The Case for Active Management
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. No investing strategy can overcome all market volatility or guarantee future results. Market forecasts and projections are based on current market conditions and are subject to change without notice. Due to market volatility, the market may not perform in a similar manner in the future. No investing strategy can overcome all market volatility or guarantee future results.
Past performance is not a reliable indicator or a guarantee of future results.
Active Share is a measure of the difference between the holdings and weightings in a portfolio and those of a benchmark index. The active share figure can be interpreted as the percentage of the portfolio that differs from the benchmark.
Earnings per share (EPS) is a company's earnings divided by the number of shares outstanding. This can also be computed for the companies in a stock index such as the S&P 500.
Market Timing, also known as factor betting or factor timing, involves investing in different asset classes or market segments (e.g., sectors, market capitalization) at different times, based on an opinion about their future returns. Market timing requires predicting the future direction of a market or market segment by analyzing market or economic data. Sector rotation is a common type of market timing.
The price-to-earnings [P/E] ratio is a measure of valuation. It is a company's share price divided by its earnings per share. The P/E ratio can also be calculated for the companies in a stock index such as the S&P 500.
The S&P 500® Index is widely regarded as the standard for measuring large cap U.S. stock market performance and includes a representative sample of leading companies in leading industries.
The opinions in the preceding commentary are as of the date of publication and subject to change based on subsequent developments and may not reflect the views of the firm as a whole. This material is not intended to be relied upon as a forecast or research or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. This material is being provided as general information only and is not intended to be legal or tax advice. Investors should not assume that investments in the securities or sectors described were or will be profitable. This document is prepared based on information Lord Abbett deems reliable; however, Lord Abbett does not warrant the accuracy or completeness of the information. Investors should consult with a financial advisor before making an investment decision.