<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-10371
Lord Abbett Blend Trust
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
---------------------------------------
(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
---------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
--------------
Date of fiscal year end: 7/31
Date of reporting period: 7/31/2005
<Page>
ITEM 1: REPORT TO SHAREHOLDERS.
<Page>
[LORD ABBETT LOGO]
2005
ANNUAL
REPORT
LORD ABBETT
SMALL-CAP BLEND FUND
FOR THE FISCAL YEAR ENDED JULY 31, 2005
<Page>
LORD ABBETT SMALL-CAP BLEND FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED JULY 31, 2005
DEAR SHAREHOLDERS: We are pleased to provide you with this overview of Lord
Abbett Small-Cap Blend Fund's strategies and performance for the fiscal year
ended July 31, 2005. On this and the following pages, we discuss the major
factors that influenced performance.
Thank you for investing in Lord Abbett mutual funds. We value the trust that
you place in us and look forward to serving your investment needs in the years
to come.
BEST REGARDS,
/s/ Robert S. Dow
ROBERT S. DOW
CHAIRMAN
- --------------------------------------------------------------------------------
Q: WHAT WERE THE OVERALL MARKET CONDITIONS OF THE FISCAL YEAR ENDED JULY 31,
2005?
A: After slowing during a 2004 summer "soft patch," the economy regained some
traction in fourth quarter 2004. The S&P 500(R) Index(1) gained 1.5 percent in
October, 4.1 percent in November, and 3.4 percent in December. For 2004 as a
whole, the S&P 500 Index reported a gain of 10.9 percent.
After a strong finish to calendar 2004, the broad stock indexes stumbled out
of the gate in early 2005. The S&P 500 Index declined 2.4 percent in January. By
the end of first quarter calendar 2005, the S&P 500 Index had declined 2.2
percent, largely reflecting investors' concerns that rising oil and gas prices
would hurt economic growth by cutting into corporate profits and dampening
consumer spending. Even with an agreement among members of the Organization of
Petroleum Exporting Countries (OPEC) to increase oil production, crude oil
prices climbed to over $57 per barrel. Although investor optimism waned in April
as energy prices soared and the stock market relinquished some of its previous
gains, economic trends again turned more positive in May and June. The stock
market rose in May and remained unchanged in June. In July, the total return for
the S&P 500 Index was 3.7 percent.
Of greatest note, the Federal Reserve Board (the Fed) continued its measured
pace of interest rate hikes, raising the fed funds rate eight consecutive times
in quarter-point increments by the end of the fiscal year, from 1.25 percent to
3.25 percent. (The fed funds rate is the interest rate charged by banks with
excess reserves at a Federal Reserve Board district bank to other banks needing
overnight loans to meet reserve requirements.)
Employment numbers started to improve in fourth quarter calendar 2004. By
January 2005, employment had risen by 146,000 jobs, and the unemployment rate
had decreased to 5.2 percent. The unemployment rate remained essentially
unchanged at 5.1 percent through May,
1
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except for a small uptick to 5.4 percent in February. In June, the unemployment
rate declined 5.0 percent and remained unchanged in July.
Throughout the fiscal year, residential housing demand surged on continued
low mortgage rates. In the final quarter of 2004, the Consumer Price Index (CPI)
increased 0.5 percent in October and 0.1 percent in November, followed by a
decrease of 0.4 percent in December. (The CPI is a commonly used measure of
inflation, which reflects changes in the prices paid by urban consumers for a
representative basket of goods and services.) By April 2005, the CPI showed a
slight upward bias. In May, the CPI decreased slightly, but then trended up
again in June and July.
Consumer confidence, as measured by the Consumer Confidence Index (CCI),
declined between July and November 2004, before returning to July levels again
in January 2005. (Based on a representative sample of 5,000 households, the CCI
measures consumer confidence about current business, employment, and economic
conditions, as well as their expectations for the next six months.) However, in
February, March, and April, the CCI declined. This downward trend was
interrupted by CCI increases in May and June, followed by a dip in July.
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED JULY 31, 2005?
A: The fund returned 27.4 percent, reflecting performance at the net asset
value (NAV) of Class A shares with all distributions reinvested, compared with
its benchmark, the Russell 2000(R) Index,(2) which returned 24.8 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 AS OF JULY 31,
2005, ARE: 1 YEAR: 20.03 PERCENT AND SINCE INCEPTION (JUNE 26, 2001): 14.60
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. During
certain periods, 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 within the producer durables sector was the greatest
2
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contributor to fund performance relative to the benchmark for the fiscal year.
Two homebuilder holdings, The Ryland Group, Inc. (3.72 percent of portfolio
weighting) and Centex Corporation (1.67 percent of portfolio weighting),
delivered strong earnings. As interest rates remained at record lows,
homebuilders benefited from continued demand, a strong backlog of orders, and
higher than expected earnings growth. In the technology sector, stock selection
and, to a lesser extent, an underweight position helped fund performance
relative to the benchmark. Western Digital Corporation (no longer held in the
portfolio), a maker of computer hard disk drives, outperformed based on strong
consumer product sales. Another strong holding, Websense, Inc. (1.95 percent of
portfolio weighting), a company that makes Internet content filtering software,
took advantage of a growing desire among employers to manage their employees'
access to nonbusiness-related Internet Websites in the workplace.
Selection of stocks within the consumer discretionary sector was a detractor
to fund performance relative to the benchmark. The consumer discretionary sector
includes stocks in the consumer durables, apparel, media, hotel, and leisure
industries. These stocks tend to move with the economy. Regent Communications,
Inc. (1.29 percent of portfolio weighting), a small-market radio broadcaster,
disappointed, as consumers continue to shift away from conventional broadcast
radio to competing technologies, such as Internet and satellite radio, as well
as the iPod and other personal devices. Also, a number of the portfolio's retail
holdings, including Fred's Inc. (no longer held in the portfolio), and Goody's
Family Clothing, Inc. (no longer held in the portfolio), were hurt as rising
gasoline prices forced many consumers to decrease spending on clothes and other
retail items. In addition, stock selection within the financial services sector
took away from fund performance relative to the benchmark. Two insurance
brokerage holdings, USI Holdings Corporation (2.26 percent of portfolio
weighting) and HILB Rogal & Hobbs Company (2.31 percent of portfolio weighting),
underperformed as a result of industry-wide regulatory scrutiny.
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.
3
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(1) The S&P 500(R) Index is widely regarded as the standard for measuring
large-cap U.S. stock market performance and includes A representative sample of
leading companies in leading industries.
(2) The Russell 2000(R) Index measures the performance of the 2,000 smallest
companies in the Russell 3000(R) Index, which represents approximately 8 percent
of the total market capitalization of the Russell 3000 Index. Indexes are
unmanaged, do not reflect the deduction of fees or expenses, and are not
available for direct investment.
IMPORTANT PERFORMANCE AND OTHER INFORMATION The views of the fund's management
and the portfolio holdings described in this report are as of July 31, 2005;
these views and portfolio holdings may have changed subsequent to this date, and
they do not guarantee the future performance of the markets or the fund.
Information provided in this report should not be considered a recommendation to
purchase or sell securities.
A NOTE ABOUT RISK: See Notes to Financial Statements for a discussion of
investment risks. For a more detailed discussion of the risks associated with
the fund, please see the fund's prospectus.
PERFORMANCE: BECAUSE OF ONGOING MARKET VOLATILITY, FUND PERFORMANCE MAY BE
SUBJECT TO SUBSTANTIAL FLUCTUATION. Except where noted, comparative fund
performance does not account for the deduction of sales charges and would be
different if sales charges were included. The fund offers additional classes of
shares with distinct pricing options. For a full description of the differences
in pricing alternatives, please see the fund's prospectus.
