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: 811-02924

 

LORD ABBETT U.S. GOVERNMENT & GOVERNMENT SPONSORED

ENTERPRISES MONEY MARKET FUND, INC.

(Exact name of Registrant as specified in charter)


 

 

 

 

90 Hudson Street, Jersey City, NJ 07302

 

 

 

 

(Address of principal executive offices) (Zip code)


 

 

 

Thomas R. Phillips, 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: 6/30

Date of reporting period: 12/31/2012



 

 

Item 1:

Report(s) to Shareholders.




(COVER PAGE)

2 0 1 2

L O R D  A B B E T T

S E M I A N N U A L

R E P O R T

Lord Abbett

U.S. Government & Government

Sponsored Enterprises Money

Market Fund

For the six-month period ended December 31, 2012




 

 

 

Lord Abbett U.S. Government & Government

Sponsored Enterprises Money Market Fund

Semiannual Report

For the six-month period ended December 31, 2012

Dear Shareholders: We are pleased to provide you with this semiannual report for the Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market Fund for the six-month period ended December 31, 2012. For additional information about the Fund, please visit our Website at www.lordabbett.com, where you can access the 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,

-S- DARIA L. FOSTER

Daria L. Foster

Director, President and Chief Executive Officer

 

 

1



 

 

Expense Example

          As a shareholder of the Fund you incur ongoing costs, including management fees; distribution and service (12b-1) fees (currently only Class B shares have an active 12b-1 Plan); 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 (July 1, 2012 through December 31, 2012).

Actual Expenses

          For each class of the Fund, the first line of the applicable 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 7/1/12 – 12/31/12” 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. 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

 

 

 

 

 

 

 

 

 

 

 

7/1/12

 

12/31/12

 

7/1/12 -
12/31/12

 

 

 

 

 

 

 

 

 

Class A

 

 

 

 

 

 

 

 

 

 

Actual

 

 

$1,000.00

 

$1,000.10

 

 

$0.66

 

 

Hypothetical (5% Return Before Expenses)

 

 

$1,000.00

 

$1,024.54

 

 

$0.66

 

 

Class B

 

 

 

 

 

 

 

 

 

 

Actual

 

 

$1,000.00

 

$1,000.00

 

 

$0.76

 

 

Hypothetical (5% Return Before Expenses)

 

 

$1,000.00

 

$1,024.44

 

 

$0.77

 

 

Class C

 

 

 

 

 

 

 

 

 

 

Actual

 

 

$1,000.00

 

$1,000.10

 

 

$0.66

 

 

Hypothetical (5% Return Before Expenses)

 

 

$1,000.00

 

$1,024.54

 

 

$0.66

 

 

Class I

 

 

 

 

 

 

 

 

 

 

Actual

 

 

$1,000.00

 

$1,000.10

 

 

$0.66

 

 

Hypothetical (5% Return Before Expenses)

 

 

$1,000.00

 

$1,024.54

 

 

$0.66

 

 


For each class of the Fund, net expenses are equal to the annualized expense ratio for such class (0.13% for Class A, 0.15% for Class B and 0.13% for Classes C and I) multiplied by the average account value over the period, multiplied by 184/365.


 

 

 

Portfolio Holdings Presented by Maturity

December 31, 2012


 

 

 

 

Days

 

%*

 

1 – 30 days

 

52.69

%

31 – 60 days

 

10.13

%

61 – 90 days

 

13.57

%

91 – 120 days

 

1.90

%

Over 120 days

 

21.71

%

Total

 

100.00

%


 

 

*

Represents percent of total investments.

3



 

Schedule of Investments (unaudited)

December 31, 2012


 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

Yield

 

Maturity
Date

 

Principal
Amount
(000)

 

Fair
Value

 

                 

 

GOVERNMENT SPONSORED ENTERPRISES SECURITIES 43.20%

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank

 

0.14%

 

6/28/2013

 

$

16,000

 

$

15,988,987

 

Federal Home Loan Bank

 

0.15%

 

2/1/2013

 

 

12,000

 

 

11,998,450

 

Federal Home Loan Bank

 

0.16%

 

2/22/2013

 

 

38,000

 

 

37,991,328

 

Federal Home Loan Bank

 

0.16%

 

4/3/2013

 

 

9,000

 

 

8,996,435

 

Federal Home Loan Bank

 

0.16%

 

5/17/2013

 

 

6,000

 

 

5,996,373

 

Federal Home Loan Bank

 

0.16%

 

5/24/2013

 

 

12,000

 

 

