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Fund Description
The Fund seeks high total return.
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Fund Advantages
- Invests primarily in forward currency contracts and corporate and government bonds of developing markets.
- At least 80% of its assets are in the developing markets of Asia, Africa, the Middle East, Latin America, and Europe.
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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
|
1
Year
|
3
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
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NAV
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-5.38
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-3.20
|
4.43
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3.58
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2.67
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4.82
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| |
Inception date: September 30, 1988
|
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B
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NAV
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-5.51
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-3.49
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3.76
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2.94
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2.01
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4.30
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| |
Inception date: August 01, 1996
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C
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NAV
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-5.50
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-3.48
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3.74
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2.93
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2.04
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4.19
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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)
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-0.48
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1.68
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4.31
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|
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Inception date: September 30, 1988
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B
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SEC (B)
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-0.24
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1.85
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4.30
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|
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Inception date: August 01, 1996
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C
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SEC (C)
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3.74
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2.04
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4.19
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Inception date: July 15, 1996
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(A) SEC Returns reflect performance at the maximum 4.75% 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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Average Current Yield
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4.04
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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
|
|
A
|
08-01-2010
|
08-31-2010
|
08-31-2010
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08-31-2010
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6.59
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.01498
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B
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08-01-2010
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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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6.63
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.01136
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B2
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08-01-2010
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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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6.61
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.01365
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B3
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08-01-2010
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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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6.59
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.01421
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BF
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08-01-2010
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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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6.59
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.01636
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C
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08-01-2010
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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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6.63
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.01136
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F
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08-01-2010
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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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6.59
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.01636
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I
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08-01-2010
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08-31-2010
|
08-31-2010
|
08-31-2010
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6.58
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.01694
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R2
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08-01-2010
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08-31-2010
|
08-31-2010
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08-31-2010
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6.61
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.01365
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R3
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08-01-2010
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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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6.59
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.01421
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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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249
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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
|
September 30, 1988
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LDMAX
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543908867
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14,351,345
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B
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August 01, 1996
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LDMBX
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543908859
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466,559
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C
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July 15, 1996
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LDMCX
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543908842
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4,990,286
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F
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September 28, 2007
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LDMFX
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543908776
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8,238,696
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I
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October 19, 2004
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LDMYX
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543908826
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10,599,535
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R2
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September 28, 2007
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LDMQX
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543908768
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5,504
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R3
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September 28, 2007
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LDMRX
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543908750
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38,266
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Investment Team
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Porfolio Commentary
As of June 30, 2010
Market Review
Concerns about European sovereign debt, slowing growth in China, and the strength of the global economic recovery played a significant role in foreign exchange markets during the quarter. Both domestic and international investors shifted away from riskier currencies and those with high correlations to the euro and toward currencies perceived as less risky, such as the U.S. dollar and emerging market currencies heavily managed to the dollar.
Most European markets were volatile during the quarter as investors reacted to news of Greece's budget difficulties and to the prospect of slower growth across the Continent as a result of fiscal austerity measures. The European component of the benchmark, the JPMorgan Emerging Local Markets Index Plus (ELMI+),1 fell 10% during the second quarter, with the Czech Republic, Hungary, Romania, and Poland among the most affected. In comparison, the Latin American and Asian components of the index only fell 1.5% and 0.16%, respectively, during the second quarter.
Despite signs that growth may be slowing from the rapid pace of the past two quarters, economic data coming out of much of the emerging markets remained robust. As many countries, especially in Asia and Latin America, are starting to experience inflationary pressures, their central banks have continued to tighten monetary policy and remove liquidity. This continued to exert upward pressure on these currencies. However, some of the tighter fiscal policies that were announced, primarily in China, have sparked concerns of a further slowdown in economic growth.
Fund Review
The Fund returned -5.38%, reflecting performance at the net asset value (NAV) of Class A shares, with all distributions reinvested, for the three-month period ended June 30, 2010. The Fund's benchmark, the JPMorgan Emerging Local Markets Index Plus (ELMI+), returned -4.42% in the same period. The Fund's average annual total returns, which reflect performance at the maximum 4.75% sales charge applicable to Class A share investments and include the reinvestment of all distributions, as of June 30, 2010, are: 1 year: -0.48%, 5 years: 1.68%, and 10 years: 4.31%. 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.
This concern over severe budgetary problems in some of the European nations led to weakness in all of the currencies of Central and Eastern European countries heavily dependent on the Western European economy. Detracting from relative performance was the Fund's overweight in the Polish zloty and Romanian leu during the first half of the quarter. In addition, exposure to the South Korean won hurt performance due to rising political tensions between North and South Korea.
The performance of the Fund in the second quarter benefited from an underweight in the euro, Czech koruna, and Israeli shekel, as those currencies continued to be affected by fear surrounding Greece's fiscal health and as investors continue to be worried that the several European countries would be unable to refinance their debt.
Outlook
We continue to have a negative bias toward the euro and the Eastern European currencies, as the European debt crisis has raised the level of uncertainty with the growth prospects of those countries. We do not, however, expect events in Europe to have a significant impact on the U.S. and global economy, but the probability of a broader growth slowdown has increased. We were reducing risk throughout the second quarter, and will continue to do so, although while favoring higher-yielding currencies.
Going forward, we will favor the currencies in Asia, since they are relatively insulated from the European slowdown and are experiencing strong domestic demand. The central banks in several of these Asian countries are currently embarking on tighter monetary policies. These countries are facing inflation and demand pressures, which should contribute to currency appreciation.
We also will maintain a cautious overweight in Latin America due to the fact that many of these countries have better fiscal balances and growth prospects. Their economies are, in general, more exposed to the United States and other emerging markets than they are to Europe. However, we remain cautious due to the dependence of many Latin American economies on commodities. Commodity exporters may suffer if there is a meaningful slowdown in global growth or a decrease in government spending on infrastructure as countries implement fiscal consolidation.
1The JPMorgan Emerging Local Markets Index Plus (ELMI+) tracks total returns for emerging markets local-currency-denominated money market instruments. The benchmark instrument of the index is FX forward contracts, and these are laddered with maturities ranging from one to three months. Country weights are based on a trade-weighted allocation, with maximum weight of 10% for countries with convertible currencies and 2% for countries with nonconvertible currencies.
An index is unmanaged, does not reflect the deduction of fees or expenses, and is not available for direct investment.
The historical performance shown for periods prior to June 29, 2007, reflects the performance of the Fund prior to its change in investment strategy. Therefore, the performance of the Fund for periods prior to June 29, 2007, is not representative of Lord Abbett's current investment strategy. The change in investment approach may affect the Fund's performance in the future.
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. The CDSC is not reflected in the average annual 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.
Note about Risk: The Fund may invest substantially in forward foreign currency contracts or other derivatives. Foreign currency exchange rates may fluctuate significantly over short periods of time. They generally are determined by supply and demand in the foreign exchange markets and relative merits of investments in different countries, actual or perceived changes in interest rates, and other complex factors. Currency exchange rates also can be affected unpredictably by intervention (or the failure to intervene) by U.S. or foreign governments or central banks, or by currency controls or political developments. Foreign investments generally pose greater risks than domestic investments.
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 or 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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