N-CSRS 1 c93707_ncsrs.htm CERTIFIED SEMI-ANNUAL SHAREHOLDER REPORT

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: 811-00005

 

LORD ABBETT AFFILIATED FUND, INC.

(Exact name of Registrant as specified in charter)

 

90 Hudson Street, Jersey City, NJ 07302

(Address of principal executive offices) (Zip code)

 

John T. Fitzgerald, Esq., Vice President & Assistant Secretary

90 Hudson Street, Jersey City, NJ 07302

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: (800) 201-6984

 

Date of fiscal year end: 10/31

 

Date of reporting period: 4/30/2019

 
Item 1: Report(s) to Shareholders.
 

 

LORD ABBETT
SEMIANNUAL REPORT

 

Lord Abbett
Affiliated Fund

 

For the six-month period ended April 30, 2019

 

Important Information on Paperless Delivery

Beginning in February 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer, investment advisor or bank. Instead, the reports will be made available on Lord Abbett’s website and you will be notified by mail each time a report is posted and provided with a website link to access the report.

 

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly with the Fund may elect to receive shareholder reports and other communications from the Fund electronically by signing into your Lord Abbett online account at lordabbett.com and selecting “Log In.” For further information, you may also contact the Fund at (800) 821-5129. Shareholders who hold accounts through a financial intermediary should contact them directly.

 

You may elect to receive all future reports in paper free of charge by contacting the Fund at (800) 821-5129. Your election to receive reports in paper will apply to all funds held with Lord Abbett. If your fund shares are held through a financial intermediary please contact them directly. Your election applies to all funds held with that intermediary.

 

Table of Contents

 

1   A Letter to Shareholders
     
2   Information About Your Fund’s Expenses and Holdings Presented by Sector
     
5   Schedule of Investments
     
10   Statement of Assets and Liabilities
     
12   Statement of Operations
     
13   Statements of Changes in Net Assets
     
14   Financial Highlights
     
18   Notes to Financial Statements
     
28   Supplemental Information to Shareholders
 

 

 

Lord Abbett Affiliated Fund
Semiannual Report

For the six-month period ended April 30, 2019

 

 

From left to right: James L.L. Tullis, Independent Chairman of the Lord Abbett Funds and Douglas B. Sieg, Director, President, and Chief Executive Officer of the Lord Abbett Funds.

  

Dear Shareholders: We are pleased to provide you with this semiannual report for Lord Abbett Affiliated Fund for the six-month period ended April 30, 2019. For additional information about the Fund, please visit our website at www.lordabbett.com, where you can access quarterly commentaries by the Fund’s portfolio managers. General information about Lord Abbett mutual funds, as well as in-depth discussions of market trends and investment strategies, is also provided in Lord Abbett Insights, a quarterly newsletter available on our website.

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,

 

 

Douglas B. Sieg

Director, President, and Chief Executive Officer

 

1

 

 

 

Expense Example

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments (these charges vary among the share classes); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees (these charges vary among the share classes); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 1, 2018 through April 30, 2019).

 

Actual Expenses

For each class of the Fund, the first line of the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled “Expenses Paid During Period 11/1/18 – 4/30/19” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

For each class of the Fund, the second line of the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

2

 

 

 

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 (loads). 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.

 

    Beginning
Account
Value		   Ending
Account
Value		   Expenses
Paid During
Period†
    11/1/18   4/30/19   11/1/18 –
4/30/19
Class A            
Actual   $1,000.00   $1,069.10   $3.64
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,021.27   $3.56
Class C            
Actual   $1,000.00   $1,064.70   $7.47
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,017.55   $7.30
Class F            
Actual   $1,000.00   $1,069.20   $2.87
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,022.02   $2.81
Class F3            
Actual   $1,000.00   $1,070.80   $2.00
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,022.86   $1.96
Class I            
Actual   $1,000.00   $1,070.10   $2.36
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,022.51   $2.31
Class P            
Actual   $1,000.00   $1,067.40   $4.66
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,020.28   $4.56
Class R2            
Actual   $1,000.00   $1,066.50   $5.43
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,019.54   $5.31
Class R3            
Actual   $1,000.00   $1,067.80   $4.92
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,020.03   $4.81
Class R4            
Actual   $1,000.00   $1,068.50   $3.64
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,021.27   $3.56
Class R5            
Actual   $1,000.00   $1,070.20   $2.36
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,022.51   $2.31
Class R6            
Actual   $1,000.00   $1,070.80   $2.00
Hypothetical (5% Return Before Expenses)   $1,000.00   $1,022.86   $1.96

 

† For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (0.71% for Class A, 1.46% for Class C, 0.56% for Class F, 0.39% for Class F3, 0.46% for Class I, 0.91% for Class P, 1.06% for Class R2, 0.96% for Class R3, 0.71% for Class R4, 0.46% for Class R5 and 0.39% for Class R6) multiplied by the average account value over the period, multiplied by 181/365 (to reflect one-half year period).

 

3

 

 

 

Portfolio Holdings Presented by Sector

April 30, 2019

 

Sector*  %**
Communication Services  3.50%
Consumer Discretionary  10.25%
Consumer Staples  10.55%
Energy  8.40%
Financials  21.27%
Health Care  9.27%
Industrials  9.92%
Information Technology  9.55%
Materials  4.91%
Real Estate  5.23%
Utilities  6.17%
Repurchase Agreement  0.98%
Total  100.00%

 

*   A sector may comprise several industries.
**   Represents percent of total investments.

 

4

 

Schedule of Investments (unaudited)

April 30, 2019

 

Investments  Shares   Fair
Value
(000)		 
COMMON STOCKS 99.60%          
           
Aerospace & Defense 2.50%          
Boeing Co. (The)   144,600   $54,614 
Northrop Grumman Corp.   134,900    39,109 
United Technologies Corp.   453,200    64,631 
Total        158,354 
           
Air Freight & Logistics 0.45%          
CH Robinson Worldwide, Inc.    349,200    28,285 
           
Airlines 0.48%          
Alaska Air Group, Inc.   496,000    30,702 
           
Auto Components 0.36%          
Gentex Corp.   1,004,400    23,131 
           
Automobiles 1.28%          
Ford Motor Co.   7,760,100    81,093 
           
Banks 11.05%          
Bank of America Corp.   4,603,500    140,775 
Citigroup, Inc.   1,384,900    97,913 
Citizens Financial Group, Inc.   1,577,400    57,102 
Comerica, Inc.   574,200    45,126 
Fifth Third Bancorp   1,228,500    35,405 
JPMorgan Chase & Co.   1,175,042    136,364 
KeyCorp   3,680,700    64,596 
PNC Financial Services Group, Inc. (The)   155,400    21,279 
U.S. Bancorp   759,300    40,486 
Wells Fargo & Co.   1,252,100    60,614 
Total        699,660 
           
Beverages 1.27%          
Coca-Cola Co. (The)   734,300    36,025 
PepsiCo, Inc.   347,900    44,548 
Total        80,573 
           
Biotechnology 0.44%          
Amgen, Inc.   155,700    27,920 
Investments  Shares   Fair
Value
(000)		 
Building Products 0.97%          
Johnson Controls International plc   1,630,700   $61,151 
           
Capital Markets 3.83%          
Ameriprise Financial, Inc.   234,700    34,447 
CME Group, Inc.   489,600    87,589 
LPL Financial Holdings, Inc.   514,300    38,104 
Nasdaq, Inc.   273,200    25,189 
Northern Trust Corp.   393,200    38,750 
TD Ameritrade Holding Corp.    348,300    18,314 
Total        242,393 
           
Chemicals 2.94%          
Celanese Corp. Series A   443,900    47,892 
Dow, Inc.*   439,600    24,939 
DowDuPont, Inc.   1,073,800    41,288 
Eastman Chemical Co.   657,500    51,864 
PPG Industries, Inc.   170,200    19,998 
Total        185,981 
           
Commercial Services & Supplies 0.29% 
Republic Services, Inc.   219,700    18,196 
           
Communications Equipment 1.99%  
Cisco Systems, Inc.   2,256,500    126,251 
           
Consumer Finance 1.12%          
Discover Financial Services   867,600    70,701 
           
Containers & Packaging 1.24%          
Graphic Packaging Holding Co.   2,009,100    27,887 
Packaging Corp. of America   509,200    50,492 
Total        78,379 
           
Diversified Consumer Services 0.65%          
H&R Block, Inc.   1,519,700    41,351 
           
Diversified Telecommunication Services 3.14% 
AT&T, Inc.   2,942,649    91,104 
Verizon Communications, Inc.   1,886,851    107,909 
Total        199,013 


 

  See Notes to Financial Statements. 5
 

Schedule of Investments (unaudited)(continued)