11,992,373

 

Federal Home Loan Bank

 

0.16%

 

5/29/2013

 

 

12,000

 

 

11,992,353

 

Federal Home Loan Bank

 

0.16%

 

6/7/2013

 

 

6,300

 

 

6,295,604

 

Federal Home Loan Bank

 

0.17%

 

4/10/2013

 

 

3,000

 

 

2,998,598

 

Federal Home Loan Bank

 

0.17%

 

5/3/2013

 

 

27,000

 

 

26,984,902

 

Federal Home Loan Bank

 

0.17%

 

5/10/2013

 

 

2,300

 

 

2,298,640

 

Federal Home Loan Bank

 

0.17%

 

5/17/2013

 

 

9,700

 

 

9,693,954

 

Federal Home Loan Mortgage Corp.

 

0.14%

 

5/13/2013

 

 

4,000

 

 

3,997,947

 

Federal Home Loan Mortgage Corp.

 

0.14%

 

6/24/2013

 

 

24,000

 

 

23,984,340

 

Federal Home Loan Mortgage Corp.

 

0.15%

 

1/3/2013

 

 

5,800

 

 

5,799,952

 

Federal Home Loan Mortgage Corp.

 

0.15%

 

3/4/2013

 

 

9,091

 

 

9,088,652

 

Federal Home Loan Mortgage Corp.

 

0.15%

 

3/5/2013

 

 

5,300

 

 

5,298,609

 

Federal Home Loan Mortgage Corp.

 

0.17%

 

2/11/2013

 

 

14,000

 

 

13,997,369

 

Federal National Mortgage Assoc.

 

0.14%

 

1/9/2013

 

 

5,000

 

 

4,999,844

 

Federal National Mortgage Assoc.

 

0.14%

 

1/14/2013

 

 

10,000

 

 

9,999,494

 

Federal National Mortgage Assoc.

 

0.14%

 

6/26/2013

 

 

12,000

 

 

11,991,904

 

Federal National Mortgage Assoc.

 

0.16%

 

1/30/2013

 

 

11,170

 

 

11,168,605

 

Federal National Mortgage Assoc.

 

0.16%

 

4/3/2013

 

 

6,000

 

 

5,997,547

 

Federal National Mortgage Assoc.

 

0.17%

 

5/15/2013

 

 

6,000

 

 

5,996,315

 

Federal National Mortgage Assoc.

 

0.18%

 

1/2/2013

 

 

10,000

 

 

9,999,951

 

 

 

 

 

 

 

 

 

 

   

 

Total Government Sponsored Enterprises Securities (cost $275,548,526)

 

 

 

 

 

 

 

 

275,548,526

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. TREASURY OBLIGATIONS 10.24%

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury Notes

 

0.75%

 

3/31/2013

 

 

10,000

 

 

10,014,341

 

U.S. Treasury Notes

 

2.50%

 

3/31/2013

 

 

55,000

 

 

55,313,690

 

 

 

 

 

 

 

 

 

 

   

 

Total U.S. Treasury Obligations (cost $65,328,031)

 

 

 

 

 

 

 

 

 

65,328,031

 

 

 

 

 

 

 

 

 

 

   

 


 

 

 

4

See Notes to Financial Statements.

 




 

Schedule of Investments (unaudited)(concluded)

December 31, 2012


 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

Principal
Amount
(000)

 

Fair
Value

 

                     

 

SHORT-TERM INVESTMENTS 45.61%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase Agreements

 

 

 

 

 

 

 

 

 

 

 

Repurchase Agreement dated 12/31/2012, 0.10%
due 1/2/2013 with Bank of America Corp.
collateralized by $55,029,000 of U.S. Treasury Bond
at 6.875% due 8/15/2025 and $45,719,000 of U.S.
Treasury Bond at 4.625% due 2/15/2040;
value: $148,477,982; proceeds: $143,889,799

 

 

 

 

 

$

143,889

 

$

143,889,000

 

Repurchase Agreement dated 12/31/2012, 0.01%
due 1/2/2013 with Fixed Income Clearing Corp.
collateralized by $1,820,000 of Federal National
Mortgage Assoc. at 5.00% due 4/15/2015; value:
$2,033,850; proceeds: $1,993,319

 

 

 

 

 

 

1,993

 

 

1,993,318

 

