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Fund Description
The Fund seeks capital appreciation by investing primarily in the stocks of mid-sized U.S. and multinational companies, from which we expect above-average earnings growth.
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Fund Advantages
- Rigorous fundamental research coupled with experienced judgment often leads to the discovery of attractive investment opportunities.
- Securities with solid identifiable catalysts have potential for price appreciation.
- A well-diversified portfolio of stocks with 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
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1
Year
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3
Year
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5
Year
|
10 Years
or Life
of Fund
|
|
A
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NAV
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-13.79
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-8.06
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16.41
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-3.48
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2.49
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0.50
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| |
Inception date: August 01, 1995
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B
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NAV
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-13.91
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-8.38
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15.69
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-4.10
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1.83
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-0.01
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| |
Inception date: October 16, 1998
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C
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NAV
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-13.92
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-8.39
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15.70
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-4.11
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1.82
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-0.14
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| |
Inception date: October 19, 1998
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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
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|
1
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
|
SEC (A)
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9.75
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1.29
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-0.10
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Inception date: August 01, 1995
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B
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SEC (B)
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11.69
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1.68
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-0.01
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|
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Inception date: October 16, 1998
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C
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SEC (C)
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15.70
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1.82
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-0.14
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Inception date: October 19, 1998
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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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25.70
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CONSUMER DISCRETIONARY
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23.10
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TELECOMMUNICATION SERVICES
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0.90
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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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12-09-1999
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12-10-1999
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12-10-1999
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12-17-1999
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19.69
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.01270
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I
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12-09-1999
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12-10-1999
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12-10-1999
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12-17-1999
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19.72
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.03820
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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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137
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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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August 01, 1995
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LMGAX
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54400R103
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22,085,662
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B
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October 16, 1998
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LMGBX
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54400R202
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2,574,835
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C
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October 19, 1998
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LMGCX
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54400R301
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3,542,569
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F
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September 28, 2007
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LGOFX
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54400R608
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275,688
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I
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December 09, 1998
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LMGYX
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54400R400
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2,465,755
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R2
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September 28, 2007
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LGOQX
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54400R707
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56,531
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R3
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September 28, 2007
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LGORX
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54400R806
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482,124
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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 -13.79%, reflecting the performance at the net asset value (NAV) of Class A shares with all distributions reinvested for the quarter ended June 30, 2010. The Fund underperformed its benchmark, the Russell Midcap® Growth Index,3 which returned -10.20%. 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: 9.75%, 5 years: 1.29%, and 10 years: -0.10%. Expense ratio, gross: 1.61%; expense ratio, net: 1.45%.
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 stock selection within the consumer discretionary sector. Teen retailers American Eagle Outfitters (0.7% portfolio weighting) and Abercrombie & Fitch (0.7% portfolio weighting) posted negative returns amid a weak retailing environment. Within the materials and financials sectors, stock selection also hampered performance. Shares of United States Steel Corporation (0.7% portfolio weighting) were under pressure from weakness within commodities pricing. Asset manager Blackrock (0.5% portfolio weighting) was another significant detractor as a result of regulatory concerns.
Positive stock selection within the energy sector was the most significant contributor to performance during the period. Improved investor sentiment on the oil and gas exploration and production industry benefited holdings Pioneer Natural Resources (0.5% portfolio weighting) and Continental Resources (1.1% portfolio weighting). Software maker VMware (1.0% portfolio weighting) was another strong contributor during the quarter. The company has experienced surging demand for its product, which allows one server to handle the workload of several. The portfolio also benefited slightly from a relative overweight within the information technology sector.
Outlook
We have maintained the basic structure of the Fund, which is tilted toward cyclical growth names expected to benefit from a gradual economic improvement. We continue to remain overweight within the financials, information technology, and consumer discretionary areas as we expect the U.S. and global economies to continue in their recoveries, albeit at a slower rate. The portfolio remains underweight within the industrials and consumer staples sectors.
The recent rebalancing of the Russell benchmarks (which occurs in late June every year) brought with it few notable changes to the Fund's benchmark, the Russell Midcap Growth Index. Our portfolio strategy is to maintain targeted active weights; therefore, benchmark revisions do not significantly affect the relative positioning of the portfolio.
The recent contraction of the equity market has presented us with the opportunity to add to strong relative growth positions at attractive valuations. Weak job growth and consumer confidence have been weighing on the market, however, and we are mindful of these risks in structuring the portfolio.
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 Midcap® Growth Index measures the performance of those Russell mid-cap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000® Growth Index.
Indexes are unmanaged, do not reflect the deductions of fees or expenses, and are not available for direct investment.
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 a 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.
Instances of high double digit returns were achieved primarily during favorable market conditions and may not be sustainable over time.
A Note about Risk: The Fund invests primarily in mid-cap growth company stocks, which tend to be more volatile and can be less liquid than other types of stocks. Mid-cap companies typically experience a higher risk of failure than large-cap companies. 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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