MUTUAL FUNDS ARE NOT INSURED BY THE FDIC, ARE NOT DEPOSITS OR OTHER OBLIGATIONS
OF, OR GUARANTEED BY, BANKS, AND ARE SUBJECT TO INVESTMENT RISKS INCLUDING
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
4
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INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the Russell 2000(R) Index (the "Index") assuming reinvestment of
all distributions. The performance of other classes will be greater than or less
than the performance shown in the graph below due to different sales loads and
expenses applicable to such classes. The graph and performance table below do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. During certain periods, certain
expenses of the fund have been reimbursed by Lord Abbett; without such
reimbursement of expenses, the fund's returns would have been lower. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND (CLASS A SHARES) THE FUND (CLASS A SHARES) AT RUSSELL 2000(R)
AT NET ASSET VALUE MAXIMUM OFFERING PRICE(1) INDEX(2)
Jun 26, 2001 $ 10,000 $ 9,425 $ 10,000
Jul 31, 2001 $ 10,388 $ 9,791 $ 9,891
Jul 31, 2002 $ 9,130 $ 8,506 $ 8,115
Jul 31, 2003 $ 11,646 $ 10,977 $ 9,990
Jul 31, 2004 $ 14,533 $ 13,716 $ 11,594
Jul 31, 2005 $ 18,538 $ 17,472 $ 14,592
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED JULY 31, 2005
<Table>
<Caption>
1 YEAR LIFE OF CLASS
CLASS A(3) 20.03% 14.60%
CLASS B(4) 22.71% 15.26%
CLASS C(5) 26.65% 15.56%
CLASS P(6) 27.35% 16.31%
CLASS Y(7) 27.88% 16.58%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 5.75%.
(2) Performance of the unmanaged index does not reflect transaction costs,
management fees or sales charges. The performance of the index is not
necessarily representative of the Fund's performance.
(3) Performance is calculated from June 26, 2001, SEC effective date. Class A
shares were first offered to the public on July 2, 2001. Total return, which is
the percent change in net asset value, after deduction of the maximum initial
sales charge of 5.75% applicable to Class A Shares, with all distributions
reinvested for the periods shown ended July 31, 2005, is calculated using the
SEC-required uniform method to compute such return.
(4) Performance is calculated from June 26, 2001, SEC effective date. Class B
shares were first offered to the public on July 2, 2001. Performance reflects
the deduction of a CDSC of 4% for 1 year and 2% for the life of the class.
(5) Performance is calculated from June 26, 2001, SEC effective date. Class C
shares were first offered to the public on July 2, 2001. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
(6) Performance is calculated from June 26, 2001, SEC effective date. Class P
shares were first offered to the public on July 2, 2001. Performance is at net
asset value.
(7) Performance is calculated from June 26, 2001, SEC effective date. Class Y
shares were first offered to the public on July 2, 2001. Performance is at net
asset value.
5
<Page>
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 (February 1, 2005 through July 31,
2005).
ACTUAL EXPENSES
For each class of the Fund, the first line of the table on the following
page provides information about actual account values and actual expenses. You
may use the information in this line, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled "Expenses Paid During the Period 2/1/05 - 7/31/05" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of the Fund, the second line of the table on the following
page provides information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio and an assumed rate of return
of 5% per year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
6
<Page>
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+
--------- ------- -----------
2/1/05 -
2/1/05 7/31/05 7/31/05
------ ------- --------
CLASS A
Actual $ 1,000.00 $ 1,090.70 $ 7.62
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.50 $ 7.35
CLASS B
Actual $ 1,000.00 $ 1,087.90 $ 10.92
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.33 $ 10.54
CLASS C
Actual $ 1,000.00 $ 1,088.00 $ 10.92
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,014.33 $ 10.54
CLASS P
Actual $ 1,000.00 $ 1,090.40 $ 8.09
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.06 $ 7.80
CLASS Y
Actual $ 1,000.00 $ 1,093.30 $ 5.76
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,019.29 $ 5.56
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.47% for Class A, 2.11% for Classes B and C, 1.56%
for Class P and 1.11% 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
JULY 31, 2005
<Table>
<Caption>
SECTOR+ %*
Auto & Transportation 4.15%
Consumer Discretionary 18.82%
Consumer Staples 2.61%
Financial Services 13.10%
Healthcare 12.08%
Materials & Processing 14.66%
Other Energy 8.39%
Producer Durables 14.59%
Short-Term Investment 4.69%
Technology 6.91%
Total 100.00%
</Table>
* Represents percent of total investments.
+ A sector may comprise several industries.
7
<Page>
SCHEDULE OF INVESTMENTS
JULY 31, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ---------------------------------------------------------------------------------------
COMMON STOCKS 93.76%
AIR TRANSPORTATION 1.15%
Pinnacle Airlines Corp.* 350,700 $ 3,616
Republic Airways
Holdings Inc.* 473,700 6,442
----------
TOTAL 10,058
----------
AUTO COMPONENTS 1.17%
Wabash National Corp. 477,450 10,270
----------
BANKS: OUTSIDE NEW YORK CITY 1.01%
Hanmi Financial Corp. 223,858 4,253
PrivateBancorp, Inc. 124,900 4,615
----------
TOTAL 8,868
----------
BIOTECHNOLOGY RESEARCH & PRODUCTION 0.15%
Kensey Nash Corp.* 40,680 1,311
----------
BUILDING: MATERIALS 4.53%
Hughes Supply, Inc. 460,800 13,096
Trex Co., Inc.* 99,800 2,934
Watsco, Inc. 501,550 23,754
----------
TOTAL 39,784
----------
BUILDING: MISCELLANEOUS 0.70%
Drew Industries Inc.* 137,900 6,143
----------
BUILDING: ROOFING & WALLBOARD 3.75%
Beacon Roofing Supply,
Inc.* 335,400 8,710
ElkCorp 726,700 24,199
----------
TOTAL 32,909
----------
CASINOS & GAMBLING 1.13%
Alliance Gaming Corp.* 650,600 9,961
----------
COAL 3.28%
Massey Energy Co. 664,500 28,740
----------
COMMUNICATIONS & MEDIA 1.53%
Entravision
Communications Corp.* 1,565,300 13,383
----------
COMPUTER SERVICES SOFTWARE & SYSTEMS 2.82%
CACI Int'l. Inc. Class A* 103,000 $ 6,776
Lionbridge Technologies,
Inc.* 181,489 1,176
Websense, Inc.* 337,300 16,811
----------
TOTAL 24,763
----------
COMPUTER TECHNOLOGY 3.42%
Hutchinson Technology
Inc.* 255,600 8,509
RadiSys Corp.* 432,400 7,498
Stratasys, Inc.* 461,009 14,024
----------
TOTAL 30,031
----------
CONSUMER ELECTRONICS 1.18%
Universal Electronics Inc.* 568,905 10,354
----------
DIVERSIFIED FINANCIAL SERVICES 2.46%
Texas United Bancshares,
Inc. 110,969 2,136
USI Holdings Corp.* 1,519,639 19,490
----------
TOTAL 21,626
----------
DIVERSIFIED MANUFACTURING 1.48%
Hexcel Corp.* 752,500 13,003
----------
DRUGS & PHARMACEUTICALS 1.67%
Noven Pharmaceuticals,
Inc.* 367,454 6,214
Par Pharmaceutical
Cos., Inc.* 358,735 8,401
----------
TOTAL 14,615
----------
ELECTRICAL EQUIPMENT & COMPONENTS 1.92%
Genlyte Group Inc. (The)* 328,268 16,866
----------
ELECTRONICS 0.56%
Avid Technology, Inc.* 119,000 4,897
----------
ELECTRONICS: INSTRUMENTS, GAUGES & METERS 2.08%
Measurement Specialties,
Inc.*(b) 721,400 18,251
----------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
JULY 31, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ---------------------------------------------------------------------------------------
ELECTRONICS: MEDICAL SYSTEMS 0.90%
TriPath Imaging, Inc.* 902,263 $ 7,931
----------
FOODS 2.57%
J & J Snack Foods Corp. 274,766 16,167
Pilgrim's Pride Corp. 168,200 6,367
----------
TOTAL 22,534
----------
HEALTH & PERSONAL CARE 0.99%
Amedisys, Inc.* 222,398 8,705
----------
HEALTHCARE FACILITIES 3.33%
ICON plc ADR* 365,475 14,308
LCA-Vision Inc. 326,394 14,949
----------
TOTAL 29,257
----------
HOMEBUILDING 5.31%
Centex Corp. 195,200 14,441
Ryland Group, Inc. (The) 397,500 32,118
----------
TOTAL 46,559
----------
HOUSEHOLD FURNISHINGS 3.53%
Select Comfort Corp.* 1,453,445 30,973
----------
IDENTIFICATION CONTROL & FILTER DEVICES 0.94%
