|
|
| Use these links to jump to a section further down the page. |
Fund Description
The Fund seeks long-term capital appreciation by investing primarily in common stocks of small companies with market capitalizations in the range of the Russell 2000 Index.
top of page ^
Fund Advantages
- Inefficiently valued small companies with improving fundamentals are often poised for appreciation.
- Quantitative screens, fundamental research and experienced portfolio management can identify companies positioned for capital appreciation.
- A well-diversified portfolio of undervalued stocks will produce attractive risk-adjusted returns.
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
|
-10.74
|
-1.89
|
21.97
|
-4.31
|
5.49
|
10.40
|
| |
Inception date: December 13, 1995
|
|
B
|
NAV
|
-10.90
|
-2.21
|
21.15
|
-4.97
|
4.77
|
9.82
|
| |
Inception date: November 15, 1996
|
|
C
|
NAV
|
-10.92
|
-2.20
|
21.17
|
-4.97
|
4.77
|
9.68
|
| |
Inception date: April 01, 1997
|
|
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)
|
14.96
|
4.25
|
9.75
|
|
|
Inception date: December 13, 1995
|
|
B
|
SEC (B)
|
17.15
|
4.63
|
9.82
|
|
|
Inception date: November 15, 1996
|
|
C
|
SEC (C)
|
21.17
|
4.77
|
9.68
|
|
|
Inception date: April 01, 1997
|
(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.
|
top of page ^
|
Rank
|
Fund
|
Percentage of Portfolio
|
The Fund's portfolio is actively managed and may change significantly over time.
top of page ^
Sector
(Sector groups include many industries)
|
Percentage of Portfolio
|
|
INFORMATION TECHNOLOGY
|
12.30
|
|
CONSUMER DISCRETIONARY
|
9.40
|
The Fund's portfolio is actively managed and may change significantly over time.
top of page ^
|
Class
|
Record
Date
|
Ex Div
Date
|
Invest
Date
|
Payable
Date
|
Reinvest
Price
|
Dividend
|
|
A
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.68
|
.04740
|
|
B2
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.65
|
.04130
|
|
B3
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.60
|
.09900
|
|
BF
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.58
|
.11870
|
|
F
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.58
|
.11870
|
|
I
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
19.68
|
.13100
|
|
R2
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.65
|
.04130
|
|
R3
|
12-18-2008
|
12-19-2008
|
12-19-2008
|
12-19-2008
|
18.60
|
.09900
|
top of page ^
|
Fund Status
|
Closed to New Investors
|
|
Dividend Frequency
|
Annually
|
|
Number of Issues
|
110
|
|
Class
|
Inception
|
Quotron
|
CUSIP
|
Outstanding
Shares
|
|
A
|
December 13, 1995
|
LRSCX
|
543913305
|
58,530,580
|
|
B
|
November 15, 1996
|
LRSBX
|
543913503
|
641,911
|
|
C
|
April 01, 1997
|
LSRCX
|
543913701
|
2,000,365
|
|
F
|
September 28, 2007
|
LRSFX
|
543913735
|
836,823
|
|
I
|
December 30, 1997
|
LRSYX
|
543913800
|
53,128,562
|
|
R2
|
March 31, 2008
|
LRSQX
|
543913727
|
2,477
|
|
R3
|
March 31, 2008
|
LRSRX
|
543913719
|
158,453
|
top of page ^
Investment Team
top of page ^
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 -10.74%, reflecting the performance at the net asset value (NAV) of Class A shares with all distributions reinvested for the period ended June 30, 2010, underperforming its benchmark, the Russell 2000® Value Index,3 which returned -10.60% 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: 14.96%, 5 years: 4.25%, and 10 years: 9.75%. Expense ratio (Class A shares): 1.24%.
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 800-821-5129 or visit us at www.lordabbett.com.
During the quarter, the Fund was hampered by some underperforming companies. MGIC Investment Corp. (0.9% of portfolio weighting) fell as the private mortgage insurer announced plans to sell $700 million in stock and $300 million in convertible senior notes to repay debt that becomes due next year. Reliance Steel & Aluminum Co. (1.4% of portfolio weighting), a metals company in the materials sector, also detracted from performance due to estimated flat steel pricing and struggling overall demand for the quarter and the remainder of year. In addition, the weak market for non-residential construction is expected to continue. The shares of Orient-Express Hotels Ltd. (0.7% of portfolio weighting), a hotel and travel service provider, came under pressure after the company disclosed first quarter earnings that were short of expectations. The shortfall was largely due to lower operating earnings that resulted from the flood-related/weather events in Peru and Madeira (a Portuguese island). Last, despite announcing strong earnings for its fiscal second quarter, Plexus Corp. (1.3% of portfolio weighting), provided fiscal third quarter guidance that overshadowed its results. The electronic manufacturing services company reaffirmed weaker demand in its networking and wireless infrastructure businesses from its European customers and continued component shortages.
Stock selection within the industrials sector added value to relative performance. Among the most notable companies within the sector were Hexcel Corp., Hub Group, Inc., and Quanex Building Products Corp. Hexcel Corp. (2.9% of portfolio weighting) is a manufacturer of composite materials for aircraft parts and bullet-resistant vests. The company announced strong estimated guidance through 2013 as a result of recent announcements from major producers regarding increased aircraft production schedules. Elsewhere, Hub Group, Inc. (1.2% of portfolio weighting), a freight transportation management company, reported solid, first quarter volume growth in all three of its business lines. Quanex Building Products Corp. (0.4% of portfolio weighting), a Houston-based manufacturer of products for residential construction, announced greater than expected earnings and, subsequently, raised its full-year guidance. The company benefited from increased sales within its Engineering Building Products and Nichols Aluminum divisions. Within the healthcare sector, Odyssey Healthcare, Inc. (0.0% of portfolio weighting), a hospice care provider, sharply rose after Gentiva Health Services, Inc. announced a bid to acquire the company for approximately $1.0 billion. The merger is expected to create the largest U.S. home-health and hospice provider.
Outlook
The economic improvement in the United States has appeared to hit some roadblocks. Housing data have weakened, consumer confidence has not improved, and unemployment continues to be a concern. Add to this the turmoil in the European markets and investors seem to be questioning the sustainability of the U.S. recovery. In this environment, we believe the market will be more selective, rewarding companies with improving fundamentals. We are focused on finding high-quality companies that can generate sustainable cost cuts and margin improvement and that have compelling reward-to-risk characteristics, strong balance sheets, market positions, and management teams.
We slightly decreased our weight in financials during the quarter, and we continue to have a significant underweight in the sector. The underweight is primarily in REITs, with a small underweight in insurance and community banks. We continue to have an overweight in the industrials sector, primarily within the aerospace, air freight/logistics, and road and rail industries. We are seeing some interesting activity with regard to pricing and volumes in the freight industries. We remain overweight in the materials sector, with an emphasis on the metals and mining and chemicals industries. We reduced our exposure to the energy sector. It appears that the oversupply of natural gas, which most small cap energy companies are leveraged to, will be with us for a while.
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 2000® Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.
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. Please refer to the prospectus for more information on redemptions that may be subject to a CDSC.
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 value of 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. The Fund invests primarily in small cap company stocks, which tend to be more volatile and can be less liquid than large cap company stocks. Small cap companies also may have more limited product lines, markets, or financial resources, and 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.
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 ^
|
