Use this form to give us your feedback or report any problems you experienced finding information on our Website.
* Indicates Required Fields
Thank you for providing feedback.
U.S. Equity markets climbed during the first quarter of 2013, as investors focused on solid growth in corporate earnings and continued monetary accommodation from the Federal Reserve. The gains came against a backdrop of continued uncertainty regarding the European sovereign debt crisis, and signs of improved economic growth in China and other key emerging markets.
The Fed noted that the U.S. economy "generally expanded at a modest to moderate pace" in January and early February, based on reports from the 12 Fed districts. The Fed said most districts reported expansion in consumer spending, although retail sales slowed in several districts. The manufacturing and service sectors showed improvement.1 The third estimate for the fourth quarter of 2012 showed that the economy grew by an annualized rate of 0.4%, versus the previous estimate of an increase of 0.1%. Third-quarter 2012 growth was 3.1%.2
The S&P 500® Index3 rose 10.6% during the quarter, reaching an all-time closing high on March 28. Gains occurred in all of the 10 major sectors. The consumer discretionary, consumer staples, financials, health care, industrials, and utilities sectors outperformed the broader market. Value stocks (as represented by the Russell 3000® Value Index4) outperformed growth stocks (as measured by the Russell 3000® Growth Index5). Small cap stocks (as represented by the Russell 2000® Index6) outperformed large caps (as represented by the Russell 1000® Index7).
The Lord Abbett Alpha Strategy Fund returned 12.73%, reflecting the performance at the net asset value (NAV) of Class A shares, with all distributions reinvested, for the three-month period ended March 31, 2013, compared to the benchmark, the 85% Russell 2000® Index6/15% S&P Developed Ex-U.S. Small Cap Index,8 which returned 11.55%. The Fund's average annual total returns, which reflect performance at the maximum 5.75% sales charge applicable for Class A share investments and include the reinvestment of all distributions, as of March 31, 2013, are: one year: 5.81%; five years: 6.22%; and 10 years: 12.67%. Expense ratio: gross, 1.71%, and net, 1.39%.
Performance data quoted represent past performance, which does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the fund will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, call Lord Abbett at 1-888-522-2388 or visit us at www.lordabbett.com.
The Fund's meaningful weighting in domestic small and micro cap growth equities contributed to relative performance, as domestic small and micro cap growth equities outperformed domestic small and micro cap value equities. The Fund's substantial weighting in international equities detracted from relative performance, as international equities struggled to keep pace with domestic equities.
The most significant contributor to relative performance was the Fund's exposure to domestic micro-cap growth equities, as this investment strategy outperformed its index. The most significant detractor from relative performance was the Fund's exposure to domestic small cap core equities, as this investment strategy underperformed its index.
Contributing to relative performance within domestic micro-cap growth equities was stock selection within the information technology and health care sectors. Within information technology, shares of SunPower Corp., a provider of solar electric systems, rose considerably on news that Berkshire Hathaway Inc. would purchase two solar power plants from the company, and again following reports that competing solar producers would cut future production. Shares of Xoom Corp., a provider of customer-to-customer online money transfer services, also contributed to relative performance, as it recently conducted an initial public offering. Within health care, Celldex Therapeutics, Inc., a biopharmaceutical company focused on the development of therapeutics used in the treatment of cancer, contributed to relative performance as its shares rose following an encouraging outlook for its drug pipeline.
Within domestic small cap core equities, security selection within the energy, information technology, and industrials sectors detracted from relative performance. Within the energy sector, shares of Endeavour International Corp., an oil and gas company, faltered following the announcement of more project delays in the firm's Rochelle drilling operations. Within the information technology sector, shares of Liquidity Services experienced a sharp sell-off following a disappointing earnings report. The firm also lowered its guidance citing higher than expected costs relating to a recent acquisition and diminishing customer flows. Within industrials, shares of Foster Wheeler Ltd., an engineering and construction company, were under pressure following a significantly weaker than expected outlook for 2013. The negative guidance was attributed to timing and project mix issues.
Please refer to www.lordabbett.com under the "Portfolio" tab for a complete list of holdings of the Fund, including the securities discussed above.
The Fund invests all of its net assets directly in the underlying funds. The percentages shown are based on individual securities owned in one or more of the underlying funds. The Fund's portfolio is actively managed and therefore, its percentage allocations may change from time to time. Holdings are for informational purposes only and are not a recommendation to buy, sell, or hold any security.
Performance data quoted is historical. Past performance is not indicative of future results. Current performance may be higher or lower than the performance quoted. The investment return and principal value of an investment in the Fund will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent quarter-end, go to quarter ending performance on our Website or call Lord Abbett at (888) 522-2388.
1 The Fund’s dividend yield is shown without sales charges (at NAV) and with maximum sales charges (at MOP). The Fund’s dividend yield takes into account any fee waiver or expense limitation arrangements, if any. Without such fee waivers or expense limitation arrangements, the Fund’s dividend yield would have been lower. Information regarding any fee waivers or expense limitation arrangements applicable to the Fund is provided with the Fund’s expense ratio information.
2 The Fund’s unsubsidized dividend yield is shown without sales charges (at NAV) and with maximum sales charges (at MOP). The Fund’s unsubsidized dividend yield reflects what the yield would have been without the affect of fee waivers or expense limitation arrangements.