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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-05476
LORD ABBETT GLOBAL FUND, INC.
-----------------------------
(Exact name of Registrant as specified in charter)
90 Hudson Street, Jersey City, NJ 07302
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(Address of principal executive offices) (zip code)
Christina T. Simmons, Vice President & Assistant Secretary
90 Hudson Street, Jersey City, NJ 07302
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 201-6984
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Date of fiscal year end: 12/31
Date of reporting period: 12/31/05
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ITEM 1: REPORT TO SHAREHOLDERS.
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[LORD ABBETT LOGO]
2005
ANNUAL
REPORT
LORD ABBETT
GLOBAL EQUITY FUND
GLOBAL INCOME FUND
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005
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LORD ABBETT GLOBAL FUND
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005
Dear Shareholders: We are pleased to provide you with this overview of the Lord
Abbett Global Equity Fund's and Lord Abbett Global Income Fund's strategies and
performance for the year ended December 31, 2005. On this and the following
pages, we discuss the major factors that influenced performance.
Thank you for investing in Lord Abbett mutual funds. We value the trust that
you place in us and look forward to serving your investment needs in the years
to come.
BEST REGARDS,
/s/ Robert S. Dow
ROBERT S. DOW
CHAIRMAN
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Q: WHAT WERE THE OVERALL MARKET CONDITIONS FOR THE FISCAL YEAR ENDED DECEMBER
31, 2005?
A: Foreign equity markets, as measured by the MSCI EAFE(R) Index(1) in U.S.
dollars, rose 14.0 percent, outperforming the U.S. equity markets, as measured
by the S&P 500(R) Index,(2) which rose 4.9 percent for the one-year period ended
December 31, 2005. Overseas markets had a strong year, with positive returns
posted by the majority of developed market indexes. Japan and the United
Kingdom, which made up roughly half of the MSCI EAFE Index at year-end, gained
25.5 percent and 7.4 percent, respectively, when measured in U.S. dollar terms.
Global emerging markets also performed well. The MSCI Emerging Market Index(3)
rose 34.0 percent in U.S. dollar terms over the year, reflecting the willingness
of global investors to turn toward risky assets to look for growth
opportunities. This trend was also evident in the small-cap sector. Foreign
small-cap stocks, up 22.1 percent as measured by the S&P/Citigroup Extended
Market World ex-U.S. Index(4) in U.S dollars, outperformed foreign large-cap
stocks over the year.
While world economic growth has slowed from the torrid pace of 2003-2004, the
current expansion continues unabated and broadened out substantially over the
course of 2005. Strength in both developing countries and in North America
buoyed many European and Asian economies through exports, thus making up for
some of the slack demand seen in their domestic economies. This stimulus was
supported by low interest rates in many economies and supported strong corporate
profit and dividend growth, which in turn led to better equity market returns.
The key drivers of performance in global bond markets throughout the year
were interest rates and currencies. Early in the year, the long-standing but
divergent monetary policies of the developed nations made some nation's bonds
more
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attractive than others and, in turn, influenced the relative valuations of
currencies. Later in the year, central bank actions and/or statements and
increasing expectations for less divergent interest rates among the developed
nations affected valuations.
LORD ABBETT GLOBAL EQUITY FUND
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED DECEMBER 31, 2005?
A: The fund returned 8.2 percent, reflecting performance at the net asset value
(NAV) of Class A shares with all distributions reinvested, compared with its
benchmark, the MSCI World Index,(5) which returned 10.0 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 DECEMBER 31, 2005, ARE:
1 YEAR: 1.96 PERCENT, 5 YEARS: -1.45 PERCENT, AND 10 YEARS: 3.40 PERCENT. Class
A shares purchased with 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. Please see section "Your
Investment-Purchases" in the prospectus for more information on redemptions that
may be subject to a CDSC.
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: Overall for the year, the allocation of sector weights detracted from fund
performance relative to its benchmark, while stock selection was generally more
positive. The greatest detractor to performance, relative to its benchmark, was
stock selection in the consumer staples sector. Consumer staples companies
include those that produce or sell regularly consumed goods, such as food,
beverages, tobacco, prescription drugs, and household products. The fund's
investment in U.S.-based Kraft Foods Inc., a global provider of branded foods
and beverages, took away from performance.
Stock selection in the utilities sector also hurt fund performance, relative
to its benchmark, for the year. Enel, a large Italian electrical utility
company, underperformed as management and the Italian Government made it clear
they
2
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would not allow a foreign takeover of the company.
The greatest contributor to fund performance, relative to its benchmark,
during the year was stock selection in the consumer discretionary sector. This
sector includes stocks in the consumer durables, apparel, media, hotel, and
leisure industries. Yamada Denki Co. Ltd. and Don Quijote, two Japanese
specialty retailers, reported strong performance as they enjoyed the benefits of
very high market share, expanded margins, and increased buying opportunities.
In addition, stock selection in the energy sector boosted fund performance
relative to its benchmark. The fund benefited most from its holdings in Asian
refineries and fast-growing, smaller exploration and production companies.
Reliance Industries Ltd., a refinery based in India, aided fund performance as
its returns were boosted by higher pricing. Opti Canada Inc., a Canadian energy
exploration and production company, outperformed as it successfully reached
significant milestones in building Canada's fourth and next integrated oil sands
project. Tullow Oil PLC, a U.K. exploration and production company, posted
strong performance primarily due to strong oil and gas pricing environment.
THE FUND'S PORTFOLIO IS ACTIVELY MANAGED AND, THEREFORE, ITS HOLDINGS AND
WEIGHTINGS OF A PARTICULAR ISSUER OR PARTICULAR SECTOR AS A PERCENTAGE OF
PORTFOLIO ASSETS ARE SUBJECT TO CHANGE. SECTORS MAY INCLUDE MANY INDUSTRIES.
LORD ABBETT GLOBAL INCOME FUND
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED DECEMBER 31, 2005?
A: The fund returned -5.6 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,(6) which returned
- -4.5 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, AS
OF DECEMBER 31, 2005, ARE: 1 YEAR: -10.07 PERCENT, 5 YEARS: 5.17 PERCENT, AND 10
YEARS: 3.61 PERCENT. Class A shares purchased with 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. Please
see section "Your Investment-Purchases" in the prospectus for more information
on redemptions that may be subject to a CDSC.
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
3
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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: Detracting from performance, relative to its benchmark, was the fund's
underweight in investment-grade corporate bonds. The fund's overweight in
mortgage-backed securities (MBS) and commercial mortgage-backed securities
(CMBS) also hurt performance relative to the benchmark. Yields for high-quality,
highly liquid securities like MBS and CMBS ended the year higher (resulting in
lower prices), both on an absolute basis and relative to Treasuries.
Contributing to performance, relative to its benchmark, was the fund's
overweight in the U.S. dollar, which appreciated against its major competitors
over much of the year. Later in the year, however, on the expectation of a shift
in monetary policy in the major central banks, some U.S. dollar positions were
eliminated.
The fund's participation in emerging markets, particularly in the sovereign
debt of Russia, Brazil, and South Africa, added to performance, relative to its
benchmark, as expectations for credit upgrades in some emerging markets grew,
pushing bond prices in the sector higher. Over much of the year, the fund's
overweight in European bonds and underweight in U.S. bonds benefited performance
relative to the benchmark.
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, WHICH 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.
(1) The Morgan Stanley Capital International (MSCI) Europe, Australia, and Far
East (EAFE)(R) Index is an unmanaged capitalization index representing the
industry composition and a sampling of small, medium, and large capitalization
companies. It is a Morgan Stanley International Index that includes stocks
traded on 21 exchanges in Europe, Australasia, and the Far East.
(2) 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.
(3) The MSCI Emerging Market Index is an unmanaged index reflecting
approximately 60 percent of the market capitalization, by industry, in each of
26 emerging market countries.
(4) The S&P/Citigroup Global Equity Index System(SM) and the names of each of
the indexes and subindexes that it comprises (GEIS and such indexes and
subindexes, each
4
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an "Index" and collectively, the "Indexes"), are service marks of Citigroup. The
S&P/Citigroup Extended Market World (EMI) ex-U.S. Index is a subset of the
Global S&P/Citigroup Broad Market Index (BMI).
(5) The MSCI 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.
(6) 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.
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 funds' management and the portfolio holdings described in this
report are as of December 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 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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GLOBAL EQUITY FUND
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INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the Morgan Stanley Capital International (MSCI) World Index ("With
Gross Dividends") and the MSCI World Index ("With Net Dividends"), assuming
reinvestment of all dividends and distributions. "With Net Dividends" reflects a
reduction in dividends after taking into account withholding of taxes by certain
foreign countries represented in the MSCI World Index. The performance of the
other classes will be greater than or less than the performance shown in the
graph below due to different sales loads and expenses applicable to such
classes. The graph and performance table below do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND (CLASS A SHARES) MSCI(R) WORLD MSCI(R) WORLD
THE FUND (CLASS A SHARES) AT MAXIMUM INDEX ("WITH GROSS INDEX ("WITH NET
AT NET ASSET VALUE OFFERING PRICE(1) DIVIDENDS")(2) DIVIDENDS")(2)
12/31/1995 $ 10,000 $ 9,425 $ 10,000 $ 10,000
12/31/1996 $ 10,837 $ 10,214 $ 11,400 $ 11,348
12/31/1997 $ 11,703 $ 11,030 $ 13,250 $ 13,136
12/31/1998 $ 12,764 $ 12,030 $ 16,536 $ 16,334
12/31/1999 $ 14,343 $ 13,519 $ 20,727 $ 20,408
12/31/2000 $ 15,029 $ 14,165 $ 18,049 $ 17,718
12/31/2001 $ 11,602 $ 10,935 $ 15,067 $ 14,738
12/31/2002 $ 9,679 $ 9,122 $ 12,123 $ 11,806
12/31/2003 $ 12,232 $ 11,529 $ 16,216 $ 15,715
12/31/2004 $ 13,698 $ 12,911 $ 18,689 $ 18,029
12/31/2005 $ 14,823 $ 13,971 $ 20,561 $ 19,740
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED DECEMBER 31, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
Class A(3) 1.96% -1.45% 3.40% --
Class B(4) 3.52% -1.10% -- 3.21%
Class C(5) 7.61% -0.94% -- 3.23%
Class Y(6) 8.64% -- -- 17.39%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 5.75%.
(2) Performance for each unmanaged index does not reflect transaction costs,
management fees or sales charges. The performance of the indexes is not
necessarily representative of the Fund's performance.
(3) Total return, which is the percent change in net asset value, after
deduction of the maximum initial sales charge of 5.75% applicable to Class A
shares, with all distributions reinvested for the periods shown ending December
31, 2005, is calculated using the SEC-required uniform method to compute such
return.
(4) Class B shares were first offered on August 1, 1996. Performance reflects
the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of
the class.
(5) Class C Shares were first offered on July 15, 1996 and made available to
the public on August 1, 1996. The 1% CDSC for Class C shares normally applies
before the first anniversary of the purchase date. Performance began on August
1, 1996 and is at net asset value.
(6) Class Y shares were first offered on October 19, 2004. Performance is at
net asset value.
6
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GLOBAL INCOME FUND
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INVESTMENT COMPARISON
Below is a comparison of a $10,000 investment in Class A shares with the same
investment in the Lehman Brothers Global Aggregate Bond Index, assuming
reinvestment of all dividends and distributions. The performance of the other
classes will be greater than or less than the performance shown in the graph
below due to different sales loads and expenses applicable to such classes. The
graph and performance table below do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
[CHART]
<Table>
<Caption>
THE FUND (CLASS A SHARES)
THE FUND (CLASS A SHARES) AT MAXIMUM LEHMAN BROTHERS GLOBAL
AT NET ASSET VALUE OFFERING PRICE(1) AGGREGATE BOND INDEX(2)
12/31/1995 $ 10,000 $ 9,525 $ 10,000
12/31/1996 $ 10,612 $ 10,108 $ 10,491
12/31/1997 $ 11,061 $ 10,535 $ 10,888
12/31/1998 $ 12,253 $ 11,671 $ 12,382
12/31/1999 $ 11,093 $ 10,566 $ 11,741
12/31/2000 $ 11,088 $ 10,562 $ 12,114
12/31/2001 $ 11,296 $ 10,759 $ 12,304
12/31/2002 $ 12,979 $ 12,362 $ 14,336
12/31/2003 $ 14,639 $ 13,944 $ 16,126
12/31/2004 $ 15,869 $ 15,115 $ 17,616
12/31/2005 $ 14,978 $ 14,267 $ 16,823
</Table>
AVERAGE ANNUAL TOTAL RETURN AT MAXIMUM APPLICABLE
SALES CHARGE FOR THE PERIODS ENDED DECEMBER 31, 2005
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS LIFE OF CLASS
Class A(3) -10.07% 5.17% 3.61% --
Class B(4) -9.89% 5.32% -- 3.68%
Class C(5) -6.20% 5.57% -- 3.87%
Class P(6) -5.60% 5.97% -- 3.39%
Class Y(7) -5.28% -- -- 0.17%
</Table>
(1) Reflects the deduction of the maximum initial sales charge of 4.75%.
