Image alt tag

Error!

There was a problem contacting the server. Please try after sometime.

Sorry, we are unable to process your request.

Error!

We're sorry, but the Insights and Intelligence Tool is temporarily unavailable

If this problem persists, or if you need immediate assistance, please contact Customer Service at 1-888-522-2388.

Error!

We're sorry, but the Literature Center checkout function is temporarily unavailable.

If this problem persists, or if you need immediate assistance, please contact Customer Service at 1-888-522-2388.

Tracked Funds

You have 0 funds on your mutual fund watch list.

Begin by selecting funds to create a personalized watch list.

(as of 12/05/2015)

Pending Orders

You have 0 items in your cart.

Subscribe and order forms, fact sheets, presentations, and other documents that can help advisers grow their business.

A verification Email Has Been Sent

An email verification email has been sent to .
Follow the instructions to complete the email validation process.

I have not received my verification email

Check your SPAM mailbox and make sure that twelcome@lordabbett.com is allowed to send you mail.

I'm still having trouble

If you're still having trouble verifying your email address. feel free to contact us.

1-888-522-2388
clientservices@lordabbett.com


OK

We're sorry. We found no record of the email address you provided.

Register For a LordAbbett.com Account
Using Your Email Address.

  • Registered Financial Advisors gain access to:
  • Our data mining tool, Insight & Intelligence
  • Best in-class practice management content
  • Educational events, videos and podcasts.
  • The Lord Abbett Review - Subscribe now!

Registered but Having Problems?

If you believe you are registered and are having problems verifying your email address, feel free to contact us.

1-888-522-2388 clientservices@lordabbett.com

Terms & Condition

These Terms of Use ("Terms of Use") are made between the undersigned user ("you") and Lord, Abbett & Co. ("we" or "us"). They become effective on the date that you electronically execute these Terms of Use ("Effective Date").

A. You are a successful financial consultant that markets securities, including the Lord Abbett Family of Funds;

B. We have developed the Lord Abbett Intelligence System (the "Intelligence System"), a state of the art information resource that we make available to a limited community of broker/dealers through the Internet at a secure Web site (the "LAIS Site"); and

C. We wish to provide access to the Intelligence System to you as an information tool responsive to the demands of your successful business pursuant to these Terms of Use. Accordingly, you and we, intending to be legally bound, hereby agree as follows:]

1. Overview. · Scope. These Terms of Use (which we may amend from time to time) govern your use of the Intelligence System. · Revisions; Changes. We may amend these Terms of Use at any time by posting amended Terms of Use ("Amended Terms of Use") on the LAIS Site. Any Amended Terms of Use will become effective immediately upon posting. Your use of the Intelligence System after any Amended Terms of Use become effective will be deemed to constitute your acceptance of those Amended Terms of Use.We may modify or discontinue the Intelligence System at any time, temporarily or permanently, with or without notice to you. Purpose of the Intelligence System. The Intelligence System is intended to be an information resource that you may use to contribute to your business research. The Intelligence System is for broker/dealer use only; it is not to be used with the public in oral, written or electronic form. The information on the Intelligence System and LAIS Site is for your information only and is neither the tax, legal or investment advice of Lord Abbett or its third-party sources nor their recommendation to purchase or sell any security.

2. Your Privileges. · Personal Use. Your use of the Intelligence System is a nontransferable privilege granted by us to you and that we may deny, suspend or revoke at any time, with or without cause or notice. · Access to and Use of the Intelligence System. The User ID and password (together, an "Access ID") issued by us to you (as subsequently changed by you from time to time) is for your exclusive access to and use of the Intelligence System. You will: (a) be responsible for the security and use of your Access ID, (b) not disclose your Access ID to anyone and (c) not permit anyone to use your Access ID. Any access or use of the Intelligence System through the use of your Access ID will be deemed to be your actions, for which you will be responsible. · Required Technology. You must provide, at your own cost and expense, the equipment and services necessary to access and use the Intelligence System. At any time, we may change the supporting technology and services necessary to use the Intelligence System. · Availability. We make no guarantee that you will be able to access the Intelligence System at any given time or that your access will be uninterrupted, error-free or free from unauthorized security breaches.

