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Fund Description
The Fund seeks to outperform the MSCI Europe Australia and Far East Index (EAFE) over a three- to five-year period with equal or less volatility.
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Fund Advantages
- Markets typically over and under react to trends, events & emotions.
- By valuing companies and their growth prospects in a consistent manner, we can identify and exploit these opportunities.
- Our research produces a more accurate estimate of a company's true intrinsic value, along with an explicit recognition of risk.
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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
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3
Year
|
5
Year
|
10 Years
or Life
of Fund
|
|
A
|
NAV
|
-14.93
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-14.93
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2.24
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-12.92
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1.26
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3.13
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| |
Inception date: December 31, 2003
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B
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NAV
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-15.12
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-15.20
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1.61
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-13.50
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0.61
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2.47
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| |
Inception date: December 31, 2003
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|
C
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NAV
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-15.10
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-15.17
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1.60
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-13.49
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0.61
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2.48
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| |
Inception date: December 31, 2003
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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
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SEC (A)
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-3.62
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0.07
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2.20
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|
|
Inception date: December 31, 2003
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B
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SEC (B)
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-2.39
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0.44
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2.47
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|
|
Inception date: December 31, 2003
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C
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SEC (C)
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1.60
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0.61
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2.48
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Inception date: December 31, 2003
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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
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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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Sector
(Sector groups include many industries)
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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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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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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.35
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.07740
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B
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.22
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.01620
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B2
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.38
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.04880
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B3
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.24
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.08150
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BF
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.28
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.10470
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C
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.24
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.01510
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F
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12-17-2009
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12-18-2009
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12-18-2009
|
12-18-2009
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11.28
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.10470
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I
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12-17-2009
|
12-18-2009
|
12-18-2009
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12-18-2009
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11.40
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.11210
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R2
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12-17-2009
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12-18-2009
|
12-18-2009
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12-18-2009
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11.38
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.04880
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R3
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12-17-2009
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12-18-2009
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12-18-2009
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12-18-2009
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11.24
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.08150
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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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100
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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 31, 2003
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LICAX
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543915649
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46,605,962
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B
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December 31, 2003
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LICBX
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543915631
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3,517,669
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C
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December 31, 2003
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LICCX
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543915623
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8,045,270
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F
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September 28, 2007
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LICFX
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543915490
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1,906,597
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I
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December 31, 2003
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LICYX
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543915599
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20,987,538
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R2
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September 28, 2007
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LICQX
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543915482
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42,773
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R3
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September 28, 2007
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LICRX
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543915474
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688,753
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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. As a consequence, this quarter saw weakness in the major European currencies which negatively affected the Fund's returns.
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 -14.93%, reflecting 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 MSCI EAFE® with Net Dividends Index,1 returned -13.97% 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: -3.62%, 5 years: 0.07%, and since inception (December 31, 2003): 2.20%. Expense ratio, gross: 1.55%, and net: 1.12%.
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. The consumer staples and health care sectors were the worst relative detractors. Within the consumer staples sector, shares of Central European Distribution Corporation (0.7% of portfolio weighting), a Polish distributor of alcohol beverages, dropped after the company lowered earnings expectations for the fiscal 2010 year. The vodka market, which is the company's primary market, has been challenging and sales have declined. Additionally, shares of Japan Tobacco Inc. (1.1% of portfolio weighting), a Japan-based company engaged in the tobacco industry, fell due to both macro and micro issues. The company announced expectations for volume declines in the Japanese market and their European division has also been negatively affected by the weak euro. Within the health care sector, shares of Teva Pharmaceutical Industries Ltd. (1.8% of portfolio weighting), an Israel-based global pharmaceutical company specializing in generic drugs, suffered due to rising competition, particularly for oral multiple sclerosis (MS) drugs of which the company is a market leader. The company recently filed a petition with the Food and Drug Administration to block competitors from creating versions of its MS drug Copaxone but this was denied.
Contributing to relative performance was the financials sector and stock selection within utilities sector. The portfolio's lack of exposure, compared to the benchmark, to several European banks was a positive as underperformance for these banks was exacerbated by the weak euro. Within the utilities sector, shares of Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) (1.2% of portfolio weighting), a Brazil-based water and sewage service provider, benefited from an agreement the company signed with the City of Sao Paolo to provide public water supply and sewage services in the state capital for the next 30 years. In addition, shares of China Resources Power Holdings Co., Ltd. (1.0% of portfolio weighting), a Hong Kong-based power producer, profited from strong growth in electricity generation due to a positive outlook in the industrial sector.
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.
1The MSCI EAFE® with Net Dividends Index is an unmanaged index that reflects the stock markets of 21 countries, including Europe, Australasia, and the Far East, with values expressed in U.S. dollars. The MSCI EAFE with Net Dividends Index approximates the minimum possible dividend reinvestment. The dividend is reinvested after deduction of withholding tax, applying the rate to nonresident individuals who do not benefit from double taxation treaties. MSCI uses withholding tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates.
Indexes are unmanaged, do not reflect the deductions 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 value of investments in equity securities will fluctuate in response to general economic conditions and changes in the prospects of particular companies and/or sectors in the economy. Foreign securities in which the fund primarily invests generally pose greater risk than domestic securities, including greater price fluctuations and higher transaction costs. Foreign investments also may be affected by changes in currency rates or currency controls. With respect to certain foreign countries, there is a possibility of nationalization, expropriation, or confiscatory taxation, imposition of withholding or other taxes, and political or social instability that could affect investments in those countries. These risks can be greater in the case of emerging country securities.
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.
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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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