(2) Performance for the unmanaged index does not reflect transaction costs,
management fees or sales charges. The performance of the index is not
necessarily representative of the Fund's performance.
(3) Total return, which is the percent change in net asset value, after
deduction of the maximum initial sales charge of 4.75% applicable to Class A
shares, with all dividends and distributions reinvested for the periods shown
ending December 31, 2005, is calculated using the SEC-required uniform method to
compute such return.
(4) Class B shares were first offered on August 1, 1996. Performance reflects
the deduction of a CDSC of 4% for 1 year, 1% for 5 years and 0% for the life of
the class.
(5) Class C shares were first offered on July 15, 1996. The 1% CDSC for Class C
shares normally applies before the first anniversary of the purchase date.
Performance is at net asset value.
(6) Class P shares were first offered on March 4, 1999. Performance is at net
asset value.
(7) Class Y shares were first offered on October 19, 2004. Performance is at
net asset value.
7
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EXPENSE EXAMPLES
As a shareholder of each 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 each Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period (July 1, 2005 through December 31,
2005).
ACTUAL EXPENSES
For each class of a Fund, the first line of the table on the following pages
provides information about actual account values and actual expenses. You may
use the information in this line, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled "Expenses Paid During the Period 7/1/05 - 12/31/05" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
For each class of a Fund, the second line of the table on the following pages
provides information about hypothetical account values and hypothetical expenses
based on each Funds' actual expense ratio and an assumed rate of return of 5%
per year before expenses, which is not each Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in each Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
8
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GLOBAL EQUITY FUND
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Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING THE
VALUE VALUE PERIOD+
----- ----- -------------
7/1/05 -
7/1/05 12/31/05 12/31/05
------ -------- --------
CLASS A
Actual $ 1,000.00 $ 1,105.60 $ 8.65
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,016.99 $ 8.29
CLASS B
Actual $ 1,000.00 $ 1,102.70 $ 12.08
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,013.71 $ 11.57
CLASS C
Actual $ 1,000.00 $ 1,103.50 $ 12.09
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,013.71 $ 11.57
CLASS Y
Actual $ 1,000.00 $ 1,108.10 $ 6.80
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.75 $ 6.51
</Table>
+ For each class of the Fund, expenses are equal to the annualized expense
ratio for such class (1.63% for Class A, 2.28% for Classes B and C, and
1.28% for Class Y) multiplied by the average account value over the period,
multiplied by 184/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
DECEMBER 31, 2005
<Table>
<Caption>
SECTOR* %**
Consumer Discretionary 7.99%
Consumer Staples 12.48%
Energy 7.40%
Financials 20.21%
Healthcare 16.79%
Industrials 13.04%
Information Technology 9.29%
Materials 5.34%
Short-Term Investment 0.33%
Telecommunication Services 4.91%
Utilities 2.22%
Total 100.00%
</Table>
* A sector may comprise several industries.
** Represents percent of total investments.
9
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GLOBAL INCOME FUND
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Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges. Therefore, the second line of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT ACCOUNT DURING THE
VALUE VALUE PERIOD+
----- ----- -------------
7/1/05 -
7/1/05 12/31/05 12/31/05
------ -------- --------
CLASS A
Actual $ 1,000.00 $ 977.00 $ 6.48
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,018.68 $ 6.61
CLASS B
Actual $ 1,000.00 $ 972.40 $ 9.69
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.38 $ 9.91
CLASS C
Actual $ 1,000.00 $ 973.80 $ 9.70
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,015.38 $ 9.91
CLASS P
Actual $ 1,000.00 $ 1,025.20 $ 7.45
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,017.85 $ 7.43
CLASS Y
Actual $ 1,000.00 $ 977.40 $ 4.73
Hypothetical (5% Return Before Expenses) $ 1,000.00 $ 1,020.42 $ 4.84
</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, 1.46%
for Class P and 0.95% for Class Y) multiplied by the average account value
over the period, multiplied by 184/365 (to reflect one-half year period).
- --------------------------------------------------------------------------------
PORTFOLIO HOLDINGS PRESENTED BY SECTOR
DECEMBER 31, 2005
<Table>
<Caption>
SECTOR* %**
Agency 3.86%
Asset Backed 1.85%
Banking 6.10%
Basic Industry 0.35%
Capital Goods 0.07%
Consumer Non-Cyclical 0.37%
Energy 0.29%
Finance & Investment 8.62%
Foreign Sovereign 28.71%
Government Guaranteed 10.45%
Local-Authority 0.31%
Media 0.39%
Mortgage Backed 23.31%
Services Cyclical 0.18%
Services Non-Cyclical 0.26%
Short-Term Investment 4.90%
Sovereign 7.75%
Supranational 0.88%
Technology & Electronics 0.04%
Telecommunications 0.65%
Utility 0.66%
Total 100.00%
</Table>
* A sector may comprise several industries.
** Represents percent of total investments.
10
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SCHEDULE OF INVESTMENTS
GLOBAL EQUITY FUND DECEMBER 31, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ----------------------------------------------------------------------------
COMMON STOCK 98.61%
AUSTRALIA 0.88%
Downer Edi Ltd. 61,722 $ 325
Qantas Airways Ltd. 146,286 433
---------------
TOTAL 758
---------------
AUSTRIA 0.48%
Telekom Austria AG~ 18,577 417
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BELGIUM 0.71%
InBev NV/SA 14,109 614
---------------
BERMUDA 0.35%
XL Capital Ltd. Class A 4,500 303
---------------
CANADA 2.48%
Alcan Inc. 15,300 627
Barrick Gold Corp. 7,906 220
Nexen Inc. 7,600 362
OPTI Canada Inc.* 11,900 391
Potash Corp. of
Saskatchewan, Inc. 2,024 162
Talisman Energy Inc. 7,200 382
---------------
TOTAL 2,144
---------------
CHINA 0.61%
China Petroleum &
Chemical Corp. 1,055,000 524
---------------
FRANCE 4.10%
AXA 12,963 419
BNP Paribas S.A. 9,160 741
France Telecom S.A. 7,811 194
PSA Peugeot Citroen S.A. 8,104 467
Sanofi-Aventis 7,325 642
VINCI S.A. 3,897 335
Vivendi Universal S.A. 23,601 739
---------------
TOTAL 3,537
---------------
GERMANY 4.01%
adidas-Salomon AG 2,721 $ 515
Allianz AG Registered
Shares 3,391 514
Deutsche Bank AG
Registered Shares 4,214 408
Fresenius Medical
Care AG 6,015 634
Hannover
Ruckversicherung 11,629 412
IVG Immobilien AG 11,011 231
ProSieben Sat.1
Media AG 21,433 415
Siemens AG 3,893 334
---------------
TOTAL 3,463
---------------
GREECE 0.94%
National Bank of
Greece S. A. 14,130 602
Piraeus Bank S.A. 9,700 208
---------------
TOTAL 810
---------------
HONG KONG 0.78%
China Mobile
(Hong Kong) Ltd. 60,500 286
China Unicom Ltd. 478,000 389
---------------
TOTAL 675
---------------
HUNGARY 0.59%
Richter Gedeon Rt. 2,824 507
---------------
INDIA 0.51%
Reliance Industries Ltd. 22,323 441
---------------
IRELAND 1.44%
DEPFA BANK plc 35,224 521
Irish Life &
Permanent plc 35,200 719
---------------
TOTAL 1,240
---------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL EQUITY FUND DECEMBER 31, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ----------------------------------------------------------------------------
ITALY 0.48%
Enel S.p.A. 36,371 $ 286
Saipem S.p.A. 7,920 130
---------------
TOTAL 416
---------------
JAPAN 12.31%
Aiful Corp. 8,150 681
Astellas Pharma Inc. 10,100 394
Don Quijote Co., Ltd. 4,000 334
East Japan Railway Co. 80 550
Fanuc Ltd. 6,000 509
Jupiter Telecommunications
Co., Ltd.* 718 573
Mizuho Financial
Group, Inc. 97 770
Murata Manufacturing
Co., Ltd. 7,200 461
Nitto Denko Corp. 7,006 546
Nomura Holdings,
Inc. ADR 5,600 108
Nomura Securities
Co., Ltd. (The) 25,300 485
NSK Ltd. 62,000 424
ORIX Corp. 1,274 325
Shionogi & Co., Ltd. 15,900 224
Sony Corp. 5,500 225
Sumitomo Corp. 60,000 776
Sumitomo Electric
Industries, Ltd. 36,012 547
Sumitomo Realty &
Development Co., Ltd. 24,726 538
Taiyo Yuden Co., Ltd. 18,000 248
Takefuji Corp. 9,280 630
Thk Co., Ltd. 11,300 295
Toyota Motor Corp. 10,300 534
Yamada Denki Co., Ltd. 3,597 450
---------------
TOTAL 10,627
---------------
LUXEMBOURG 0.52%
Millicom Int'l
Cellular S.A.* 16,600 $ 446
---------------
NETHERLANDS 1.03%
ING Groep N.V. CVA 18,023 625
SBM Offshore N.V. 3,318 268
---------------
TOTAL 893
---------------
NETHERLANDS ANTILLES 0.84%
Schlumberger Ltd. 7,423 721
---------------
NORWAY 0.17%
Petroleum Geo-Services
ASA* 4,850 150
---------------
RUSSIA 0.73%
Mobile TeleSystems
OTSC ADR 12,000 420
OAO Novatek GDR+ 9,500 207
---------------
TOTAL 627
---------------
SINGAPORE 0.48%
DBS Group Holdings Ltd. 42,000 417
---------------
SOUTH KOREA 2.15%
Hana Financial Inc. 8,514 389
LG Chem Ltd.*~ 9,250 517
LG Electronics Inc.*~ 4,600 401
Samsung Electronics
Co., Ltd.~ 855 550
---------------
TOTAL 1,857
---------------
SWITZERLAND 3.85%
Nestle S.A. Registered
Shares 2,262 676