X-Rite, Inc. 684,832 8,287
----------
INSURANCE: MULTI-LINE 2.28%
Hilb Rogal & Hobbs Co. 589,500 19,978
----------
INSURANCE: PROPERTY-CASUALTY 5.65%
First Acceptance Corp.* 204,800 2,050
HCC Insurance Holdings,
Inc. 942,150 26,116
Ohio Casualty Corp. 839,092 21,439
----------
TOTAL 49,605
----------
MACHINERY: INDUSTRIAL/SPECIALTY 3.60%
Actuant Corp. Class A* 578,600 26,922
Joy Global Inc. 112,900 4,637
----------
TOTAL 31,559
----------
MACHINERY: OIL WELL EQUIPMENT & SERVICES 3.46%
Key Energy Services, Inc.* 322,000 $ 4,218
Pride Int'l., Inc.* 1,005,400 26,161
----------
TOTAL 30,379
----------
MEDICAL & DENTAL INSTRUMENTS & SUPPLIES 3.46%
ICU Medical, Inc.* 394,317 13,020
Kyphon Inc.* 230,720 9,377
Symmetry Medical Inc.* 321,100 8,005
----------
TOTAL 30,402
----------
MEDICAL SERVICES 1.38%
Option Care, Inc. 861,987 12,085
----------
METAL FABRICATING 1.41%
Commercial Metals Co. 431,700 12,407
----------
METALS & MINERALS MISCELLANEOUS 1.66%
Cleveland-Cliffs Iron
Co. (The) 200,900 14,607
----------
OIL: CRUDE PRODUCERS 1.52%
Grey Wolf, Inc.* 1,734,000 13,300
----------
RADIO & TV BROADCASTERS 1.27%
Regent Communications,
Inc.* 1,895,719 11,128
----------
RESTAURANTS 1.64%
Dave & Buster's, Inc.* 570,200 10,765
Ruby Tuesday, Inc. 144,500 3,616
----------
TOTAL 14,381
----------
RETAIL 4.53%
Global Imaging Systems,
Inc.* 432,696 14,997
Insight Enterprises, Inc.* 539,140 10,998
Rush Enterprises, Inc.
Class A* 406,200 6,459
Tuesday Morning Corp. 206,200 7,281
----------
TOTAL 39,735
----------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
JULY 31, 2005
<Table>
<Caption>
VALUE
INVESTMENTS SHARES (000)
- ---------------------------------------------------------------------------------------
SAVINGS & LOAN 1.48%
Brookline Bancorp, Inc. 809,565 $ 12,961
----------
SERVICES: COMMERCIAL 2.28%
Harris Interactive Inc.* 1,619,140 6,525
SM&A*(b) 1,539,691 13,503
----------
TOTAL 20,028
----------
SHIPPING 0.30%
Excel Maritime Carriers
Ltd.*(a) 203,800 2,621
----------
STEEL 0.88%
Gibraltar Industries, Inc. 320,490 7,682
----------
TELECOMMUNICATIONS EQUIPMENT 0.50%
SpectraLink Corp. 401,360 4,417
----------
TEXTILES APPAREL MANUFACTURERS 1.43%
Warnaco Group, Inc. (The)* 514,710 12,533
----------
TRANSPORTATION MISCELLANEOUS 0.91%
Vitran Corp. Inc.*(a) 455,000 7,963
----------
TRUCKERS 0.56%
Old Dominion Freight
Line, Inc.* 147,808 4,895
----------
TOTAL COMMON STOCKS
(cost $724,135,015) 822,745
==========
<Caption>
PRINCIPAL
AMOUNT VALUE
INVESTMENTS (000) (000)
- ---------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 4.61%
REPURCHASE AGREEMENT 4.61%
REPURCHASE AGREEMENT
DATED 7/29/2005,
2.66% DUE 8/1/2005
WITH STATE STREET
BANK & TRUST CO.
COLLATERALIZED BY
$41,455,000 OF FEDERAL
HOME LOAN BANK AT
3.75% DUE 1/16/2007;
VALUE: $41,299,544;
PROCEEDS: $40,494,539
(COST $40,485,565) $ 40,486 $ 40,486
----------
TOTAL INVESTMENTS IN
SECURITIES 98.37%
(cost $764,620,580) 863,231
==========
OTHER ASSETS IN EXCESS OF
LIABILITIES 1.63% 14,307
==========
NET ASSETS 100.00% $ 877,538
==========
</Table>
* Non-income producing security.
(a) Foreign security traded in U.S. dollars.
(b) Affiliated issuer (holding represents 5% or more of the underlying issuer's
outstanding voting shares). See Note 10.
ADR American Depository Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<Page>
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2005
<Table>
ASSETS:
Investment in unaffiliated issers, at value (cost $734,065,207) $ 831,476,093
Investment in affiliated issuers, at value (cost $30,555,373) 31,754,510
Receivables:
Interest and dividends 291,730
Investment securities sold 11,283,094
Capital shares sold 12,307,521
From advisor 1,398
Prepaid expenses and other assets 124,345
- ----------------------------------------------------------------------------------------
TOTAL ASSETS 887,238,691
- ----------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 7,828,594
Capital shares reacquired 497,664
Management fee 518,506
12b-1 distribution fees 456,073
Fund administration 38,640
Trustees' fees 27,853
Accrued expenses and other liabilities 333,385
- ----------------------------------------------------------------------------------------
TOTAL LIABILITIES 9,700,715
========================================================================================
NET ASSETS $ 877,537,976
========================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 750,316,670
Accumulated net investment loss (27,853)
Accumulated net realized gain on investments 28,639,136
Net unrealized appreciation on investments 98,610,023
- ----------------------------------------------------------------------------------------
NET ASSETS $ 877,537,976
========================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 465,124,115
Class B Shares $ 81,116,767
Class C Shares $ 221,554,485
Class P Shares $ 13,954,132
Class Y Shares $ 95,788,477
OUTSTANDING SHARES BY CLASS (UNLIMITED NUMBER OF AUTHORIZED
SHARES OF BENEFICIAL INTEREST, NO PAR VALUE):
Class A Shares 27,829,207
Class B Shares 4,965,774
Class C Shares 13,576,099
Class P Shares 832,056
Class Y Shares 5,673,752
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 16.71
Class A Shares-Maximum offering price
(Net asset value plus sales charge of 5.75%) $ 17.73
Class B Shares-Net asset value $ 16.34
Class C Shares-Net asset value $ 16.32
Class P Shares-Net asset value $ 16.77
Class Y Shares-Net asset value $ 16.88
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2005
<Table>
INVESTMENT INCOME:
Dividends $ 1,969,372
Interest 549,162
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 2,518,534
- ----------------------------------------------------------------------------------------
EXPENSES:
Management fee 3,740,930
12b-1 distribution plan-Class A 1,008,437
12b-1 distribution plan-Class B 614,859
12b-1 distribution plan-Class C 1,280,405
12b-1 distribution plan-Class P 9,643
Shareholder servicing 1,253,317
Professional 61,648
Reports to shareholders 141,822
Fund administration 199,516
Custody 80,193
Trustees' fees 31,681
Registration 53,642
Other 7,909
- ----------------------------------------------------------------------------------------
Gross expenses 8,484,002
Expense reductions (See Note 7) (15,019)
- ----------------------------------------------------------------------------------------
NET EXPENSES 8,468,983
- ----------------------------------------------------------------------------------------
NET INVESTMENT LOSS (5,950,449)
========================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments in unaffiliated issuers 38,830,209
Net realized gain (loss) on investments in affiliated issuers (42,467)
Net change in unrealized appreciation (depreciation) on investments 88,832,217
========================================================================================
NET REALIZED AND UNREALIZED GAIN 127,619,959
========================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 121,669,510
========================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE YEAR ENDED FOR THE YEAR ENDED
INCREASE IN NET ASSETS JULY 31, 2005 JULY 31, 2004
OPERATIONS:
Net investment loss $ (5,950,449) $ (2,707,538)
Net realized gain (loss) on investments 38,787,742 36,260,284
Net change in unrealized appreciation (depreciation)
on investments 88,832,217 (2,171,628)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 121,669,510 31,381,118
=====================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain
Class A (19,850,931) (1,707,862)
Class B (5,004,449) (450,381)
Class C (8,648,412) (548,153)
Class P (36,167) (25)
Class Y (862,999) (73,076)
- -----------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (34,402,958) (2,779,497)
=====================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 555,640,932 175,002,209
Reinvestment of distributions 27,702,802 2,267,482
Cost of shares reacquired (71,067,406) (32,151,979)
- -----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS 512,276,328 145,117,712
=====================================================================================================
