Bond Debenture Fund
5 decades of delivering income through a flexible, multi-sector approach
Performance data quoted reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance 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. You can obtain performance data current to the most recent month-end by calling Lord Abbett at 888-522-2388 or referring to lordabbett.com.
The Bond Debenture Class A share rankings within the Morningstar Multisector Bond Category as of 9/30/21 for the one-year time period was 10% (28/337); three-year,26% (72/271); five-year, 5% (18/237); and 10-year, 2% (4/128).
1Morningstar rated the Lord Abbett Bond-Debenture class A share 4, 5 and 5 stars among 273, 237 and 128 Multisector Bond Funds for the overall rating and the 3, 5 and 10 year periods ended 10/31/2021, respectively. The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life sub-accounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.
3 Reasons to Consider Bond Debenture Fund
1. Decades of Outperformance vs. Multisector, High Yield, and Core-Plus Category Averages
Bond Debenture A-Share data as of 9/30/21. Source: Morningstar. Past performance is no guarantee of future results. The Bond Debenture Fund performance information shown is based on total return of Class A Shares at net asset value, including the reinvestment of dividends and capital gains, if any, but excludes sales charges. The maximum front-end sales charge applicable to Class A Shares is 2.25%. If sales charges were deducted the fund performance would be lower. Morningstar category averages are based on all share classes of each fund within the category. The performance of the Bond Debenture Fund vs. the Morningstar categories may have been different during other time periods.
Morningstar High Yield Bond Category: Funds in this Morningstar category have at least 65% of assets in bonds rated below BBB. Morningstar Intermediate Core-Plus Bond Category: Intermediate-term core-plus bond portfolios invest primarily in investment-grade U.S. fixed-income issues including government, corporate, and securitized debt, but generally have greater flexibility than core offerings to hold non-core sectors such as corporate high yield, bank loan, emerging-markets debt, and non-U.S. currency exposures. Their durations (a measure of interest-rate sensitivity) typically range between 75% and 125% of the three-year average of the effective duration of the Morningstar Core Bond Index.
Insights
Credit: Two Major Considerations for Today’s Market
We address questions about rising U.S. inflation and interest rates, as well as recent U.S. credit spread levels.
Understanding Two Key Dimensions of U.S. Credit Spreads
While credit spreads have tightened, we believe lower default risk to come, and the resulting, reasonable liquidity compensation means valuations are well supported by fundamentals.
A Multi-Sector Response to Low Rates in 2021
With U.S. Treasury yields remaining near multi-year lows, income investors may wish to consider a multi-sector bond strategy. Here’s why.
2. Seeking True Market Participation with Less Risk
(10/01/2001 – 09/30/2021)
Index Data Source: S&P Dow Jones Indices. Past performance is no guarantee of future results. The Bond Debenture Fund performance information shown is based on total return of Class A Shares at net asset value, including the reinvestment of dividends and capital gains, if any, but excludes sales charges. The maximum front-end sales charge applicable to Class A Shares is 2.25%. If sales charges were deducted the fund performance would be lower. Indexes are unmanaged, do not reflect the deduction of fees and expenses, and are not available for direct investment.
Videos
Multi-Sector Fixed Income at Lord Abbett: A Brief History
Learn more about our Bond Debenture Fund's 50-Year track record.
What’s Behind the Drop in Bond Yields?
Lord Abbett Portfolio Manager Leah Traub looks at the factors driving recent movements in interest rates.
3. Historically Strong Performance During Rising Yields
Index Data Sources: FTSE Russell and Bloomberg Index Services Limited. Past performance is no guarantee of future results. Indexes are unmanaged, do not reflect the deduction of fees and expenses, and are not available for direct investment.
The Bond Debenture Fund performance information shown is based on total return of Class A Shares at net asset value, including the reinvestment of dividends and capital gains, if any, but excludes sales charges. The maximum front-end sales charge applicable to Class A Shares is 2.25%. If sales charges were deducted the fund performance would be lower.
Celebrating 50 Years for the Lord Abbett Bond Debenture Fund
April 1, 2021 marked the 50th anniversary of the Bond Debenture Fund, a significant achievement for Lord Abbett and a pioneering investment strategy in our industry. This video shares the storied history of the fund as told by some of the investment professionals who helped to shape it: Robert S. Dow, former Managing Partner; Christopher Towle, former Partner and Portfolio Manager; and Steven Rocco, Partner and Co-head of Taxable Fixed Income.
A-Share Data as of 9/30/2021.
2Category: Morningstar Multisector Bond Funds Average: Multisector bond portfolios seek income by diversifying their assets among several fixed-income sectors, usually U.S. government obligations, U.S. corporate bonds, foreign bonds, and high-yield U.S. debt securities. These portfolios typically hold 35% to 65% of bond assets in securities that are not rated or are rated by a major agency such as Standard & Poor's or Moody's at the level of BB (considered speculative for taxable bonds) and below. Category average performance values are net of fees.
A Note about Risk: The Fund is subject to the general risks associated with investing in debt securities, including market, credit, liquidity, and interest rate risk. The value of your investment will change as interest rates fluctuate and in response to market movements. When interest rates fall, the prices of debt securities tend to rise, and when interest rates rise, the prices of debt securities are likely to decline. Longer-term debt securities are usually more sensitive to interest-rate changes; the longer the maturity of a security, the greater the effect a change in interest rates is likely to have on its price. The Fund may make substantial investments in high-yield debt securities and may invest in senior loans which may be primarily below-investment grade. High-yield securities, sometimes called junk bonds, carry increased risks of price volatility, illiquidity, and the possibility of default in timely payment of interest and expenses. 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. Convertible securities are subject to the risks affecting both equity and fixed income securities, including market, credit, liquidity, and interest rate risk. These factors can affect Fund performance.
Diversification does not protect against losses in a declining market.
A basis point is one hundredth of a percent or equivalently one percent of one percent or one ten thousandth.
Dividend Yield is a financial ratio that shows how much a mutual fund pays out in dividends each year relative to value with maximum sales charges and without sales charges. The dividend yield is calculated by annualizing the last dividend and dividing it by the fund’s net asset value with maximum sales charges and without sales charges.
The 30-Day SEC Yield represents net investment income earned by a fund over a 30-day period. It is expressed as an annual percentage rate using a method of calculation adopted by the Securities and Exchange Commission (SEC). Yields for other share classes will vary.
The S&P 500 Index is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices
The Bloomberg U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Total return comprises price appreciation/depreciation and income as a percentage of the original investment.
Bloomberg Index Information:
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg owns all proprietary rights in the Bloomberg Indices. Bloomberg does not approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, shall not have any liability or responsibility for injury or damages arising in connection therewith.