Repurchase Agreement dated 12/31/2012, 0.16%
due 1/2/2013 with J.P. Morgan Chase & Co.
collateralized by $19,500,000 of Federal Farm Credit
Bank at 0.19% due 6/20/2013; $40,200,000 of
Federal Farm Credit Bank at 0.44% due 12/28/2015;
$14,280,000 of Federal Home Loan Bank at 0.09%
due 12/11/2013; $22,000,000 of Federal Home Loan
Bank at 0.18% due 2/27/2014; $22,985,000 of
Federal National Mortgage Assoc. at 0.50% due
1/10/2017; $13,400,000 of Federal National
Mortgage Assoc. at 0.50% due 9/27/2017 and
$15,440,000 of Federal National Mortgage Assoc. at
0.75% due 11/21/2017; value: $147,890,889;
proceeds: $145,001,289

 

 

 

 

 

$

145,000

 

 

145,000,000

 

 

 

 

 

 

 

 

 

 

   

 

Total Repurchase Agreements (cost $290,882,318)

 

 

 

 

 

 

 

 

 

290,882,318

 

 

 

 

 

 

 

 

 

 

   

 

Total Investments in Securities 99.05% (cost $631,758,875)*

 

 

 

 

 

 

 

 

 

631,758,875

 

 

 

 

 

 

 

 

 

 

   

 

Other Assets in Excess of Liabilities 0.95%

 

 

 

 

 

 

 

 

 

6,034,495

 

 

 

 

 

 

 

 

 

 

   

 

Net Assets 100.00%

 

 

 

 

 

 

 

 

$

637,793,370

 

 

 

 

 

 

 

 

 

 

   

 


 

 

 

 

*

Cost for Federal income tax purposes is $631,758,875. Weighted average maturity of investments: 53 days.


 

 

 

 

See Notes to Financial Statements.

5




 

 

Statement of Assets and Liabilities (unaudited)

December 31, 2012


 

 

 

 

 

ASSETS:

 

 

 

 

Investments in securities, at cost and fair value

 

$

340,876,557

 

Investments in repurchase agreements, at cost and fair value

 

 

290,882,318

 

Receivables:

 

 

 

 

Capital shares sold

 

 

6,765,033

 

Interest

 

 

371,512

 

From advisor (See Note 3)

 

 

51,120

 

Prepaid expenses

 

 

52,399

 

         

Total assets

 

 

638,998,939

 

         

LIABILITIES:

 

 

 

 

Payables:

 

 

 

 

Capital shares reacquired

 

 

751,228

 

Directors’ fees

 

 

164,287

 

Fund administration

 

 

21,065

 

12b-1 distribution fees-Class B

 

 

10,090

 

Distributions payable

 

 

584

 

Accrued expenses and other liabilities

 

 

258,315

 

         

Total liabilities

 

 

1,205,569

 

         

NET ASSETS

 

$

637,793,370

 

         

COMPOSITION OF NET ASSETS:

 

 

 

 

Paid-in capital

 

$

637,788,450

 

Undistributed net investment income

 

 

259

 

Accumulated net realized gain on investments

 

 

4,661

 

         

Net Assets

 

$

637,793,370

 

         

Net assets by class:

 

 

 

 

Class A Shares

 

$

559,965,460

 

Class B Shares

 

$

15,003,654

 

Class C Shares

 

$

47,316,982

 

Class I Shares

 

$

15,507,274

 

Outstanding shares by class:

 

 

 

 

Class A Shares (2 billion shares of common stock authorized, $.001 par value)

 

 

559,961,160

 

Class B Shares (400 million shares of common stock authorized, $.001 par value)

 

 

15,003,500

 

Class C Shares (500 million shares of common stock authorized, $.001 par value)

 

 

47,316,628

 

Class I Shares (100 million shares of common stock authorized, $.001 par value)

 

 

15,507,210

 

Net asset value, offering and redemption price per share
(Net assets divided by outstanding shares)

 

 

 

 

Class A Shares-Net asset value

 

 

$1.00

 

Class B Shares-Net asset value

 

 

$1.00

 

Class C Shares-Net asset value

 

 

$1.00

 

Class I Shares-Net asset value

 

 

$1.00

 

         

 

 

 

6

See Notes to Financial Statements.