Novartis AG ADR 16,325 857
Novartis AG Registered
Shares 10,887 572
Roche Holding Ltd. AG 3,288 494
UBS AG Registered Shares 7,586 722
---------------
TOTAL 3,321
---------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL EQUITY FUND DECEMBER 31, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ----------------------------------------------------------------------------
TAIWAN 0.90%
AU Optronics Corp. ADR 22,818 $ 343
MediaTek, Inc. 37,186 438
---------------
TOTAL 781
---------------
THAILAND 0.25%
Thai Oil Co., Ltd. 139,700 216
---------------
TURKEY 0.53%
Koc Holding AS 24,300 114
Turkiye Vakiflar
Bankasi TAO* 65,000 344
---------------
TOTAL 458
---------------
UNITED ARAB EMIRATES 0.39%
Investcom LLC GDR* 24,300 342
---------------
UNITED KINGDOM 9.01%
BAE Systems plc 121,124 796
British American
Tobacco plc 26,408 591
CSR plc* 22,388 360
Diageo plc ADR 11,037 643
Enterprise Inns plc 13,450 217
GlaxoSmithKline
plc ADR 12,154 614
National Grid plc 34,469 337
Prudential plc 56,013 530
Punch Taverns plc 17,303 253
Royal Bank of Scotland
Group (The) plc 25,183 760
Smith & Nephew plc 33,877 312
Smiths Group plc 23,334 420
Tesco plc 91,843 524
Tullow Oil plc 71,507 332
Vodafone Group plc 188,449 407
Wm Morrison
Supermarkets plc 79,810 266
WPP Group plc 38,474 416
---------------
TOTAL 7,778
---------------
UNITED STATES 47.09%
Abbott Laboratories 15,700 $ 619
Aflac Inc. 7,530 349
American Express Co. 2,603 134
American Int'l
Group, Inc. 12,899 880
AT&T Inc 19,955 489
Automatic Data
Processing, Inc. 14,598 670
Baker Hughes, Inc. 8,388 510
Bank of America Corp. 10,364 478
Bank of New York
Co., Inc. (The) 9,970 317
Baxter Int'l., Inc. 17,283 651
BellSouth Corp. 9,900 268
Bristol-Myers Squibb Co. 18,704 430
Campbell Soup Co. 18,300 545
Caterpillar Inc. 3,958 229
Chevron Corp. 8,871 504
CIGNA Corp. 3,086 345
Citigroup, Inc. 10,444 507
Clorox Co. (The) 5,303 302
Coca-Cola Co. (The) 7,000 282
Colgate-Palmolive Co. 12,767 700
Comcast Corp. Special
Class A* 18,125 466
ConocoPhillips 3,858 224
Corning, Inc.* 27,954 550
CVS Corp. 13,452 355
Deere & Co. 3,419 233
Dell, Inc.* 7,519 225
EMC Corp.* 8,485 116
Emerson Electric Co. 9,410 703
Exxon Mobil Corp. 17,642 991
Fluor Corp. 3,288 254
General Dynamics Corp. 4,903 559
General Electric Co. 41,256 1,446
Genzyme Corp.* 7,478 529
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL EQUITY FUND DECEMBER 31, 2005
<Table>
<Caption>
U.S. $
VALUE
INVESTMENTS SHARES (000)
- ----------------------------------------------------------------------------
Gilead Sciences, Inc.* 6,378 $ 336
H.J. Heinz Co. 6,075 205
Hartford Financial
Services Group, Inc. (The) 6,651 571
Hewlett-Packard Co. 16,390 469
Honeywell Int'l., Inc. 6,558 244
ImClone Systems, Inc.* 10,600 363
Intel Corp. 14,788 369
International Business
Machines Corp. 2,700 222
iShares MSCI Japan
Index Fund 32,700 442
Johnson & Johnson 11,760 707
JPMorgan Chase & Co. 8,523 338
Kimberly-Clark Corp. 4,627 276
Kraft Foods, Inc. Class A 24,030 676
Kroger Co. (The)* 33,263 628
Lockheed Martin Corp. 3,400 216
Marsh & McLennan
Cos., Inc. 7,200 229
Medco Health
Solutions, Inc.* 3,900 218
MedImmune, Inc.* 9,447 331
Medtronic, Inc. 14,100 812
Microsoft Corp. 36,970 967
Monsanto Co. 10,775 835
Motorola, Inc. 36,056 814
Newmont Mining Corp. 14,636 782
NIKE, Inc. Class B 5,034 437
Oracle Corp.* 12,726 155
Parker Hannifin Corp. 6,940 458
PepsiCo, Inc. 15,139 894
Pfizer, Inc. 36,249 845
PG&E Corp. 13,413 498
Praxair, Inc. 8,099 429
Procter & Gamble
Co. (The) 25,590 1,481
Progress Energy, Inc. 7,351 323
QUALCOMM, Inc. 15,896 $ 685
Raytheon Co. 9,833 395
Southern Co. (The) 13,095 452
Sprint Nextel Corp. 9,640 225
St. Jude Medical, Inc.* 8,300 417
SunTrust Banks, Inc. 1,500 109
Texas Instruments Inc. 9,161 294
Transocean Inc.* 5,900 411
Union Pacific Corp. 4,144 334
United Parcel Service,
Inc. Class B 2,810 211
UnitedHealth Group Inc. 10,149 631
Verizon
Communications, Inc. 10,412 314
Wachovia Corp. 5,785 306
Walgreen Co. 4,144 183
Wal-Mart Stores, Inc. 17,502 819
Walt Disney Co. (The) 15,962 383
WellPoint, Inc.* 5,737 458
Wells Fargo & Co. 3,182 200
Wyeth 20,628 950
Zimmer Holdings, Inc.* 6,678 450
---------------
TOTAL 40,657
---------------
TOTAL COMMON STOCKS
(cost $76,915,970) 85,140
===============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
GLOBAL EQUITY FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL U.S. $
AMOUNT VALUE
INVESTMENTS (000) (000)
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENT 0.32%
REPURCHASE AGREEMENT 0.32%
Repurchase Agreement
dated 12/30/2005,
3.60% due 1/3/2006
with State Street
Bank & Trust Co.
collateralized by
$285,000 of Federal
Home Loan Mortgage
Corp. at 5.25% due
10/19/2015;
value: $285,000;
proceeds: $279,453
(cost $279,342) 279 $ 279
===============
TOTAL INVESTMENTS IN
SECURITIES 98.93%
(cost $77,195,312) 85,419
===============
CASH, FOREIGN CASH AND
OTHER ASSETS IN
EXCESS OF LIABILITIES 1.07% 921
---------------
NET ASSETS 100.00% $ 86,340
===============
</Table>
* Non-income producing security.
+ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration normally to qualified institutional buyers.
~ Fair Valued Security- See Note 2a.
ADR American Depository Receipt.
GDR Global Depository Receipt.
SEE NOTES TO FINANCIAL STATEMENTS.
15
<Page>
SCHEDULE OF INVESTMENTS
GLOBAL INCOME FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ---------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 109.21%
FOREIGN NOTES & BONDS 57.74%
ARGENTINA 0.07%
Republic of Argentina 3.00%# 4/30/2013 USD 55 $ 44,512
------------------
AUSTRALIA 0.20%
Australian Government(a) 6.25% 4/15/2015 AUD 166 131,035
------------------
BRAZIL 0.40%
Republic of Brazil 11.00% 8/17/2040 USD 200 258,050
------------------
BULGARIA 0.19%
Republic of Bulgaria+ 8.25% 1/15/2015 USD 100 121,000
------------------
CANADA 1.11%
Government of Canada(a) 5.25% 6/1/2012 CAD 200 184,887
Government of Canada(a) 5.50% 6/1/2010 CAD 577 528,103
------------------
TOTAL 712,990
------------------
DENMARK 0.57%
Kingdom of Denmark(a) 4.00% 8/15/2008 DKK 1,800 293,349
Kingdom of Denmark(a) 4.00% 11/15/2010 DKK 460 76,082
------------------
TOTAL 369,431
------------------
EGYPT 0.52%
Republic of Egypt(a) Zero Coupon 6/13/2006 EGP 2,000 335,362
------------------
FINLAND 0.99%
Finnish Government(a) 4.25% 7/4/2015 EUR 500 640,386
------------------
FRANCE 8.26%
Republic of France(a) 3.00% 10/25/2015 EUR 460 530,350
Republic of France(a) 3.50% 7/12/2009 EUR 2,400 2,890,009
Republic of France(a) 4.50% 7/12/2006 EUR 735 878,604
Republic of France(a) 4.75% 4/25/2035 EUR 452 644,784
Republic of France(a) 5.00% 4/25/2012 EUR 291 380,719
------------------
TOTAL 5,324,466
------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ---------------------------------------------------------------------------------------------------------------------------
GERMANY 16.14%
Bundesrepublik Deutschland(a) 3.25% 4/9/2010 EUR 550 $ 656,825
Bundesrepublik Deutschland(a) 3.75% 1/4/2015 EUR 530 650,198
Bundesrepublik Deutschland(a) 4.25% 2/15/2008 EUR 1,711 2,082,784
Bundesrepublik Deutschland(a) 4.75% 7/4/2028 EUR 39 54,373
Bundesrepublik Deutschland(a) 4.75% 7/4/2034 EUR 1,004 1,432,837
Bundesrepublik Deutschland(a) 5.25% 1/4/2011 EUR 969 1,261,190
Bundesrepublik Deutschland(a) 5.375% 1/4/2010 EUR 250 321,895
Kreditanstalt fur Wiederaufbau(a) 4.25% 7/4/2014 EUR 2,300 2,907,247
Kreditanstalt fur Wiederaufbau(a) 5.625% 11/27/2007 EUR 835 1,037,234
------------------
TOTAL 10,404,583
------------------
JAPAN 10.51%
Japan-17 (30 Year Issue)(a) 2.40% 12/20/2034 JPY 37,000 319,788
Japan-58 (20 Year Issue)(a) 1.90% 9/20/2022 JPY 36,000 309,094
Japan-82 (20 Year Issue)(a) 2.10% 9/20/2025 JPY 37,000 319,753
Japan-199 (10 Year Issue)(a) 2.20% 12/20/2007 JPY 38,800 341,292
Japan-230 (10 Year Issue)(a) 1.60% 3/21/2011 JPY 196,950 1,730,247
Japan-238 (2 Year Issue)(a) 0.30% 11/15/2007 JPY 76,000 645,068
Japan-264 (10 Year Issue)(a) 1.50% 9/20/2014 JPY 169,000 1,448,733
Japan Finance Corp. Municipal
Enterprises(a) 1.55% 2/21/2012 JPY 191,000 1,664,741
------------------
TOTAL 6,778,716
------------------
LUXEMBOURG 0.23%
Telecom Italia Capital S.A. 6.375% 11/15/2033 USD 145 147,152
------------------
MEXICO 0.84%
Mexican Udibonos Strip(a)(b) 4.50% 12/18/2014 MXN 5 185,095
United Mexican States(a) 10.50% 7/14/2011 MXN 3,300 355,450
------------------
TOTAL 540,545
------------------
NETHERLANDS 2.66%
Netherlands Government(a) 3.00% 7/15/2006 EUR 1,448 1,717,657
------------------
OTHER 5.34%
European Investment Bank, MTN(a) 2.125% 9/20/2007 JPY 74,000 648,001
European Investment Bank, MTN(a) 3.00% 9/20/2006 JPY 186,000 1,609,525
European Investment Bank, MTN(a) 6.25% 12/7/2008 GBP 657 1,186,841
------------------
TOTAL 3,444,367
------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ---------------------------------------------------------------------------------------------------------------------------
POLAND 0.33%
Poland Government Bond(a) 6.00% 5/24/2009 PLN 675 $ 215,266
------------------
ROMANIA 0.54%
Romania Government(a) 10.625% 6/27/2008 EUR 250 347,203
------------------
RUSSIA 0.11%
Russian Federation+ 5.00%# 3/31/2030 USD 65 73,450
------------------
SOUTH AFRICA 0.13%
Republic of South Africa 6.50% 6/2/2014 USD 75 81,281
------------------