April 30, 2019

 

Investments  Shares   Fair
Value
(000)		 
Electric: Utilities 3.76%          
Duke Energy Corp.   844,039   $76,909 
Edison International   679,800    43,351 
Evergy, Inc.   755,857    43,704 
FirstEnergy Corp.   1,353,000    56,866 
NextEra Energy, Inc.   88,500    17,208 
Total        238,038 
           
Electrical Equipment 1.37%          
Eaton Corp. plc   497,800    41,228 
Emerson Electric Co.   206,200    14,638 
Hubbell, Inc.   241,800    30,854 
Total        86,720 
           
Electronic Equipment, Instruments & Components 0.96% 
Corning, Inc.   1,910,500    60,849 
           
Energy Equipment & Services 0.86%      
Schlumberger Ltd.   1,276,300    54,472 
           
Entertainment 0.38%          
Viacom, Inc. Class B   837,300    24,206 
           
Equity Real Estate Investment Trusts 3.87%  
AvalonBay Communities, Inc.    220,000    44,205 
Duke Realty Corp.   540,400    16,817 
Federal Realty Investment Trust   189,600    25,378 
Host Hotels & Resorts, Inc.   2,213,000    42,578 
Prologis, Inc.   516,300    39,585 
Starwood Property Trust, Inc.   1,251,800    28,854 
UDR, Inc.   1,058,200    47,566 
Total        244,983 
           
Food & Staples Retailing 2.24%          
Sysco Corp.   344,900   $24,271 
Walgreens Boots Alliance, Inc.    798,600    42,781 
Walmart, Inc.   730,800    75,155 
Total        142,207 
Investments  Shares   Fair
Value
(000)		 
Food Products 3.66%          
Hershey Co. (The)   485,900   $60,665 
Hormel Foods Corp.   1,147,100    45,815 
J.M. Smucker Co. (The)   212,200    26,022 
Mondelez International, Inc. Class A   1,956,200    99,473 
Total        231,975 
           
Gas Utilities 0.34%          
Atmos Energy Corp.   208,000    21,287 
           
Health Care Equipment & Supplies 1.46%    
Medtronic plc (Ireland)(a)   1,038,100    92,194 
           
Health Care Providers & Services 0.61%  
CVS Health Corp.   707,200    38,458 
           
Hotels, Restaurants & Leisure 2.80%  
Carnival Corp.   1,104,400    60,587 
Dunkin’ Brands Group, Inc.   474,100    35,382 
Royal Caribbean Cruises Ltd.   157,100    19,000 
Yum! Brands, Inc.   597,400    62,363 
Total        177,332 
           
Household Durables 0.24%          
Newell Brands, Inc.   1,069,500    15,379 
           
Household Products 2.85%          
Kimberly-Clark Corp.   341,800    43,880 
Procter & Gamble Co. (The)    1,285,200    136,848 
Total        180,728 
           
Industrial Conglomerates 0.45%          
Honeywell International, Inc.    165,900    28,805 
           
Information Technology Services 0.71%  
Leidos Holdings, Inc.   262,500    19,289 
Paychex, Inc.   306,600    25,849 
Total        45,138 


 

6 See Notes to Financial Statements.
 

Schedule of Investments (unaudited)(continued)

April 30, 2019

 

Investments  Shares   Fair
Value
(000)		 
Insurance 5.41%          
Arthur J Gallagher & Co.   651,400   $54,470 
Axis Capital Holdings Ltd.   94,200    5,355 
Chubb Ltd. (Switzerland)(a)   666,000    96,703 
Lincoln National Corp.   890,400    59,408 
Prudential Financial, Inc.   354,100    37,432 
Reinsurance Group of America, Inc.   200,300    30,348 
Travelers Cos., Inc. (The)   298,400    42,895 
Willis Towers Watson plc (United Kingdom)(a)   86,900    16,019 
Total        342,630 
           
Machinery 2.42%          
Cummins, Inc.   233,100    38,762 
Flowserve Corp.   736,200    36,096 
Ingersoll-Rand plc   299,000    36,660 
Stanley Black & Decker, Inc.    284,200    41,664 
Total        153,182 
           
Media 2.22%          
Comcast Corp. Class A   2,094,000    91,152 
Interpublic Group of Cos., Inc. (The)   2,157,400    49,620 
Total        140,772 
           
Metals & Mining 0.77%          
Nucor Corp.   852,600    48,658 
           
Multi-Line Retail 1.02%          
Kohl’s Corp.   501,800    35,678 
Target Corp.   374,900    29,025 
Total        64,703 
           
Multi-Utilities 2.12%          
Dominion Energy, Inc.   382,500    29,785 
Public Service Enterprise Group, Inc.   1,007,900    60,121 
Sempra Energy   345,100    44,156 
Total        134,062 
Investments  Shares   Fair
Value
(000)		 
Oil, Gas & Consumable Fuels 7.59%  
Chevron Corp.   1,501,932   $180,322 
ConocoPhillips   1,104,000    69,684 
Exxon Mobil Corp.   559,800    44,941 
Kinder Morgan, Inc.   1,805,400    35,873 
Marathon Petroleum Corp.   355,600    21,645 
Noble Energy, Inc.   920,200    24,901 
ONEOK, Inc.   399,200    27,118 
Valero Energy Corp.   841,550    76,295 
Total        480,779 
           
Pharmaceuticals 6.82%          
Allergan plc   351,100    51,612 
Bristol-Myers Squibb Co.   708,800    32,910 
Johnson & Johnson   565,700    79,877 
Merck & Co., Inc.   1,730,200    136,184 
Pfizer, Inc.   3,232,100    131,255 
Total        431,838 
           
Real Estate Investment Trusts 1.39%  
Boston Properties, Inc.   411,500    56,631 
Liberty Property Trust   633,500    31,447 
Total        88,078 
           
Road & Rail 1.05%          
Union Pacific Corp.   375,700    66,514 
           
Semiconductors & Semiconductor Equipment 4.17% 
Broadcom, Inc.   323,600    103,034 
Intel Corp.   2,613,000    133,368 
Xilinx, Inc.   231,400    27,800 
Total        264,202 
           
Software 1.16%          
Microsoft Corp.   563,500    73,593 
           
Specialty Retail 1.72%          
Foot Locker, Inc.   842,800    48,217 
Lowe’s Cos., Inc.   539,000    60,982 
Total        109,199 


 

  See Notes to Financial Statements. 7
 

Schedule of Investments (unaudited)(continued)

April 30, 2019

 

Investments  Shares   Fair
Value
(000)		 
Technology Hardware, Storage & Peripherals 0.61% 
Xerox Corp.   1,149,800   $38,357 
           
Tobacco 0.57%          
Philip Morris International, Inc.   420,100    36,364 
Total Common Stocks
(cost $5,871,766,837)		        6,308,836 
Investments  Principal
Amount
(000)		   Fair
Value
(000)		 
SHORT-TERM INVESTMENT 0.99%          
           
Repurchase Agreement          
Repurchase Agreement dated 4/30/2019, 1.45% due 5/1/2019 with Fixed Income Clearing Corp. collateralized by $64,580,000 of U.S. Treasury Note at 1.375% due 5/31/2021; value: $63,734,712; proceeds: $62,483,607
(cost $62,481,091)		   $62,481   $62,481 
Total Investments in Securities 100.59%
(cost $5,934,247,928)		        6,371,317 
Liabilities in Excess of Cash and Other Assets(b) (0.59)%   (37,165)
Net Assets 100.00%       $6,334,152 

 

*   Non-income producing security.
(a)   Foreign security traded in U.S. dollars.
(b)   Liabilities in Excess of Cash and Other Assets include net unrealized appreciation on futures contracts as follows:


 

8 See Notes to Financial Statements.
 

Schedule of Investments (unaudited)(concluded)

April 30, 2019

 

Open Futures Contracts at April 30, 2019:

 

Type  Expiration  Contracts  Position  Notional
Amount		   Notional
Value		   Unrealized
Appreciation		 
E-Mini S&P 500 Index  June 2019  172  Long  $24,890,580   $25,357,100   $466,520 

 

The following is a summary of the inputs used as of April 30, 2019 in valuing the Fund’s investments carried at fair value(1):

 

Investment Type(2)(3)  Level 1
(000)		   Level 2
(000)		   Level 3
(000)		   Total
(000)
Common Stocks  $6,308,836   $–   $–   $6,308,836
Short-Term Investment                   
Repurchase Agreement   –    62,481    –    62,481
Total  $6,308,836   $62,481   $–   $6,371,317
Other Financial Instruments                   
Futures Contracts                   
Assets  $467   $–   $–   $467
Liabilities   –    –    –    –
Total  $467   $–   $–   $467

 

(1)   Refer to Note 2(i) for a description of fair value measurements and the three-tier hierarchy of inputs.
(2)   See Schedule of Investments for fair values in each industry and identification of foreign issuers and/or geography.
(3)   There were no Level 1/Level 2 transfers during the period ended April 30, 2019.