 




 

 

 

 

 

Statement of Operations (unaudited)

 

 

 

 

For the Six Months Ended December 31, 2012

 

 

 

 

 

 

 

 

 

Investment income:

 

 

 

 

 

Interest and other

 

$

464,233

 

         

Expenses:

 

 

 

 

Management fee

 

 

1,415,034

 

Shareholder servicing

 

 

445,922

 

Fund administration

 

 

122,599

 

12b-1 distribution plan-Class B

 

 

58,598

 

Registration

 

 

51,648

 

Professional

 

 

25,336

 

Reports to shareholders

 

 

22,768

 

Directors’ fees

 

 

8,789

 

Custody

 

 

6,921

 

Other

 

 

8,506

 

         

Gross expenses

 

 

2,166,121

 

Expense reductions (See Note 6)

 

 

(173

)

Management fee waived and expenses reimbursed (See Note 3)

 

 

(1,704,035

)

12b-1 distribution plan-Class B reimbursed (See Note 3)

 

 

(57,035

)

         

Net expenses

 

 

404,878

 

         

Net investment income

 

$

59,355

 

         

 

 

 

 

See Notes to Financial Statements.

7



Statements of Changes in Net Assets

 

 

 

 

 

 

 

 

INCREASE IN NET ASSETS

 

For the Six Months Ended
December 31, 2012
(unaudited)

 

For the Year Ended
June 30, 2012

 

Operations:

 

 

 

 

 

 

 

Net investment income

 

$

59,355

 

$

133,955

 

Net realized gain on investments

 

 

 

 

4,661

 

               

Net increase in net assets resulting from operations

 

 

59,355

 

 

138,616

 

               

Distributions to shareholders from:

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

 

 

Class A

 

 

(53,809

)

 

(121,284

)

Class C

 

 

(4,249

)

 

(10,309

)

Class I

 

 

(1,297

)

 

(2,362

)

               

Total distributions to shareholders

 

 

(59,355

)

 

(133,955

)

               

Capital share transactions (Net of share conversions) (See Note 9):

 

 

 

 

 

 

 

Net proceeds from sales of shares

 

 

724,611,379

 

 

1,407,324,879

 

Reinvestment of distributions

 

 

55,813

 

 

125,667

 

Cost of shares reacquired

 

 

(699,780,887

)

 

(1,405,735,731

)

               

Net increase in net assets resulting from capital
share transactions

 

 

24,886,305

 

 

1,714,815

 

               

Net increase in net assets

 

 

24,886,305

 

 

1,719,476

 

               

NET ASSETS:

 

 

 

 

 

 

 

Beginning of period

 

$

612,907,065

 

$

611,187,589

 

               

End of period

 

$

637,793,370

 

$

612,907,065

 

               

Undistributed net investment income

 

$

259

 

$

259

 

               

 

 

 

8

See Notes to Financial Statements.

 



Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Shares

 

 

 

 

 

Six Months
Ended
12/31/2012
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended 6/30

 

 

 

 

 

 

 

2012

 

2011

 

2010

 

2009

 

2008

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value,
beginning of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income (a)

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

.01

 

 

.03

 

Net realized gain

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total from investment
operations

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

.01

 

 

.03

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Distributions to
shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

(.01

)

 

(.03

)

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Net asset value,
end of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total Return (c)

 

 

 

.01

%

 

 

.02

%

 

.02

%

 

.02

%

 

.59

%

 

3.21

%

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses, excluding
expense reductions and
including management
fee waived and expenses
reimbursed

 

 

 

.07

% (d)

 

 

.06

%

 

.14

%

 

.13

%

 

.51

%

 

.70

%

 

Expenses, including
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.07

% (d)

 

 

.06

%

 

.14

%

 

.13

%

 

.51

%

 

.70

%

 

Expenses, excluding
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.35

% (d)

 

 

.66

%

 

.68

%

 

.76

%

 

.79

%

 

.90

%

 

Net investment income

 

 

 

.01

% (d)

 

 

.02

%

 

.02

%

 

.02

%

 

.53

%

 

3.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets,
end of period (000)

 

 

 

$559,965

 

 

 

$538,523

 

 

$539,205

 

 

$498,657

 

 

$536,755

 

 

$425,473

 

 

 

 

(a)

Calculated using average shares outstanding during the period.

(b)

Amount is less than $.01.

(c)

Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.

(d)

Not annualized.


 

 

 

 

See Notes to Financial Statements.

