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Fixed-Income Insights

Lord Abbett Portfolio Manager Chris Gizzo shares his perspective on the week ahead. 


AM with a PM

Christopher Gizzo, CFA

Air Date: January 15, 2021


Hi, I'm Chris Gizzo, as a portfolio manager of the multi sector bond and high yield portfolios at Lord Abbett.

Interstitial: Market Environment


We entered 2021 with a constructive view on risk, but we don't think we're going to have as great an opportunity in overall beta like we had following the first quarter of last year.

We're already seeing that active management and selection is going to be extremely important this year. Just take a look at some of the rotations that are currently happening underneath the surface like the big outperformance of small caps and value within equities or the underperformance of double Bs within high yield.

Where active management is taking our team to start the year is in protecting against the potential for higher interest rates and a stronger USD in the near term, in finding bigger upside opportunities in terms of price for fixed income securities and positioning ourselves for further spread compression and maintaining a balance equity portfolio between value and cyclicals and high growth secular winners.

Interstitial: Election Considerations


The impact of the Georgia elections was pretty big on markets early to start this year. The main impact was in much higher expectations for fiscal stimulus which is undoubtedly a near term positive for markets

At some point, the market is going to have to contend with the potential for a higher regulatory and tax burden from this change in the administration and the fact that Democrats might be in control of the Senate, but we think it's too early for us to worry about that. We think that legislation that might lead to those outcomes is not going to be a near-term focus for this administration.

The other impact of the Georgia elections and one of the impacts that it has had on our portfolio is a bigger focus on renewable energy. We think that's very much going to be a sector that is well supported over the next four years.

Interstitial: The Pandemic Picture


On COVID and the impact of the pandemic on markets we continue to recognize that it continues to be a very big humanitarian crisis.

Though we do not think that it is a major market risk and we are encouraged by the prospects for a faster pace of vaccinations as we move over the next couple of quarters.

So, in looking at the portfolio and the sectors that we have exposure to we continue to like those that are exposed to a reopening theme.

That mainly includes leisure, transportation, and energy space. And we think those sectors can continue to be a source of alpha for us going forward.

If you look over the past month the leisure and transportation sectors have taken a bit of a pause, but we think that now it is looking like a good time to add in that they are set to resume their recovery as we move into the spring and the case load from the pandemic hopefully improves


Thank you very much for listening and thank you for your continued interest in Lord Abbett


Important Information

Unless otherwise noted, all discussions are based on U.S. markets and U.S. monetary and fiscal policies.

Asset allocation or diversification does not guarantee a profit or protect against loss in declining markets.

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. Projections should not be considered a guarantee.

The value of investments in fixed-income securities will change as interest rates fluctuate and in response to market movements. Generally, when interest rates rise, the prices of debt securities fall, and when interest rates fall, prices generally rise. High-yield securities, sometimes called junk bonds, carry increased risks of price volatility, illiquidity, and the possibility of default in the timely payment of interest and principal. Bonds may also be subject to other types of risk, such as call, credit, liquidity, interest-rate, and general market risks. 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. Lower-rated bonds may be subject to greater risk than higher-rated bonds. No investing strategy can overcome all market volatility or guarantee future results.

The credit quality of the securities in a portfolio are assigned by a nationally recognized statistical rating organization (NRSRO), such as Standard & Poor’s, Moody’s, or Fitch, as an indication of an issuer’s creditworthiness. Ratings range from ‘AAA’ (highest) to ‘D’ (lowest). Bonds rated ‘BBB’ or above are considered investment grade. Credit ratings ‘BB’ and below are lower-rated securities (junk bonds). High-yielding, non-investment-grade bonds (junk bonds) involve higher risks than investment-grade bonds. Adverse conditions may affect the issuer’s ability to pay interest and principal on these securities.

This broadcast may contain assumptions that are “forward-looking statements,” which are based on certain assumptions of future events. Actual events are difficult to predict and may differ from those assumed. There can be no assurance that forward-looking statements will materialize or that actual returns or results will not be materially different from those described here.

This broadcast serves as reference material and is provided for general educational 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. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon, and risk tolerance.

Please consult your investment professional for additional information concerning your specific situation.

The information provided is not directed at any investor or category of investors and is provided solely as general information about Lord Abbett’s products and services and to otherwise provide general investment education. None of the information provided should be regarded as a suggestion to engage in or refrain from any investment-related course of action as neither Lord Abbett nor its affiliates are undertaking to provide impartial investment advice, act as an impartial adviser, or give advice in a fiduciary capacity. If you are an individual retirement investor, contact your financial advisor or other fiduciary about whether any given investment idea, strategy, product or service may be appropriate for your circumstances.

This broadcast is the copyright © 2021 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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