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 Fund returned 11.54%, reflecting the performance at the net asset value (NAV) of Class A shares, with all distributions reinvested for the period ended March 31, 2013, compared to the Russell 1000® Value Index,8 which returned 12.31% for the same period. Average total returns, which reflect performance at the maximum 5.75% sales charge applicable to Class A share investments and include the reinvestment of all distributions, as of March 31, 2013, are: one year: 12.04% since inception (December 29, 2011): 21.19%. Expense ratio: 1.41%, gross; 0.75%, net.
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.
Consistent with the strategy's design and sector neutral positioning, stock selection (-0.50%) was the primary driver of the performance variance relative to the index during the quarter. Unfortunately, stock selection was negative for the three month period and the Fund underperformed its index by -0.77%. The Fund outperformed, however, when compared to the Lipper Large Cap Value category peer group, ranking Class A shares in the thirty-eighth percentile (178/480) for the first quarter 2013. The Fund's one year Lipper Large Cap Value category peer group ranking was in the fourth percentile (18/460) and since inception was in the second percentile (6/457) as of March 31, 2013. Rankings are based on total return and do not reflect sales charges.*
Stock selection within the financials and information technology sectors detracted from relative performance. Within the financials sector, shares of Capital One Financial Corp., a diversified financial services holding company, fell after the firm reported lower than expected fourth quarter results, while also disappointing investors by announcing that they would not be enacting a share buyback in 2013. Investors also reacted negatively to the announced sale of the Best Buy private label and co-branded credit card accounts. This announcement was a reversal of the company's efforts to build in private labels. Shares of Aflac, Inc., the leading underwriter and marketer of supplemental health and life insurance in Japan, declined due to concerns about the impact of a weaker Japanese yen on margins. Within the information technology sector, shares of Cisco Systems, Inc., a company that designs, manufactures, and sells networking equipment, underperformed amid uncertainty about enterprise spending. Shares of Broadcom Corp., provider of semiconductor solutions for wired and wireless communications, declined as management issued disappointing guidance for the infrastructure and networking segments.
Stock selection within the energy and consumer discretionary sectors contributed to performance during the quarter. Within the energy sector, shares of Valero Energy Corp., the largest refiner in North America, appreciated after reporting solid Gulf Coast refining margins. Shares also benefited from the company's plan to spin off its rebranded retail operations in the second quarter. Shares of Denbury Resources, an oil and gas exploration and production company, benefited from management's positive outlook for steady production growth in high margin oil wells. Within the consumer discretionary sector, shares of Time Warner, Inc. rose upon the announcement that the firm will be spinning off its challenged magazine publishing business by year-end. Shares of Hasbro, Inc., a global toy and board game company, rose after management announced a 20% dividend increase and cost-saving initiatives.
Please refer to www.lordabbett.com under the "Portfolio" tab for a complete list of holdings of the Fund, including the securities discussed above.
Consistent with the central tenets of the investment strategy, the portfolio continues to be approximately equal-weight in all sectors relative to its index, as of March 31, 2013.
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.