NET INCREASE IN NET ASSETS 599,542,880 173,719,333
=====================================================================================================
NET ASSETS:
Beginning of year 277,995,096 104,275,763
- -----------------------------------------------------------------------------------------------------
END OF YEAR $ 877,537,976 $ 277,995,096
=====================================================================================================
ACCUMULATED NET INVESTMENT LOSS $ (27,583) $ (329)
=====================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
2005 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS A
SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.37 $ 11.71 $ 9.18 $ 10.45 $ 10.00
========= ======== ======== ======== ========
Unrealized appreciation on investments .06
--------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
========
Investment operations:
Net investment loss(a) (.15) (.16) (.12) (.12) (.07)
Net realized and unrealized gain (loss) 3.88 3.07 2.65 (1.15) .46
--------- -------- -------- -------- --------
Total from investment operations 3.73 2.91 2.53 (1.27) .39
--------- -------- -------- -------- --------
Distributions to shareholders from:
Net realized gain (1.39) (.25) - -(g) -
--------- -------- -------- -------- --------
Total distributions (1.39) (.25) - -(g) -
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.71 $ 14.37 $ 11.71 $ 9.18 $ 10.45
========= ======== ======== ======== ========
Total Return(b)(e) .60%(c)
Total Return(b) 27.38% 24.96% 27.56% (12.11)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions 1.47% 1.55% 1.71% 1.66% .69%(c)
Expenses, excluding expense
reductions 1.47% 1.55% 1.89% 2.41% .81%(c)
Net investment loss (.96)% (1.12)% (1.30)% (1.09)% (.67)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 2002 7/31/2001
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 465,124 $ 162,651 $ 59,717 $ 29,962 $ 2,214
Portfolio turnover rate 58.65% 84.91% 68.48% 47.69% 5.86%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
2005 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS B
SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.15 $ 11.56 $ 9.12 $ 10.45 $ 10.00
========= ======== ======== ======== ========
Unrealized appreciation on investments .06
--------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
========
Investment operations:
Net investment loss(a) (.24) (.24) (.18) (.18) (.07)
Net realized and unrealized gain (loss) 3.82 3.02 2.62 (1.15) .46
--------- -------- -------- -------- --------
Total from investment operations 3.58 2.78 2.44 (1.33) .39
--------- -------- -------- -------- --------
Distributions to shareholders from:
Net realized gain (1.39) (.19) - -(g) -
--------- -------- -------- -------- --------
Total distributions (1.39) (.19) - -(g) -
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.34 $ 14.15 $ 11.56 $ 9.12 $ 10.45
========= ======== ======== ======== ========
Total Return(b)(e) .60%(c)
Total Return(b) 26.71% 24.19% 26.75% (12.68)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions 2.10% 2.18% 2.33% 2.27% .75%(c)
Expenses, excluding expense
reductions 2.10% 2.18% 2.51% 3.02% .87%(c)
Net investment loss (1.61)% (1.75)% (1.92)% (1.70)% (.76)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 2002 7/31/2001
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 81,117 $ 45,384 $ 21,518 $ 12,013 $ 283
Portfolio turnover rate 58.65% 84.91% 68.48% 47.69% 5.86%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
2005 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS C
SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.14 $ 11.56 $ 9. $ 10.45 $ 10.00
========= ======== ======== ======== ========
Unrealized appreciation on investments .06
--------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
========
Investment operations:
Net investment loss(a) (.24) (.24) (.18) (.18) (.07)
Net realized and unrealized gain (loss) 3.81 3.02 2.62 (1.15) .46
--------- -------- -------- -------- --------
Total from investment operations 3.57 2.78 2.44 (1.33) .39
--------- -------- -------- -------- --------
Distributions to shareholders from:
Net realized gain (1.39) (.20) - -(g) -
--------- -------- -------- -------- --------
Total distributions (1.39) (.20) - -(g) -
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.32 $ 14.14 $ 11.56 $ 9.12 $ 10.45
========= ======== ======== ======== ========
Total Return(b)(e) .60%(c)
Total Return(b) 26.65% 24.18% 26.75% (12.68)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions 2.10% 2.18% 2.33% 2.27% .75%(c)
Expenses, excluding expense
reductions 2.10% 2.18% 2.51% 3.02% .87%(c)
Net investment loss (1.60)% (1.75)% (1.92)% (1.70)% (.76)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 2002 7/31/2001
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 221,554 $ 64,447 $ 23,039 $ 10,432 $ 468
Portfolio turnover rate 58.65% 84.91% 68.48% 47.69% 5.86%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
2005 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS P
SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.42 $ 11.73 $ 9.19 $ 10.45 $ 10.00
========= ======== ======== ======== ========
Unrealized appreciation on investments .06
--------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
========
Investment operations:
Net investment loss(a) (.17) (.37) (.10) (.12) (.07)
Net realized and unrealized gain (loss) 3.91 3.28 2.64 (1.14) .46
--------- -------- -------- -------- --------
Total from investment operations 3.74 2.91 2.54 (1.26) .39
--------- -------- -------- -------- --------
Distributions to shareholders from:
Net realized gain (1.39) (.22) - -(g) -
--------- -------- -------- -------- --------
Total distributions (1.39) (.22) - -(g) -
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.77 $ 14.42 $ 11.73 $ 9.19 $ 10.45
========= ======== ======== ======== ========
Total Return(b)(e) .60%(c)
Total Return(b) 27.35% 24.97% 27.64% (12.01)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions 1.69% 1.63%+ 1.78%+ 1.72% .70%(c)
Expenses, excluding expense
reductions 1.70% 1.63%+ 1.96%+ 2.47% .82%(c)
Net investment loss (1.06)% (1.20)%+ (1.37)%+ (1.15)% (.68)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 2002 7/31/2001
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 13,954 $ 218 $ 1 $ 1 $ 1
Portfolio turnover rate 58.65% 84.91% 68.48% 47.69% 5.86%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
<Table>
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
2005 2004 2003 2002 7/31/2001
PER SHARE OPERATING PERFORMANCE (CLASS Y
SHARES)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.45 $ 11.75 $ 9.20 $ 10.45 $ 10.00
========= ======== ======== ======== ========
Unrealized appreciation on investments .06
--------
NET ASSET VALUE ON SEC EFFECTIVE DATE $ 10.06
========
Investment operations:
Net investment loss(a) (.09) (.10) (.11) (.10) (.07)
Net realized and unrealized gain (loss) 3.91 3.07 2.66 (1.15) .46
--------- -------- -------- -------- --------
Total from investment operations 3.82 2.97 2.55 (1.25) .39
--------- -------- -------- -------- --------
Distributions to shareholders from:
Net realized gain (1.39) (.27) - -(g) -
--------- -------- -------- -------- --------
Total distributions (1.39) (.27) - -(g) -
--------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.88 $ 14.45 $ 11.75 $ 9.20 $ 10.45
========= ======== ======== ======== ========
Total Return(b)(e) .60%(c)
Total Return(b) 27.88% 24.45% 27.72% (11.92)% 3.88%(c)(f)
RATIOS TO AVERAGE NET ASSETS:
Expenses, including expense
reductions 1.17% 1.18%+ 1.33%+ 1.27% .66%(c)
Expenses, excluding expense
reductions 1.17% 1.18%+ 1.51%+ 2.02% .78%(c)
Net investment loss (.57)% (.75)%+ (.92)%+ (.70)% (.63)%(c)
<Caption>
YEAR ENDED 7/31 6/18/2001(d)
--------------------------------------------------- TO
SUPPLEMENTAL DATA: 2005 2004 2003 2002 7/31/2001
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 95,788 $ 5,295 $ 1 $ 1 $ 1
Portfolio turnover rate 58.65% 84.91% 68.48% 47.69% 5.86%
</Table>
+ The ratios have been determined on a Fund basis.
