|
|
| Use these links to jump to a section further down the page. |
Fund Description
The Fund seeks to provide investors with high current income and the opportunity for capital appreciation to provide a high total return.
top of page ^
Fund Advantages
- A flexible investment strategy and well diversified portfolio of high yield, high grade and convertible securities can generate high levels of income and the opportunity for capital appreciation.
- A disciplined investment process emphasizing asset rich companies with credible management teams will help enhance returns while reducing risk.
- Rigorous credit analysis and understanding of changing industry conditions are critical to proper valuation of securities.
top of page ^
|
Fund Returns
|
|
As of August 31, 2010
|
All returns in percentages
|
| Class |
Last
Quarter
06/30/2010
|
Year
to Date
|
1
Year
|
3
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
|
NAV
|
-1.20
|
2.45
|
20.12
|
3.93
|
5.46
|
5.66
|
| |
Inception date: April 01, 1971
|
|
B
|
NAV
|
-1.36
|
2.10
|
19.29
|
3.23
|
4.75
|
5.11
|
| |
Inception date: August 01, 1996
|
|
C
|
NAV
|
-1.35
|
2.27
|
19.36
|
3.24
|
4.78
|
4.98
|
| |
Inception date: July 15, 1996
|
|
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.
|
top of page ^
|
SEC Returns
|
|
As of June 30, 2010
|
All returns in percentages
|
|
Class
|
|
1
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
|
SEC (A)
|
14.45
|
4.45
|
5.14
|
|
|
Inception date: April 01, 1971
|
|
B
|
SEC (B)
|
15.29
|
4.60
|
5.11
|
|
|
Inception date: August 01, 1996
|
|
C
|
SEC (C)
|
19.36
|
4.78
|
4.98
|
|
|
Inception date: July 15, 1996
|
(A) SEC Returns reflect performance at the maximum 4.75% 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.
|
top of page ^
|
Rank
|
Fund
|
Percentage of Portfolio
|
The Fund's portfolio is actively managed and may change significantly over time.
top of page ^
|
CONVERTIBLE BONDS, COMMON AND PREFERRED STOCK
|
16.70
|
|
INVESTMENT GRADE STRAIGHT DEBT
|
14.80
|
The Fund's portfolio is actively managed and may change significantly over time.
top of page ^
|
Average Yield To Maturity
|
7.21
|
|
Class
|
Record
Date
|
Ex Div
Date
|
Invest
Date
|
Payable
Date
|
Reinvest
Price
|
Dividend
|
|
A
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.52
|
.03830
|
|
B
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.55
|
.03400
|
|
B2
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.52
|
.03670
|
|
B3
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.51
|
.03760
|
|
BF
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.51
|
.03990
|
|
C
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.54
|
.03420
|
|
F
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.51
|
.03990
|
|
I
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.49
|
.04050
|
|
R2
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.52
|
.03670
|
|
R3
|
08-06-2010
|
09-02-2010
|
09-02-2010
|
09-02-2010
|
7.51
|
.03760
|
top of page ^
|
Fund Status
|
Open to New Investors
|
|
Dividend Frequency
|
Monthly
|
|
Number of Issues
|
561
|
|
Class
|
Inception
|
Quotron
|
CUSIP
|
Outstanding
Shares
|
|
A
|
April 01, 1971
|
LBNDX
|
544004104
|
589,666,115
|
|
B
|
August 01, 1996
|
LBNBX
|
544004203
|
80,320,786
|
|
C
|
July 15, 1996
|
BDLAX
|
544004302
|
245,537,366
|
|
F
|
September 28, 2007
|
LBDFX
|
544004609
|
75,572,428
|
|
I
|
March 27, 1998
|
LBNYX
|
544004401
|
42,092,751
|
|
R2
|
September 28, 2007
|
LBNQX
|
544004708
|
134,973
|
|
R3
|
September 28, 2007
|
LBNRX
|
544004807
|
3,914,950
|
top of page ^
Investment Team
top of page ^
Porfolio Commentary
As of June 30, 2010
Market Review
Concerns about European sovereign debt, slowing growth in China, and the strength of the U.S. economic recovery played a significant role in fixed-income markets during the quarter. Both domestic and international investors shifted away from risky assets and toward assets perceived as less risky, such as U.S. Treasuries.1 This led to a widening of spreads in many segments of the market.
After the economy expanded in the first quarter, the expansion showed signs of moderating. Consumer spending, for example, remained flat in April after six consecutive months of improvement, and in May, retail sales fell 1.7%. Inflation remained subdued, and the economy continued to add jobs in the second quarter, but unemployment remained between 9.5% and 10.0%. The Federal Reserve kept the fed funds target rate between 0% and 0.25%, and indicated that conditions were likely to warrant low rates for an "extended period."
In the investment-grade corporate sector, yields began to rise late in the quarter as investors reacted to downgrades of debt issued by Greece, Spain, and Portugal. In the high-yield sector, an improving economy and declining defaults had attracted a significant flow of investor funds, but a flight to quality led high-yield spreads to widen late in the quarter. In the municipal bond market, states continued to cut spending and raise taxes in order to balance their budgets by the June fiscal year-end.