3. Rights in Data. Our use of information collected from you will be in accordance with our Privacy Policy posted on the LAIS Site. Our compliance with our Privacy Policy will survive any termination of these Terms of Use or of your use of the Intelligence System.

4. Your Conduct in the Use of the Intelligence System. You may access, search, view and store a personal copy of the information contained on the LAIS Site for your use as a broker/dealer. Any other use by you of the Intelligence System and the information contained on the LAIS Site these Terms of Use is strictly prohibited. Without limiting the preceding sentence, you will not: · Engage in or permit any reproduction, copying, translation, modification, adaptation, creation of derivative works from, distribution, transmission, transfer, republication, compilation or decompilation, reverse engineering, display, removal or deletion of the Intelligence System, any portion thereof, or any data, content or information provided by us or any of our third-party sources in any form, media or technology now existing or hereafter developed, that is not specifically authorized under these Terms of Use.

· Remove, obscure or alter any notice, disclaimer or other disclosure affixed to or contained within the Intelligence System, including any copyright notice, trademark and other proprietary rights notices and any legal notices regarding the data, content or information provided through the Intelligence System.

· Create a hyperlink to, frame or use framing techniques to enclose any information found anywhere on the LAIS Site without our express prior written consent.

· Impersonate any person, or falsely state or otherwise misrepresent his or her affiliation with any person in connection with any use of the Intelligence System.

· Breach or attempt to breach the security of the Intelligence System or any network, servers, data, or computers or other hardware relating to or used in connection with the Intelligence System; nor (b) use or distribute through the Intelligence System software or other tools or devices designed to interfere with or compromise the privacy, security or use of the Intelligence System by others or the operations or assets of any person.

· Violate any applicable law, including, without limitation, any state federal securities laws. 5. Your Representations and Warranties. You hereby represent and warrant to us, for our benefit, as of the time of these Terms of Use and for so long as you continue to use the Intelligence System, that (a) you are, and will continue to be, in compliance with these Terms of Use and any applicable laws and (b) you are authorized to provide to us the information we collect, as described in our Privacy Policy.

6. Disclaimer of Warranties.

· General Disclaimers.

THE INTELLIGENCE SYSTEM, THE LAIS SITE AND ALL DATA, INFORMATION AND CONTENT ON THE LAIS SITE ARE PROVIDED "AS IS" AND “AS AVAILABLE” AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND. WITHOUT LIMITING THE PRECEDING SENTENCE, LORD ABBETT, ITS AFFILIATES, AGENTS, THIRD-PARTY SUPPLIERS AND LICENSORS, AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, DIRECTORS, OFFICERS AND SHAREHOLDERS (COLLECTIVELY, THE “LORD ABBETT GROUP”) EXPRESSLY DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NONINFRINGEMENT. YOU EXPRESSLY AGREE THAT YOUR USE OF THE LAIS SITE, THE INTELLIGENCE SYSTEM, AND THE DATA, INFORMATION AND CONTENT PRESENTED THERE ARE AT YOUR SOLE RISK AND THAT THE LORD ABBETT GROUP WILL NOT BE RESPONSIBLE FOR ANY (A) ERRORS OR INACCURACIES IN THE DATA, CONTENT AND INFORMATION ON THE LAIS SITE AND THE INTELLIGENCE SYSTEM OR (B) ANY TERMINATION, SUSPENSION, INTERRUPTION OF SERVICES, OR DELAYS IN THE OPERATION OF THE LAIS SITE OR THE INTELLIGENCE SYSTEM.

· Disclaimer Regarding Investment Research.