9



Financial Highlights (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B Shares

 

 

 

 

 

Six Months
Ended
12/31/2012
(unaudited)

 

 

 

 

 

Year Ended 6/30

 

 

 

 

 

 

 

2012

 

2011

 

2010

 

2009

 

2008

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value,
beginning of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income (a)

 

 

 

(b)

 

 

 

 

 

 

 

 

(b)

 

.02

 

Net realized gain

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total from investment
operations

 

 

 

(b)

 

 

(b)

 

 

 

 

 

(b)

 

.02

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Distributions to
shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

 

 

 

 

 

 

 

(b)

 

(.02

)

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Net asset value,
end of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total Return (c)

 

 

 

.00

%

 

 

.00

%

 

.00

%

 

.00

%

 

.26

%

 

2.44

%

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses, excluding
expense reductions and
including management
fee waived and expenses
reimbursed

 

 

 

.08

% (d)

 

 

.08

%

 

.16

%

 

.15

%

 

.80

%

 

1.45

%

 

Expenses, including
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.08

% (d)

 

 

.08

%

 

.16

%

 

.15

%

 

.80

%

 

1.45

%

 

Expenses, excluding
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.72

% (d)

 

 

1.41

%

 

1.43

%

 

1.51

%

 

1.54

%

 

1.66

%

 

Net investment income

 

 

 

.00

% (d)

 

 

.00

%

 

.00

%

 

.00

%

 

.19

%

 

2.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets,
end of period (000)

 

 

 

$15,004

 

 

 

$16,456

 

 

$23,172

 

 

$33,210

 

 

$56,243

 

 

$39,283

 

 

 

 

(a)

Calculated using average shares outstanding during the period.

(b)

Amount is less than $.01.

(c)

Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.

(d)

Not annualized.


 

 

 

10

See Notes to Financial Statements.

 



Financial Highlights (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class C Shares

 

 

 

 

 

Six Months
Ended
12/31/2012
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended 6/30

 

 

 

 

 

 

 

2012

 

2011

 

2010

 

2009

 

2008

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value,
beginning of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income (a)

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

.01

 

 

.03

 

Net realized gain

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total from investment
operations

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

.01

 

 

.03

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Distributions to
shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

(.01

)

 

(.03

)

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Net asset value,
end of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total Return (c)

 

 

 

.01

%

 

 

.02

%

 

.02

%

 

.02

%

 

.59

%

 

3.21

%

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses, excluding
expense reductions and
including management
fee waived and expenses
reimbursed

 

 

 

.07

% (d)

 

 

.06

%

 

.14

%

 

.13

%

 

.50

%

 

.70

%

 

Expenses, including
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.07

% (d)

 

 

.06

%

 

.14

%

 

.13

%

 

.50

%

 

.70

%

 

Expenses, excluding
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.35

% (d)

 

 

.66

%

 

.68

%

 

.76

%

 

.79

%

 

.91

%

 

Net investment income

 

 

 

.01

% (d)

 

 

.02

%

 

.02

%

 

.02

%

 

.44

%

 

2.92

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets,
end of period (000)

 

 

 

$47,317

 

 

 

$45,710

 

 

$38,965

 

 

$45,310

 

 

$56,597

 

 

$27,276

 

 

 

 

(a)

Calculated using average shares outstanding during the period.

(b)

Amount is less than $.01.

(c)

Total return does not consider the effects of sales loads and assumes the reinvestment of all distributions.

(d)

Not annualized.


 

 

 

 

See Notes to Financial Statements.

11



Financial Highlights (concluded)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class I Shares

 

 

 

 

 

Six Months
Ended
12/31/2012
(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended 6/30

 

 

 

 

 

 

 

2012

 

2011

 

2010

 

2009

 

2008

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value,
beginning of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income (a)

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

.01

 

 

.03

 

Net realized gain

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total from investment
operations

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

.01

 

 

.03

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Distributions to
shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

(b)

 

 

(b)

 

(b)

 

(b)

 

(.01

)

 

(.03

)

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Net asset value,
end of period

 

 

 

$1.00

 

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

$1.00

 

 

 

 

   

 

 

   

 

   

 

   

 

   

 

   

 

Total Return (c)

 

 

 

.01

%

 

 

.02

%

 

.02

%

 

.02

%

 

.59

%

 

3.21

%

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses, excluding
expense reductions and
including management
fee waived and expenses
reimbursed

 

 

 

.07

% (d)

 

 

.06

%

 

.14

%

 

.13

%

 

.52

%

 

.70

%

 

Expenses, including
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.07

% (d)

 

 

.06

%

 

.14

%

 

.13

%

 

.52

%

 

.70

%

 

Expenses, excluding
expense reductions,
management fee waived
and expenses reimbursed

 

 

 

.35

% (d)

 

 

.66

%

 

.68

%

 

.76

%

 

.79

%

 

.90

%

 

Net investment income

 

 

 

.01

% (d)

 

 

.02

%

 

.02

%

 

.02

%

 

.58

%

 

3.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets,
end of period (000)

 

 

 

$15,507

 

 

 

$12,219

 

 

$9,846

 

 

$8,921

 

 

$10,689

 

 

$10,925

 

 

 

 

(a)

Calculated using average shares outstanding during the period.

