How U.S. Policy Can Fuel Green Energy Investments | Lord Abbett
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Fixed-Income Insights

Lord Abbett Portfolio Manager Annika Lombardi discusses how President Biden’s sustainability commitments can have long-term impacts on the energy and automotive industries.

Transcript

Air Date: September 20, 2021

Good morning. My name is Annika Lombardi. I'm a portfolio manager on Lord Abbett's Climate Focused Bond Fund and Global Multi Sectoral Strategies.

Title: What we’re watching

In the past month President Joe Biden has made two significant sustainability related commitments that could potentially have large long-term impacts on the energy and automotive industries. At the beginning of August, the President signed an executive order that aims to make half of all new vehicles sold in the US by the year 2030 electric vehicles. And earlier this month, he also announced the goal of ramping up solar power so that it accounts for half of all US power generation by the year 2050.

These targets are very ambitious. If we think about 2020, electric vehicles only accounted for about 2% of all US car sales and solar energy only accounted for about 2% of US power generation. Given the low penetration rates we are starting with, there are significant barriers to reaching both of these ambitious targets from supply chain constraints, difficulties around trade relationships with China, and the need to get significant infrastructure spending approved in order to fund things like electric vehicle charging networks.

Title: Key takeaways

Despite these barriers, the key takeaway for us here at Lord Abbott is that whether these goals are actually reached or not, the transition to renewable power and electric vehicles will only continue to build steam. And growth will remain high in these industries for the foreseeable future, as companies and issuers attempt to meet these targets. The US is not the only country to make these kinds of sustainability commitments either.

For example, in the UK, they've announced a target of having 100% of all new vehicle sales be electric vehicles by the year 2035. Given Lord Abbott's firm wide focus on ESG and sustainability, we continue to monitor these trends very closely. They are particularly important for Lord Abbott's Climate Focus Bond Fund which invests in sustainability themes like solar power and further emphasizes our view that issuers, who are focused on sustainability will benefit over the long term.

OUTRO

Thank you so much for watching. And thank you for your continued interest in Lord Abbett.

Disclosure

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.

IMPORTANT INFORMATION

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, 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. The securities markets of emerging market countries tend to be less liquid, especially subject to greater price volatility, have a smaller market capitalization, have less government regulation and may not be subject to as extensive and frequent accounting, financial and other reporting requirements as securities markets in more developed countries. Further, investing in the securities of issuers located in certain emerging countries may present a greater risk of loss resulting from problems in security registration and custody or substantial economic or political disruptions.

The information provided herein is not directed at any investor or category of investors and is provided solely as general information about our products and services and to otherwise provide general investment education. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as Lord, Abbett & Co LLC (and its affiliates, “Lord Abbett”) is not undertaking to provide impartial investment advice, act as an impartial adviser, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement investor, contact your financial advisor or other non-Lord Abbett fiduciary about whether any given investment idea, strategy, product, or service described herein may be appropriate for your circumstances.

The views and opinions expressed are as of the date of publication and are subject to change based on subsequent developments, and may not reflect the views of the firm as a whole. The information discussed is only for illustrative purposes and is intended to provide general investment education and is not intended to provide legal, tax or investment advice. It is not intended to be relied upon as a forecast or research regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment or serve as a recommendation or offer to buy or sell securities.

Copyright © 2021 Lord, Abbett & Co. LLC. All rights reserved. Lord Abbett mutual funds are distributed by Lord Abbett Distributor LLC.

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