|
|
| Use these links to jump to a section further down the page. |
Fund Description
The Fund's investment objective is to seek a high level of total return.
top of page ^
Fund Advantages
- Stock prices are driven by company-specific, industry-specific, and macroeconomic catalysts.
- Rigorous fundamental research coupled with experienced judgment often leads to the discovery of attractive investment opportunities.
- A portfolio of undervalued stocks with solid earnings prospects and an appropriate risk profile should 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
|
-14.20
|
-8.35
|
9.43
|
-12.08
|
-2.21
|
1.75
|
| |
Inception date: June 30, 2003
|
|
B
|
NAV
|
-14.39
|
-8.68
|
8.78
|
-12.66
|
-2.86
|
1.06
|
| |
Inception date: June 30, 2003
|
|
C
|
NAV
|
-14.39
|
-8.68
|
8.71
|
-12.63
|
-2.82
|
1.09
|
| |
Inception date: June 30, 2003
|
|
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)
|
3.11
|
-3.36
|
0.90
|
|
|
Inception date: June 30, 2003
|
|
B
|
SEC (B)
|
4.78
|
-3.01
|
1.06
|
|
|
Inception date: June 30, 2003
|
|
C
|
SEC (C)
|
8.71
|
-2.82
|
1.09
|
|
|
Inception date: June 30, 2003
|
(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
|
|
CONSUMER DISCRETIONARY
|
12.10
|
|
INFORMATION TECHNOLOGY
|
7.90
|
|
TELECOMMUNICATION SERVICES
|
3.70
|
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
|
11-23-2009
|
11-24-2009
|
11-24-2009
|
11-24-2009
|
9.08
|
.05780
|
|
B
|
11-23-2009
|
11-24-2009
|
11-24-2009
|
11-24-2009
|
8.98
|
.00330
|
|
BF
|
11-23-2009
|
11-24-2009
|
11-24-2009
|
11-24-2009
|
9.03
|
.07840
|
|
C
|
11-23-2009
|
11-24-2009
|
11-24-2009
|
11-24-2009
|
8.98
|
.00950
|
|
F
|
11-23-2009
|
11-24-2009
|
11-24-2009
|
11-24-2009
|
9.03
|
.07840
|
|
I
|
11-23-2009
|
11-24-2009
|
11-24-2009
|
11-24-2009
|
9.11
|
.08560
|
top of page ^
|
Fund Status
|
Open to New Investors
|
|
Dividend Frequency
|
Annually
|
|
Number of Issues
|
114
|
|
Class
|
Inception
|
Quotron
|
CUSIP
|
Outstanding
Shares
|
|
A
|
June 30, 2003
|
LALAX
|
543915698
|
3,121,311
|
|
B
|
June 30, 2003
|
LLCBX
|
543915680
|
260,428
|
|
C
|
June 30, 2003
|
LLCCX
|
543915672
|
622,467
|
|
F
|
September 28, 2007
|
LCVFX
|
543915433
|
61,069
|
|
I
|
June 30, 2003
|
LLCYX
|
543915656
|
999,473
|
|
R2
|
March 24, 2010
|
LLCQX
|
543915425
|
1,030
|
|
R3
|
March 24, 2010
|
LLCRX
|
543915417
|
4,781
|
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%. The Conference Board's Index of Economic Indicators also posted its first decline in more than a year, suggesting some slowing is likely in the future. Nevertheless, the Federal Reserve's Beige Book indicated that economic activity was expanding in all 12 of the central bank's districts.
Much of the improvement appears to be coming from the manufacturing sector. The Manufacturing Index published by the Institute for Supply Management (ISM) posted its tenth straight month above the 50% mark that indicates expansion. Industrial production rose at a healthy clip in April, with the manufacturing component gaining 1% on top of March's 1.1% rise. The June reading of the ISM Purchasing Managers Index declined more than expected, to 56.2%, but remained well above the 50% mark.
Despite the unprecedented monetary and fiscal stimulus of the past two years, inflation remained subdued. The 12-month change in the Consumer Price Index (CPI) stood at 2.2% as of April 2010, down from 2.7% in January 2010.
The economy continued to add jobs in the second quarter, but an employment report in May indicated that the pace of job growth in the private sector had declined. Unemployment remained between 9.5% and 10.0%, as the improving economy drew workers back into the work force.