(a) Calculated using average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(c) Not annualized.
(d) Commencement of investment operations; SEC effective date is June 26, 2001;
Fund shares became available to the public on July 2, 2001.
(e) Total return is for the period 6/18/01 through 6/26/01.
(f) Total return is for the period 6/26/01 through 7/31/01.
(g) Amount represents less than $.01.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Blend Trust (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act") as an open-end management company, organized as a
Delaware Business Trust on May 1, 2001. The Trust has one series, Lord Abbett
Small-Cap Blend Fund (the "Fund"). The Securities and Exchange Commission
declared the registration of the Fund and its shares effective on June 26, 2001
and each class of shares became available to the public on July 2, 2001. The
Fund is diversified under the Act.
The Fund's investment objective is to seek long-term growth of capital by
investing primarily in stocks of small companies. The Fund offers five classes
of shares: Classes A, B, C, P and Y, each with different expenses and dividends.
A front-end sales charge is normally added to the Net Asset Value ("NAV") for
Class A shares. There is no front-end sales charge in the case of the Classes B,
C, P and Y shares, although there may be a contingent deferred sales charge
("CDSC") as follows: certain redemptions of Class A shares made within 24 months
(12 months if shares were purchased on or after November 1, 2004) following
certain purchases made without a sales charge; Class B shares redeemed before
the sixth anniversary of purchase; and Class C shares redeemed before the first
anniversary of purchase. Class B shares will convert to Class A shares on the
eighth anniversary of the original purchase of Class B shares.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
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. Unlisted equity securities are valued at the last quoted sale price
or, if no sale price is available, at the mean between the most recently
quoted bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined by management and
approved in good faith by the Board of Trustees. Short-term securities with
60 days or less remaining to maturity are valued using the amortized cost
method, which approximates current market value.
(b) SECURITY TRANSACTIONS-Security transactions are recorded as of the date that
the securities are purchased or sold (trade date). Realized gains and losses
on sales of portfolio securities are calculated using the identified-cost
method. Realized and unrealized gains (losses) are allocated to each class
of shares based upon the relative proportion of net assets at the beginning
of the day.
(c) INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Discounts are accreted and
premiums are amortized using the effective interest method. Investment
income is allocated to each class of shares based upon the relative
proportion of net assets at the beginning of the day.
19
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(d) FEDERAL TAXES-It is the policy of the Fund to meet the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all taxable income and capital
gains to its shareholders. Therefore, no Federal income tax provision is
required.
(e) EXPENSES-Expenses, excluding class specific expenses, are allocated to each
class of shares based upon the relative proportion of net assets at the
beginning of the day. Classes A, B, C, and P shares bear all expenses and
fees relating to their respective 12b-1 Distribution Plans.
(f) REPURCHASE AGREEMENTS-The Fund may enter into repurchase agreements with
respect to securities. A repurchase agreement is a transaction in which the
Fund acquires a security and simultaneously commits to resell that security
to the seller (a bank or securities dealer) at an agreed-upon price on an
agreed-upon date. The Fund requires at all times that the repurchase
agreement be collateralized by cash, or by securities of the U.S.
Government, its agencies, its instrumentalities, or U.S. Government
sponsored enterprises having a value equal to, or in excess of, the value of
the repurchase agreement (including accrued interest). If the seller of the
agreement defaults on its obligation to repurchase the underlying securities
at a time when the value of those securities has declined, the Fund may
incur a loss upon disposition of the securities.
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE
The Trust has a management agreement with Lord, Abbett & Co. LLC ("Lord Abbett")
pursuant to which Lord Abbett supplies the Fund with investment management
services and executive and other personnel, pays the remuneration of officers,
provides office space and pays for ordinary and necessary office and clerical
expenses relating to research and statistical work and supervision of the Fund's
investment portfolio.
The management fee is based on average daily net assets at an annual rate of
..75%.
Lord Abbett provides certain administrative services to the Fund pursuant to an
Administrative Services Agreement at an annual rate of .04% of the Fund's
average daily net assets.
12b-1 DISTRIBUTION PLANS
The Fund has adopted a distribution plan with respect to one or more classes of
shares pursuant to Rule 12b-1 of the Act, which provides for the payment of
ongoing distribution and service fees to Lord Abbett Distributor LLC
("Distributor"), an affiliate of Lord Abbett. The fees are accrued daily at
annual rates based upon average daily net assets as follows:
<Table>
<Caption>
FEE CLASS A CLASS B CLASS C CLASS P
- -------------------------------------------------------------------------------------
Service .25% .25% .25% .20%
Distribution .10%(1) .75% .75% .25%
</Table>
(1) Until October 1, 2004, the Fund paid a one-time distribution fee of up to
1.00% on certain qualifying purchases of Class A shares. Effective October
1, 2004, the Distributor commenced payment of such one-time distribution
fee. The unamortized balance of the prepaid distribution fee as of July 31,
2005 was $39,503. This amount will continue to be amortized by the Fund,
generally over a two-year period. The amount of CDSC collected during the
year ended July 31, 2005 was $8,427.
Class Y does not have a distribution plan.
20
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
COMMISSIONS
Distributor received the following commissions on sales of Class A shares of the
Fund, after concessions were paid to authorized dealers, for the year ended July
31, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- ------------------------------
$ 791,465 $ 4,486,092
</Table>
One Trustee and certain of the Trust's officers have an interest in Lord Abbett.
4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARD
Dividends from net investment income, if any, are declared and paid at least
annually. Taxable net realized gains from investment transactions, reduced by
capital loss carryforwards, if any, are declared and distributed to shareholders
at least annually. The capital loss carryforward amount, if any, is available to
offset future net capital gains. Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions from
net investment income and net realized capital gains are determined in
accordance with Federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America. These book/tax
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the components of net assets based on their federal tax basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed earnings and profits for tax purposes are reported as
a tax return of capital.
The tax character of distributions paid during the years ended July 31, 2005 and
2004 are as follows:
<Table>
<Caption>
7/31/2005 7/31/2004
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 17,492,584 $ 1,319,556
Net long-term capital gains 16,910,374 1,459,941
- --------------------------------------------------------------------------------
Total distributions paid $ 34,402,958 $ 2,779,497
================================================================================
</Table>
As of July 31, 2005, the Fund's components of accumulated earnings (losses) on a
tax basis are as follows:
<Table>
Undistributed ordinary income - net $ 16,421,623
Undistributed long-term capital gains 12,629,904
- ---------------------------------------------------------------
Total undistributed earnings 29,051,527
Temporary differences (27,853)
Unrealized gains - net 98,197,632
- ---------------------------------------------------------------
Total accumulated gains - net $ 127,221,306
===============================================================
</Table>
21
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of July 31, 2005, the Fund's aggregate unrealized security gains and losses
based on cost for U.S. Federal income tax purposes are as follows:
<Table>
Tax cost $ 765,032,971
- ---------------------------------------------------------
Gross unrealized gain 108,574,528
Gross unrealized loss (10,376,896)
- ---------------------------------------------------------
Net unrealized security gain $ 98,197,632
=========================================================
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
primarily attributable to wash sales and other temporary tax adjustments.
