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Fund Description
The Fund seeks current income and capital appreciation from U.S. stocks and bonds by investing in the Lord Abbett Affiliated, Large Cap Core, Bond-Debenture and Total Return Funds.
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Fund Advantages
- The Fund is managed in a Fund of Funds approach.
- The Fund will seek to maintain a 60% equity, 40% fixed income allocation with a 5% band.
- Within the fixed income strategy, the Fund will maintain an 80% allocation to the Bond Debenture Fund and a 20% allocation to the Total Return Fund.
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Fund Returns
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As of August 31, 2010
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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
|
-8.59
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-4.98
|
14.16
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-3.31
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2.13
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3.56
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| |
Inception date: December 27, 1994
|
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B
|
NAV
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-8.75
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-5.30
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13.48
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-3.94
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1.46
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3.02
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| |
Inception date: May 01, 1998
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|
C
|
NAV
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-8.76
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-5.21
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13.53
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-3.93
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1.47
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2.91
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| |
Inception date: July 15, 1996
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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
|
SEC (A)
|
7.60
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0.93
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2.94
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|
|
Inception date: December 27, 1994
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B
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SEC (B)
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9.48
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1.31
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3.02
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|
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Inception date: May 01, 1998
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C
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SEC (C)
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13.53
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1.47
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2.91
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|
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Inception date: July 15, 1996
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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
|
Fund
|
Percentage of Portfolio
|
The Fund's portfolio is actively managed and may change significantly over time.
|
Class
|
Record
Date
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Ex Div
Date
|
Invest
Date
|
Payable
Date
|
Reinvest
Price
|
Dividend
|
|
A
|
08-30-2010
|
08-31-2010
|
08-31-2010
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08-31-2010
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9.47
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.02720
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B
|
08-30-2010
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08-31-2010
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08-31-2010
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08-31-2010
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9.46
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.02160
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B2
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08-30-2010
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08-31-2010
|
08-31-2010
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08-31-2010
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9.60
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.02530
|
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B3
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08-30-2010
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08-31-2010
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08-31-2010
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08-31-2010
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9.46
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.02650
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BF
|
08-30-2010
|
08-31-2010
|
08-31-2010
|
08-31-2010
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9.46
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.02920
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C
|
08-30-2010
|
08-31-2010
|
08-31-2010
|
08-31-2010
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9.44
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.02190
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|
F
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08-30-2010
|
08-31-2010
|
08-31-2010
|
08-31-2010
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9.46
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.02920
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|
I
|
08-30-2010
|
08-31-2010
|
08-31-2010
|
08-31-2010
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9.47
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.03010
|
|
R2
|
08-30-2010
|
08-31-2010
|
08-31-2010
|
08-31-2010
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9.60
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.02530
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|
R3
|
08-30-2010
|
08-31-2010
|
08-31-2010
|
08-31-2010
|
9.46
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.02650
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Fund Status
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Open to New Investors
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Dividend Frequency
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Monthly
|
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Number of Issues
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9
|
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Class
|
Inception
|
Quotron
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CUSIP
|
Outstanding
Shares
|
|
A
|
December 27, 1994
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LABFX
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543916209
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99,220,291
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B
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May 01, 1998
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LABBX
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543916886
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8,424,058
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C
|
July 15, 1996
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BFLAX
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543916605
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18,359,303
|
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F
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September 28, 2007
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BLAFX
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543916332
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771,181
|
|
I
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October 19, 2004
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LABYX
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543916696
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341,446
|
|
R2
|
September 28, 2007
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BLAQX
|
543916324
|
21,303
|
|
R3
|
September 28, 2007
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BLARX
|
543916316
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1,222,469
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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 Balanced Strategy Fund uses a fund-of-funds approach, which currently divides assets among the Lord Abbett Affiliated Fund, approximately 16.2% of the Balanced Strategy Fund's portfolio; Lord Abbett Capital Structure Fund (formerly America's Value Fund), approximately 16.8%; Lord Abbett High Yield Fund, approximately 15.8%; Lord Abbett Bond Debenture Fund, approximately 14.8%; Lord Abbett International Dividend Income Fund, approximately 13.0%; Lord Abbett Classic Stock Fund (formerly Large Cap Core Fund), approximately 10.1%; Lord Abbett International Core Equity Fund, approximately 5.5%; and Lord Abbett Floating Rate Fund, approximately 5.4%; and Lord Abbett Developing Local Markets Fund, approximately 2.1%. (The Fund's portfolio is actively managed and, therefore, its percentage allocation may change from time to time. Fund allocations may not total 100% due to rounding.) The Balanced Strategy Fund returned -8.59%, reflecting performance at the net asset value (NAV) of Class A shares, with all distributions reinvested, for the quarter ended June 30, 2010, compared to the 60% Russell 3000® Index3/40% Barclays Capital U.S. Universal Index,4 which returned -5.65%. The Fund's 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: 7.60%, 5 years: 0.93%, and 10 years: 2.94%. Expense ratio: gross, 1.46%, and net, 1.14%.
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. Most recent performance is published online at each month's end. To obtain performance data current to the most recent month-end, call Lord Abbett at 888-522-2388 or refer to www.lordabbett.com.
In the challenging negative market, the Balanced Strategy Fund posted negative returns and underperformed its benchmark during the second quarter of 2010. The largest detractor to relative performance was the overweight position within the equity asset class, especially within the domestic large capitalization and international equity areas. These groups posted weak returns for the period.
The High Yield Fund, a large holding in the portfolio, was a significant overweight with respect to the index. This position detracted relatively for the period, as it underperformed its index.
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 are subject to change. Sectors may include many industries.
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. 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 a CDSC.
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 The 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.
3 The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.
4 The Barclays Capital U.S. Universal Index represents the union of the U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index, the non-ERISA portion of the CMBS Index, and the CMBS High-Yield Index. Municipal debt, private placements, and non-dollar-denominated issues are excluded from the Universal Index. The only constituent of the index that includes floating-rate debt is the Emerging Markets Index.
Unless otherwise specified, indexes reflect total return, with all dividends reinvested. 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 net expense ratio takes into account a contractual management fee waiver agreement through March 31, 2011, without which performance would have been lower.
A Note about Risk: The Fund invests in underlying funds that may engage in a variety of investment strategies involving certain risks; this fund of funds may be subject to those particular risks of the underlying funds in proportion in which the fund invests in them. Performance may be lower than the performance of the asset class that they were selected to represent. Because the Lord Abbett Balanced Strategy Fund's balanced allocation among fixed-income funds and equity funds, it will be affected by risks associated with equity and fixed-income funds. Foreign securities may pose greater risks than domestic securities, including greater price fluctuation, less government regulation, and higher transaction costs. Foreign investments also may be affected by changes in currency rates or currency controls. High yield securities sometimes called junk bonds, carry increased risks of price volatility, illiquidity, and the possibility of default in the timely payment of interest and principal. 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, 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 investing.
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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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