THE INTELLIGENCE SYSTEM INCORPORATES DATA, CONTENT AND INFORMATION FROM VARIOUS SOURCES THAT WE BELIEVE TO BE ACCURATE AND RELIABLE. HOWEVER, THE LORD ABBETT GROUP MAKES NO CLAIMS, REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY, TIMELINESS, COMPLETENESS OR TRUTHFULNESS OF SUCH DATA, CONTENT AND INFORMATION. YOU EXPRESSLY AGREE THAT YOU ARE RESPONSIBLE FOR INDEPENDENTLY VERIFYING YOUR INVESTMENT RESEARCH PRIOR TO FORMING YOUR INVESTMENT DECISIONS OR RENDERING INVESTMENT ADVICE. THE LORD ABBETT GROUP WILL NOT BE LIABLE FOR ANY INVESTMENT DECISION MADE BY YOU OR ANY OTHER PERSON BASED UPON THE DATA, CONTENT AND INFORMATION PROVIDED THROUGH THE INTELLIGENCE SYSTEM OR ON THE LAIS SITE.

· Survival.

THIS SECTION 6 SHALL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM..

7. Limitations on Liability.

NONE OF THE MEMBERS OF THE LORD ABBETT GROUP WILL BE LIABLE TO YOU OR ANY OTHER PERSON FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES (INCLUDING LOSS OF PROFITS, LOSS OF USE, TRANSACTION LOSSES, OPPORTUNITY COSTS, LOSS OF DATA, OR INTERRUPTION OF BUSINESS) RESULTING FROM, ARISING OUT OF OR IN ANY WAY RELATING TO THE INTELLIGENCE SYSTEM, THE LAIS SITE OR YOUR USE THEREOF, EVEN IF THE LORD ABBETT GROUP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS SECTION 7 WILL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM.

8. Miscellaneous Provisions.

· Governing Law. This Agreement will governed by and construed in accordance with the laws of the State of New York, without giving effect to applicable conflicts of law principles.

THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT OR ANY VERSION THEREOF, ADOPTED BY ANY STATE, IN ANY FORM ("UCITA") WILL NOT APPLY TO THESE TERMS OF USE. TO THE EXTENT THAT UCITA IS APPLICABLE, THE PARTIES HEREBY AGREE TO OPT OUT OF THE APPLICABILITY OF UCITA PURSUANT TO THE OPT-OUT PROVISION(S) CONTAINED THEREIN.

The Intelligence System is not intended to be used by consumers, nor are the consumer protection laws of any jurisdiction intended to apply to the Intelligence System. You agree to initiate and maintain any action, suit or proceeding relating to these Terms of Use or arising out of the use of the Intelligence System exclusively in the courts, state and federal, located in or having jurisdiction over New York County, New York.

YOU HEREBY CONSENT TO THE PERSONAL JURISDICTION AND VENUE OF THE COURTS, STATE AND FEDERAL, LOCATED IN OR HAVING JURISDICTION OVER NEW YORK COUNTY, NEW YORK. YOU AGREE THAT YOU WILL NOT OBJECT TO A PROCEEDING BROUGHT IN YOUR LOCAL JURISDICTION TO ENFORCE AN ORDER OR JUDGMENT OBTAINED IN NEW YORK.

· Relationship of Parties. The parties to these Terms of Use are independent contractors and nothing in these Terms of Use will be construed as creating an employment relationship, joint venture, partnership, agency or fiduciary relationship between the parties.

· Notice. All notices provided under these Terms of Use will be in writing and will be deemed effective: (a) when delivered personally, (b) when received by electronic delivery, (c) one business day after deposit with a commercial overnight carrier specifying next day delivery, with written verification of receipt, or (d) three business days after having been sent by registered or certified mail, return receipt requested. We will only accept notices from you in English and by conventional mail addressed to: General Counsel Lord, Abbett & Co. 90 Hudson Street Jersey City, N.J. 07302-3973 We may give you notice by conventional mail or electronic mail addressed to the last mail or electronic mail address transmitted by you to us.

· Third-Party Beneficiaries. The members of the Lord Abbett Group are third-party beneficiaries of the rights and benefits provided to us under these Terms of Use. You understand and agree that any right or benefit available to us or any member of the Lord Abbett Group hereunder will also be deemed to accrue to the benefit of, and may be exercised directly by, any member of the Lord Abbett Group to the extent applicable.