SPAIN 4.11%
Spanish Government(a) 4.00% 1/31/2010 EUR 1,475 1,813,252
Spanish Government(a) 4.40% 1/31/2015 EUR 650 836,794
------------------
TOTAL 2,650,046
------------------
SWEDEN 0.71%
Swedish Government(a) 4.50% 8/12/2015 SEK 3,300 455,965
------------------
UNITED KINGDOM 3.78%
United Kingdom Treasury(a) 4.00% 3/7/2009 GBP 316 540,507
United Kingdom Treasury(a) 4.25% 3/7/2036 GBP 224 403,907
United Kingdom Treasury(a) 5.00% 9/7/2014 GBP 450 824,512
United Kingdom Treasury(a) 6.00% 12/7/2028 GBP 300 668,334
------------------
TOTAL 2,437,260
------------------
TOTAL FOREIGN NOTES & BONDS (cost $36,904,203) 37,230,723
==================
UNITED STATES NOTES & BONDS 51.47%
UNITED STATES 51.47%
Amerada Hess Corp. 7.875% 10/1/2029 USD 50 60,723
AT&T Broadband Corp. 9.455% 11/15/2022 USD 115 151,029
Banc of America Commercial Mortgage
Inc. Series 2004-2 Class A1 2.764% 11/10/2038 USD 302 290,986
Banc of America Commercial Mortgage
Inc. Series 2005-5 Class A4 5.115%# 10/10/2045 USD 460 458,202
Capital Auto Receivables Asset Trust
Series 2003-3 Class A3 3.58% 10/16/2006 USD 73 72,996
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ---------------------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance
Trust Series 2003-A5 Class A5 2.50% 4/7/2008 USD 500 $ 497,422
Citigroup/Deutsche Bank Commercial
Mortgage Trust Series 2005-CD1 Class A4 5.225%# 7/15/2044 USD 100 101,105
Commercial Mortgage Pass-Through
Certificates Series 2005 C6 Class A5A 5.116%# 6/10/2044 USD 540 538,626
Commonwealth Edison Co. 6.95% 7/15/2018 USD 67 71,506
Corn Products Int'l., Inc. 8.45% 8/15/2009 USD 65 71,694
Corning Inc. 5.90% 3/15/2014 USD 30 30,337
Credit Suisse First Boston Mortgage
Inc. Series 1998-C2 Class A1 5.96% 11/11/2030 USD 39 38,682
Delhaize America, Inc. 9.00% 4/15/2031 USD 26 30,696
Dun & Bradstreet Corp. (The) 6.625% 3/15/2006 USD 237 237,788
Energy Transfer Partners, L.P. 5.95% 2/1/2015 USD 75 74,866
Federal Home Loan Mortgage Corp.(a) 4.75% 1/15/2013 EUR 151 194,832
Federal Home Loan Mortgage
Corp. B15593 5.50% 7/1/2019 USD 133 134,027
Federal Home Loan Mortgage
Corp. C63990 7.00% 2/1/2032 USD 116 120,786
Federal National Mortgage Assoc. 4.519%# 12/1/2034 USD 371 367,032
Federal National Mortgage Assoc. 4.542%# 7/1/2035 USD 379 375,515
Federal National Mortgage Assoc. 4.74% 4/1/2015 USD 250 244,535
Federal National Mortgage Assoc. 5.16% 4/1/2015 USD 380 381,494
Federal National Mortgage Assoc.(c) 5.50% TBA USD 10,600 10,497,307
Federal National Mortgage Assoc. 5.50% 9/1/2034 USD 595 589,729
Federal National Mortgage Assoc. 5.50% 11/1/2034 USD 298 295,869
Federal National Mortgage Assoc. 5.50% 7/1/2035 USD 626 620,378
Federal National Mortgage Assoc. 5.50% 10/1/2035 USD 825 817,352
Federal National Mortgage Assoc. 5.50% 11/1/2035 USD 505 500,318
Federal National Mortgage Assoc.(c) 6.00% TBA USD 615 620,766
Ford Credit Auto Owner Trust
Series 2005-C Class A3 4.30% 8/15/2009 USD 300 297,140
Ford Motor Credit Corp. 6.875% 2/1/2006 USD 1,045 1,042,773
General Electric Capital Corp. 4.125% 3/4/2008 USD 100 98,526
General Electric Co. 5.00% 2/1/2013 USD 115 115,110
General Mills, Inc. 5.125% 2/15/2007 USD 100 99,941
Goldman Sachs Group, Inc. (The) 6.125% 2/15/2033 USD 49 51,600
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ---------------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding
Corp. Series 2005-GG5 Class A5 5.224%# 4/10/2037 USD 910 $ 914,600
Harrah's Operating Co., Inc. 8.00% 2/1/2011 USD 60 66,378
Household Affinity Credit Card
Series 2003-2 Class A 2.18% 2/15/2008 USD 800 798,132
Household Finance Corp 7.00% 5/15/2012 USD 150 164,293
Houston TX Independent School District(d) 5.00% 2/15/2032 USD 220 227,850
Int'l. Flavors & Fragrances Inc. 6.45% 5/15/2006 USD 75 75,365
JPMorgan Chase Commercial
Securities Series 2002-C1 Class A2 4.914% 7/12/2037 USD 600 597,769
KB Home 5.875% 1/15/2015 USD 70 66,366
Kerr-McGee Corp. 6.95% 7/1/2024 USD 45 47,956
KFW Int'l. Finance Inc.(a) 6.00% 12/7/2028 GBP 162 348,375
LB-UBS Commercial Mortgage
Trust Series 2004-C1 Class A1 2.964% 1/15/2029 USD 1,888 1,817,040
LB-UBS Commercial Mortgage
Trust Series 2004-C7 Class A2 3.992% 10/15/2029 USD 1,300 1,253,499
Lubrizol Corp. (The) 5.50% 10/1/2014 USD 55 55,241
Mediacom Broadband LLC+ 8.50% 10/15/2015 USD 50 46,563
Merrill Lynch Mortgage Trust
Series 2005-MKB2 Class A1 4.446% 9/12/2042 USD 449 444,299
Monongahela Power Co. 7.36% 1/15/2010 USD 225 237,687
Morgan Stanley Capital I
Series 2003-IQ6 Class A3 4.74% 12/15/2041 USD 75 73,464
Morgan Stanley Capital I
Series 2003-IQ6 Class A4 4.97% 12/15/2041 USD 300 295,571
Morgan Stanley Capital I
Series 2004-HQ3 Class A4 4.80% 1/13/2041 USD 950 928,609
Pacific Energy Partners, L.P.+ 6.25% 9/15/2015 USD 30 29,700
Phelps Dodge Corp. 9.50% 6/1/2031 USD 15 20,381
PSEG Power LLC 5.50% 12/1/2015 USD 50 49,730
Rockwood Specialties Group, Inc.(a) 7.625% 11/15/2014 EUR 150 184,244
SBC Communications, Inc. 6.15% 9/15/2034 USD 25 25,196
Scholastic Corp. 5.75% 1/15/2007 USD 75 75,294
Sprint Capital Corp. 8.375% 3/15/2012 USD 100 116,039
Sprint Capital Corp. 8.75% 3/15/2032 USD 32 42,595
Time Warner, Inc. 6.125% 4/15/2006 USD 50 50,154
Time Warner, Inc. 7.625% 4/15/2031 USD 105 117,280
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<Page>
SCHEDULE OF INVESTMENTS (CONTINUED)
GLOBAL INCOME FUND DECEMBER 31, 2005
<Table>
<Caption>
PRINCIPAL
AMOUNT
IN LOCAL
INTEREST MATURITY CURRENCY US $
INVESTMENTS RATE DATE (000) VALUE
- ---------------------------------------------------------------------------------------------------------------------------
TXU Corp. 5.55% 11/15/2014 USD 65 $ 62,064
U.S. Treasury Bond 5.25% 2/15/2029 USD 690 753,152
U.S. Treasury Note 4.25% 8/15/2013 USD 1,488 1,475,156
U.S. Treasury Note Inflation
Index Bond(b) 1.875% 7/15/2015 USD 252 247,823
UnitedHealth Group, Inc. 3.375% 8/15/2007 USD 119 116,347
Ventas Realty L.P./Ventas Capital Corp. 6.625% 10/15/2014 USD 75 77,062
Verizon Global Funding Corp. 7.25% 12/1/2010 USD 185 200,957
Wachovia Bank Commercial Mortgage
Series 2005-C17 Class A1 4.43% 3/15/2042 USD 904 894,897
------------------
TOTAL UNITED STATES NOTES & BONDS (cost $33,186,803) 33,188,816
==================
TOTAL LONG-TERM INVESTMENTS (cost $70,091,006) 70,419,539
==================
SHORT-TERM INVESTMENT 5.63%
REPURCHASE AGREEMENT 5.63%
Repurchase Agreement dated 12/30/2005,
3.60% due 1/3/2006 with State
Street Bank & Trust Co. collateralized by
$3,745,000 of Federal Home Loan Bank at
4.06% due 3/23/2009; value:
$3,702,869; proceeds: $3,629,637
(cost $3,628,186) USD 3,628 $ 3,628,186
==================
TOTAL INVESTMENTS IN SECURITIES 114.84% (cost $73,719,192) 74,047,725
==================
LIABILITIES IN EXCESS OF FOREIGN CASH AND OTHER ASSETS (14.84%) (9,566,485)
------------------
NET ASSETS 100.00% $ 64,481,240
==================
</Table>
+ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration normally to qualified institutional buyers.
# Variable rate security. The interest rate represents the rate at December
31, 2005.
(a) Investment in non-U.S. dollar denominated securities (50.28% of total
investments). The remaining securities (49.72% of total investments) are
invested in U.S. dollar denominated securities.
(b) Security with principal amount adjusted for inflation.
(c) Security purchased on a forward delivery or when-issued basis.
(d) Insured by Financial Security Assurance, Inc. municipal bond insurance
company.
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
EGP Egyptian Pound
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.
21
<Page>
SCHEDULE OF INVESTMENTS (CONCLUDED)
GLOBAL INCOME FUND DECEMBER 31, 2005
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AS OF DECEMBER 31, 2005:
- --------------------------------------------------------------------------------
<Table>
<Caption>
FORWARD U.S. $ COST ON U.S. $
FOREIGN CURRENCY EXPIRATION FOREIGN ORIGINATION CURRENT UNREALIZED UNREALIZED
PURCHASE CONTRACTS DATE CURRENCY DATE VALUE APPRECIATION DEPRECIATION
- ------------------- ------------ ---------- --------------- --------------- ------------- ------------
EUR 1/6/2006 2,000,000 $ 2,358,820 $ 2,368,709 $ 9,889 $ -
EUR 1/30/2006 1,000,000 1,181,900 1,185,915 4,015 -
TRY 6/15/2006 455,488 325,000 324,283 - 717
-------------- -------------- ------------ ------------
Total Forward Foreign Currency
Purchase Contracts $ 3,865,720 $ 3,878,907 $ 13,904 $ 717
============== ============== ============ ============
<Caption>
FORWARD U.S. $ COST U.S. $
FOREIGN CURRENCY EXPIRATION FOREIGN ON ORIGINATION CURRENT UNREALIZED UNREALIZED
SALE CONTRACTS DATE CURRENCY DATE VALUE APPRECIATION DEPRECIATION
- ------------------- ------------ ---------- --------------- --------------- ------------- ------------
EUR 1/6/2006 2,000,000 $ 2,393,280 $ 2,368,709 $ 24,571 $ -
EUR 1/30/2006 1,000,000 1,213,030 1,185,915 27,115 -
GBP 4/18/2006 200,000 350,120 344,169 5,951 -
MXN 3/15/2006 2,002,226 186,171 186,783 - 612
-------------- -------------- ------------ ------------
Total Forward Foreign Currency
Sale Contracts $ 4,142,601 $ 4,085,576 $ 57,637 $ 612
============== ============== ============ ============
</Table>
ABBREVIATIONS:
EUR Euro
GBP British Pound
MXN Mexican Peso
TRY New Turkish Lira
SEE NOTES TO FINANCIAL STATEMENTS.