The Fed, citing the tentative nature of the recovery, kept the fed funds target rate between 0% and 0.25% during the quarter. The central bank explained that low inflation and low rates of resource utilization were likely to warrant low rates for an "extended period."
The European debt crisis, combined with disappointing economic data, led investors to question the sustainability of the U.S. recovery. This contributed to a flight to quality, in which many investors shifted away from stocks and into safer assets. 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 -14.20%, reflecting the performance at the net asset value (NAV) of Class A shares, with all distributions reinvested for the three month period ended June 30, 2010, compared to the benchmarks, the Russell 1000® Value Index,3 which returned -11.14%, and the S&P 500 Value Index,4 which returned -11.57% 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: 3.11%, 3 years: 13.80%, 5 years: -3.36%, and since inception (June 30, 2003): 0.90%. Expense ratio: 1.27%.
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.
Unfavorable stock selection within the financials sector was the largest detractor from relative performance for the period. Shares of financial institutions Goldman Sachs (2.7% portfolio weighting) and Morgan Stanley (1.8% portfolio weighting) declined after the Securities and Exchange Commission initiated an investigation regarding a 2007 synthetic collateralized debt obligation transaction. Investors' concerns completely overshadowed the firms' quarterly earnings reports, which far exceeded analysts' expectations.
Within the materials sector, shares of U.S. Steel (0.6% portfolio weighting) detracted moderately due to European and Chinese credit tightening and the Gulf of Mexico oil spill. In addition, the recent weakness in spot Chinese iron ore prices and some softening in U.S. scrap prices have been pressuring the stock.
Within the industrials sector, Caterpillar (1.0% portfolio weighting) contributed relatively, as equipment orders and shipments both accelerated. The construction equipment manufacturer announced that it was expanding its product offerings and capacity in its mining business. The company also announced an accretive acquisition of a locomotive manufacturer.
Also within the industrials sector, the portfolio benefited from underweighting General Electric (1.9% portfolio weighting), which posted a weak return for the quarter. Investors were concerned about higher input material costs (especially steel, due to the switch by iron ore producers who moved to quarterly rather than annual contracts) and rising foreign exchange headwinds due to the strong U.S. dollar.
Outlook
The portfolio continues to be positioned for a cyclical recovery in the economy, but exposure to the most cyclical parts of the market is down considerably from a year ago.
Consumer discretionary is now the portfolio's largest overweight sector relative to the benchmark, concentrated primarily in the hotels, restaurants and leisure, and in the multi-line retail areas. The annual Russell index rebalancing resulted in a decline by over three percentage points in the index exposure. During the quarter, we continued to trim profitable positions in retailers and automobile companies.
The energy sector moved from a market weight to a substantial overweight during the quarter, due to the significant reduction in the benchmark sector weight arising out of the annual index reconstitution. We trimmed positions in select oilfield services companies and in integrated oil firms.
The materials sector remains overweight in the portfolio, with an emphasis on the chemicals and the metals and mining industries. During the quarter, we increased the exposure to both these areas by initiating a position within each industry. The active weight of the sector also increased moderately due to the reduction in the benchmark sector weight resulting from the annual index rebalancing.
The utilities sector remains the portfolio's largest underweight sector, as we believe better opportunities exist elsewhere in the market today.
Consumer staples has become the second largest underweight sector in the portfolio due to a substantial increase in weight within the index from the annual rebalancing. As a result, the sector went from being at a market weight to being a significant underweight. We initiated a position in a food products stock and added to existing beverage holdings during the quarter.
Health care was similarly affected by an increase in benchmark weight in the sector. Consequently, our active exposure here moved from a market weight to a large underweight. We marginally increased the exposure in this area by initiating a position in biotechnology and adding to two holdings in large pharmaceutical companies.
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.
3 The Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
4The S&P 500 Growth and Value Indexes are constructed by dividing the stocks in an index according to a single attribute: price-to-book ratios. This splits the index into two mutually exclusive groups designed to track two of the predominant investment styles in the U.S. equity market. The Value Index contains companies with lower price-to-book ratios; conversely, the Growth Index containing firms with higher price-to-book ratios.
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 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 section "Your Investment—Purchases" in 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 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: 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 and 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 ^
|
