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Fund Description
The Fund seeks growth of capital and growth of income consistent with reasonable risk.
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Fund Advantages
- The market consistently misprices stocks and groups of stocks. A broad universe of stocks will significantly improve opportunities to identify these situations.
- A disciplined process will incorporate quantitative insights and fundamental research to identify attractive stocks, while generating market like risk.
- A well-diversified portfolio of stocks with strong growth prospects and favorable market risk factors should produce attractive risk-adjusted returns.
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Fund Returns
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As of August 31, 2010
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All returns in percentages
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| Class |
Last
Quarter
06/30/2010
|
Year
to Date
|
1
Year
|
3
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
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NAV
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-14.13
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-8.89
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9.06
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-6.61
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0.62
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2.40
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| |
Inception date: June 03, 1992
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B
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NAV
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-14.25
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-9.17
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8.35
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-7.22
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-0.03
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1.88
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| |
Inception date: August 01, 1996
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C
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NAV
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-14.22
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-9.15
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8.37
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-7.20
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-0.02
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1.78
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| |
Inception date: April 01, 1997
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Past performance is no guarantee of future results. Investment returns and principal will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All returns assume the reinvestment of all distributions.
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SEC Returns
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As of June 30, 2010
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All returns in percentages
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|
Class
|
|
1
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
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SEC (A)
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2.78
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-0.56
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1.80
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Inception date: June 03, 1992
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B
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SEC (B)
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4.35
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-0.20
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1.88
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|
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Inception date: August 01, 1996
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C
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SEC (C)
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8.37
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-0.02
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1.78
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Inception date: April 01, 1997
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(A) SEC Returns reflect performance at the maximum 5.75% sales charge applicable to Class A share investments as of 06/30/2010.
(B) A maximum Contingent Deferred Sales Charge (CDSC) of 5% is applied to shares sold prior to the 6th anniversary of purchase. There are also ongoing 12b-1 service and distribution fees. Class B shares automatically convert to class A shares after 8 years.
(C) Class C shares are subject to ongoing 12b-1 service and distribution fees as well as a maximum Contingent Deferred Sales Charge (CDSC) of 1% if you redeem your shares before the first anniversary of your original purchase.
Past performance is no guarantee of future results. Investment returns and principal will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All returns assume the reinvestment of all distributions.
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Rank
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Fund
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Percentage of Portfolio
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The Fund's portfolio is actively managed and may change significantly over time.
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Sector
(Sector groups include many industries)
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Percentage of Portfolio
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INFORMATION TECHNOLOGY
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20.70
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CONSUMER DISCRETIONARY
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12.80
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TELECOMMUNICATION SERVICES
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1.30
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The Fund's portfolio is actively managed and may change significantly over time.
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Class
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Record
Date
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Ex Div
Date
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Invest
Date
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Payable
Date
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Reinvest
Price
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Dividend
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A
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.71
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.15810
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B
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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24.62
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.00920
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B2
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.66
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.16990
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B3
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.50
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.18410
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BF
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.60
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.21970
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C
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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24.67
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.03070
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F
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.60
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.21970
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I
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.72
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.23820
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R2
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.66
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.16990
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R3
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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25.50
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.18410
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Fund Status
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Open to New Investors
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Dividend Frequency
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Annually
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Number of Issues
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126
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Class
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Inception
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Quotron
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CUSIP
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Outstanding
Shares
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A
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June 03, 1992
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LRLCX
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543913107
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21,495,745
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B
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August 01, 1996
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LARBX
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543913404
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1,538,010
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C
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April 01, 1997
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LLRCX
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543913602
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3,466,436
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F
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September 28, 2007
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LRLFX
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543913768
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1,556,598
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I
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May 03, 1999
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LARYX
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543913875
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11,258,687
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R2
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September 28, 2007
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LRLQX
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543913750
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57,854
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R3
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September 28, 2007
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LRLRX
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543913743
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317,420
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Investment Team
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Porfolio Commentary
As of June 30, 2010
Market Review
Among the primary factors that influenced the market in the second quarter were the European sovereign debt crisis, slowing growth in China, and concerns about the strength of the U.S. economic recovery. In response to these, both domestic and foreign investors shifted away from stocks and toward assets perceived as less risky, such as U.S. Treasuries.1
After the economy posted 3% growth in the first quarter, the expansion showed signs of moderating. Consumer spending, for example, flattened in April after six consecutive months of improvement. In May, retail sales declined 1.7%. Inflation remained subdued, but the unemployment rate stayed between 9.5% and 10.0%. The Federal Reserve kept the fed funds target rate between 0% and 0.25%, explaining that conditions were likely to warrant low rates for an "extended period."
The S&P 500® Index2 reached a 2010 high of 1,217.28 on April 26, but then fell more than 100 points in May, largely due to concerns that the debt crisis in Greece could spread to the rest of Europe and threaten the monetary union. For the quarter, the index lost 11.4%. Declines occurred across all 10 major sectors, but defensive sectors, including telecommunication services and utilities, outperformed the broader market. Value stocks slightly outperformed growth stocks during the period, and small caps outperformed large caps.
Fund Review
The Fund returned -14.13%, reflecting the performance at the net asset value (NAV) of Class A shares with all distributions reinvested for the period ended June 30, 2010, compared to its benchmark, the Russell 1000® Index, which returned -11.44%, and the S&P 500 Index, which returned -11.43% for the same period. Average annual 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 June 30, 2010, are: 1 year: 2.78%, 5 years: -0.56%, and 10 years: 1.80%. Expense ratio, gross: 1.37%, and net: 0.98%.