22
<Page>
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2005
<Table>
<Caption>
GLOBAL GLOBAL
EQUITY FUND INCOME FUND
ASSETS:
Investment in securities, at cost $ 77,195,312 $ 73,719,192
- ------------------------------------------------------------------------------------------------
Investment in securities, at value $ 85,418,877 $ 74,047,725
Cash 32,173 -
Foreign cash, at value (cost $442,405 and $896,297, respectively) 445,812 904,817
Receivables:
Interest and dividends 121,532 841,416
Investment securities sold 1,039,933 -
Capital shares sold 684,965 147,327
From advisor 47,954 16,970
Appreciation on forward foreign currency exchange contracts - 71,541
Prepaid expenses and other assets 17,165 26,634
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS 87,808,411 76,056,430
================================================================================================
LIABILITIES:
Payables:
Investment securities purchased 982,530 11,057,670
Capital shares reacquired 203,487 116,018
Management fees 53,439 27,321
12b-1 distribution fees 36,987 33,807
Fund administration 2,865 2,194
Directors' fees 31,212 56,009
Depreciation on forward foreign currency exchange contracts - 1,329
Distributions payable - 186,694
Accrued expenses and other liabilities 157,632 94,148
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,468,152 11,575,190
================================================================================================
NET ASSETS $ 86,340,259 $ 64,481,240
================================================================================================
COMPOSITION OF NET ASSETS:
Paid-in capital $ 76,945,613 $ 71,060,748
Undistributed (distributions in excess of) net investment income (101,412) 1,043,776
Accumulated net realized gain (loss) on investments and foreign
currency related transactions 1,270,268 (8,016,321)
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 8,225,790 393,037
- ------------------------------------------------------------------------------------------------
NET ASSETS $ 86,340,259 $ 64,481,240
================================================================================================
NET ASSETS BY CLASS:
Class A Shares $ 67,807,017 $ 52,274,948
Class B Shares $ 9,064,123 $ 4,636,448
Class C Shares $ 8,990,669 $ 7,003,844
Class P Shares - $ 1,947
Class Y Shares $ 478,450 $ 564,053
OUTSTANDING SHARES BY CLASS:
Class A Shares (430 million, and 415 million shares of common
stock authorized respectively, $.001 par value) 5,542,315 7,692,054
Class B Shares (15 million, and 30 million shares of common
stock authorized respectively, $.001 par value) 778,125 681,441
Class C Shares (20 million, and 20 million shares of common
stock authorized respectively, $.001 par value) 770,633 1,029,136
Class P Shares (20 million and 20 million shares of common
stock authorized respectively, $.001 par value) - 287.57
Class Y Shares (15 million and 15 million shares of common
stock authorized respectively, $.001 par value) 39,061 82,957
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(NET ASSETS DIVIDED BY OUTSTANDING SHARES):
Class A Shares-Net asset value $ 12.23 $ 6.80
Class A Shares-Maximum offering price
(Net asset value plus sales charge of
5.75% and 4.75%, respectively) $ 12.98 $ 7.14
Class B Shares-Net asset value $ 11.65 $ 6.80
Class C Shares-Net asset value $ 11.67 $ 6.81
Class P Shares-Net asset value - $ 6.77
Class Y Shares-Net asset value $ 12.25 $ 6.80
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<Page>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
<Table>
<Caption>
GLOBAL GLOBAL
EQUITY FUND INCOME FUND
INVESTMENT INCOME:
Dividends $ 1,642,454 $ -
Interest and other 37,964 2,492,765
Foreign withholding tax (94,601) (547)
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 1,585,817 2,492,218
- ------------------------------------------------------------------------------------------------
EXPENSES:
Management fee 585,413 340,861
12b-1 distribution plan-Class A 218,214 191,588
12b-1 distribution plan-Class B 81,655 52,564
12b-1 distribution plan-Class C 79,925 76,492
12b-1 distribution plan-Class P - 10
Shareholder servicing 368,666 149,114
Professional 49,301 52,192
Reports to shareholders 72,842 54,696
Fund administration 31,222 27,269
Custody 91,293 36,960
Directors' fees 4,178 3,804
Registration 29,895 30,892
Other 2,506 2,879
- ------------------------------------------------------------------------------------------------
Gross expenses 1,615,110 1,019,321
Expense reductions (See Note 7) (1,338) (3,606)
Expenses assumed by advisor (See Note 3) (261,063) (47,516)
- ------------------------------------------------------------------------------------------------
NET EXPENSES 1,352,709 968,199
- ------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 233,108 1,524,019
- ------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments and foreign currency
related transactions (net of foreign capital gains tax) 5,215,536 1,554,416
Net change in unrealized appreciation (depreciation) on
investments and translation of assets and liabilities
denominated in foreign currencies 935,475 (7,129,623)
================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) 6,151,011 (5,575,207)
================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 6,384,119 $ (4,051,188)
================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2005
<Table>
<Caption>
GLOBAL GLOBAL
INCREASE (DECREASE) IN NET ASSETS EQUITY FUND INCOME FUND
OPERATIONS:
Net investment income $ 233,108 $ 1,524,019
Net realized gain (loss) on investment and foreign currency
related transactions 5,215,536 1,554,416
Net change in unrealized appreciation (depreciation) on
investments and translation of assets and liabilities
denominated in foreign currencies 935,475 (7,129,623)
- ------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 6,384,119 (4,051,188)
================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (262,216) (3,279,578)
Class B - (277,141)
Class C - (406,012)
Class P - (111)
Class Y (3,110) (35,889)
Net realized gain
Class A (2,295,955) -
Class B (325,164) -
Class C (321,840) -
Class Y (14,889) -
- ------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,223,174) (3,998,731)
================================================================================================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 19,449,838 20,656,835
Reinvestment of distributions 3,118,193 3,306,702
Cost of shares reacquired (14,739,365) (19,358,718)
- ------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS 7,828,666 4,604,819
================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS 10,989,611 (3,445,100)
================================================================================================
NET ASSETS:
Beginning of year 75,350,648 67,926,340
- ------------------------------------------------------------------------------------------------
END OF YEAR $ 86,340,259 $ 64,481,240
================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME $ (101,412) $ 1,043,776
================================================================================================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<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.
26
<Page>
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2005
<Table>
<Caption>
GLOBAL
INCREASE IN CASH INCOME FUND
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations $ (4,051,188)
- -----------------------------------------------------------------------------------------------
ADJUSTMENTS TO RECONCILE NET DECREASE IN NET ASSETS FROM OPERATIONS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Purchases of long-term portfolio investments (147,973,926)
Proceeds from disposition of long-term portfolio
investments and principal paydowns 136,638,383
Sales of short-term portfolio investments, net 37,919
Proceeds received from foreign currency transactions 260,750
Decrease in interest receivable 127,625
Decrease in receivable for investments sold 917,427
Increase in receivable from advisor (16,970)
Increase in prepaid expenses and other assets (22,970)
Increase in payable for investments purchased 8,280,593
Decrease in management fee payable (1,037)
Increase in 12b-1 distribution fee payable 845
Decrease in fund administration fee payable (83)
Increase in directors' fee payable 2,107
Increase in accrued expenses and other liabilities 15,868
Net premium amortization on investments 324,746
Unrealized (appreciation) depreciation on investments and translation
of assets and liabilities denominated in foreign currencies 7,129,623
Net realized (gain) loss on investments and foreign currency
related transactions (1,554,416)
- -----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 115,296
===============================================================================================
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES*:
Proceeds from shares sold 20,710,245
Payment on shares redeemed (19,339,950)
Cash dividends paid (689,349)
Purchase of mortgage dollar roll transactions (57,783,563)
Proceeds from sales of mortgage dollar roll transactions 57,859,963
- -----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 757,346
- -----------------------------------------------------------------------------------------------
NET INCREASE IN CASH 872,642
- -----------------------------------------------------------------------------------------------
CASH AT BEGINNING OF YEAR 32,175
CASH AT END OF YEAR $ 904,817
===============================================================================================
</Table>
* Non cash financing activities not included herein consist of reinvestment of
distributions of $3,306,702.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<Page>
FINANCIAL HIGHLIGHTS
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.75 $ 10.51 $ 8.33 $ 10.02 $ 12.98
========= ========= ========= ========= =========
Investment operations
Net investment income (loss)(b) .05 (.01) .04 .03 (.02)
Net realized and unrealized gain (loss) .91 1.27 2.16 (1.69) (2.94)
--------- --------- --------- --------- ---------
Total from investment operations .96 1.26 2.20 (1.66) (2.96)
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.05) (.02) (.02) (.03) -
Net realized gain (.43) - - - -
--------- --------- --------- --------- ---------
Total distributions (.48) (.02) (.02) (.03) -
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 12.23 $ 11.75 $ 10.51 $ 8.33 $ 10.02
========= ========= ========= ========= =========
Total Return(c) 8.21% 11.99% 26.38% (16.58)% (22.80)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 1.60% 2.05% 1.95% 2.29% 1.99%
Expenses, excluding expense
reductions and expenses assumed 1.94% 2.05% 1.95% 2.29% 2.01%
Net investment income (loss) .43% (.11)% .45% .30% (.19)%
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 67,807 $ 59,915 $ 52,828 $ 37,555 $ 47,016
Portfolio turnover rate 97.65% 170.93% 56.26% 43.52% 97.27%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.24 $ 10.10 $ 8.04 $ 9.70 $ 12.65
========= ========= ========= ========= =========
Investment operations
Net investment loss(b) (.02) (.08) (.02) (.03) (.09)
Net realized and unrealized gain (loss) .86 1.22 2.08 (1.63) (2.86)
--------- --------- --------- --------- ---------
Total from investment operations .84 1.14 2.06 (1.66) (2.95)
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net realized gain (.43) - - - -
--------- --------- --------- --------- ---------
Total distributions (.43) - - - -
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 11.65 $ 11.24 $ 10.10 $ 8.04 $ 9.70
========= ========= ========= ========= =========
Total Return(c) 7.52% 11.29% 25.62% (17.11)% (23.32)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 2.25% 2.69% 2.61% 2.92% 2.62%
Expenses, excluding expense
reductions and expenses assumed 2.58% 2.69% 2.61% 2.92% 2.64%
Net investment loss (.22)% (.75)% (.21)% (.33)% (.82)%
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 9,064 $ 7,818 $ 6,033 $ 4,208 $ 4,568
Portfolio turnover rate 97.65% 170.93% 56.26% 43.52% 97.27%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 11.25 $ 10.11 $ 8.06 $ 9.73 $ 12.69
========= ========= ========= ========= =========
Investment operations
Net investment loss(b) (.02) (.08) (.02) (.03) (.08)
Net realized and unrealized gain (loss) .87 1.22 2.07 (1.64) (2.88)
--------- --------- --------- --------- ---------
Total from investment operations .85 1.14 2.05 (1.67) (2.96)
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net realized gain (.43) - - - -
--------- --------- --------- --------- ---------
Total distributions (.43) - - - -
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 11.67 $ 11.25 $ 10.11 $ 8.06 $ 9.73
========= ========= ========= ========= =========
Total Return(c) 7.61% 11.28% 25.59% (17.16)% (23.33)%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 2.25% 2.69% 2.61% 2.92% 2.62%
Expenses, excluding expense
reductions and expenses assumed 2.58% 2.69% 2.61% 2.92% 2.64%
Net investment loss (.22)% (.75)% (.29)% (.33)% (.78)%
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 8,991 $ 7,158 $ 4,111 $ 2,406 $ 2,262
Portfolio turnover rate 97.65% 170.93% 56.26% 43.52% 97.27%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
GLOBAL EQUITY FUND
<Table>
<Caption>
10/19/2004(a)
YEAR ENDED TO
12/31/2005 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) .09 -(e)
Net realized and unrealized gain .92 1.22
------------- -------------
Total from investment operations 1.01 1.22
------------- -------------
Distributions to shareholders from:
Net investment income (.09) -
Net realized gain (.43) -
------------- -------------
Total distributions (.52) -
------------- -------------
NET ASSET VALUE, END OF PERIOD $ 12.25 $ 11.76
============= =============
Total Return(c) 8.64% 11.57%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense reductions and expenses assumed 1.25% .33%(d)
Expenses, excluding expense reductions and expenses assumed 1.58% .33%(d)
Net investment income .77% .02%(d)
<Caption>
10/19/2004(a)
YEAR ENDED TO
SUPPLEMENTAL DATA: 12/31/2005 12/31/2004
- -------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 478 $ 460
Portfolio turnover rate 97.65% 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.