(b)

Amount is less than $.01.

(c)

Total return assumes the reinvestment of all distributions.

(d)

Not annualized.


 

 

 

12

See Notes to Financial Statements.

 



Notes to Financial Statements (unaudited)

 

 

 

1.

ORGANIZATION

 

Lord Abbett U.S. Government & Government Sponsored Enterprises Money Market 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 incorporated under Maryland law on May 9, 1979.

The investment objective of the Fund is to seek high current income and preservation of capital through investments in high quality, short-term, liquid securities. These securities are commonly known as money market instruments.

The Fund has four classes of shares: Classes A, B, C and I. There are no front-end sales charges on shares of each class, although there may be a contingent deferred sales charge (“CDSC”) applied to a class of shares as follows: certain redemptions of Class A or Class C shares acquired through an exchange; and Class B shares redeemed before the sixth anniversary of purchase. Class B shares will automatically convert to Class A shares on the 25 th day of the month (or, if the 25 th day is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted. The Fund no longer issues Class B shares for purchase.

The preparation of the 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 –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.

 

 

 

The Fund values securities utilizing the amortized cost method, which approximates fair value. Under the amortized cost method, all investments purchased at a discount or premium are valued by amortizing the difference between the original purchase price and maturity value of the issue over the period to maturity. Securities purchased at face value are valued at cost, which approximates fair value due to the short duration of the issue.

 

 

(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.

 

 

(c)

Investment Income –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. 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

13


Notes to Financial Statements (unaudited)(continued)

 

 

 

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 ended June 30, 2009 through June 30, 2012. 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 B shares bear all expenses and fees relating to the Fund’s 12b-1 Distribution Plan.

 

 

(f)

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.

 

 

(g)

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 of inputs 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).

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 are deemed to have occurred as of the beginning of the reporting period. The inputs or

14


Notes to Financial Statements (unaudited)(continued)

          methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of December 31, 2012 in valuing the Fund’s investments carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Type

 

Level 1

 

Level 2

 

Level 3

 

Total

 

                 

 

Government Sponsored Enterprises

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities

 

$

 

$

275,548,526

 

$

 

$

275,548,526

 

U.S. Treasury Notes

 

 

 

 

65,328,031

 

 

 

 

65,328,031

 

Repurchase Agreements

 

 

 

 

290,882,318

 

 

 

 

290,882,318

 

                         

 

Total

 

$

 

$

631,758,875

 

$

 

$

631,758,875

 

                         

 


 

 

 

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 $250 million

.50%

Next $250 million

.45%

Over $500 million

.40%

For the six months ended December 31, 2012, the effective management fee, net of waivers, was at an annualized rate of .00% of the Fund’s average daily net assets.

Lord Abbett voluntarily agreed to waive a portion of the Fund’s management fee and administrative fee and, if necessary, reimburse expenses to the extent necessary so Class A, C and I shares maintain a .02% annualized distribution yield, and Class B shares maintain a .00% annualized distribution yield. For the period ended December 31, 2012, Lord Abbett waived its entire management fee of $1,415,034 and reimbursed other expenses of $289,001. For the period ended December 31, 2012, Lord Abbett Distributor LLC (the “Distributor”) reimbursed Class B 12b-1 distribution fees of $57,035.

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, B and C shares pursuant to Rule 12b-1 under the Act, which provides for the payment of ongoing distribution and service fees to the Distributor, an affiliate of Lord Abbett. The fees are accrued daily at annual rates based upon the Fund’s average daily net assets as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees

 

Class A (1)

 

Class B

 

Class C (1)

 

Service and distribution fee

 

 

 

.15

%

 

 

 

.75

%

 

 

 

1.00

%

 


 

 

(1)

The Fund has not activated its plan for Class A and Class C, and therefore, no payments are currently authorized under the distribution plan.

Class I shares do not have a distribution plan.

15


Notes to Financial Statements (unaudited)(continued)

For the six months ended December 31, 2012, two directors and certain of the Fund’s officers had an interest in Lord Abbett.

 

 

 

4.

DISTRIBUTIONS

 

Dividends from net investment income are declared daily and paid monthly.