Performance data quoted represent past performance, which is no guarantee of 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 888-522-2388 or visit us at www.lordabbett.com.
The largest detractor from performance during the second quarter was negative stock selection within the materials sector. Agricultural company Monsanto Co. (1.3% portfolio weighting) saw its shares fall amid growing generic competition from China in its Roundup chemical business. Shares of steel producer United States Steel Corp. (0.7% portfolio weighting) were hurt by concerns that the global economic slowdown would lower prices and profits for steel. Stock selection within the financials sector also detracted from relative performance. Shares of Goldman Sachs Group (1.9% portfolio weighting), an investment bank, were hurt by a Securities and Exchange Commission probe and fears of the negative impact financial reform would have on its profits. State Street Corp. (0.9% portfolio weighting), a provider of investment management and trading services to institutional investors, saw its shares stumble in response to an anticipated decline in fees and assets due to turmoil in equity markets.
The energy sector was the largest contributor during the quarter as a result of strong stock selection. Exploration and production companies EOG Resources, Inc. (0.6% portfolio weighting), Southwestern Energy Co. (0.3% portfolio weighting), and Devon Energy Corp. (0.5% portfolio weighting) outperformed as natural gas prices rallied from their lows in early April, approaching $4.00 to more than $5.00 in mid-June. Stock selection within the hotels segment of the consumer discretionary sector was another contributor to performance. Marriott International, Inc. (1.6% portfolio weighting) benefited from the improved hotel business and an uptick in travel.
Outlook
Although we have seen some moderation in the rate of economic growth, we continue to see improvements in economic data. Overall, we continue to invest in high-quality companies that maintain their strong competitive position even during a challenging market environment. These companies are well-positioned for strong revenue and earnings growth potential. Despite some recent profit taking, we remain overweight within the consumer discretionary sector, particularly within hotels, retail, and cruise lines. These segments should do well as incomes grow and consumer spending improves. Within the financials sector, we continue to hold an overweight, emphasizing companies that should benefit from improved credit quality. Information technology also remains an overweight, as we expect improved corporate profits to result in increased capital spending. Conversely, our favorable economic outlook has led us to underweight relatively defensive sectors, such as consumer staples and utilities.
Prior to July 1, 2009, the Lord Abbett Classic Stock Fund was known as the Lord Abbett Large Cap Core Fund.
Note: The historical performance shown for periods October 1, 2004, reflects the performance of the Fund prior to its change in investment approach from large cap value to large cap core. Therefore, the performance of the Fund for periods prior to October 1, 2004, is not representative of Lord Abbett's current large cap core investment strategy. The change in investment approach may affect the Fund's performance in the future.
1Treasuries are debt securities issued by the U.S. government and secured by its full faith and credit. Income from Treasury securities is exempt from state and local taxes. Although U.S. government securities are guaranteed as to payments of interest and principal, their market prices are not guaranteed and will fluctuate in response to market movements.
2The S&P 500® Index is widely regarded as the standard for measuring large cap U.S. stock market performance and includes a representative sample of leading companies in leading industries.
3The Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.
Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.
Instances of high double digit returns were achieved primarily during favorable market conditions and may not be sustainable over time.
Expense ratio: The net expense ratio takes into account a contractual management fee waiver/expense reimbursement agreement that currently is scheduled to remain in place through March 31, 2011, without which performance would have been lower.
The Fund's portfolio is actively managed and, therefore, its holdings and the weightings of a particular issuer or particular sector as a percentage of portfolio assets may change significantly over time. Sectors may include many industries. The mention of specific portfolio holdings is for information only. It does not constitute a recommendation or an offer for a particular security or fund, nor should it be taken as a solicitation or recommendation to buy or sell securities or other investments.
Note: Class A shares purchased subject to a front-end sales charge have no contingent deferred sales charge (CDSC). However, certain purchases of Class A shares made without a front-end sales charge may be subject to a CDSC of 1% if the shares are redeemed before the first day of the month in which the one year anniversary of the purchase falls. Please refer to the prospectus for more information on redemptions that may be subject to a CDSC. The CDSC is not reflected in the standardized average annual total returns. If these charges were included performance would be lower. Please refer to the prospectus for more information on redemptions that may be subject to CDSC.
A Note about Risk: Investments in equity securities will fluctuate in response to general economic conditions and to changes in the prospects of particular companies and/or sectors in the economy. These factors can affect fund performance.
The views and information discussed in this commentary are as of June 30, 2010, are subject to change and may not reflect the views of the firm as a whole. The views expressed in market commentaries are at a specific point in time, are opinions only, and should not be relied upon as a forecast, or research or investment advice regarding a particular investment or the markets in general. Information discussed should not be considered a recommendation to purchase or sell securities.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Lord Abbett Funds. This and other important information is contained in the fund's summary prospectus and/or prospectus. To obtain a prospectus or summary prospectus on any Lord Abbett mutual fund, contact your investment professional, Lord Abbett Distributor LLC at (888) 522-2388 or visit us at www.lordabbett.com. Read the prospectus carefully before you invest.
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Prospectus
You agree to receive the following
prospectus electronically and to read and agree to its terms before investing or sending money. It contains detailed information about the fund's investment policies, risks, charges and expenses. If you would like a reprinted copy of the prospectus, please contact your local Edward Jones investment representative.
The following prospectus is not an offer to sell, or a solicitation of an offer to buy shares in the fund nor shall any such shares be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.
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