31
<Page>
FINANCIAL HIGHLIGHTS
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-------------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS A SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.66 $ 7.43 $ 6.91 $ 6.35 $ 6.65
========= ========= ========= ========= =========
Investment operations
Net investment income(b) .17 .17(e) .18 .20 .25(e)
Net realized and unrealized gain (loss) (.59) .43 .68 .72 (.12)
--------- --------- --------- --------- ---------
Total from investment operations (.42) .60 .86 .92 .13
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.44) (.37) (.34) (.25) (.40)
Paid-in capital - - - (.11) (.03)
--------- --------- --------- --------- ---------
Total distributions (.44) (.37) (.34) (.36) (.43)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 6.80 $ 7.66 $ 7.43 $ 6.91 $ 6.35
========= ========= ========= ========= =========
Total Return(c) (5.61)% 8.40% 12.79% 14.90% 1.87%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 1.30% 1.40% 1.35% 1.44% 1.25%
Expenses, excluding expense
reductions and expenses assumed 1.38% 1.40% 1.35% 1.44% 1.29%
Net investment income 2.36% 2.33% 2.43% 3.09% 3.85%
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 52,275 $ 55,821 $ 56,386 $ 55,419 $ 52,449
Portfolio turnover rate 194.12% 260.11% 239.18% 216.16% 393.95%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS B SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.67
========= ========= ========= ========= =========
Investment operations
Net investment income(b) .12 .12(e) .13 .16 .21(e)
Net realized and unrealized gain (loss) (.60) .43 .70 .71 (.12)
--------- --------- --------- --------- ---------
Total from investment operations (.48) .55 .83 .87 .09
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.39) (.33) (.30) (.22) (.36)
Paid-in capital - - - (.10) (.03)
--------- --------- --------- --------- ---------
Total distributions (.39) (.33) (.30) (.32) (.39)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 6.80 $ 7.67 $ 7.45 $ 6.92 $ 6.37
========= ========= ========= ========= =========
Total Return(c) (6.34)% 7.58% 12.22% 14.04% 1.28%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 1.95% 2.04% 1.99% 2.06% 1.88%
Expenses, excluding expense
reductions and expenses assumed 2.03% 2.04% 1.99% 2.06% 1.92%
Net investment income 1.71% 1.69% 1.79% 2.42% 3.20%
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 4,636 $ 5,291 $ 3,719 $ 2,842 $ 1,519
Portfolio turnover rate 194.12% 260.11% 239.18% 216.16% 393.95%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS C SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.67 $ 7.45 $ 6.92 $ 6.37 $ 6.66
========= ========= ========= ========= =========
Investment operations
Net investment income(b) .12 .12(e) .13 .17 .21(e)
Net realized and unrealized gain (loss) (.59) .43 .70 .71 (.11)
--------- --------- --------- --------- ---------
Total from investment operations (.47) .55 .83 .88 .10
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.39) (.33) (.30) (.23) (.36)
Paid-in capital - - - (.10) (.03)
--------- --------- --------- --------- ---------
Total distributions (.39) (.33) (.30) (.33) (.39)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 6.81 $ 7.67 $ 7.45 $ 6.92 $ 6.37
========= ========= ========= ========= =========
Total Return(c) (6.20)% 7.59% 12.29% 14.19% 1.34%
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 1.95% 2.04% 1.99% 1.94% 1.84%
Expenses, excluding expense
reductions and expenses assumed 2.02% 2.04% 1.99% 1.94% 1.88%
Net investment income 1.70% 1.69% 1.79% 2.56% 3.23%
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 7,004 $ 6,235 $ 5,212 $ 2,989 $ 2,152
Portfolio turnover rate 194.12% 260.11% 239.18% 216.16% 393.95%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<Page>
FINANCIAL HIGHLIGHTS (CONTINUED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
2005 2004 2003 2002 2001
PER SHARE OPERATING PERFORMANCE (CLASS P SHARES)
NET ASSET VALUE, BEGINNING OF YEAR $ 7.59 $ 7.39 $ 6.87 $ 6.32 $ 6.62
========= ========= ========= ========= =========
Investment operations
Net investment income(b) .16 .16(e) .17 .20 .24(e)
Net realized and unrealized gain (loss) (.58) .36 .69 .71 (.11)
--------- --------- --------- --------- ---------
Total from investment operations (.42) .52 .86 .91 .13
--------- --------- --------- --------- ---------
Distributions to shareholders from:
Net investment income (.40) (.32) (.34) (.25) (.40)
Paid-in capital - - - (.11) (.03)
--------- --------- --------- --------- ---------
Total distributions (.40) (.32) (.34) (.36) (.43)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 6.77 $ 7.59 $ 7.39 $ 6.87 $ 6.32
========= ========= ========= ========= =========
Total Return(c) (5.60)% 7.34% 12.78% 14.82% 1.84%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense
reductions and expenses assumed 1.38% 1.49% 1.44% 1.51% 1.33%(d)
Expenses, excluding expense
reductions and expenses assumed 1.39% 1.49% 1.44% 1.51% 1.37%(d)
Net investment income 2.20% 2.24% 2.34% 2.96% 3.69%(d)
<Caption>
YEAR ENDED 12/31
-----------------------------------------------------------------
SUPPLEMENTAL DATA: 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) $ 2 $ 2 $ 1,904 $ 1,082 $ 526
Portfolio turnover rate 194.12% 260.11% 239.18% 216.16% 393.95%
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<Page>
FINANCIAL HIGHLIGHTS (CONCLUDED)
GLOBAL INCOME FUND
<Table>
<Caption>
10/19/2004(a)
YEAR ENDED TO
12/31/2005 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) .20 .04(e)
Net realized and unrealized gain (loss) (.60) .37
------------- -------------
Total from investment operations (.40) .41
------------- -------------
Distributions to shareholders from:
Net investment income (.46) (.13)
------------- -------------
Total distributions (.46) (.13)
------------- -------------
NET ASSET VALUE, END OF PERIOD $ 6.80 $ 7.66
============= =============
Total Return(c) (5.28)% 5.79%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses, including expense reductions and expenses assumed .95% .21%(d)
Expenses, excluding expense reductions and expenses assumed 1.03% .21%(d)
Net investment income 2.71% .57%(d)
<Caption>
10/19/2004(a)
YEAR ENDED TO
SUPPLEMENTAL DATA: 12/31/2005 12/31/2004
- -------------------------------------------------------------------------------------------------
Net assets, end of period (000) $ 564 $ 577
Portfolio turnover rate 194.12% 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.
36
<Page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Lord Abbett Global Fund, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "Act") as an open-end management investment company,
incorporated under Maryland law on February 23, 1988. The Company consists of
the following two portfolios ("Funds") and their respective classes: Equity
Series ("Global Equity Fund"), 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 occurring after the close of trading on non-U.S. exchanges
may result in adjustments to the valuation of foreign securities to more
accurately reflect their fair value as of the close of regular trading on
the New York Stock Exchange. The Fund may rely on an independent fair
valuation service in adjusting the valuations of foreign securities.
Unlisted equity securities are valued at last quoted sale price or, if no
sale price is available, at the mean between the most recently quoted bid
and asked prices. Fixed income securities are valued at the mean between
the bid and asked prices on the basis of prices supplied by independent
pricing services, which reflect broker/dealer supplied valuations and
electronic data processing techniques. Exchange-traded options and futures
contracts are valued at the last 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
37
<Page>
NOTES TO FINANCIAL STATEMENTS (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 (net of foreign
capital gains tax) 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 each Fund's 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.
38
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Generally, open futures contracts are marked to market for Federal income
tax purposes at fiscal year-end. As of December 31, 2005, there were no
open futures contracts.
(i) WHEN-ISSUED OR FORWARD TRANSACTIONS-Each Fund may purchase portfolio
securities on a when-issued or forward basis. When-issued, forward
transactions or to-be-announced ("TBA") transactions involve a commitment
by the Fund to purchase securities, with payment and delivery
("settlement") to take place in the future, in order to secure what is
considered to be an advantageous price or yield at the time of entering
into the transaction. During the period between purchase and settlement,
the value of the securities will fluctuate and assets consisting of cash
and/or marketable securities (normally short-term U.S. Government or U.S.
Government sponsored enterprises securities) marked to market daily in an
amount sufficient to make payment at settlement will be segregated at a
Fund's custodian in order to pay for the commitment. At the time the Fund
makes the commitment to purchase a security on a when-issued basis, it will
record the transaction and reflect the liability for the purchase and the
value of the security in determining its net asset value. Each Fund,
generally, has the ability to close out a purchase obligation on or before
the settlement date rather than take delivery of the security. Under no
circumstances will settlement for such securities take place more than 120
days after the purchase date.
(j) TBA SALE COMMITMENTS-Global Income Fund may enter into TBA sale commitments
to hedge its positions or to sell mortgage-backed securities it owns under
delayed delivery arrangements. Proceeds of TBA sale commitments are not
received until the contractual settlement date. During the time a TBA sale
commitment is outstanding equivalent deliverable securities, or an
offsetting TBA purchase commitment deliverable on or before the sale
commitment date, are held as "cover" for the transaction. Unsettled TBA
sale commitments are valued at the current market value of the underlying
securities, according to the procedures described under "Investment
Valuation" above. The contract is adjusted to market value daily and the
change in market value is recorded by the Fund as an unrealized gain or
loss. If the TBA sale commitment is closed through the acquisition of an
offsetting purchase (sale) commitment, the Fund realizes a gain or loss
from the sale of the securities based upon the unit price established at
the date the commitment was entered into.
(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) 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).
39
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
(m) STRUCTURED SECURITIES-The Funds may invest in structured securities.
Structured securities are a type of derivative security whose value is
determined by reference to changes in the value of specific underlying
securities, currencies, interest rates, commodities, indices, credit
default swaps, or other indicators (the "Reference"), or to relative
changes in two or more References. The interest rate or principal amount
payable upon maturity or redemption may be increased (decreased) depending
upon changes in the applicable Reference or certain specified events.
Structured securities may be positively or negatively indexed with the
result that the appreciation of the Reference may produce an increase
(decrease) in the interest rate or the value of the security at maturity.
As of December 31, 2005, there were no structured securities held in the
Funds.
(n) REDEMPTION FEES-Until March 31, 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 are included as
Paid-in Capital on the Statement of Asset and Liabilities. During the year
ended December 31, 2005, the Fund collected $274 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 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>
Effective January 1, 2006, the annual management fee rate for the Global Equity
Fund was changed from a flat fee rate of .75% to the following annual rates:
..75% of the first $1 billion of average daily net assets;
..70% of the next $1 billion of average daily net assets;
..65% of average daily net assets over $2 billion.
Effective January 1, 2006, the annual management fee rate for the Global Income
Fund was changed from a flat fee rate of .50% to the following annual rates:
..50% of the first $1 billion of average daily net assets;
..45% of average daily net assets over $1 billion.
40
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the fiscal year ended December 31, 2005, Lord Abbett contractually agreed to
reimburse each Fund to the extent necessary so that each class' total annual
operating expenses did not exceed the following annual rates(1):
<Table>
<Caption>
GLOBAL EQUITY FUND % OF AVERAGE
CLASS DAILY NET ASSETS
- --------------------------------------
A 1.60%
B 2.25%
C 2.25%
Y 1.25%
<Caption>
GLOBAL INCOME FUND % OF AVERAGE
CLASS DAILY NET ASSETS
- --------------------------------------
A 1.30%
B 1.95%
C 1.95%
P 1.40%
Y .95%
</Table>
(1) A similar agreement is in place through December 31, 2006.
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(2)
- -----------------------------------------------------------------
Service .25% .25% .25% .20%
Distribution .10%(1) .75% .75% .25%
</Table>
(1) The amount of CDSC collected by each Fund for the year ended December 31,
2005 was as follows:
<Table>
<Caption>
CDSC
COLLECTED
- -----------------------------------
Global Equity Fund $ 336
Global Income Fund $ 82
</Table>
(2) Global Income Fund only.
Class Y does not have a distribution plan.
COMMISSIONS
Distributor received the following commissions on sales of shares of the Funds,
after concessions were paid to authorized dealers, for the year ended December
31, 2005:
<Table>
<Caption>
DISTRIBUTOR DEALERS'
COMMISSIONS CONCESSIONS
- ---------------------------------------------------------------------
Global Equity Fund $ 51,135 $ 271,619
Global Income Fund 39,358 191,160
</Table>
41
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Distributor received the following amount of CDSCs for the year ended December
31, 2005.
<Table>
<Caption>
CLASS A CLASS C
- -----------------------------------------------------
Global Equity Fund $ 54 $ 227
Global Income Fund 229 1,635
</Table>
One Director and certain of the Company'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 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 years ended December 31, 2005
and 2004 are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------
12/31/2005 12/31/2004 12/31/2005 12/31/2004
- ----------------------------------------------------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 1,804,916 $ 92,395 $ 3,998,731 $ 3,243,877
Net capital gains 1,418,258 - - -
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions paid $ 3,223,174 $ 92,395 $ 3,998,731 $ 3,243,877
============================================================================================================================
</Table>
As of December 31, 2005, the components of accumulated earnings (losses) on a
tax-basis are as follows:
<Table>
<Caption>
GLOBAL EQUITY FUND GLOBAL INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income - net $ 1,071,774 $ 1,170,714
Undistributed long-term capital gains 568,165 -
- ----------------------------------------------------------------------------------------------------------------------------
Total undistributed earnings $ 1,639,939 $ 1,170,714
Capital loss carryforwards* - (7,207,128)
Temporary differences (48,401) (281,275)
Unrealized gains (losses) - net 7,803,108 (261,819)
- ----------------------------------------------------------------------------------------------------------------------------
Total accumulated earnings - net $ 9,394,646 $ (6,579,508)
============================================================================================================================
</Table>
* As of December 31, 2005, the capital loss carryforwards, along with the
related expiration dates are as follows:
<Table>
<Caption>
2007 2008 2010 TOTAL
- ----------------------------------------------------------------------------------------------------------------------------
Global Income Fund $ 1,473,226 $ 2,677,712 $ 3,056,190 $ 7,207,128
</Table>
Certain losses incurred after October 31 ("Post-October Losses") within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Global Equity Fund and the Global Income Fund incurred and
will elect to defer net currency losses of $17,189 and $225,226 of net capital
losses respectively during fiscal 2005.
42
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of December 31, 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 $ 77,617,994 $ 74,303,119
- ----------------------------------------------------------------------------------------------------------------------------
Gross unrealized gain 9,429,305 1,189,331
Gross unrealized loss (1,628,422) (1,444,725)
- ----------------------------------------------------------------------------------------------------------------------------
Net unrealized security gain (losses) $ 7,800,883 $ (255,394)
============================================================================================================================
</Table>
The difference between book-basis and tax-basis unrealized gains (losses) is
attributable primarily to wash sales and other temporary tax adjustments.
