment management personnel.
NATURE AND QUALITY OF OTHER SERVICES. The Board considered the nature, quality,
costs, and extent of administrative and other services performed by Lord Abbett
and Lord Abbett Distributor and the nature and extent of Lord Abbett supervision
of third party service providers, including the Fund's transfer agent and
custodian.
EXPENSES. The Board considered the expense ratios of each class and the expense
ratios of peer groups. It also considered the amount and nature of the fees paid
by shareholders. The Board noted that the contractual management and
administrative services fees of the Fund were approximately twelve basis points
below the median of the peer group and that the actual management and
administrative services fees were approximately seven basis points below the
median. The Board noted that the actual total expense ratio of Class A was
approximately eight basis points above the median of the peer group, that the
total expense ratios of Classes B and C were approximately the same as the
median, and that the actual total expense ratio of Class P was approximately
twenty-seven basis points above the median. The Board also noted that Lord
Abbett proposed to implement a total expense cap for the Fund that would reduce
the total expense ratio of Class A to 1.30%, the total expense ratios of Classes
B and C to 1.95%, the total expense ratio of Class P to 1.40%, and the total
expense ratio of Class Y to 0.95%. The Board noted that the total expense ratio
of Class A would be approximately two basis points below the median of the peer
group and the total expense ratio of Classes B and C would be approximately nine
basis points below the median of the peer group.
PROFITABILITY. The Board considered the level of Lord Abbett's profits in
managing the Fund, including a review of Lord Abbett's methodology for
allocating its costs to its management of the Fund. The Board concluded that the
allocation methodology had a reasonable basis and was appropriate. It considered
the profits realized by Lord Abbett in connection with the operation of the Fund
and whether the amount of profit was fair for the management of the Fund. The
Board also considered the profits realized from other businesses of Lord Abbett,
which may benefit from or be related to the Fund's business. The Board
considered Lord Abbett's profit margins in comparison with available industry
data, both accounting for and ignoring marketing and
45
<Page>
distribution expenses, and how those profit margins could affect Lord Abbett's
ability to recruit and retain investment personnel. The Board noted that Lord
Abbett's profitability had increased, in part due to an increase in assets under
management.
ECONOMIES OF SCALE. The Board considered whether there had been any economies of
scale in managing the Fund, whether the Fund had appropriately benefited from
any such economies of scale, and whether there was potential for realization of
any further economies of scale.
OTHER BENEFITS TO LORD ABBETT. The Board considered the character and amount of
fees paid by the Fund and the Fund's shareholders to Lord Abbett and Lord Abbett
Distributor for services other than investment advisory services. The Board also
considered the revenues and profitability of Lord Abbett's investment advisory
business apart from its mutual fund business, and the intangible benefits
enjoyed by Lord Abbett by virtue of its relationship with the Fund.
ALTERNATIVE ARRANGEMENTS. The Board considered whether, instead of approving
continuation of the management agreement, employing one or more alternative
arrangements might be in the best interests of the Fund, such as continuing to
employ Lord Abbett, but on different terms.
In considering whether to approve the continuation of the management agreement,
the Board did not identify any single factor as paramount or controlling. This
summary does not discuss in detail all matters considered. After considering all
of the relevant factors, the Board unanimously found that continuation of the
existing management agreement was in the best interests of the Fund and its
shareholders and voted unanimously to approve the continuation of the management
agreement.
46
<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-3-0605
LORD ABBETT DISTRIBUTOR LLC Income Series (08/05)
</Table>
<Page>
ITEM 2: CODE OF ETHICS.
Not applicable.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
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: PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11: CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the Registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) as of a date within 90 days prior to the filing
date of this report, the Chief Executive Officer and Chief Financial
Officer of the Registrant have concluded that such disclosure
controls and procedures are reasonably designed and effective to
ensure that material information relating to the Registrant,
including its consolidated subsidiaries, is made known to them by
others within those entities.
(b) There were no significant changes in the Registrant's internal
control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company
<Page>
Act of 1940) that occurred during the Registrant's second fiscal
quarter that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over financial
reporting.
ITEM 12: 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 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: August 17, 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: August 17, 2005