 

  See Notes to Financial Statements. 9
 

Statement of Assets and Liabilities (unaudited)

April 30, 2019

 

ASSETS:     
Investments in securities, at fair value (cost $5,934,247,928)  $6,371,316,862 
Cash   52 
Deposits with brokers for futures collateral   1,083,600 
Receivables:     
Investment securities sold   35,953,344 
Interest and dividends   8,495,476 
Capital shares sold   1,567,625 
Variation margin for futures contracts   227,749 
Prepaid expenses and other assets   52,986 
Total assets   6,418,697,694 
LIABILITIES:     
Payables:     
Capital shares reacquired   56,578,567 
Investment securities purchased   17,574,184 
12b-1 distribution plan   4,318,496 
Directors’ fees   3,096,989 
Management fee   1,631,794 
Fund administration   207,161 
Accrued expenses   1,138,790 
Total liabilities   84,545,981 
NET ASSETS  $6,334,151,713 
COMPOSITION OF NET ASSETS:     
Paid-in capital  $5,871,926,406 
Total distributable earnings   462,225,307 
Net Assets  $6,334,151,713 

 

10 See Notes to Financial Statements.
 

Statement of Assets and Liabilities (unaudited)(concluded)

April 30, 2019

 

Net assets by class:     
Class A Shares  $5,582,093,686 
Class C Shares  $126,972,406 
Class F Shares  $311,992,794 
Class F3 Shares  $107,130,521 
Class I Shares  $111,407,264 
Class P Shares  $13,943,464 
Class R2 Shares  $1,506,401 
Class R3 Shares  $43,190,360 
Class R4 Shares  $8,432,404 
Class R5 Shares  $188,553 
Class R6 Shares  $27,293,860 
Outstanding shares by class:     
Class A Shares (2.9 billion shares of common stock authorized, $.001 par value)   372,489,393 
Class C Shares (300 million shares of common stock authorized, $.001 par value)   8,447,754 
Class F Shares (300 million shares of common stock authorized, $.001 par value)   20,806,505 
Class F3 Shares (300 million shares of common stock authorized, $.001 par value)   7,090,551 
Class I Shares (300 million shares of common stock authorized, $.001 par value)   7,400,510 
Class P Shares (200 million shares of common stock authorized, $.001 par value)   932,371 
Class R2 Shares (300 million shares of common stock authorized, $.001 par value)   100,414 
Class R3 Shares (300 million shares of common stock authorized, $.001 par value)   2,883,115 
Class R4 Shares (300 million shares of common stock authorized, $.001 par value)   563,513 
Class R5 Shares (300 million shares of common stock authorized, $.001 par value)   12,514 
Class R6 Shares (300 million shares of common stock authorized, $.001 par value)   1,807,624 
Net asset value, offering and redemption price per share (Net assets divided by outstanding shares):     
Class A Shares-Net asset value   $14.99 
Class A Shares-Maximum offering price (Net asset value plus sales charge of 5.75%)   $15.90 
Class C Shares-Net asset value   $15.03 
Class F Shares-Net asset value   $14.99 
Class F3 Shares-Net asset value   $15.11 
Class I Shares-Net asset value   $15.05 
Class P Shares-Net asset value   $14.95 
Class R2 Shares-Net asset value   $15.00 
Class R3 Shares-Net asset value   $14.98 
Class R4 Shares-Net asset value   $14.96 
Class R5 Shares-Net asset value   $15.07 
Class R6 Shares-Net asset value   $15.10 

 

  See Notes to Financial Statements. 11
 

Statement of Operations (unaudited)

For the Six Months Ended April 30, 2019

 

Investment income:     
Dividends  $93,779,773 
Interest and other   215,213 
Total investment income   93,994,986 
Expenses:     
Management fee   9,589,551 
12b-1 distribution plan-Class A   6,615,127 
12b-1 distribution plan-Class C   634,103 
12b-1 distribution plan-Class F   151,214 
12b-1 distribution plan-Class P   30,726 
12b-1 distribution plan-Class R2   4,095 
12b-1 distribution plan-Class R3   103,053 
12b-1 distribution plan-Class R4   10,151 
Shareholder servicing   2,828,380 
Fund administration   1,215,794 
Reports to shareholders   174,707 
Registration   106,303 
Directors’ fees   99,136 
Professional   73,292 
Custody   60,794 
Other   86,422 
Gross expenses   21,782,848 
Expense reductions (See Note 9)   (337,764)
Net expenses   21,445,084 
Net investment income   72,549,902 
Net realized and unrealized gain (loss):     
Net realized gain on investments   31,418,566 
Net realized loss on futures contracts   (402,773)
Net change in unrealized appreciation/depreciation on investments   302,485,852 
Net change in unrealized appreciation/depreciation on futures contracts   2,146,081 
Net realized and unrealized gain   335,647,726 
Net Increase in Net Assets Resulting From Operations  $408,197,628 

 

12 See Notes to Financial Statements.
 

Statements of Changes in Net Assets

 

INCREASE (DECREASE) IN NET ASSETS  For the Six Months
Ended April 30, 2019
(unaudited)		   For the Year Ended
October 31, 2018		 
Operations:          
Net investment income  $72,549,902   $168,997,314 
Net realized gain on investments and futures contracts   31,015,793    471,548,009 
Net change in unrealized appreciation/depreciation on investments and futures contracts   304,631,933    (358,643,336)
Net increase in net assets resulting from operations   408,197,628    281,901,987 
Distributions to shareholders:          
Class A   (498,642,905)   (653,845,843)
Class B   –    (481,318)
Class C   (11,483,824)   (33,690,520)
Class F   (28,817,580)   (36,693,259)
Class F3   (9,392,718)   (11,031,424)
Class I   (10,893,186)   (12,987,407)
Class P   (1,304,198)   (1,963,627)
Class R2   (120,083)   (188,034)
Class R3   (3,738,407)   (5,154,057)
Class R4   (756,988)   (656,756)
Class R5   (7,814)   (2,607)
Class R6   (2,308,968)   (2,824,242)
Class T   –    (1,132)
Total distributions to shareholders   (567,466,671)   (759,520,226)
Capital share transactions (Net of share conversions) (See Note 14):          
Net proceeds from sales of shares   278,604,309    459,673,079 
Reinvestment of distributions   519,579,438    691,399,663 
Cost of shares reacquired   (609,601,211)   (1,099,967,867)
Net increase in net assets resulting from capital share transactions   188,582,536    51,104,875 
Net increase (decrease) in net assets   29,313,493    (426,513,364)
NET ASSETS:          
Beginning of period  $6,304,838,220   $6,731,351,584 
End of period  $6,334,151,713   $6,304,838,220 

 

  See Notes to Financial Statements. 13
 

Financial Highlights

 