Permanent items identified during the year ended December 31, 2005 have been
reclassified among the components of net assets based on their tax-basis
treatment as follows:
<Table>
<Caption>
UNDISTRIBUTED
(DISTRIBUTIONS
IN EXCESS OF) ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN (LOSS) CAPITAL
- ----------------------------------------------------------------------------------------------------------------------------
Global Equity Fund $ (40,679) $ 40,679 $ -
Global Income Fund 1,467,266 (1,068,997) (398,269)
</Table>
The permanent differences are primarily attributable to the tax treatment of
amortization, foreign currency transactions, certain foreign securities, and the
expiration of capital loss carrryforwards.
5. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended December 31, 2005 were 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 $ - $ 80,385,406 $ - $ 74,263,882
Global Income Fund 97,884,650 50,084,446 89,565,604 45,498,990
</Table>
* Includes U.S. Government sponsored enterprises securities.
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 paid to outside Directors 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 have 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.
43
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. EXPENSE REDUCTIONS
The Company has entered into arrangements with its transfer agent and custodian
whereby credits realized as a result of uninvested cash balances are used to
reduce a portion of each Fund's expenses.
8. LINE OF CREDIT
The Funds, along with certain other funds managed by Lord Abbett, have available
a $250,000,000 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. Effective
December 9, 2005, the amount available to the funds under the Facility was
increased from $200,000,000 to $250,000,000. 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 .08%. At December 31, 2005, there were
no loans outstanding pursuant to this Facility nor was the Facility utilized at
any time during the year ended December 31, 2005.
9. CUSTODIAN AND ACCOUNTING AGENT
State Street Bank & Trust Company ("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.
44
<Page>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
11. SUMMARY OF CAPITAL TRANSACTIONS
Transactions in shares of capital stock are as follows:
GLOBAL EQUITY FUND
<Table>
<Caption>
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
- ----------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Shares sold 1,126,968 $ 13,352,546 1,076,592 $ 11,492,396
Reinvestment of distributions 203,807 2,486,402 8,498 88,463
Shares reacquired (887,399) (10,473,236) (1,010,748) (10,777,785)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 443,376 $ 5,365,712 74,342 $ 803,074
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 225,272 $ 2,541,231 243,992 $ 2,497,616
Reinvestment of distributions 26,439 306,950 - -
Shares reacquired (169,332) (1,904,868) (145,640) (1,479,850)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 82,379 $ 943,313 98,352 $ 1,017,766
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 310,034 $ 3,494,424 325,101 $ 3,320,284
Reinvestment of distributions 26,384 306,842 - -
Shares reacquired (201,960) (2,284,033) (95,402) (973,280)
- ----------------------------------------------------------------------------------------------------------------------------
Increase 134,458 $ 1,517,233 229,699 $ 2,347,004
- ----------------------------------------------------------------------------------------------------------------------------
<Caption>
PERIOD ENDED
DECEMBER 31, 2004*
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 5,109 $ 61,637 39,098 $ 414,362
Reinvestment of distributions 1,474 17,999 - -
Shares reacquired (6,620) (77,228) - -
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) (37) $ 2,408 39,098 $ 414,362
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
* For the period October 19, 2004 (commencement of offering of class shares)
to December 31, 2004.
45
<Page>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
GLOBAL INCOME FUND
<Table>
<Caption>
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Shares sold 1,798,824 $ 13,067,535 1,076,914 $ 7,962,694
Reinvestment of distributions 387,751 2,752,131 305,978 2,261,192
Shares reacquired (1,784,881) (12,878,565) (1,679,359) (12,333,405)
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) 401,694 $ 2,941,101 (296,467) $ (2,109,519)
- ------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 357,061 $ 2,629,268 342,255 $ 2,538,197
Reinvestment of distributions 30,118 213,332 19,544 144,926
Shares reacquired (395,519) (2,877,917) (171,329) (1,260,647)
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) (8,340) $ (35,317) 190,470 $ 1,422,476
- ------------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 668,771 $ 4,931,340 278,191 $ 2,064,447
Reinvestment of distributions 43,129 305,446 24,797 183,832
Shares reacquired (495,781) (3,591,039) (189,877) (1,412,365)
- ------------------------------------------------------------------------------------------------------------------------------
Increase 216,119 $ 1,645,747 113,111 $ 835,914
- ------------------------------------------------------------------------------------------------------------------------------
CLASS P SHARES
Shares sold 29 $ 212 37,132 $ 273,672
Reinvestment of distributions -(a) 3 -(a) 3
Shares reacquired (35) (247) (294,610) (2,109,470)
- ------------------------------------------------------------------------------------------------------------------------------
Decrease (6) $ (32) (257,478) $ (1,835,795)
- ------------------------------------------------------------------------------------------------------------------------------
<Caption>
PERIOD ENDED
DECEMBER 31, 2004**
- ------------------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Shares sold 4,118 $ 28,480 74,088 $ 551,282
Reinvestment of distributions 5,036 35,790 1,126 8,559
Shares reacquired (1,571) (10,950) 160 1,188
- ------------------------------------------------------------------------------------------------------------------------------
Increase 7,583 $ 53,320 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.
46
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
LORD ABBETT GLOBAL FUND, INC. - EQUITY SERIES AND INCOME SERIES:
We have audited the accompanying statement of assets and liabilities, including
the schedules of investments, of Lord Abbett Global Fund, Inc. - Equity Series
and Income Series (collectively the "Funds"), as of December 31, 2005, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, the
statement of cash flows of Income Series for the year then ended, and the
financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Funds
are not required to have, nor were we engaged to perform, an audit of their
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 Funds' internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2005 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Lord
Abbett Global Fund, Inc. - Equity Series and Income Series as of December 31,
2005, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, the cash
flows of Income Series for the year 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
February 27, 2006
47
<Page>
BASIC INFORMATION ABOUT MANAGEMENT
The Board of Directors (the "Board") is responsible for the management of the
business and affairs of the Company in accordance with the laws of the State of
Maryland. The Board appoints officers who are responsible for the day-to-day
operations of the Company and who execute policies authorized by the Board. The
Board also approves an investment adviser to the Company and continues to
monitor the cost and quality of the services provided by the investment adviser,
and annually considers whether to renew the contract with the adviser.
Generally, each Director holds office until his/her successor is elected and
qualified or until his/her earlier resignation or removal, as provided in the
Company's organizational documents.
Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, is
the Fund's investment adviser.
INTERESTED DIRECTOR
The following Director is the Managing Partner of Lord Abbett and is an
"interested person" as defined in the Act. Mr. Dow is also an officer, director,
or trustee of each of the fourteen Lord Abbett-sponsored funds, which consist of
54 portfolios or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH COMPANY DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Director since 1995; Chairman Managing Partner and Chief N/A
Lord, Abbett & Co. LLC since 1996 Executive Officer of Lord
90 Hudson Street Abbett since 1996.
Jersey City, NJ 07302
(1945)
</Table>
----------
INDEPENDENT DIRECTORS
The following independent or outside Directors are also directors or trustees of
each of the fourteen Lord Abbett-sponsored funds, which consist of 54 portfolios
or series.
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH COMPANY DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------------
E. THAYER BIGELOW Director since 1994 Managing General Partner, Currently serves as director
Lord, Abbett & Co. LLC Bigelow Media, LLC (since of Adelphia Communications,
c/o Legal Dept. 2000); Senior Adviser, Time Inc., Crane Co., and Huttig
90 Hudson Street Warner Inc. (1998 - 2000); Building Products Inc.
Jersey City, NJ 07302 Acting Chief Executive Officer
(1941) of Courtroom Television
Network (1997 - 1998);
President and Chief Executive
Officer of Time Warner Cable
Programming, Inc. (1991 -
1997).
WILLIAM H.T. BUSH Director since 1998 Co-founder and Chairman of the Currently serves as director
Lord, Abbett & Co. LLC Board of the financial of WellPoint, Inc. (since
c/o Legal Dept. advisory firm of 2002), and Engineered Support
90 Hudson Street Bush-O'Donnell & Company Systems, Inc. (since 2000).
Jersey City, NJ 07302 (since 1986).
(1938)
</Table>
48
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
<Table>
<Caption>
CURRENT POSITION
NAME, ADDRESS AND LENGTH OF SERVICE PRINCIPAL OCCUPATION OTHER
YEAR OF BIRTH WITH COMPANY DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------------
ROBERT B. CALHOUN, JR. Director since 1998 Managing Director of Monitor Currently serves as director
Lord, Abbett & Co. LLC Clipper Partners (since 1997) of Avondale, Inc. and
c/o Legal Dept. and President of Clipper Asset Interstate Bakeries Corp.
90 Hudson Street Management Corp. (since 1991),
Jersey City, NJ 07302 both private equity investment
(1942) funds.
JULIE A. HILL Director since 2004 Owner and CEO of the Hillsdale Currently serves as director
Lord, Abbett & Co. LLC Companies, a business of WellPoint, Inc.; Resources
c/o Legal Dept. consulting firm (since 1998); Connection Inc.; and Holcim
90 Hudson Street Founder, President and Owner (US) Inc. (a subsidiary of
Jersey City, NJ 07302 of the Hiram-Hill and Holcim Ltd.).
(1946) Hillsdale Development
Companies (1998 - 2000).
FRANKLIN W. HOBBS Director since 2000 Former Chief Executive Officer Currently serves as director
Lord, Abbett & Co. LLC of Houlihan Lokey Howard & of Adolph Coors Company.
c/o Legal Dept. Zukin, an investment bank
90 Hudson Street (January 2002 - April 2003);
Jersey City, NJ 07302 Chairman of Warburg Dillon
(1947) Read (1999 - 2001); Global
Head of Corporate Finance of
SBC Warburg Dillon Read (1997
- 1999); Chief Executive
Officer of Dillon, Read & Co.
(1994 - 1997).
C. ALAN MACDONALD Director since 1998 Retired - General Business and Currently serves as director
Lord, Abbett & Co. LLC Governance Consulting (since of H.J. Baker (since 2003).
c/o Legal Dept. 1992); formerly President and
90 Hudson Street CEO of Nestle Foods.
Jersey City, NJ 07302
(1933)
THOMAS J. NEFF Director since 1988 Chairman of Spencer Stuart Currently serves as director
Lord, Abbett & Co. LLC (U.S.), an executive search of Ace, Ltd. (since 1997) and
c/o Legal Dept. consulting firm (since 1996); Hewitt Associates, Inc.
90 Hudson Street President of Spencer Stuart
Jersey City, NJ 07302 (1979 - 1996).
(1937)
</Table>
49
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONTINUED)
OFFICERS
None of the officers listed below have received compensation from the Company.
All the officers of the Company may also be officers of the other Lord
Abbett-sponsored funds and maintain offices at 90 Hudson Street, Jersey City, NJ
07302.
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------
ROBERT S. DOW Chief Executive Officer and Elected in 1995 Managing Partner and Chief
(1945) President Executive Officer of Lord
Abbett (since 1996).
DANIEL H. FRASCARELLI Executive Vice President Elected in 2005 Partner and Investment
(1954) Manager, joined Lord Abbett in
1990.
ROBERT I. GERBER Executive Vice President Elected in 2001 Partner and Director of
(1954) Taxable Fixed Income
Management, joined Lord Abbett
in 1997.
JERALD LANZOTTI Executive Vice President Elected in 1997 Partner and Fixed Income
(1967) Investment Manager, joined
Lord Abbett in 1996.
HAROLD E. SHARON Executive Vice President Elected in 2003 Investment Manager and
(1960) Director, International Core
Equity, joined Lord Abbett in
2003; formerly Financial
Industry Consultant for
Venture Capitalist (2001 -
2003); prior thereto Managing
Director of Warburg Pincus
Asset Management and Credit
Suisse Asset Management.
JAMES BERNAICHE Chief Compliance Officer Elected in 2004 Chief Compliance Officer,
(1956) joined Lord Abbett in 2001;
formerly Vice President and
Chief Compliance Officer with
Credit Suisse Asset
Management.
JOAN A. BINSTOCK Chief Financial Officer and Elected in 1999 Partner and Chief Operations
(1954) Vice President Officer, joined Lord Abbett in
1999.