Permanent items identified during the year ended July 31, 2005, have been
reclassified among the components of net assets based on their tax basis
treatment as follows:
<Table>
<Caption>
ACCUMULATED ACCUMULATED
NET INVESTMENT NET REALIZED
LOSS GAINS
- ------------------------------------
$ 5,922,925 $ (5,922,925)
</Table>
The permanent difference is primarily due to tax net investment losses.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended July 31, 2005 are as follows:
<Table>
<Caption>
PURCHASES SALES
- --------------------------------
$ 716,117,077 $ 281,739,081
</Table>
There were no purchases or sales of U.S. Government securities for the year
ended July 31, 2005.
6. TRUSTEES' REMUNERATION
The Trust's officers and the one Trustee who are associated with Lord Abbett do
not receive any compensation from the Trust for serving in such capacities.
Outside Trustees' fees are allocated among all Lord Abbett-sponsored funds based
on the net assets of each fund. There is an equity based plan available to all
outside Trustees under which outside Trustees must defer receipt of a portion
of, and may elect to defer receipt of an additional portion of Trustees' fees.
The deferred amounts are treated as though equivalent dollar amounts have been
invested proportionately in the funds. Such amounts and earnings accrued thereon
are included in Trustees' Fees on the Statement of Operations and in Trustees'
Fees Payable on the Statement of Assets and Liabilities and are not deductible
for U.S. Federal income tax purposes until such amounts are paid.
7. EXPENSE REDUCTIONS
The Fund has entered into arrangements with its transfer agent and custodian
whereby credits realized as a result of uninvested cash balances are used to
reduce a portion of the Fund's expenses.
22
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. LINE OF CREDIT
The Fund, along with certain other funds managed by Lord Abbett, has available a
$200,000,000 unsecured revolving credit facility ("Facility") from a consortium
of banks, to be used for temporary or emergency purposes as an additional source
of liquidity to fund redemptions of investor shares. Any borrowings under this
Facility will bear interest at current market rates as defined in the agreement.
For the period August 1, 2004 through December 9, 2004 the fee for this Facility
was at an annual rate of .09%. Effective December 10, 2004, the Facility was
renewed at an annual rate of .08%. At July 31, 2005, there were no loans
outstanding pursuant to this Facility nor was the Facility utilized at any time
during the fiscal year ended July 31, 2005.
9. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank & Trust Company ("SSB") is the Fund's custodian and accounting
agent. SSB performs custodial, accounting and recordkeeping functions relating
to portfolio transactions and calculating the Fund's NAV.
10. TRANSACTIONS WITH AFFILIATED ISSUERS
An affiliated issuer is one in which the Fund has ownership of at least 5% of
the voting securities of the underlying issuer at any point during the fiscal
year. The Fund had the following transactions with an affiliated issuers during
the year ended July 31, 2005:
<Table>
<Caption>
REALIZED DIVIDEND
BALANCE OF BALANCE OF VALUE LOSS INCOME
SHARES HELD GROSS GROSS SHARES HELD AT 8/1/2004 8/1/2004
AFFILIATED ISSUER AT 7/31/2004 ADDITIONS SALES AT 7/31/2005 7/31/2005 TO 7/31/2005 TO 7/31/2005
- --------------------------------------------------------------------------------------------------------------------------------
Measurement
Specialties, Inc. 115,200 606,200 - 721,400 $ 18,251,420 $ - $ -
SM&A 1,214,515 349,104 (23,928) 1,539,691 13,503,090 (42,467) -
- --------------------------------------------------------------------------------------------------------------------------------
Total $ 31,754,510 $ (42,467) $ -
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
11. INVESTMENT RISKS
The Fund is subject to the general risks and considerations associated with
equity investing as well as the particular risks associated with growth and
value stocks. The value of an investment will fluctuate in response to movements
in the stock market in general and to the changing prospects of individual
companies in which the Fund invests. Different types of stocks shift in and out
of favor depending on market and economic conditions. Growth stocks tend to be
more volatile than other stocks. The market may fail to recognize the intrinsic
value of particular value stocks for a long time. In addition, if the Fund's
assessment of a company's potential for growth or market conditions is wrong, it
could suffer losses or produce poor performance relative to other funds, even in
a rising market. The Fund invests primarily in small company stocks, which tend
to be more volatile and can be less liquid than large company stocks. Small
companies may also have more limited product lines, markets or financial
resources, and typically experience a higher risk of failure than large
companies.
These factors can affect the Fund's performance.
23
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
12. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of beneficial interest are as follows:
<Table>
<Caption>
YEAR ENDED YEAR ENDED
JULY 31, 2005 JULY 31, 2004
- -------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Shares sold 18,253,096 $ 281,039,330 7,516,857 $ 104,897,437
Reinvestment of distributions 1,200,214 17,475,539 112,438 1,503,302
Shares reacquired (2,942,691) (44,852,942) (1,409,642) (19,954,176)
- -------------------------------------------------------------------------------------------------------------------
Increase 16,510,619 $ 253,661,927 6,219,653 $ 86,446,563
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 1,975,663 $ 29,598,985 1,681,290 $ 22,980,342
Reinvestment of distributions 285,365 4,077,898 27,311 361,047
Shares reacquired (501,708) (7,467,921) (362,759) (5,008,078)
- -------------------------------------------------------------------------------------------------------------------
Increase 1,759,320 $ 26,208,962 1,345,842 $ 18,333,311
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 9,636,857 $ 145,030,429 3,059,464 $ 42,147,359
Reinvestment of distributions 386,657 5,521,470 24,983 330,033
Shares reacquired (1,004,023) (15,079,178) (520,096) (7,188,371)
- -------------------------------------------------------------------------------------------------------------------
Increase 9,019,491 $ 135,472,721 2,564,351 $ 35,289,021
- -------------------------------------------------------------------------------------------------------------------
CLASS P SHARES
Shares sold 863,783 $ 13,771,499 15,107 $ 218,867
Reinvestment of distributions 2,473 36,160 2 24
Shares reacquired (49,324) (794,363) (97) (1,353)
- -------------------------------------------------------------------------------------------------------------------
Increase 816,932 $ 13,013,296 15,012 $ 217,538
- -------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 5,447,857 $ 86,200,689 360,838 $ 4,758,204
Reinvestment of distributions 40,337 591,735 5,449 73,076
Shares reacquired (180,841) (2,873,002) -(a) (1)
- -------------------------------------------------------------------------------------------------------------------
Increase 5,307,353 $ 83,919,422 366,287 $ 4,831,279
- -------------------------------------------------------------------------------------------------------------------
</Table>
(a) Amount represents less than 1 share.
24
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS,
LORD ABBETT BLEND TRUST - LORD ABBETT SMALL-CAP BLEND FUND:
We have audited the accompanying statement of assets and liabilities of Lord
Abbett Blend Trust - Lord Abbett Small-Cap Blend Fund (the "Fund"), including
the schedule of investments, as of July 31, 2005, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of July 31, 2005 by correspondence with the custodian and
brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Lord
Abbett Blend Trust - Lord Abbett Small-Cap Blend Fund as of July 31, 2005, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods presented, in conformity with accounting principles
generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
September 27, 2005
25
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Trustees (the "Board") is responsible for the management of the
business and affairs of the Trust in accordance with the laws of the State of
Delaware. The Board appoints officers who are responsible for the day-to-day
operations of the Trust and who execute policies authorized by the Board. Board
also approves an investment adviser to the Trust and continues to monitor the
cost and quality of the services provided by the investment adviser, and
annually considers whether to renew the contract with the adviser. Generally,
each Trustee holds office until his/her successor is elected and qualified or
until his/her earlier resignation or removal, as provided in the Trust's
organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Trust's investment adviser.