       Per Share Operating Performance:
       Investment Operations:  Distributions to
shareholders from:
   Net asset
value,
beginning
of period		  Net
investment
Income
(loss)(a)		  Net
realized
and
unrealized
gain (loss)		  Total
from
invest-
ment
opera-
tions		  Net
investment
income		  Net
realized
gain		  Total
distri-
butions
Class A                            
4/30/2019(c)   $15.41        $0.17        $0.79    $0.96    $(0.16)   $(1.22)   $(1.38)
10/31/2018   16.65    0.40    0.23    0.63    (0.33)   (1.54)   (1.87)
10/31/2017   15.03    0.36    2.45    2.81    (0.37)   (0.82)   (1.19)
10/31/2016   15.70    0.37    0.46    0.83    (0.35)   (1.15)   (1.50)
10/31/2015   16.65    0.36    (0.15)   0.21    (0.36)   (0.80)   (1.16)
10/31/2014   14.94    0.36    1.72    2.08    (0.37)   –    (0.37)
Class C                                   
4/30/2019(c)   15.45    0.12    0.79    0.91    (0.11)   (1.22)   (1.33)
10/31/2018   16.65    0.26    0.26    0.52    (0.18)   (1.54)   (1.72)
10/31/2017   15.03    0.24    2.45    2.69    (0.25)   (0.82)   (1.07)
10/31/2016   15.70    0.26    0.46    0.72    (0.24)   (1.15)   (1.39)
10/31/2015   16.64    0.24    (0.14)   0.10    (0.24)   (0.80)   (1.04)
10/31/2014   14.94    0.24    1.71    1.95    (0.25)   –    (0.25)
Class F                                   
4/30/2019(c)   15.42    0.18    0.78    0.96    (0.17)   (1.22)   (1.39)
10/31/2018   16.64    0.43    0.25    0.68    (0.36)   (1.54)   (1.90)
10/31/2017   15.03    0.38    2.45    2.83    (0.40)   (0.82)   (1.22)
10/31/2016   15.70    0.39    0.47    0.86    (0.38)   (1.15)   (1.53)
10/31/2015   16.65    0.38    (0.14)   0.24    (0.39)   (0.80)   (1.19)
10/31/2014   14.94    0.38    1.73    2.11    (0.40)   –    (0.40)
Class F3                                   
4/30/2019(c)   15.52    0.19    0.80    0.99    (0.18)   (1.22)   (1.40)
10/31/2018   16.74    0.46    0.24    0.70    (0.38)   (1.54)   (1.92)
4/4/2017 to 10/31/2017(e)   15.94    0.11    0.89    1.00    (0.20)   –    (0.20)
Class I                                   
4/30/2019(c)   15.48    0.18    0.79    0.97    (0.18)   (1.22)   (1.40)
10/31/2018   16.71    0.45    0.23    0.68    (0.37)   (1.54)   (1.91)
10/31/2017   15.09    0.41    2.44    2.85    (0.41)   (0.82)   (1.23)
10/31/2016   15.75    0.40    0.48    0.88    (0.39)   (1.15)   (1.54)
10/31/2015   16.70    0.41    (0.16)   0.25    (0.40)   (0.80)   (1.20)
10/31/2014   14.99    0.39    1.73    2.12    (0.41)   –    (0.41)
Class P                                   
4/30/2019(c)   15.38    0.16    0.78    0.94    (0.15)   (1.22)   (1.37)
10/31/2018   16.62    0.39    0.23    0.62    (0.32)   (1.54)   (1.86)
10/31/2017   15.01    0.36    2.44    2.80    (0.37)   (0.82)   (1.19)
10/31/2016   15.68    0.37    0.46    0.83    (0.35)   (1.15)   (1.50)
10/31/2015   16.62    0.36    (0.14)   0.22    (0.36)   (0.80)   (1.16)
10/31/2014   14.91    0.36    1.71    2.07    (0.36)   –    (0.36)

 

14 See Notes to Financial Statements.
 
        Ratios to Average Net Assets:  Supplemental Data:
Net
asset
value,
end of
period		  Total
return(b)
(%)		  Total
expenses,
including
expense
reduction
(%)		  Total
expenses,
excluding
expense
reduction
(%)		  Net
investment
income
(loss)
(%)		  Net
assets,
end of
period
(000)		   Portfolio
turnover
rate
(%)
                                 
 $14.99    6.91(d)   0.71(g)   0.72(g)   2.39(g)   $5,582,094    27(d)
 15.41    4.10    0.71    0.71    2.55    5,540,007    62 
 16.65    19.54    0.70    0.70    2.26    5,774,835    69 
 15.03    5.81    0.74    0.74    2.51    5,347,367    73 
 15.70    1.26    0.74    0.74    2.22    5,663,305    66 
 16.65    14.08    0.74    0.74    2.25    6,079,217    81 
                                 
 15.03    6.47(d)   1.46(g)   1.47(g)   1.64(g)   126,972    27(d)
 15.45    3.34    1.46    1.46    1.66    133,507    62 
 16.65    18.62    1.45    1.45    1.53    334,809    69 
 15.03    5.03    1.48    1.48    1.77    382,356    73 
 15.70    0.55    1.49    1.49    1.48    422,766    66 
 16.64    13.17    1.48    1.48    1.50    459,439    81 
                                 
 14.99    6.92(d)   0.56(g)   0.57(g)   2.54(g)   311,993    27(d)
 15.42    4.38    0.56    0.56    2.69    314,764    62 
 16.64    19.66    0.55    0.55    2.36    362,708    69 
 15.03    5.97    0.59    0.59    2.66    188,161    73 
 15.70    1.42    0.59    0.59    2.37    156,842    66 
 16.65    14.25    0.59    0.59    2.36    152,988    81 
                                 
 15.11    7.08(d)   0.39(g)   0.40(g)   2.70(g)   107,131    27(d)
 15.52    4.49    0.39    0.39    2.88    103,179    62 
 16.74    6.30(d)   0.38(g)   0.38(g)   1.15(g)   90,582    69 
                                 
 15.05    7.01(d)   0.46(g)   0.47(g)   2.57(g)   111,407    27(d)
 15.48    4.40    0.46    0.46    2.83    120,897    62 
 16.71    19.74    0.46    0.46    2.56    68,197    69 
 15.09    6.12    0.49    0.49    2.76    137,838    73 
 15.75    1.51    0.49    0.49    2.52    131,435    66 
 16.70    14.31    0.49    0.49    2.48    268,873    81 
                                 
 14.95    6.74(d)   0.91(g)   0.92(g)   2.19(g)   13,943    27(d)
 15.38    4.03    0.79    0.79    2.46    14,703    62 
 16.62    19.48    0.71    0.71    2.27    17,375    69 
 15.01    5.81    0.74    0.74    2.52    19,648    73 
 15.68    1.31    0.74    0.74    2.22    22,407    66 
 16.62    14.02    0.74    0.74    2.32    28,397    81 

 

  See Notes to Financial Statements. 15
 

Financial Highlights (concluded)

 

       Per Share Operating Performance:
       Investment Operations:  Distributions to
shareholders from:
   Net asset
value,
beginning
of period		  Net
investment
Income
(loss)(a)		  Net
realized
and
unrealized
gain (loss)		  Total
from
invest-
ment
opera-
tions		  Net
investment
income		  Net
realized
gain		  Total
distri-
butions
Class R2                            
4/30/2019(c)   $15.43        $0.14        $0.79    $0.93    $(0.14)   $(1.22)   $(1.36)
10/31/2018   16.65    0.34    0.26    0.60    (0.28)   (1.54)   (1.82)
10/31/2017   15.04    0.29    2.46    2.75    (0.32)   (0.82)   (1.14)
10/31/2016   15.71    0.32    0.46    0.78    (0.30)   (1.15)   (1.45)
10/31/2015   16.61    0.31    (0.14)   0.17    (0.27)   (0.80)   (1.07)
10/31/2014   14.91    0.30    1.72    2.02    (0.32)   –    (0.32)
Class R3                                   
4/30/2019(c)   15.40    0.15    0.80    0.95    (0.15)   (1.22)   (1.37)
10/31/2018   16.63    0.36    0.24    0.60    (0.29)   (1.54)   (1.83)
10/31/2017   15.02    0.32    2.44    2.76    (0.33)   (0.82)   (1.15)
10/31/2016   15.69    0.33    0.47    0.80    (0.32)   (1.15)   (1.47)
10/31/2015   16.63    0.32    (0.13)   0.19    (0.33)   (0.80)   (1.13)
10/31/2014   14.93    0.32    1.72    2.04    (0.34)   –    (0.34)
Class R4                                   
4/30/2019(c)   15.39    0.17    0.78    0.95    (0.16)   (1.22)   (1.38)
10/31/2018   16.63    0.40    0.24    0.64    (0.34)   (1.54)   (1.88)
10/31/2017   15.03    0.33    2.48    2.81    (0.39)   (0.82)   (1.21)
10/31/2016   15.70    0.36    0.47    0.83    (0.35)   (1.15)   (1.50)
6/30/2015 to 10/31/2015(f)   15.95    0.12    (0.28)   (0.16)   (0.09)   –    (0.09)
Class R5                                   
4/30/2019(c)   15.49    0.18    0.80    0.98    (0.18)   (1.22)   (1.40)
10/31/2018   16.72    0.45    0.23    0.68    (0.37)   (1.54)   (1.91)
10/31/2017   15.09    0.40    2.46    2.86    (0.41)   (0.82)   (1.23)
10/31/2016   15.75    0.40    0.48    0.88    (0.39)   (1.15)   (1.54)
6/30/2015 to 10/31/2015(f)   16.00    0.13    (0.28)   (0.15)   (0.10)   –    (0.10)
Class R6                                   
4/30/2019(c)   15.51    0.19    0.80    0.99    (0.18)   (1.22)   (1.40)
10/31/2018   16.74    0.46    0.23    0.69    (0.38)   (1.54)   (1.92)
10/31/2017   15.10    0.38    2.50    2.88    (0.42)   (0.82)   (1.24)
10/31/2016   15.76    0.42    0.47    0.89    (0.40)   (1.15)   (1.55)
6/30/2015 to 10/31/2015(f)   16.00    0.14    (0.28)   (0.14)   (0.10)   –    (0.10)

 

(a) Calculated using average shares outstanding during the period.
(b) Total return for Classes A and C does not consider the effects of sales loads and assumes the reinvestment of all distributions. Total return for all other classes assumes the reinvestment of all distributions.
(c) Unaudited.
(d) Not annualized.
(e) Commenced on April 4, 2017.
(f) Commenced on June 30, 2015.
(g) Annualized.
   