Fund Review
The Fund returned -1.20%, reflecting performance at the net asset value (NAV) of Class A shares, with all distributions reinvested, for the quarter ended June 30, 2010. The Fund's benchmark, the Barclays Capital U.S. Aggregate Bond Index,2 returned 3.49% in the same period. A blended index of 60% BofA Merrill Lynch High Yield Master II Constrained Index, 3 20% BofA Merrill Lynch All Convertible Index,4 and 20% Barclays Capital U.S. Aggregate Bond Index returned -0.49%. The blended index is more representative of the diversified nature of the Bond Debenture Fund than is the Barclays U.S. Aggregate Bond Index, which includes only investment-grade securities. Average annual total returns, which reflect performance at the maximum 4.75% sales charge applicable to Class A share investments and include the reinvestment of all distributions, as of June 30, 2010, are: 1 year: 14.45%, 5 years: 4.45%, and 10 years: 5.14%. Expense ratio: 1.00%.
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.
Relative to the Blended Index, the Fund underperformed during the quarter. Lower-quality, credit-sensitive assets such as high-yield corporates and convertible securities detracted from the Fund's performance, as did the Fund's equity allocation. The Fund's performance was helped by positions in higher-quality holdings, such as investment-grade corporates, as the European debt crisis sparked a flight to quality during the second quarter.
In terms of industries, pharmaceuticals, chemicals, and banking sectors were among the largest detractors from performance, while gaming, electric-integrated, and media/broadcast were among the largest contributors to performance.
Outlook
The U.S. economy has hit a soft patch, but although recent economic data point to a slowdown in the pace of the recovery, indicators still reflect growth. We are aware of the risks surrounding European sovereign risks, strained fiscal finances, financial regulatory reform, and a slowing economic recovery. We expect moderate growth to continue and a gradual resolution of the issues surrounding European sovereign risk.
The Fed will likely remain on hold, and accommodative. Inflation readings are benign, and we do not see interest rates rising for the remainder of the year. We will look for opportunities to reduce duration further given the extremely low current level of rates.
This environment, which is good for credit, has created a shortage of yield, leading to increased interest in the high-yield asset class as investors seek alternatives. With money market rates near 0%, Treasuries yielding approximately 3%, and a volatile equity market, high yield remains an attractive asset class.
The fundamental and technical underpinnings in the corporate bond market remain favorable. We continue to see healthy earnings, default rates remain low, and the market is experiencing inflows. In the long term, we see good value in corporate bonds, short duration bonds, and mid-tier high-yield bonds.
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.
2 Barclays Capital U.S. Aggregate Bond Index represents securities that are U.S. domestic, taxable, nonconvertible and dollar denominated. The index covers the investment-grade, fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
3 The BofA Merrill Lynch High Yield Master II Constrained Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market, including 144a issues. Qualifying bonds must have at least one year remaining term to maturity, a fixed coupon schedule and a minimum amount outstanding of $100 million. Bonds must be rated below investment grade based on a composite of Moody's and Standard & Poor's. Qualifying bonds are capitalization-weighted provided the total allocation to an individual issuer (defined by Bloomberg tickers) does not exceed 2%. Issuers that exceed the limit are reduced to 2% and the face value of each of their bonds is adjusted on a pro-rata basis. Similarly, the face value of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis.
4 The BofA Merrill Lynch All Convertibles Index consists of publicly traded U.S. issues convertible into shares, including traditional and mandatory convertibles.
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.
The yield spread is the difference between yields on differing debt instruments, calculated by deducting the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by each instrument. The spread can be measured between debt instruments of differing maturities, credit ratings and risk.
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 average annual total returns. If these charges were included, performance would be lower.
The credit quality of the securities in the portfolio is generally calculated by a national rating organization, such as Standard & Poor's, Moody's, or Fitch. Credit ratings of 'A' or better are considered to be high credit quality; credit ratings of 'BBB' are good credit quality and the lowest category of investment grade; credit ratings 'BB' and below are lower-rated securities (junk bonds). High-yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment-grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal on these securities. The credit quality of the investment in the portfolio does not apply to the stability or safety of the Fund.
A Note about Risk: The Fund is subject to the general risks and considerations associated with investing in debt securities. The value of your investment will change as interest rates fluctuate and in response to market movements. When interest rates fall, the prices of debt securities tend to rise, and when rates rise, the prices of debt securities are likely to decline. Longer-term debt securities are usually more sensitive to interest rate changes, the longer the maturity of a security, the greater the effect a change in interest rates is likely to have on its price. The Fund may make substantial investments in high-yield debt securities and may invest in senior loans which may be primarily below investment grade. High yield securities sometimes called junk bonds; carry increased risks of price volatility, illiquidity and the possibility of default in timely payment of interest and expenses.
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.
top of page ^
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.
top of page ^
|