JOHN K. FORST Vice President and Assistant Elected in 2005 Deputy General Counsel, joined
(1960) Secretary Lord Abbett in 2004; prior
thereto Managing Director and
Associate General Counsel at
New York Life Investment
Management LLC (2002 - 2003);
formerly Attorney at Dechert
LLP (2000 - 2002).
</Table>
50
<Page>
BASIC INFORMATION ABOUT MANAGEMENT (CONCLUDED)
<Table>
<Caption>
NAME AND CURRENT POSITION LENGTH OF SERVICE PRINCIPAL OCCUPATION
YEAR OF BIRTH WITH COMPANY OF CURRENT POSITION DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------
LAWRENCE H. KAPLAN Vice President and Secretary Elected in 1997 Partner and General Counsel,
(1957) joined Lord Abbett in 1997.
ROBERT G. MORRIS Vice President Elected in 1995 Partner and Chief Investment
(1944) Officer, joined Lord Abbett in
1991.
A. EDWARD OBERHAUS, III Vice President Elected in 1996 Partner and Manager of Equity
(1959) Trading, joined Lord Abbett in
1983.
CHRISTINA T. SIMMONS Vice President and Assistant Elected in 2001 Assistant General Counsel,
(1957) Secretary joined Lord Abbett in 1999.
BERNARD J. GRZELAK Treasurer Elected in 2003 Director of Fund
(1971) Administration, 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 Company's Directors. It is
available free upon request.
51
<Page>
APPROVAL OF ADVISORY CONTRACTS
At meetings on December 7 and 8, 2005, the Board, including all Directors who
are not interested persons, considered whether to approve the continuation of
the existing management agreements between the Global Equity Fund and the Global
Income 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 Board
also took into account its familiarity with Lord Abbett gained through its
previous meetings and discussions, and the examination of the portfolio
management teams conducted by members of the Contract Committee during the year.
The materials received by the Board 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, 2005, (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 for each Fund are set forth 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, and Lord Abbett's commitment to
compliance with all relevant legal requirements. The Board also observed that
Lord Abbett was solely engaged in the investment management business and
accordingly did not experience the conflicts of interest resulting from being
engaged in other lines of business. The Board noted that Lord Abbett did not use
brokerage commissions to purchase third-party research. The Board also
considered the investment advisory services provided by Lord Abbett to other
clients, the fees charged for the services, and the differences in the nature of
the services provided to the Fund and other Lord Abbett Funds, on the one hand,
and the services provided to other clients, on the other.
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 observed that the performance of the Class A shares of the Fund was in the
fourth quintile of its performance universe for the nine-month, one-year,
three-year, and five-year periods and in the fifth quintile in the ten-year
period. The Board also observed that the performance was below that of the
Lipper Global Large-Cap Core Index for the nine-month, five-year, and ten-year
periods and above that of the Index for the one- and three-year periods.
LORD ABBETT'S PERSONNEL AND METHODS. The Board considered the qualifications of
the personnel providing investment management services to the Fund, in light of
its investment objective and discipline. Among other things, they considered the
size, experience, and turnover
52
<Page>
rates 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. The Board determined that Lord
Abbett had the expertise and resources to manage the Fund effectively.
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 ratio of the Fund and the expense
ratios of peer groups. It also considered the amount and nature of the fees paid
by shareholders. The Board observed that the contractual management and
administrative services fees were approximately eighteen basis points below the
median of the peer group and the actual management and administrative services
fees were approximately five basis points below the median of the peer group.
The Board observed that Lord Abbett had implemented a total expense cap for the
Fund that limited the total expense ratio of Class A to not more than 1.60%, the
total expense ratios of Classes B and C to not more than 2.25%, and the total
expense ratio of Class Y to not more than 1.25%. The Board observed that the
total expense ratio of Class A was approximately ten basis points below the
median of the peer group, the total expense ratios of Classes B and C were
approximately fifteen basis points below the median of the peer group, and the
total expense ratio of Class Y was approximately one basis point below the
median of the peer group. The Board also observed that transfer agent and
custodian expenses of the Fund were higher than for most of the peer group, due
to the relatively small average account size.
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 recognized that Lord Abbett's
profitability was a factor in enabling it to attract and retain qualified
investment management personnel to provide services to the Fund. The Board noted
that Lord Abbett's profitability had increased, in part due to an increase in
assets under management, but concluded that Lord Abbett's profitability overall
and with respect to the Fund was not excessive.
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. The Board concluded that the existing advisory
fee schedule adequately addressed any economies of scale in managing the Fund.
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
53
<Page>
intangible benefits enjoyed by Lord Abbett by virtue of its relationship with
the Fund. The Board observed that Lord Abbett Distributor receives 12b-1 fees
from the Funds as to shares held in accounts for which there is no other broker
of record, may retain a portion of the 12b-1 fees from the Funds, and receives a
portion of the sales charges on sales and redemptions of some classes of shares.
In addition, Lord Abbett accrues certain benefits for its business of providing
investment advice to clients other than the Funds, but that that business also
benefits the Funds. The Board also noted that Lord Abbett, as disclosed in the
prospectus of each Fund, has entered into revenue sharing arrangements with
certain entities that distribute shares of the Funds.
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.
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, and Lord Abbett's commitment to
compliance with all relevant legal requirements. The Board also observed that
Lord Abbett was solely engaged in the investment management business and
accordingly did not experience the conflicts of interest resulting from being
engaged in other lines of business. The Board noted that Lord Abbett did not use
brokerage commissions to purchase third-party research. The Board also
considered the investment advisory services provided by Lord Abbett to other
clients, the fees charged for the services, and the differences in the nature of
the services provided to the Fund and other Lord Abbett Funds, on the one hand,
and the services provided to other clients, on the other.
INVESTMENT PERFORMANCE AND COMPLIANCE. The Board reviewed the Fund's investment
performance 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 observed that the performance of the Class A shares of the
Fund was in the fifth quintile of its performance universe for the nine-month,
one-year, and ten-year periods, and in the fourth quintile for the three-year
period, and in the third quintile for the five-year period. The Board also
observed that the performance was below that of the Lipper Global Income Fund
Index for all of the periods. The Board noted that it was difficult to find an
adequate performance comparison for the Fund, because the Fund invested to a
greater degree in high-quality debt securities than most other global income
funds.
LORD ABBETT'S PERSONNEL AND METHODS. The Board considered the qualifications of
the personnel providing investment management services to the Fund, in light of
its investment objective and discipline. Among other things, they considered the
size, experience, and turnover rates 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.
The Board determined that Lord Abbett had the expertise and resources to manage
the Fund effectively.
54
<Page>
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 ratio of the Fund and the expense
ratios of peer groups. It also considered the amount and nature of the fees paid
by shareholders. The Board observed that the contractual management and
administrative services fees were approximately ten basis points below the
median of the peer group and that the actual management and administrative
services fees were approximately eight basis points below the median of the peer
group. The Board observed that Lord Abbett had implemented a total expense cap
for the Fund that limited the total expense ratio of Class A to not more than
1.30%, the total expense ratios of Classes B and C to not more than 1.95%, the
total expense ratio of Class P to not more than 1.40%, and the total expense
ratio of Class Y to not more than 0.95%. The Board observed that the actual
total expense ratio of Class A was approximately one basis point above the
median of the peer group, the total expense ratios of Classes B and C were
approximately four basis points below the median of the peer group, the actual
total expense ratio of Class P was approximately nineteen basis points above the
median of the peer group, and the total expense ratio of Class Y was
approximately twenty 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 recognized that Lord Abbett's
profitability was a factor in enabling it to attract and retain qualified
investment management personnel to provide services to the Fund. The Board noted
that Lord Abbett's profitability had increased, in part due to an increase in
assets under management, but concluded that Lord Abbett's profitability overall
and with respect to the Fund was not excessive.
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. The Board concluded that the existing advisory
fee schedule adequately addressed any economies of scale in managing the Fund.
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. The Board
observed that Lord Abbett Distributor receives 12b-1 fees from the Funds as to
shares held in accounts for which there is no other broker of record, may retain
a portion of the 12b-1 fees from the Funds, and receives a portion of the sales
charges on sales and redemptions of some classes of shares. In addition, Lord
Abbett accrues certain benefits for its business of providing
55
<Page>
investment advice to clients other than the Funds, but that that business also
benefits the Funds. The Board also noted that Lord Abbett, as disclosed in the
prospectus of each Fund, has entered into revenue sharing arrangements with
certain entities that distribute shares of the Funds.
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.
56
<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 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; and (iii) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
SHAREHOLDER REPORTS AND QUARTERLY PORTFOLIO DISCLOSURE
The Funds 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 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 1-800-SEC-0330); (ii) sending your request and
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
78.73% of the ordinary income distribution paid by the Global Equity Fund during
fiscal 2005 is qualified dividend income. For corporate shareholders, 41.05% of
the Global Equity Fund's ordinary income distribution qualified for the
dividends received deduction.
Additionally, of the distributions paid by Global Equity Fund to shareholders
during the fiscal year ended December 31, 2005, $1,418,258 represents long-term
capital gains.
Also, for foreign shareholders, of the distributions paid by Global Equity Fund
to shareholders during the fiscal year ended December 31, 2005, $1,539,590
represents short-term capital gain dividends. Of the distributions paid by
Global Income Fund during the year ended December 31, 2005, $919,415 represents
interest-related dividends.
57
<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.
Equity Series
Lord Abbett mutual fund shares are distributed by Income Series LAGF-2-1205
LORD ABBETT DISTRIBUTOR LLC (2/06)
</Table>
<Page>
ITEM 2: CODE OF ETHICS.
(a) In accordance with applicable requirements, the Registrant adopted a
Sarbanes-Oxley Code of Ethics on June 19, 2003 that applies to the
principal executive officer and senior financial officers of the
Registrant ("Code of Ethics"). The Code of Ethics was in effect
during the fiscal year ended December 31, 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 12(a)(1) concerning the filing of the Code of Ethics. The
Registrant will provide a copy of the Code of Ethics to any person
without charge, upon request. To obtain a copy, please call Lord
Abbett at 800-821-5129.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Directors has determined that each of the
following independent Directors who are members of the audit
committee are audit committee financial experts: E. Thayer Bigelow,
Robert B. Calhoun, and Franklin W. Hobbs. Each of these persons is
independent within the meaning of the Form N-CSR.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
In response to sections (a), (b), (c) and (d) of Item 4, the
aggregate fees billed to the Registrant for the fiscal years ended
December 31, 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} $ 73,000 $ 73,000
Audit-Related Fees {b} 20 22
--------- ---------
</Table>
<Page>
<Table>
Total audit and audit-related
fees 73,020 73,022
--------- ---------
Tax Fees {c} 14,721 14,129
All Other Fees {d} - 0 - - 0 -
--------- ---------
Total Fees $ 87,741 $ 87,151
--------- ---------
</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 years ended December 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} Not applicable.
(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 December 31, 2005
and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees {a} $ 105,500 $ 120,650
</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 December 31, 2005 and 2004 were:
<Table>
<Caption>
FISCAL YEAR ENDED:
2005 2004
All Other Fees $ - 0 - $ - 0 -
</Table>
(h) The Registrant's Audit Committee has considered the provision of
non-audit services that were rendered to the Registrant's investment
adviser, and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services
to the Registrant, that were not pre-approved pursuant to
Rule 2-01(c)(7)(ii) of Regulation S-X and has determined that the
provision of such services is compatible with maintaining Deloitte's
independence.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
<Page>
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 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.
(a)(1) Amendments to Code of Ethics - Not applicable.
(a)(2) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Rule 30a-2 under
the Act (17 CFR 270.30a-2) is attached hereto as a part of
EX-99.CERT.
<Page>
(a)(3) Not applicable.
(b) Certification of each principal executive officer and principal
financial officer of the Registrant as required by Section 906 of
the Sarbanes-Oxley Act of 2002 is attached hereto as a part of
EX-99.906CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LORD ABBETT GLOBAL FUND, INC.
/s/ Robert S. Dow
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
Joan A. Binstock
Chief Financial Officer and Vice President
Date: February 23, 2006
<Page>
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
LORD ABBETT GLOBAL FUND, INC.
/s/ Robert S. Dow
Robert S. Dow
Chief Executive Officer,
Chairman and President
/s/ Joan A. Binstock
Joan A. Binstock
Chief Financial Officer and Vice President
Date: February 23, 2006