16 See Notes to Financial Statements.
 
        Ratios to Average Net Assets:  Supplemental Data:
Net
asset
value,
end of
period		  Total
return(b)
(%)		  Total
expenses,
including
expense
reduction
(%)		  Total
expenses,
excluding
expense
reduction
(%)		  Net
investment
income
(loss)
(%)		  Net
assets,
end of
period
(000)		   Portfolio
turnover
rate
(%)
                                 
 $15.00    6.65(d)   1.06(g)   1.07(g)   2.03(g)   $1,506    27(d)
 15.43    3.85    1.06    1.06    2.16    1,340    62 
 16.65    19.10    1.05    1.05    1.81    1,751    69 
 15.04    5.41    1.09    1.09    2.17    480    73 
 15.71    0.99    1.09    1.09    1.90    624    66 
 16.61    13.65    1.09    1.09    1.88    718    81 
                                 
 14.98    6.78(d)   0.96(g)   0.97(g)   2.13(g)   43,190    27(d)
 15.40    3.91    0.96    0.96    2.29    41,776    62 
 16.63    19.20    0.93    0.93    2.04    46,658    69 
 15.02    5.57    0.97    0.97    2.28    52,793    73 
 15.69    1.09    0.98    0.98    1.99    55,901    66 
 16.63    13.75    0.98    0.98    2.00    55,545    81 
                                 
 14.96    6.85(d)   0.71(g)   0.72(g)   2.38(g)   8,432    27(d)
 15.39    4.12    0.71    0.71    2.56    8,434    62 
 16.63    19.54    0.69    0.69    2.01    5,220    69 
 15.03    5.82    0.72    0.72    2.46    19    73 
 15.70    (0.95)(d)   0.72(g)   0.72(g)   2.25(g)   10    66 
                                 
 15.07    7.02(d)   0.46(g)   0.47(g)   2.53(g)   189    27(d)
 15.49    4.39    0.46    0.46    2.83    47    62 
 16.72    19.82    0.44    0.44    2.48    18    69 
 15.09    6.13    0.47    0.47    2.77    11    73 
 15.75    (0.88)(d)   0.47(g)   0.47(g)   2.50(g)   10    66 
                                 
 15.10    7.08(d)   0.39(g)   0.40(g)   2.70(g)   27,294    27(d)
 15.51    4.42    0.39    0.39    2.89    26,184    62 
 16.74    19.91    0.39    0.39    2.32    23,836    69 
 15.10    6.17    0.37    0.37    2.87    18    73 
 15.76    (0.82)(d)   0.38(g)   0.38(g)   2.59(g)   10    66 

 

  See Notes to Financial Statements. 17
 

Notes to Financial Statements (unaudited)

 

1. ORGANIZATION  

 

Lord Abbett Affiliated Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. The Fund was organized in 1934 and was reincorporated under Maryland law on November 26, 1975.

 

The Fund’s investment objective is long-term growth of capital and income without excessive fluctuations in market value.

 

The Fund has eleven active classes of shares: Class A, C, F, F3, I, P, R2, R3, R4, R5 and R6, each with different expenses and dividends. A front-end sales charge is normally added to the net asset value (“NAV”) for Class A shares. There is no front-end sales charge in the case of Class C, F, F3, I, P, R2, R3, R4, R5 and R6 shares, although there may be a contingent deferred sales charge (“CDSC”) in certain cases as follows: Class A shares purchased without a sales charge and redeemed before the first day of the month in which the one-year anniversary of the purchase falls (subject to certain exceptions as set forth in the Fund’s prospectus); and Class C shares redeemed before the first anniversary of purchase. Class C shares convert automatically into Class A shares on the 25th day of the month (or, if the 25th is not a business day, the next business day thereafter) following the tenth anniversary of the month on which the purchase order was accepted. The Fund’s Class P shares are closed to substantially all new investors, with certain exceptions as set forth in the Fund’s prospectus.

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

 

2. SIGNIFICANT ACCOUNTING POLICIES  

 

(a) Investment Valuation–Under procedures approved by the Fund’s Board of Directors (the “Board”), Lord, Abbett & Co. LLC (“Lord Abbett”), the Fund’s investment manager, has formed a Pricing Committee to administer the pricing and valuation of portfolio investments and to ensure that prices utilized reasonably reflect fair value. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
   
  Securities actively traded on any recognized U.S. or non-U.S. exchange or on The NASDAQ Stock Market LLC 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 reflect their fair value as of the close of regular trading on the New York Stock Exchange. The Fund may utilize an independent fair valuation service in adjusting the valuations of foreign securities. Unlisted equity securities are valued at the last quoted sale price or, if no sale price is available, at the mean between the most recently quoted bid and asked prices. Exchange traded options and futures contracts are valued at the last quoted 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.

 

18

   

Notes to Financial Statements (unaudited)(continued)

 

  Securities for which prices are not readily available are valued at fair value as determined by the Pricing Committee. The Pricing Committee considers a number of factors, including observable and unobservable inputs, when arriving at fair value. The Pricing Committee may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information to determine the fair value of portfolio investments. The Board or a designated committee thereof regularly reviews fair value determinations made by the Pricing Committee and may employ techniques such as reviewing related market activity, reviewing inputs and assumptions, and retrospectively comparing prices of subsequent purchases and sales transactions to fair value determinations made by the Pricing Committee.
   
  Short-term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates fair 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 as earned. Discounts are accreted and premiums are amortized using the effective interest method and are included in Interest income on the Statement of Operations. Withholding taxes on foreign dividends have been provided for in accordance with the applicable country’s tax rules and rates. Investment income is allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day.
   
(d) Income Taxes–It is the policy of the Fund to meet the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income and capital gains to its shareholders. Therefore, no income tax provision is required.
   
  The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund’s filed U.S. federal tax returns remains open for the fiscal years that ended from October 31, 2015 through October 31, 2018. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.
   
(e) Expenses–Expenses, excluding class-specific expenses, are allocated to each class of shares based upon the relative proportion of net assets at the beginning of the day. Class A, C, F, P, R2, R3 and R4 shares bear their class-specific share of all expenses and fees relating to the Fund’s 12b-1 Distribution Plan.
   
(f) Foreign Transactions–The books and records of the Fund are maintained in U.S. dollars and transactions denominated in foreign currencies are recorded in the Fund’s records at the rate prevailing when earned or recorded. Asset and liability accounts that are denominated in foreign currencies are adjusted daily to reflect current exchange rates. The resultant exchange gains and losses upon settlement of such transactions are included in Net realized gain on investments in the Fund’s Statement of Operations. The 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.

 

19

   

Notes to Financial Statements (unaudited)(continued)

 

(g) Futures Contracts–The Fund may purchase and sell index futures contracts to manage cash, or as a substitute position in lieu of holding the underlying asset on which the instrument is based. At the time of entering into a futures transaction, an investor is required to deposit and maintain a specified amount of cash or eligible securities called “initial margin.” Subsequent payments made or received by the Fund called “variation margin” are made on a daily basis as the market price of the futures contract fluctuates. The Fund will record an unrealized gain (loss) based on the amount of variation margin. When a contract is closed, a realized gain (loss) is recorded equal to the difference between the opening and closing value of the contract.
   
(h) Repurchase Agreements–The Fund may enter into repurchase agreements with respect to securities. A repurchase agreement is a transaction in which a fund acquires a security and simultaneously commits to resell that security to the seller (a bank or securities dealer) at an agreed-upon price on an agreed-upon date. The Fund requires at all times that the repurchase agreement be collateralized by cash, or by securities of the U.S. Government, its agencies, its instrumentalities, or U.S. Government sponsored enterprises having a value equal to, or in excess of, the value of the repurchase agreement (including accrued interest). If the seller of the agreement defaults on its obligation to repurchase the underlying securities at a time when the fair value of these securities has declined, the Fund may incur a loss upon disposition of the securities.
   
(i) Fair Value Measurements–Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk–for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three-tier hierarchy classification is determined based on the lowest level of inputs that is significant to the fair value measurement, and is summarized in the three broad Levels listed below:

 

  • Level 1 –  unadjusted quoted prices in active markets for identical investments;
       
  • Level 2 –  other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.); and
       
  • Level 3 –  significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

 

  A summary of inputs used in valuing the Fund’s investments and other financial instruments as of April 30, 2019 and, if applicable, Level 1/Level 2 transfers and Level 3 rollforwards for the six months then ended is included in the Fund’s Schedule of Investments.
   
