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Fund Description
Lord Abbett Securities Trust — International Series seeks to provide long-term capital appreciation by investing primarily in the stocks of foreign companies.
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Fund Advantages
- International small cap companies offer significant investment opportunities due to a lack of research coverage.
- A global perspective of companies and an understanding of their business models are crucial to exploiting market inefficiencies.
- On-site company research is essential for long-term investment success.
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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
|
-11.73
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-7.92
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13.04
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-14.68
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1.77
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-2.27
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| |
Inception date: December 13, 1996
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B
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NAV
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-11.86
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-8.20
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12.36
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-15.21
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1.14
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-2.78
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| |
Inception date: June 02, 1997
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C
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NAV
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-11.84
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-8.16
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12.39
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-15.21
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1.14
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-2.85
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| |
Inception date: June 02, 1997
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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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6.50
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0.57
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-2.85
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|
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Inception date: December 13, 1996
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B
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SEC (B)
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8.36
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0.97
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-2.78
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|
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Inception date: June 02, 1997
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C
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SEC (C)
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12.39
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1.14
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-2.85
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Inception date: June 02, 1997
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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
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The Fund's portfolio is actively managed and may change significantly over time.
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Region / Country
|
Percentage of Portfolio
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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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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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11.11
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.08590
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B
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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10.61
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.02600
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B2
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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11.05
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.08080
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B3
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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11.00
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.09540
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BF
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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11.03
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.10860
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C
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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10.55
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.03320
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F
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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11.03
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.10860
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I
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11-23-2009
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11-24-2009
|
11-24-2009
|
11-24-2009
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11.35
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.11750
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R2
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11-23-2009
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11-24-2009
|
11-24-2009
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11-24-2009
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11.05
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.08080
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R3
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11-23-2009
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11-24-2009
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11-24-2009
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11-24-2009
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11.00
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.09540
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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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113
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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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December 13, 1996
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LAIEX
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543915854
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7,861,374
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B
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June 02, 1997
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LINBX
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543915847
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1,290,599
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C
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June 02, 1997
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LINCX
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543915839
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1,755,052
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F
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September 28, 2007
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LINFX
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543915466
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62,892
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I
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December 30, 1997
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LINYX
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543915813
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17,893,365
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R2
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September 28, 2007
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LINQX
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543915458
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8,953
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R3
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September 28, 2007
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LINRX
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543915441
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191,752
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Investment Team
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Porfolio Commentary
As of June 30, 2010
Market Review
Last quarter, we highlighted the dominance of macroeconomic news on the direction of equity markets around the world. We concluded that when economic cycles evolve from one extreme to the other it is very common that there is a period of transition wherein economic signals are uneven, thus creating volatile highs and lows in equity prices. This quarter saw a stark continuation of that trend, exacerbated by a disturbing plunge in the U.S. stock market of close to 10% intraday at one point. Government finances continue to be the major focus of capital markets for good reason, but the second quarter saw the addition of political tension in both Korea and the Middle East. Despite this, equity markets began to claw their way back over the quarter from the extreme lows seen in May. Unfortunately, one of the byproducts of overseas turmoil is a retreat into the safety of the U.S. dollar.
Economic signals continue to be mixed and differ by region. While the Organization for Economic Co-operation and Development (OECD) leading indicators have peaked, Asian economies continue to grow, although somewhat slower than anticipated, and North American manufacturing is picking up solidly. The most negative expectations are embedded in European markets, although areas such as Scandinavia, Russia, Germany, and the Benelux (Belgium, Luxembourg, and the Netherlands) region seem to show the worst is past. From an investing viewpoint, we believe that it is far more important to look beyond the white noise of daily events and stock price gyrations to take advantage of market overreactions with an eye toward the longer term, where our view is that the world economy will be better off in 2011 and 2012 than it is now. As such, we have used the turmoil of early 2010 to position our portfolios in solid, growing, undervalued companies located in the appropriate countries of the world, knowing that there will be rolling stories of fiscal deficits, tax increases, higher unemployment, and missed expectations over the next few years of the recovery.
Fund Review
The Fund returned -11.73%, 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's benchmark, the S&P Developed Ex-U.S. Small Cap Index,1 returned -10.72% in 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: 6.50%, 5 years: 0.57%, and 10 years: -2.85%. Expense ratio, gross: 1.77%, and net: 1.70%.
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.
Overall, stock selection was the reason for our relative underperformance. Detracting from relative performance was stock selection within the consumer discretionary and industrials sectors. Within the consumer discretionary sector, shares of REXLot Holdings Limited (0.5% of portfolio weighting), a Hong Kong-quoted provider of lottery services in China, fell due to greater than anticipated start-up costs for its scratch card retail network. Sales growth of scratch cards has also slowed. In addition, shares of Minth Group Limited (1.2% of portfolio weighting), a Hong Kong-based manufacturer and seller of auto parts, dropped as a result of the company's issuance of additional shares which diluted the share price. Speculation that passenger vehicle sales will fall during the second quarter also hurt the company. Within the industrials sector, the portfolio's over-exposure to European industrials, particularly in Germany, was a negative exacerbated by the weak euro. Moreover, investors' concerns over sovereign debt caused Japanese industrials, especially those with exposure to the European consumer, to fall.
Contributing to relative performance was stock selection within the health care and energy sectors. Within the health care sector, shares of Sawai Pharmaceutical Co. Ltd. (1.1% of portfolio weighting), a Japan-based pharmaceutical company, rose upon the announcement of a positive earnings revision. The increase in generic drug usage as well as new product launches has benefited the company. Additionally, shares of Gerresheimer AG (1.3% of portfolio weighting), a Germany-based manufacturer of specialty glass and plastic products for the pharmaceutical industry, were propelled by strong growth in the insulin market. The company, which receives orders from the top insulin companies, provides the pen devices used in insulin products for diabetic patients. The company's balance sheet has improved due to solid inflows, and we believe the stock remains cheap. Within the energy sector, shares of Premier Oil plc (1.1% of portfolio weighting), a United Kingdom-based oil and gas exploration and production company with projects in Asia, benefited from analyst upgrades and increased activity in the Singaporean gas market. Demand for gas in Singapore has risen and the company has plans to drill new wells in the coming year.
Outlook
It appears that regional and country economic strength will be highly variable over the next 12–18 months. Traditional macroeconomic concerns such as fiscal deficits, current accounts, and money policy look very different country to country and this is a major cause of the expected variability. But it is important to point out that, as investors, we have seen this before. The only difference is that this time it is not in the emerging markets but rather in the developed world. We understand the playbook of what works in these types of situations, having had front-row seats to the Asian crisis, the Latin American crisis, and numerous other severe economic transitions over the past three decades. More than anything, we believe that this creates great long-term investment opportunities for those who can position themselves correctly. We may be out of step with the markets for brief periods as confusion and anxiety reign, but, ultimately, we believe that good stock-picking will reassert its importance over macro, thematic investing, and drive returns once again.
1S&P Global Equity Index SystemSM and the names of each of the indexes and subindexes that it comprises (GEIS and such indexes and subindexes, each an "Index" and collectively, the "Indexes"), are service marks of Citigroup. The S&P Developed Ex-U.S. Small Cap Index is a subset of the Global S&P Broad Market Index (BMI).
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/expense reimbursement agreement that currently is scheduled to remain in place through February 28, 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 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.
A Note about Risk: The fund invests primarily in foreign small-cap stocks, which tend to be more volatile and can be less liquid than foreign or U.S. 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. In addition, investments in foreign and derivative securities may present increased market, liquidity, currency, political, informational, and other risks. 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.
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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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