The tax character of distributions paid during the six months ended December 31, 2012 and fiscal year ended June 30, 2012 was as follows:

 

 

 

 

 

 

 

 

 

 

Six Months Ended
12/31/2012
(unaudited)

 

Year Ended
6/30/2012

 

         

 

Distributions paid from:

 

 

 

 

 

 

 

Ordinary income

 

$

59,355

 

$

133,955

 

             

 

Total distributions paid

 

$

59,355

 

$

133,955

 

             

 


 

 

 

5.

DIRECTORS’ REMUNERATION

 

For the six months ended December 31, 2012, the Fund’s officers and the two Directors who were associated with Lord Abbett did 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.

 

 

 

6.

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.

 

 

 

7.

CUSTODIAN AND ACCOUNTING AGENT

 

State Street Bank and Trust Company (“SSB”) is the Fund’s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating the Fund’s net asset value.

 

 

 

8.

INVESTMENT RISKS

 

The Fund’s yield may vary in response to changes in interest rates and other market factors.

The Fund generally invests a substantial portion of its assets in money market securities issued by the U.S. Government and by various government-sponsored enterprises such as Federal Home Loan Mortgage Corporation, the Federal Home Loan Banks and Federal National Mortgage Association. Such securities are not guaranteed by the U.S. Government, but are supported only by the credit of the particular government-sponsored enterprises involved, and the discretionary authority of the U.S. Treasury to purchase the enterprise’s obligations. There is no assurance that the U.S. Government will provide financial support to enterprises that are not supported by the full faith and credit of the U.S. Government. The Fund also may invest in repurchase agreements involving the securities described herein.

16


Notes to Financial Statements (unaudited)(concluded)

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in the Fund.

These factors can affect the Fund’s performance.

 

 

 

9.

SUMMARY OF CAPITAL TRANSACTIONS

 

Transactions in shares of capital stock were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
December 31, 2012
(unaudited)

 

Year Ended
June 30, 2012

 

         

 


Class A Shares

 

Shares

 

Amount

 

Shares

 

Amount

 

                 

 

Shares sold

 

 

693,016,697

 

$

693,016,695

 

 

1,319,954,405

 

$

1,319,954,406

 

Converted from Class B*

 

 

1,268,875

 

 

1,268,876

 

 

3,983,327

 

 

3,983,327

 

Reinvestment of distributions

 

 

51,935

 

 

51,935

 

 

116,511

 

 

116,511

 

Shares reacquired

 

 

(672,894,587

)

 

(672,894,588

)

 

(1,324,741,167

)

 

(1,324,741,170

)

                         

 

Increase (decrease)

 

 

21,442,920

 

$

21,442,918

 

 

(686,924

)

$

(686,926

)

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

 

Shares sold

 

 

3,624,681

 

$

3,624,681

 

 

11,726,047

 

$

11,726,047

 

Shares reacquired

 

 

(3,807,884

)

 

(3,807,883

)

 

(14,458,760

)

 

(14,458,760

)

Converted to Class A*

 

 

(1,268,874

)

 

(1,268,876

)

 

(3,983,324

)

 

(3,983,327

)

                         

 

Decrease

 

 

(1,452,077

)

$

(1,452,078

)

 

(6,716,037

)

$

(6,716,040

)

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class C Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

 

Shares sold

 

 

20,069,778

 

$

20,069,779

 

 

61,774,440

 

$

61,774,440

 

Reinvestment of distributions

 

 

3,878

 

 

3,878

 

 

9,156

 

 

9,156

 

Shares reacquired

 

 

(18,466,945

)

 

(18,466,945

)

 

(55,038,580

)

 

(55,038,581

)

                         

 

Increase

 

 

1,606,711

 

$

1,606,712

 

 

6,745,016

 

$

6,745,015

 

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class I Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

 

Shares sold

 

 

7,900,224

 

$

7,900,224

 

 

13,869,987

 

$

13,869,986

 

Shares reacquired

 

 

(4,611,470

)

 

(4,611,471

)

 

(11,497,221

)

 

(11,497,220

)

                         

 

Increase

 

 

3,288,754

 

$

3,288,753

 

 

2,372,766

 

$

2,372,766

 

                         

 


 

 

*

Automatic conversion of Class B shares occurs on the 25th day of the month (or, if the 25th day is not a business day, the next business day thereafter) following the eighth anniversary of the day on which the purchase order was accepted.

