A Note about Risk:
Although the Fund invests a significant portion in large cap company stocks, it also invests in mid cap and small cap company stocks, which tend to be more volatile and less liquid than large cap company stocks. Mid cap and small cap companies typically experience higher risk of failure than large cap companies. Investments in multinational companies generally pose greater risks than those of domestic companies, including market, liquidity, currency, and political risks. These factors can affect Fund performance.
Additional Risks to Consider:
The value of investments in equity securities will fluctuate in response to general economic conditions and to changes in the prospectus of particular companies and/or sectors in the economy. Investing in international securities generally poses greater risk than investing in domestic securities, including greater price fluctuations and higher transaction costs. Special risks are inherent to international investing, including those related to currency fluctuations and foreign, political, and economic events. While growth stocks are subject to the daily ups and downs of the stock market, their long-term potential as well as their volatility can be substantial. Value investing involves the risk that the market may not recognize that securities are undervalued, and they may not appreciate as anticipated. No investing strategy can overcome all market volatility or guarantee future results.
Dividends are not guaranteed and may be increased, decreased, or suspended altogether at the discretion of the issuing company.
The portfolio may not perform in a similar manner under similar conditions in the future.
All portfolio characteristics data mentioned in this video are as of August 30, 2013.
The portfolio is actively managed and may change significantly over time.
As of June 30, 2013 the average industry experience for the team was 20 years.
Higher returns mentioned refer to return on equity.
The reference of "the market" when compared to the portfolio is based on the Russell 3000 Value Index.
The source for discount rates levels nearing 300 basis points is Credit Suisse HOLT.
The source for the portfolio's return on equity over the last five years averaging 100 basis points better than the Russell 3000 Value Index is Russell.
The source for the portfolio's average price-earnings (PE) at 13.3% compared to 12.9% for the Russell 3000 Value Index is BNY Mellon.
Glossary of Terms
Delta is the ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative. It is sometimes referred to as the "hedge ratio."
Orphan Drugs refers to drugs that are targeted to cure rare diseases.
Basis Point is a financial unit of measurement that is 1/100th of 1%.
Price-Earnings Ratio is the valuation ratio of a company's current share price compared to its per-share earnings. It is sometimes referred to as "price multiple" because it shows how much investors are willing to pay per dollar of earnings.
Return on Equity is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
The Russell 3000® Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000 Value or the Russell 2000 Value indexes.
Market Derived Discount Rate is what the discount rate "should" be, given long-term average returns and today's level of inflation and taxes.
Fundamental Discount Rate is based on historical debt and equity returns and inflation and tax rates. The spread between the two series quantifies "other" risks beyond inflation and taxes that are currently priced into the market.
This broadcast serves as reference material for information purposes only; does not constitute an offer to acquire, solicitation for an offer to acquire, an offer to sell or solicitation for an offer to buy, any securities, nor is intended to be relied upon as a forecast, research, or investment advice on any securities, and cannot be used for any of the foregoing.
The views and opinions expressed by the Lord Abbett speaker are those of the speaker as of the date of the broadcast, and do not necessarily represent the views of the firm as a whole. Any such views are subject to change at any time based upon market or other conditions and Lord Abbett disclaims any responsibility to update such views. Neither Lord Abbett nor the Lord Abbett speaker can be responsible for any direct or incidental loss incurred by applying any of the information offered.
The value of investments and any income from them is not guaranteed and may fall as well as rise, and an investor may not get back the amount originally invested. Please consult your investment professional for additional information concerning your specific situation.
This broadcast is the copyright © 2014 of Lord, Abbett & Co. LLC. All Rights Reserved. This recording may not be reproduced in whole or in part or any form without the permission of Lord Abbett. Lord Abbett mutual funds are distributed by Lord Abbett Distributor LLC.
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