INTERESTED TRUSTEE
The following Trustee is the Managing Partner of Lord Abbett and is an
"interested person" as defined in the Act. Mr. Dow is also an officer, director,
or trustee of each of the fourteen Lord Abbett-sponsored funds, which consist of
53 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Trustee and Managing Partner and Chief N/A
Lord, Abbett & Co. LLC Chairman since Investment Officer of Lord Abbett
90 Hudson Street 2001 since 1996.
Jersey City, NJ 07302
(1945)
</Table>
----------
INDEPENDENT TRUSTEES
The following independent or outside Trustees are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 53 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Trustee since 2001 Managing General Partner, Bigelow Currently serves as director of
Lord, Abbett & Co. LLC Media, LLC (since 2000); Senior Adelphia Communications, Inc.,
c/o Legal Dept. Adviser, Time Warner Inc. (1998 - Crane Co., and Huttig Building
90 Hudson Street 2000); Acting Chief Executive Products Inc.
Jersey City, NJ 07302 Officer of Courtroom Television
(1941) Network (1997 - 1998); President
and Chief Executive Officer of
Time Warner Cable Programming,
Inc. (1991 - 1997).
WILLIAM H.T. BUSH Trustee since 2001 Co-founder and Chairman of the Currently serves as director of
Lord, Abbett & Co. LLC Board of the financial advisory WellPoint Health Networks Inc.
c/o Legal Dept. firm of Bush-O'Donnell & Company (since 2002), and Engineered
90 Hudson Street (since 1986). Support Systems, Inc. (since
Jersey City, NJ 07302 2000).
(1938)
</Table>
26
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH TRUST DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Trustee since 2001 Managing Director of Monitor Currently serves as director of
Lord, Abbett & Co. LLC Clipper Partners (since 1997) and Avondale, Inc. and Interstate
c/o Legal Dept. President of Clipper Asset Bakeries Corp.
90 Hudson Street Management Corp. (since 1991),
Jersey City, NJ 07302 both private equity investment
(1942) funds.
JULIE A. HILL Trustee since 2004 Owner and CEO of the Hillsdale Currently serves as director of
Lord, Abbett & Co. LLC Companies, a business consulting WellPoint Health Networks Inc.;
c/o Legal Dept. firm (since 1998); Founder, Resources Connection Inc.; and
90 Hudson Street President and Owner of the Holcim (US) Inc. (a subsidiary
Jersey City, NJ 07302 Hiram-Hill and Hillsdale of Holcim Ltd.).
(1946) Development Companies (1998 -
2000).
FRANKLIN W. HOBBS Trustee since 2001 Former Chief Executive Officer of Currently serves as director of
Lord, Abbett & Co. LLC Houlihan Lokey Howard & Zukin, an Adolph Coors Company.
c/o Legal Dept. investment bank (January 2002 -
90 Hudson Street April 2003); Chairman of Warburg
Jersey City, NJ 07302 Dillon Read (1999 - 2001); Global
(1947) Head of Corporate Finance of SBC
Warburg Dillon Read (1997 - 1999);
Chief Executive Officer of Dillon,
Read & Co. (1994 - 1997).
C. ALAN MACDONALD Trustee since 2001 Retired - General Business and Currently serves as director of
Lord, Abbett & Co. LLC Governance Consulting (since H.J. Baker (since 2003).
c/o Legal Dept. 1992); formerly President and CEO
90 Hudson Street of Nestle Foods.
Jersey City, NJ 07302
(1933)
THOMAS J. NEFF Trustee since 2001 Chairman of Spencer Stuart (U.S.), Currently serves as director of
Lord, Abbett & Co. LLC an executive search consulting Ace, Ltd. (since 1997) and
c/o Legal Dept. firm (since 1996); President of Hewitt Associates, Inc.
90 Hudson Street Spencer Stuart (1979-1996).
Jersey City, NJ 07302
(1937)
</Table>
27
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
OFFICERS
None of the officers listed below have received compensation from the Trust All
the officers of the Trust may also be officers of the other Lord
Abbett-sponsored funds and maintain offices at 90 Hudson Street, Jersey City, NJ
07302.
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH WITH TRUST OF CURRENT POSITION DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Elected in 2001 Managing Partner and Chief
(1945) Officer and Investment Officer of Lord Abbett
President (since 1996).
MICHAEL T. SMITH Executive Vice Elected in 2001 Partner and Investment Manager,
(1963) President joined Lord Abbett in 1997.
TRACIE E. AHERN Vice President Elected in 2001 Partner and Director of Portfolio
(1968) Accounting and Operations, joined
Lord Abbett in 1999.
JAMES BERNAICHE Chief Compliance Elected in 2004 Chief Compliance Officer, joined
(1956) Officer Lord Abbett in 2001; formerly
Vice President and Chief
Compliance Officer with Credit
Suisse Asset Management LLC.
JOAN A. BINSTOCK Chief Financial Elected in 2001 Partner and Chief Operations
(1954) Officer and Vice Officer, joined Lord Abbett in
President 1999.
DANIEL E. CARPER Vice President Elected in 2001; Partner, joined Lord Abbett in
(1952) Retiring as of 1979.
9/30/2005
PAUL A. HILSTAD Vice President and Elected in 2001; Partner and General Counsel,
(1942) Secretary Retiring as of joined Lord Abbett in 1995.
9/30/2005
LAWRENCE H. KAPLAN Vice President and Elected in 2001 Partner and Deputy General
(1957) Assistant Counsel, joined Lord Abbett in
Secretary 1997.
ROBERT G. MORRIS Vice President Elected in 2001 Partner and Director of Equity
(1944) Investments, joined Lord Abbett
in 1991.
A. EDWARD OBERHAUS, III Vice President Elected in 2001 Partner and Manager of Equity
(1959) Trading, joined Lord Abbett in
1983.
CHRISTINA T. SIMMONS Vice President and Elected in 2001 Assistant General Counsel, joined
(1957) Assistant Lord Abbett in 1999.
Secretary
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund Administration,
(1971) joined Lord Abbett in 2003;
formerly Vice President, Lazard
Asset Management LLC (2000-2003);
prior thereto Manager of Deloitte
& Touche LLP.
</Table>
Please call 888-522-2388 for a copy of the Statement of Additional Information
(SAI), which contains further information about the Trust's Trustees. It is
available free upon request.
28
<Page>
APPROVAL OF ADVISORY CONTRACTS
At a meeting on December 9, 2004, the Board of Trustees of the Fund, including
all Trustees who are not interested persons of the Fund (the "Board"),
considered whether to approve the continuation of the existing management
agreement between the Fund 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 the Fund included, but were not
limited to, (1) information provided by Lipper Analytical Services, Inc.
regarding the investment performance of the 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 the 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 the Fund, (7) information regarding
the personnel and other resources devoted by Lord Abbett to managing the 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
second quintile of its performance universe for the nine-month and one-year
periods and in the first quintile in the three-year period. The Board also noted
that the performance was above that of the Lipper Small-Cap Core Index for each
period.
LORD ABBETT'S PERSONNEL AND METHODS. The Board considered the qualifications of
the personnel providing investment management services to the Fund, in light of
the Fund's investment objective and discipline. Among other things, they
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 the 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 five basis points below the
median of the peer group, while the actual management and
29
<Page>
APPROVAL OF ADVISORY CONTRACTS (CONCLUDED)
administrative services fees were approximately one basis point above that
median. The Board also noted that the total expense ratio of Class A was
approximately sixteen basis points above the median of the peer group, the total
expense ratios of Classes B and C were approximately the same as the median of
the peer group, the total expense ratio of Class P was approximately twenty-two
basis points above the median of the peer group, and the total expense ratio of
Class Y was approximately twenty-three basis points above 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. 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.