17


Approval of Advisory Contract

The Board of Directors of the Fund, including all of the Directors who are not interested persons of the Fund or Lord, Abbett & Co. LLC (“Lord Abbett”), annually considers whether to approve the continuation of the existing management agreement between the Fund and Lord Abbett. In connection with its most recent approval, the Board reviewed materials relating specifically to the management 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 familiarity with Lord Abbett gained through its meetings and discussions. These meetings and discussions included the examination of the portfolio management team 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 materials received by the Board included, but were not limited to: (1) information provided by Lipper Inc. regarding the investment performance of the Fund compared to the investment performance of a group of funds within the same investment classification/objective (the “performance universe”) and the investment performance of an appropriate benchmark; (2) information provided by Lipper Inc. regarding the expense ratios, contractual and effective management fee rates, and other expense components for the Fund and one or more groups of funds with similar objectives and of similar size (the “peer group”); (3) information provided by Lord Abbett on the projected expense ratios, management fee rates, and other expense components for the Fund; (4) sales and redemption information for the Fund; (5) information regarding Lord Abbett’s financial condition; (6) an analysis of the relative profitability of the management agreement to Lord Abbett; (7) information provided by Lord Abbett regarding the investment management fees Lord Abbett receives from its other advisory clients maintaining accounts with a similar investment strategy as the Fund; (8) information regarding the distribution arrangements of the Fund; and (9) information regarding the personnel and other resources devoted by Lord Abbett to managing the Fund.

Investment Management Services Generally. The Board considered the investment management services provided by Lord Abbett to the Fund, including investment research, portfolio management, and trading, 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 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. The Board reviewed the Fund’s investment performance in relation to that of the performance universe as of various periods ended September 30, 2012. The Board observed that the investment performance of the Class A shares was slightly above the median of the performance universe for the nine-month, one-year, and three-year periods and slightly below the median of the performance universe for the other 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, the Board considered the size, experience, and turnover of Lord Abbett’s investment management staff, Lord Abbett’s investment methodology and philosophy,

18


and Lord Abbett’s approach to recruiting, training, and retaining investment management personnel.

Nature and Quality of Other Services. The Board considered the nature, quality, costs, and extent of compliance, administrative, and other services performed by Lord Abbett and Lord Abbett Distributor LLC (“Distributor”) 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 each class of shares of the Fund and the expense levels of the peer group. The Board considered the fiscal periods on which the peer group comparisons were based, and noted that the fiscal years of many funds in the peer group did not coincide with the Fund’s fiscal year. It also considered the projected expense levels and how those levels would relate to those of the peer group and the amount and nature of the fees paid by shareholders. The Board observed that the expense ratios generally were below the medians 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 any profits realized by Lord Abbett in connection with the operation of the Fund, including the fee that Lord Abbett receives from the Fund for providing administrative services to 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 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 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 concluded that Lord Abbett’s profitability as 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 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 character and amount of fees paid by the Fund and the Fund’s shareholders to Lord Abbett and 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 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 from the Funds, and receives a portion of the sales charges on sales and redemptions of some classes of shares. 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 Fund.

19


Alternative Arrangements. The Board considered whether, instead of approving continuation of the management 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 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. 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.

20


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 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. You can also obtain copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330).

21


 

(LORD ABBETT LOGO)





 

 

 

 

(GO PAPERLESS LOGO)

 

 

 

 

 

 

 

 

 

 

 

 

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 U.S. Government & Government
Sponsored Enterprises Money Market
Fund, Inc.

LAMM-3-1212
(02/13)




 

 

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)

The Lord Abbett Family of Funds Sarbanes Oxley Code of Ethics for the Principal Executive Officer and Senior Financial Officers is attached hereto as part of Ex-99. CODEETH.

 

 

 

 

(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 U.S. GOVERNMENT &
GOVERNMENT SPONSORED ENTRPRISES
MONEY MARKET FUND, INC.


 

 

 

 

 

 

 

By:

/s/ Daria L. Foster

 

 

 

 

 

 

 

 

Daria L. Foster

 

 

 

President and Chief Executive Officer

 

 

 

 

Date: February 26, 2013

 

 

 

 

 

 

 

 

 

By:

/s/ Joan A. Binstock

 

 

 

 

 

 

 

 

Joan A. Binstock

 

 

 

Chief Financial Officer and Vice President

Date: February 26, 2013

 

 

 



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/ Daria L. Foster

 

 

 

 

 

 

 

 

Daria L. Foster

 

 

 

President and Chief Executive Officer

 

 

 

 

Date: February 26, 2013

 

 

 

 

 

 

 

 

 

By:

/s/ Joan A. Binstock

 

 

 

 

 

 

 

 

Joan A. Binstock

 

 

 

Chief Financial Officer and Vice President

Date: February 26, 2013

 

 

 



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