  Changes in valuation techniques may result in transfers into or out of an assigned level within the three-tier hierarchy. All transfers between different levels within the three-tier hierarchy

 

20

   

Notes to Financial Statements (unaudited)(continued)

 

  are deemed to have occurred as of the beginning of the reporting period. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES  

 

Management Fee

The Fund has a management agreement with Lord Abbett, pursuant to which Lord Abbett supplies the Fund with investment management services and executive and other personnel, provides office space and pays for ordinary and necessary office and clerical expenses relating to research and statistical work and supervision of the Fund’s investment portfolio.

 

The management fee is based on the Fund’s average daily net assets at the following annual rate:

 

First $200 million   .50%
Next $300 million   .40%
Next $200 million   .375%
Next $200 million   .35%
Over $900 million   .30%

 

For the six months ended April 30, 2019, the effective management fee paid to Lord Abbett was at an annualized rate of .32% of the Fund’s average daily net assets.

 

In addition, Lord Abbett provides certain administrative services to the Fund pursuant to an Administrative Services Agreement in return for a fee at an annual rate of .04% of the Fund’s average daily net assets.

 

12b-1 Distribution Plan

The Fund has adopted a distribution plan with respect to Class A, C, F, P, R2, R3 and R4 shares pursuant to Rule 12b-1 under the Act, which provides for the payment of ongoing distribution and service fees to Lord Abbett Distributor LLC (the “Distributor”), an affiliate of Lord Abbett. The following annual rates have been authorized by the Board pursuant to the plan:

 

Fees*   Class A Class C Class F(2) Class P Class R2 Class R3 Class R4
Service   .25%(1) .25% – .25% .25% .25% .25%
Distribution   – .75% .10% .20% .35% .25% –

 

* The Fund may designate a portion of the aggregate fee as attributable to service activities for purposes of calculating Financial Industry Regulatory Authority, Inc. (“FINRA”) sales charge limitations.
(1) Annual service fee on shares sold prior to June 1, 1990 is .15% of the average daily net assets attributable to Class A shares.
(2) The Class F Share Rule 12b-1 fee may be designated as a service fee in limited circumstances as described in the Fund’s prospectus.

 

Class F3, I, R5 and R6 shares do not have a distribution plan.

 

Commissions

Distributor received the following commissions on sales of shares of the Fund, after concessions were paid to authorized dealers, for the six months ended April 30, 2019:

 

Distributor
Commissions		   Dealers’
Concessions
$174,824     $961,793

 

Distributor received CDSCs of $4,478 and $4,948 for Class A and Class C shares, respectively, for the six months ended April 30, 2019.

 

One Director and certain of the Fund’s officers have an interest in Lord Abbett.

 

21

   

Notes to Financial Statements (unaudited)(continued)

 

4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS  

 

Dividends from net investment income, if any, are declared and paid at least quarterly. Taxable net realized gains from investment transactions, reduced by allowable 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 amounts of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These book/tax differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets based on their federal tax basis treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profits for tax purposes, are reported as a tax return of capital.

 

The tax character of distributions paid during the six months ended April 30, 2019 and fiscal year ended October 31, 2018 was as follows:

 

   Six Months Ended
4/30/2019
(unaudited)		   Year Ended
10/31/2018		 
Distributions paid from:          
Ordinary income   $231,920,274    $399,073,233 
Net long-term capital gains   335,546,397    360,446,993 
Total distributions paid   $567,466,671    $759,520,226 

 

As of April 30, 2019, the aggregate unrealized security gains and losses on investments and other financial instruments based on cost for U.S. federal income tax purposes were as follows:

 

Tax cost  $5,949,614,225 
Gross unrealized gain   684,668,961 
Gross unrealized loss   (262,499,804)
Net unrealized security gain  $422,169,157 

 

The difference between book-basis and tax-basis unrealized gains (loss) is attributable to the tax treatment of certain securities, other financial instruments and wash sales.

 

5. PORTFOLIO SECURITIES TRANSACTIONS  

 

Purchases and sales of investment securities (excluding short-term investments) for the six months ended April 30, 2019 were as follows:

 

Purchases    Sales
$1,647,897,718   $1,946,259,012

 

There were no purchases or sales of U.S. Government securities for the six months ended April 30, 2019.

 

The Fund is permitted to purchase and sell securities (“cross-trade”) from and to other Lord Abbett funds or client accounts pursuant to procedures approved by the Board in compliance with Rule 17a-7 under the Act (the “Rule”). Each cross-trade is executed at a fair market price in compliance with provisions of the Rule. For the six months ended April 30, 2019, the Fund engaged in cross-trades sales of $13,926,079 which resulted in net realized gains of $341,161.

 

22

   

Notes to Financial Statements (unaudited)(continued)

 

6. DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES  

 

The Fund entered into E-Mini S&P 500 Index futures contracts for the six months ended April 30, 2019 (as described in note 2(g)) to manage cash. The Fund bears the risk that the underlying index will move unexpectedly, in which case the Fund may realize a loss. There is minimal counterparty credit risk to the Fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees futures against default.

 

As of April 30, 2019, the Fund had futures contracts with unrealized appreciation of $466,520. Amounts of $(402,773) and $2,146,081 are included in the Statement of Operations related to futures contracts under the captions Net realized loss on futures contracts and Net change in unrealized appreciation/depreciation on futures contracts, respectively. The average number of futures contracts throughout the period was 187.

 

7. DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES  

 

The Financial Accounting Standards Board (“FASB”) requires disclosures intended to help better assess the effect or potential effect of offsetting arrangements on a fund’s financial position. The following tables illustrate gross and net information about recognized assets and liabilities eligible for offset in the Statement of Assets and Liabilities; and disclose such amounts subject to an enforceable master netting agreement or similar agreement, by counterparty. A master netting agreement is an agreement between the Fund and a counterparty which provides for the net settlement of amounts owed under all contracts traded under that agreement, as well as cash collateral, through a single payment by one party to the other in the event of default on or termination of any one contract. The Fund’s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the master netting agreement does not result in an offset of reported amounts of financial assets and liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty:

 

Description  Gross Amounts of
Recognized Assets		   Gross Amounts
Offset in the
Statement of Assets
and Liabilities		   Net Amounts of
Assets Presented
in the Statement of
Assets and Liabilities		 
Repurchase Agreement  $62,481,091   $–   $62,481,091 
Total  $62,481,091   $–   $62,481,091 

 

   Net Amounts
of Assets
Presented in		 Amounts Not Offset in the
Statement of Assets and Liabilities		     
Counterparty  the Statement
of Assets and
Liabilities		   Financial
Instruments		   Cash
Collateral
Received(a)		   Securities
Collateral
Received(a)		   Net Amount(b) 
Fixed Income Clearing Corp.  $62,481,091   $–   $–   $(62,481,091)  $– 
Total  $62,481,091   $–   $–   $(62,481,091)  $– 

 

(a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statement of Assets and Liabilities, for each respective counterparty.
(b) Net amount represents the amount owed to the Fund by the counterparty as of April 30, 2019.

 

23

   

Notes to Financial Statements (unaudited)(continued)

 

8. DIRECTORS’ REMUNERATION  

 

The Fund’s officers and one Director, who are associated with Lord Abbett, do not receive any compensation from the Fund for serving in such capacities. Independent Directors’ fees are allocated among all Lord Abbett-sponsored funds based on the net assets of each fund. There is an equity-based plan available to all Independent Directors under which Independent Directors must defer receipt of a portion of, and may elect to defer receipt of an additional portion of Directors’ fees. The deferred amounts are treated as though equivalent dollar amounts had been invested in the funds. Such amounts and earnings accrued thereon are included in Directors’ fees on the Statement of Operations and in Directors’ fees payable on the Statement of Assets and Liabilities and are not deductible for U.S. federal income tax purposes until such amounts are paid.

 

9. EXPENSE REDUCTIONS  

 

The Fund has entered into an arrangement with its transfer agent and custodian, whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s expenses.

 

10. LINE OF CREDIT  

 

During the period ended December 20, 2018, the Fund and certain other funds managed by Lord Abbett (collectively, the “Participating Funds”) participated in a syndicated line of credit facility with various lenders for $1.06 billion (the “Syndicated Facility”), whereas State Street Bank (“SSB”) participates as a lender and as agent for the lenders. Under the Syndicated Facility, the Participating Funds are subject to graduated borrowing limits of one-third of Fund assets (if Fund assets are less than $750 million), $250 million, $300 million, $350 million, or $1 billion, based on past borrowings and likelihood of future borrowings. Effective December 21, 2018, the Participating Funds entered into an amended Syndicated Facility with various lenders for $1.1 billion based on the same terms as described above.