30
<Page>
HOUSEHOLDING
The Trust has adopted a policy that allows it to send only one copy of the
Fund's Prospectus, proxy material, annual report and 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 Fund's portfolio securities, and information on how Lord
Abbett voted the Fund's proxies during the 12-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 Trust is required to file its complete schedule of portfolio holdings with
the SEC for its first and third fiscal quarters on Form N-Q. Copies of the
filings will be available without charge, upon request on the SEC's website at
www.sec.gov and may be available by calling Lord Abbett at 800-821-5129. You can
also obtain copies of Form N-Q by (i) visiting the SEC's Public Reference Room
in Washington, DC (information on the operation of the Public Reference Room may
be obtained by calling 800-SEC-0330); (ii) sending your request and a
duplicating fee to the SEC's Public Reference Room, Washington, DC 20549-0102;
or (iii) sending your request electronically to publicinfo@sec.gov.
TAX INFORMATION
3.83% of the ordinary income distribution paid by the Fund during fiscal 2005 is
qualifying dividend income for individual shareholders and also eligible for the
dividends received deduction for corporate shareholders.
Additionally, of the distributions paid to shareholders during the fiscal year
ended July 31, 2005, $16,910,374 represents long-term capital gains.
31
<Page>
<Table>
[LORD ABBETT(R) LOGO]
This report when not used for the general
information of shareholders of the Fund, is to
be distributed only if preceded or accompanied Lord Abbett Blend Trust
by a current Fund Prospectus. Lord Abbett Small-Cap Blend Fund
Lord Abbett Mutual Fund shares are distributed by LASCB-2-0705
LORD ABBETT DISTRIBUTOR LLC (09/05)
</Table>
<Page>
ITEM 2: CODE OF ETHICS.
(a) In accordance with applicable requirements, the Registrant
adopted a Sarbanes-Oxley Code of Ethics on June 19, 2003 that
applies to the principal executive officer and senior financial
officers of the Registrant ("Code of Ethics"). The Code of
Ethics was in effect during the fiscal year ended July 31, 2005
(the "Period").
(b) Not applicable.
(c) The Registrant has not amended the Code of Ethics as described
in Form N-CSR during the Period.
(d) The Registrant has not granted any waiver, including an implicit
waiver, from a provision of the Code of Ethics as described in
Form N-CSR during the Period.
(e) Not applicable.
(f) See Item 11(a) concerning the filing of the Code of Ethics. The
Registrant will provide a copy of the Code of Ethics to any
person without charge, upon request. To obtain a copy, please
call Lord Abbett at 800-821-5129.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Trustees has determined that each of
the following independent Trustees who are members of the audit
committee are audit committee financial experts: E. Thayer
Bigelow, Robert B. Calhoun, and Franklin W. Hobbs. Each of these
persons is independent within the meaning of the Form N-CSR.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
In response to sections (a), (b), (c) and (d) of Item 4, the
aggregate fees billed to the Registrant for the fiscal years
ended July 31, 2005 and 2004 by the Registrant's principal
accounting firm, Deloitte & Touche LLP, the member firms of
Deloitte Touche Tohmatsu and their respective affiliates
(collectively, "Deloitte") were as follows:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
Audit Fees {a} $ 36,000 $ 34,000
Audit-Related Fees {b} 82 31
---------------------
</Table>
<Page>
<Table>
Total audit and audit-related fees 36,082 34,031
---------------------
Tax Fees {c} 6,865 6,595
All Other Fees {d} -0- 36
---------------------
Total Fees $ 42,947 $ 40,662
---------------------
</Table>
- ----------
{a} Consists of fees for audits of the Registrant's annual financial
statements.
{b} Consists of the Registrant's proportionate share of fees for
performing certain agreed-upon procedures regarding compliance
with the provisions of Rule 17a-7 of the Investment Company Act of
1940 and related Board approved procedures.
{c} Fees for the fiscal year ended July 31, 2005 and 2004 consist of
fees for preparing the U.S. Income Tax Return for Regulated
Investment Companies, New Jersey Corporation Business Tax Return,
New Jersey Annual Report Form, U.S. Return of Excise Tax on
Undistributed Income of Investment Companies, IRS Forms 1099-MISC
and 1096 Annual Summary and Transmittal of U.S. Information
Returns.
{d} Fees for the fiscal year ended July 31, 2004 consist of the
Registrant's proportionate share of fees for testing of Anti-Money
Laundering Compliance.
(e) (1) Pursuant to Rule 2-01(c) (7) of Regulation S-X, the
Registrant's Audit Committee has adopted pre-approval policies and
procedures. Such policies and procedures generally provide that
the Audit Committee must pre-approve:
- any audit, audit-related, tax, and other services to be
provided to the Lord Abbett Funds, including the
Registrant, and
- any audit-related, tax, and other services to be
provided to the Registrant's investment adviser and any
entity controlling, controlled by or under common
control with the investment adviser that provides
ongoing services to one or more Funds comprising the
Registrant if the engagement relates directly to
operations and financial reporting of a Fund, by the
independent auditor to assure that the provision of
such services does not impair the auditor's
independence.
The Audit Committee has delegated pre-approval authority to its
Chairman, subject to a fee limit of $10,000 per event, and not to
exceed $25,000 annually. The Chairman will report any pre-approval
decisions to the Audit Committee at its next scheduled meeting.
Unless a type of service to be provided by the independent auditor
has received general pre-approval, it must be pre-approved
<Page>
by the Audit Committee. Any proposed services exceeding
pre-approved cost levels will require specific pre-approval by the
Audit Committee.
(e) (2) The Registrant's Audit Committee has approved 100% of the
services described in this Item 4 (b) through (d).
(f) Not applicable.
(g) The aggregate non-audit fees billed by Deloitte for services
rendered to the Registrant are shown above in the response to Item
4 (a), (b), (c) and (d) as "All Other Fees".
The aggregate non-audit fees billed by Deloitte for services
rendered to the Registrant's investment adviser, Lord, Abbett &
Co. LLC ("Lord Abbett"), for the fiscal years ended July 31, 2005
and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees {a} $ 165,650 $ 81,900
</Table>
- ----------
{a} Consist of fees for Independent Services Auditors' Report on
Controls Placed in Operation and Tests of Operating Effectiveness
related to Lord Abbett's Asset Management Services ("SAS 70
Report").
The aggregate non-audit fees billed by Deloitte for services rendered
to entities under the common control of Lord Abbett (i.e., Lord Abbett
Distributor LLC, the Registrant's principal underwriter) for the fiscal
years ended July 31, 2005 and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees {b} $ - 0 - $ 11,378
</Table>
{b} Fees for the fiscal year ended July 31, 2004 represent fees for
testing of Anti-Money Laundering Compliance.
(h) The Registrant's Audit Committee has considered the provision of
non-audit services that were rendered to the Registrant's
investment adviser, and any entity controlling, controlled by or
under common control with the investment adviser that provides
ongoing services to the Registrant, that were not pre-approved
pursuant to Rule 2-01 (c)(7)(ii) of Regulation S-X and has
determined that the provision of such services is compatible with
maintaining Deloitte's independence.
<Page>
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6: SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8: 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-2(c) under the
Investment Company Act of 1940) as of a date within 90 days
prior to the filing date of this report, the Chief Executive
Officer and Chief Financial Officer of the Registrant have
concluded that such disclosure controls and procedures are
reasonably designed and effective to ensure that material
information relating to the Registrant, including its
consolidated subsidiaries, is made known to them by others
within those entities.
(b) There were no significant changes in the Registrant's internal
control over financial reporting (as defined in Rule 30a-3(d)
under the Investment Company Act of 1940) that occurred during
the second fiscal quarter of the period covered by this report
that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over
financial reporting.
ITEM 12: EXHIBITS.
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(a)(1) Amendments to Code of Ethics - Not applicable.
(a)(2) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2) is attached hereto as a part
of EX-99.CERT.
(a)(3) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Section 906
of the Sarbanes-Oxley Act of 2002 is attached hereto as a part
of EX-99.906CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LORD ABBETT BLEND TRUST
/s/ Robert S. Dow
-----------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
--------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: September 23, 2005
<Page>
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
LORD ABBETT BLEND TRUST
/s/ Robert S. Dow
-----------------
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
--------------------
Joan A. Binstock
Chief Financial Officer and Vice President
Date: September 23, 2005