· Survival. This Section 8 will survive any termination of these Terms of Use or your use of the Intelligence System. The undersigned hereby signs these Terms of Use. By electronically signing and clicking "Accept" below, these Terms of Use will be legally binding on me. To sign these Terms of Use, confirm your full name and enter your User ID and Password (as your electronic signature) in the fields indicated below and click the “I Accept” button.

Reset Your Password

Financial Professionals*

Your password must be a minimum of characters.

Confirmation Message

Your LordAbbett.com password was successully updated. This page will be refreshed after 3 seconds.

OK

 

Equity Perspectives

Speculation aside, companies across a wide swath of sectors are exploring the potential opportunities. Technology, regulation, and compliance will be key.

When it comes to assessing the implications of disruptive technologies (and investment crazes)—especially those with the potential to upend traditional modes of finance and investment— Lord Abbett portfolio managers and research analysts take a very meticulous and collaborative approach.  The emergence of cryptocurrencies is no exception. Amid the well-publicized gyrations of “crypto”-linked financial instruments, these investment professionals are not about to embrace the notion that any of the leading cryptocurrencies will become a widely accepted alternative means of payment or, for that matter, the next major asset class. By contrast, a number of institutions have ventured into those waters, most notably hedge funds seeking to arbitrage price differences across multiple venues.

However, they are very careful to assess the potential of the underlying blockchain technology, which is a shared, decentralized, and encrypted ledger technology that requires consensus to update.  Blockchain eventually could lead to faster, better, and cheaper ways of doing business, in our opinion, not just in the banking sector but also across a broad set of industries. (See Chart 1.) But for that to happen, computers, semiconductors, regulation, laws, and accounting systems will have significant hurdles to clear.

Such was the consensus that emerged from a recent meeting of Lord Abbett investment professionals and senior management. While they recognized that some companies are already leveraged to cryptocurrencies and blockchain (e.g., semiconductors and computers required for the “data mining” required to determine values), the long-term investment implications are rife with uncertainty.

“The regulatory and taxation debate won’t be settled anytime soon,” said Eric Ghernati, Lord Abbett partner and technology research analyst. “But [in the case of cryptocurrencies], what is settled is the technology: it will take more powerful computing to mine digital currencies with a finite supply, and the chips running the algorithms will be either graphical processing units [GPUs] or application specific integrated circuits [ASIC] with some participation from flexible and software programmable architectures like field programmable gate array [FPGA].” (More on that later.)

Tackling Blockchain
Some futurists have suggested that, over time, blockchain technology will help transform the modern capital system. But some questions arise. For example, would that apply to sectors where there already has been massive investment and innovation (e.g., credit cards)? Probably not. But blockchain certainly has stirred interest in sectors still plagued by friction and red tape.

Here’s what we know now: Amid considerable doubt about cryptocurrencies being integrated into the global financial system, as either a fiat currency (i.e., that which a government deems legal tender) or alternative form of payment, major companies in a variety of sectors are actively researching how blockchain could streamline operations and boost shareholder value. The cost of such research is relatively minuscule, but the companies with the most at stake want to be ready to embrace such innovation when it becomes feasible.

One case in point concerns an enterprise software firm that is working with more than 100 banks, financial institutions, regulators, trade associations, professional services firms, and technology companies, spread across six continents, to develop a distributed ledger platform designed specifically for financial services.

That consortium grew out of a common frustration among banks and other financial institutions with multiple generations of disparate legacy financial technology platforms that struggle to interoperate, causing inefficiencies, risk, and spiraling costs.

Another example is a global asset management association that is attempting to shape regulation and promote industry-wide best practices; drive research and education; promote security best practices; and influence future governance procedures around blockchain systems.

Meantime, a wide array of companies has raised capital in the form of “initial coin offerings” (ICOs). In an ICO, investors provide fiat or even cryptocurrency in return for a newly issued cryptocurrency. Interestingly enough, the sector with the most blockchain ICO offerings is gaming and gambling, followed by infrastructure and development; media and advertising; asset management; and payments and banking.  (See Chart 2.)