 

Effective December 21, 2018, the Participating Funds participated in an additional line of credit facility with SSB for $250 million (the “Bilateral Facility,” and together with the Syndicated Facility, the “Facilities”). Under the Bilateral Facility, each Participating Fund may borrow up to the lesser of $250 million or one-third of Fund assets. The Facilities are to be used for temporary or emergency purposes to satisfy redemption requests and manage liquidity.

 

For the six months ended April 30, 2019, the Fund did not utilize the Facilities.

 

11. INTERFUND LENDING PROGRAM  

 

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC exemptive order”), certain registered open-end management investment companies managed by Lord Abbett, including the Fund, participate in a joint lending and borrowing program (the “Interfund Lending Program”). The SEC exemptive order allows the Fund to borrow money from and lend money to each other for temporary or emergency purposes subject to the limitations and conditions.

 

During the six months ended April 30, 2019, the Fund did not participate as a borrower or lender in the Interfund Lending Program.

 

12. CUSTODIAN AND ACCOUNTING AGENT  

 

SSB is the Fund’s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating the Fund’s NAV.

 

24

   

Notes to Financial Statements (unaudited)(continued)

 

13. INVESTMENT RISKS  

 

The Fund is subject to the general risks and considerations associated with equity investing, as well as the particular risks associated with value stocks and dividend paying companies. The value of an investment in the Fund will fluctuate in response to movements in the equity securities market in general and to the changing prospects of the individual companies in which the Fund invests. Large-cap value stocks may perform differently than the market as a whole and other types of stocks, such as small company stocks and growth stocks. Different types of stocks tend to shift in and out of favor depending on market and economic conditions. The market may fail to recognize the intrinsic value of particular value stocks for a long time. In addition, if the Fund’s assessment of a company’s value or prospects for exceeding earnings expectations or market conditions is wrong, the Fund could suffer losses or produce poor performance relative to other funds, even in a rising market. The performance of dividend paying companies may lag the performance of other companies or the broader market as a whole. There is no guarantee that companies that currently pay dividends will continue to do so. Due to its investments in multinational companies, foreign companies and ADRs, the Fund may experience increased market, liquidity, currency, political, information, and other risks.

 

The Fund is subject to the risks associated with derivatives, which may be different from and greater than the risks associated with investing directly in securities and other investments.

 

These factors can affect the Fund’s performance.

 

14. SUMMARY OF CAPITAL TRANSACTIONS  

 

Transactions in shares of capital stock were as follows:

 

       Six Months Ended
April 30, 2019
(unaudited		)      Year Ended
October 31, 2018		 
Class A Shares  Shares   Amount   Shares   Amount 
Shares sold   9,688,687   $135,500,999    11,264,965   $177,874,950 
Converted from Class B *   –    –    269,241    4,274,217 
Converted from Class C**   455,419    6,487,062    11,804,686    183,862,758 
Reinvestment of distributions   32,502,780    459,628,562    39,015,946    597,973,347 
Shares reacquired   (29,658,442)   (420,423,460)   (49,783,544)   (787,557,730)
Increase   12,988,444   $181,193,163    12,571,294   $176,427,542 
 
Class B Shares                    
Shares sold   –   $–    2,132   $33,637 
Reinvestment of distributions   –    –    29,237    451,359 
Shares reacquired   –    –    (83,525)   (1,336,615)
Converted to Class A*   –    –    (265,996)   (4,274,217)
Decrease   –   $–    (318,152)  $(5,125,836)
 
Class C Shares                    
Shares sold   1,191,731   $16,693,037    1,704,615   $27,114,246 
Reinvestment of distributions   732,388    10,391,573    2,084,073    31,858,174 
Shares reacquired   (1,663,762)   (23,465,737)   (3,454,470)   (54,667,235)
Converted to Class A**   (454,383)   (6,487,062)   (11,804,392)   (183,862,758)
Decrease   (194,026)  $(2,868,189)   (11,470,174)  $(179,557,573)

 

25

   

Notes to Financial Statements (unaudited)(continued)

 

       Six Months Ended
April 30, 2019
(unaudited		)      Year Ended
October 31, 2018		 
Class F Shares  Shares   Amount   Shares   Amount 
Shares sold   3,795,073   $54,114,050    7,493,630   $118,254,042 
Reinvestment of distributions   1,599,961    22,632,130    1,840,686    28,222,799 
Shares reacquired   (5,002,502)   (70,110,937)   (10,712,662)   (171,399,994)
Increase (decrease)   392,532   $6,635,243    (1,378,346)  $(24,923,153)
                     
Class F3 Shares                    
Shares sold   724,362   $10,424,653    2,483,701   $39,643,316 
Reinvestment of distributions   659,035    9,392,718    714,385    11,031,425 
Shares reacquired   (939,761)   (13,532,850)   (1,963,909)   (31,301,707)
Increase   443,636   $6,284,521    1,234,177   $19,373,034 
                     
Class I Shares                    
Shares sold   3,602,080   $53,146,920    4,619,055   $75,451,773 
Reinvestment of distributions   744,569    10,575,388    834,270    12,853,523 
Shares reacquired   (4,758,075)   (70,458,867)   (1,722,752)   (27,693,011)
Increase (decrease)   (411,426)  $(6,736,559)   3,730,573   $60,612,285 
                     
Class P Shares                    
Shares sold   24,799   $353,325    56,085   $901,928 
Reinvestment of distributions   90,379    1,275,824    126,172    1,929,189 
Shares reacquired   (138,799)   (1,967,922)   (271,780)   (4,296,805)
Decrease   (23,621)  $(338,773)   (89,523)  $(1,465,688)
                     
Class R2 Shares                    
Shares sold   7,572   $108,384    10,637   $165,484 
Reinvestment of distributions   6,291    89,078    6,951    106,487 
Shares reacquired   (290)   (4,171)   (35,919)   (590,243)
Increase (decrease)   13,573   $193,291    (18,331)  $(318,272)
                     
Class R3 Shares                    
Shares sold   188,765   $2,658,468    294,820   $4,654,284 
Reinvestment of distributions   264,454    3,738,294    336,748    5,151,469 
Shares reacquired   (282,019)   (4,060,438)   (725,740)   (11,525,052)
Increase (decrease)   171,200   $2,336,324    (94,172)  $(1,719,299)
                     
Class R4 Shares                    
Shares sold   80,082   $1,141,415    327,384   $5,138,097 
Reinvestment of distributions   27,195    383,988    18,063    277,539 
Shares reacquired   (91,791)   (1,322,884)   (111,327)   (1,763,308)
Increase   15,486   $202,519    234,120   $3,652,328 
                     
Class R5 Shares                    
Shares sold   9,346   $134,333    2,137   $34,078 
Reinvestment of distributions   518    7,353    169    2,607 
Shares reacquired   (374)   (5,290)   (346)   (5,512)
Increase   9,490   $136,396    1,960   $31,173 

 

26

   

Notes to Financial Statements (unaudited)(concluded)

 

     Six Months Ended
April 30, 2019
(unaudited		)      Year Ended
October 31, 2018		 
Class R6 Shares  Shares   Amount   Shares   Amount 
Shares sold   301,954   $4,328,725    642,738   $10,407,244 
Reinvestment of distributions   102,834    1,464,530    99,754    1,540,613 
Shares reacquired   (285,012)   (4,248,655)   (478,740)   (7,819,703)
Increase   119,776   $1,544,600    263,752   $4,128,154 
                     
Class T Shares                    
Shares sold   –   $–    –   $– 
Reinvestment of distributions   –    –    74    1,132 
Shares reacquired   –    –    (694)   (10,952)
Increase (decrease)   –   $–    (620)  $(9,820)

 

* Automatic conversion of Class B shares occurred on the 25th day of the month (or, if the 25th day was not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. Class B shares were closed on April 25, 2018.
**  Automatic conversion of Class C shares occurs on the 25th day of the month (or, if the 25th day was not a business day, the next business day thereafter) following the tenth anniversary of the day on which the purchase order was accepted.

 

27

   

Approval of Advisory Contract

 

The Board, including all of the Directors who are not “interested persons” of the Fund or of Lord Abbett, as defined in the Investment Company Act of 1940, as amended (the “Independent Directors”), annually considers whether to approve the continuation of the existing management agreement between the Fund and Lord Abbett (the “Agreement”). In connection with its most recent approval, the Board reviewed materials relating specifically to the Agreement, as well as numerous materials received throughout the course of the year, including information about the Fund’s investment performance compared to the performance of its benchmark. Before making its decision as to the Fund, the Board had the opportunity to ask questions and request further information, taking into account its knowledge of Lord Abbett gained through its meetings and discussions. These meetings and discussions included reviews of Fund performance conducted by members of the Contract Committee, the deliberations of the Contract Committee, and discussions between the Contract Committee and Lord Abbett’s management. The Independent Directors also met with their independent legal counsel in various private sessions at which no representatives of management were present.