While many of these ICOs may be fraught with risk, some well-known companies, such as Eastman Kodak, have also jumped on the ICO bandwagon as a cheap means of raising capital and providing customers a convenient alternative form of payment in a peer-to-peer network.  (In Kodak’s case, the ICO is tied to the establishment of a payment system to help photographers monetize the use of their images.)

In general, what will make or break such ICOs is the ability to demonstrate a clear path to fungibility (i.e., interchangeability) and utility.

“From a payment perspective, you have to have enough leverage within the marketplace, like an AirBnB, for this to work,” said Tulu Yunus, Lord Abbett research analyst, who covers Internet and business services companies. “Otherwise, restricting the kingdom to a select group of people is probably not going to produce a great business outcome.”

 

Chart 1. A Centralized Ledger versus a Secure Distributed Ledger 
Traditionally, a centralized-ledger approach (left) solves the transaction trust issue by tracking the movement and ownership of value.  A secure-distributed ledger (right) removes the counterparty, as the transaction record is universally visible and immutable.


Source: Credit Suisse research.

 

Chart 2. 135 Blockchain Startups Have Been Funded by Initial Coin Offerings (ICOs)

Source: CB Insights, TokenData.io, and company data, as of August 9, 2017. 
* The chart is only for illustrative purpose and is not an exhaustive list.

 

Chips: GPU versus ASIC 
One of the biggest issues in the evolution of cryptocurrencies and blockchain is the amount of electricity computers consume for each transaction. Much of that power consumption has been via graphic processing units (GPUs), a type of programmable logic chip specialized for display functions.  For a while, a few chip manufacturers benefited mightily because cryptocurrencies and blockchain platforms could only run on their specific GPUs.  To reduce power consumption, a number of platforms have since moved to application-specific integrated circuits (ASICs), which are far more efficient microchips designed for a special applications.  “Future application of cryptocurrencies and blockchain will hinge on semiconductor manufacturers’ ability to make chips more energy efficient,” said Ghernati.    

Cutting Through the Hype
“Everyone understands this will take time to evolve,” said Subrata Ghose, Lord Abbett technology analyst. “The technology will be more evolutionary than revolutionary, especially with regard to time-sensitive transactions. Anything that is time sensitive and needs instant verification cannot happen on current blockchain platforms.”

Take the credit card industry, for example, where the leading payments networks have invested vast amounts of capital over decades to ensure that their cards are widely accepted around the world. No cryptocurrency comes close to such “acceptance ubiquity.”   

”Bitcoin’s [blockchain] platformprocesses seven transactions per second; Visa and Mastercard process 2,000–3,000 transactions per second,” Ghose said.  “With Visa and Mastercard, the system works beautifully as a four-party system [consumer, merchant, network, and card-issuing bank]. The costs for merchants isn’t too onerous, and blockchain platforms can’t compete with the speed of validating transactions.”

All of which may help explain why Amazon and Google have been noticeably quiet about applying their prodigious technology resources to alternative payment systems. “They could do this in a heartbeat, but they haven’t,” said Ghernati.  “Nor have they really commented on where this fits into their long-term business model.  So, the question is why they haven’t made any forays in this area.”

Even so, 58% of senior executives interviewed by Deloitte in the consumer products and manufacturing sectors said they were implementing blockchain solutions in 2017; 53% of executives of life sciences and healthcare companies said they would use some kind of blockchain solution.

Deployment of blockchain solutions in the financial services industry is likely to take longer, although a number of analysts believe the technology has the potential to shorten settlement times for corporate bonds, OTC [over-the-counter] derivatives, equities, syndicated loans, and private debt instruments.  According to one recent survey, 33% of financial services executives polled expect to see commercial adoption of blockchain during 2018, and 49% expect adoption by 2020.  (See Chart 3.)   

At any rate, the anonymity of blockchain transactions, the authentication of users, and the verification of underlying contracts will weigh heavily on the minds of bank executives, regulators, and taxing authorities.