 

The materials received by the Board included, but were not limited to: (1) information provided by Broadridge Financial Solutions (“Broadridge”) regarding the investment performance of the Fund compared to the investment performance of certain funds with similar investment styles as determined by Broadridge, based, in part, on the Fund’s Morningstar category (the “performance peer group”), and the investment performance of the Fund’s benchmark; (2) information provided by Broadridge regarding the expense ratios, contractual and actual management fee rates, and other expense components for the Fund and certain funds in the same Morningstar category, with generally the same or similar share classes and operational characteristics, including asset size (the “expense peer group”); (3) certain supplemental investment performance information provided by Lord Abbett; (4) information provided by Lord Abbett on the expense ratios, management fee rates, and other expense components for the Fund; (5) sales and redemption information for the Fund; (6) information regarding Lord Abbett’s financial condition; (7) an analysis of the relative profitability of the Agreement to Lord Abbett; (8) information provided by Lord Abbett regarding the investment management fee schedules for Lord Abbett’s other advisory clients maintaining accounts with a similar investment strategy as the Fund; and (9) information regarding the personnel and other resources devoted by Lord Abbett to managing the Fund.

 

Investment Management and Related Services Generally. The Board considered the services provided by Lord Abbett to the Fund, including investment research, portfolio management, and trading, and Lord Abbett’s commitment to compliance with all applicable 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 that may result from being engaged in other lines of business. The Board 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. After reviewing these and related factors, the Board concluded that the Fund was likely to continue to benefit from the nature, extent and quality of the investment services provided by Lord Abbett under the Agreement.

 

28

   

Approval of Advisory Contract (continued)

 

Investment Performance. The Board reviewed the Fund’s investment performance in relation to that of the performance peer group and the Fund’s benchmark as of various periods ended August 31, 2018. The Board observed that the Fund’s investment performance was above the median of the performance peer group for the one-, three-, and five-year periods, but below the median of the performance peer group for the ten-year period. The Board took into account actions taken by Lord Abbett to attempt to improve equity fund performance. The Board further considered Lord Abbett’s performance and reputation generally, the performance of other Lord Abbett-managed funds overseen by the Board, and the willingness of Lord Abbett to take steps intended to improve performance when appropriate. After reviewing these and related factors, the Board concluded that the Fund’s Agreement should be continued.

 

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, and other services provided to the Fund by Lord Abbett. Among other things, the Board considered the size, experience, and turnover of Lord Abbett’s staff, Lord Abbett’s investment methodology and philosophy, and Lord Abbett’s approach to recruiting, training, and retaining personnel.

 

Nature and Quality of Other Services. The Board considered the nature, quality, and extent of compliance, administrative, and other services performed by Lord Abbett and the nature and extent of Lord Abbett’s supervision of third party service providers, including the Fund’s transfer agent and custodian.

 

Expenses. The Board considered the expense level of the Fund, including the contractual and actual management fee rates, and the expense levels of the Fund’s expense peer group. It also considered how the expense level of the Fund related to those of the expense peer group and the amount and nature of the fees paid by shareholders. The Board observed that the net total expense ratio of the Fund was below the median of the expense peer group. After reviewing these and related factors, the Board concluded, within the context of its overall approval of the Agreement, that the expense level of the Fund was reasonable and supported the continuation of the Agreement.

 

Profitability. The Board considered the level of Lord Abbett’s operating margin in managing the Fund, including a review of Lord Abbett’s methodology for allocating its costs to its management of the Fund. It considered whether the Fund was profitable to Lord Abbett in connection with the Fund’s operation, including the fee that Lord Abbett receives from the Fund for providing administrative services to the Fund. The Board also considered the profits realized from other business segments of Lord Abbett, which may benefit from or be related to the Fund’s business. The Board considered Lord Abbett’s profit margins excluding Lord Abbett’s marketing and distribution expenses. The Board also considered Lord Abbett’s profit margins, without those exclusions, in comparison with available industry data and how those profit margins could affect Lord Abbett’s ability to recruit and retain personnel. The Board recognized that Lord Abbett’s overall profitability was a factor in enabling it to attract and retain qualified personnel to provide services to the Fund. After reviewing these and related factors, the Board concluded, within the context of its overall approval of the Agreement, that Lord Abbett’s profitability with respect to the Fund was not excessive.

 

29

   

Approval of Advisory Contract (concluded)

 

Economies of Scale. The Board considered the extent to which there had been economies of scale in managing the Fund, whether the Fund’s shareholders had appropriately benefited from such economies of scale, and whether there was potential for realization of any further economies of scale. The Board concluded that the existing management fee schedule, with its breakpoints in the level of the management fee, adequately addressed any economies of scale in managing the Fund.

 

Other Benefits to Lord Abbett. The Board considered the amount and nature of the fees paid by the Fund and the Fund’s shareholders to Lord Abbett and the Distributor for services other than investment advisory services, such as the fee that Lord Abbett receives from the Fund for providing administrative services to the Fund. 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 the Distributor receives 12b-1 fees from certain of the Lord Abbett 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 it receives, and receives a portion of the sales charges on sales and redemptions of some classes of shares of the Lord Abbett Funds. In addition, the Board observed that Lord Abbett accrues certain benefits for its business of providing investment advice to clients other than the Lord Abbett Funds, but that business also benefits the Funds. The Board also noted that Lord Abbett, as disclosed in the prospectus of the Fund, has entered into revenue sharing arrangements with certain entities that distribute shares of the Lord Abbett Funds. The Board also took into consideration the investment research that Lord Abbett receives as a result of client brokerage transactions.

 

Alternative Arrangements. The Board considered whether, instead of approving continuation of the Agreement, it might be in the best interests of the Fund to implement one or more alternative arrangements, such as continuing to employ Lord Abbett, but on different terms. After considering all of the relevant factors, the Board unanimously found that continuation of the Agreement was in the best interests of the Fund and its shareholders and voted unanimously to approve the continuation of the Agreement. In considering whether to approve the continuation of the Agreement, the Board did not identify any single factor as paramount or controlling. Individual Directors may have evaluated the information presented differently from one another, giving different weights to various factors. This summary does not discuss in detail all matters considered.

 

30

   

Householding

 

The Fund has adopted a policy that allows it to send only one copy of the Fund’s prospectus, proxy material, annual report and semiannual report to certain shareholders residing at the same “household.” This reduces Fund expenses, which benefits you and other shareholders. If you need additional copies or do not want your mailings to be “householded,” please call Lord Abbett at 888-522-2388 or send a written request with your name, the name of your fund or funds and your account number or numbers to Lord Abbett Family of Funds, P.O. Box 219336, Kansas City, MO 64121.

 

Proxy Voting Policies, Procedures and Records

 

A description of the policies and procedures that Lord Abbett uses to vote proxies related to the Fund’s portfolio securities, and information on how Lord Abbett voted the Fund’s proxies during the 12-month period ended June 30 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 Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters as an attachment to Form N-PORT. Previously, this information was filed 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 888-522-2388.

 

31

   

 

 

 

 

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 mutual fund shares are distributed by
LORD ABBETT DISTRIBUTOR LLC.		 Lord Abbett Affiliated Fund, Inc.

LAA-3

(06/19)

 
Item 2: Code of Ethics.
  Not applicable.
   
Item 3: Audit Committee Financial Expert.
  Not applicable.
   
Item 4: Principal Accountant Fees and Services.
  Not applicable.
   
Item 5: Audit Committee of Listed Registrants.
  Not applicable.
   
Item 6: 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 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) 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 Investment Company Act of 1940 is attached hereto as a part of EX-99.CERT.
     
  (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 provided as a part of EX-99.906CERT.
 

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 affiliated fund, inc.  
       
  By:  /s/ Douglas B. Sieg  
    Douglas B. Sieg  
    President and Chief Executive Officer  

 

Date: June 27, 2019

 

  By:  /s/ Bernard J. Grzelak  
    Bernard J. Grzelak  
    Chief Financial Officer and Vice President  

 

Date: June 27, 2019

 

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.

 

  By:  /s/ Douglas B. Sieg  
    Douglas B. Sieg  
    President and Chief Executive Officer  

 

Date: June 27, 2019

 

  By:  /s/ Bernard J. Grzelak  
    Bernard J. Grzelak  
    Chief Financial Officer and Vice President  

 

Date: June 27, 2019