“Big banks are waiting to see where the regulations fall, and until the regulators say which applications they will allow, no one wants to go into it at full speed, because if something goes wrong, the banks will be held liable,” said Ghose.

 

Chart 3.  When Financial Services Leaders Expect to See Commercial Adoption of Blockchain


Source: BI Intelligence, Cognizant, and Credit Suisse research. For illustrative purposes only.

 

The Bottom Line
Chart 4 illustrates how the broad blockchain timeline may evolve.  It also suggests that blockchain’s development will be far from linear.

“In 2018, we are entering a growth phase, where the products and platforms should move into more comprehensive production phases,” said Credit Suisse analysts Charles Brennan, Brad Zelnick, and Matthew Yates, in a recent report.  “For the time being, we do not expect them to replace current legacy systems but rather to run alongside to allow for testing and refining.  After all, much of blockchain’s utility is derived from its network—the more development and the more applications that can be built upon the platforms, the more solutions we will arrive at through blockchain.” 1

Assessing the long-term potential for financial institutions, Asad Mawjee, a Lord Abbett research analyst, sees blockchain as a tool, not a threat.  For instance, many banks are already running trials that someday may determine blockchain’s applicability to cross-border payments transactions.  But considering the range of legal, regulatory, and technological uncertainty, Mawjee doubts that blockchain will replace the SWIFT [Society for Worldwide Interbank Financial Telecommunication] network for interbank payments anytime soon.  SWIFT was built in the 1970s, and it is now the backbone of the banking industry worldwide, with roughly $5 trillion in currency traded over its network each day.  It also plays a critical role in global securities settlement.

“If anything changes, it’s likely to happen slowly and help banks do things better and cheaper,” Mawjee said.  “But a lot of government bodies, regulators, and central banks have to opine on such transformation.  They’re the key actors.”

Many central banks are investigating whether blockchain (or the underlying “digital ledger technology”) can be applied to transactions in a permissioned network between a central bank and trusted wholesale counterparties, Mawjee added.

This is where the high-performance computing abovementioned comes in. According to Rick Vallieres, a Lord Abbett research analyst, banks are a prime target market for a major technology company that recently introduced a powerful new mainframe with embedded security, encryption systems, and artificial intelligence that can greatly accelerate interactions with existing business data on various databases for blockchain users worldwide.   

Meanwhile, the outlook for cryptocurrencies varies from country to country.  In any case, no cryptocurrency has an intrinsic value like gold.  From a legal standpoint, no country defines cyrptocurrencies as currencies per se. Some define them as property. The United States, on the other hand, defines a “cryptocurrency” as a commodity; as a result, authorities have warned that investment gains are likely to be taxable.  

Could the U.S Federal Reserve issue its own cryptocurrency some day?  The practical obstacles to widespread adoption are enormous, especially given concerns that bank runs could be bigger and much faster on such a decentralized system.

It also is important to remember that the financial services industry worldwide has paid out tens of billions of dollars in fines and legal settlements since the global financial crisis of 2008–09.  All of which underscores how cautiously banks, exchanges, and asset managers will embrace major innovation.  The risk of hacking customer information residing at a large number of nodes in a vast decentralized network cannot be underestimated.  Nor can the impediments of current “know your customer” and anti-money-laundering rules, which are the antithesis of cryptocurrency anonymity.

 

Chart 4. Blockchain Development Is Still in the Early Innings
As the hype subsides and new obstacles arise, companies will focus on winning the race to deployment.


Source: Accenture and Credit Suisse estimates.  For informational purposes only and should not be construed as research or investment advice. Market forecasts and projections are based on current market conditions and are subject to change without notice. Projections should not be considered a guarantee.

 

Reported by Steve Govoni

 

1 Charles Brennan, Brad Zelnick, and Matthew Yates, “Cryptocurrencies Are Only the Beginning,” Credit Suisse research, January 11, 2018.

 

 

Please confirm your literature shipping address

Please review the address information below and make any necessary changes.

All literature orders will be shipped to the address that you enter below. This information can be edited at any time.

Current Literature Shipping Address

* Required field