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

 

Market View

In 2017, fixed-income markets performed the opposite of virtually all that Wall Street had predicted. What happened, and how did our forecasts turn out?

(In 2017, the fixed-income markets did not follow the path that many had predicted. Political changes, both in the United States and abroad, consequent policy implications, and their impact on investment risks and opportunities were still being assessed as the year began. In this article, we review some of Wall Street’s expectations for the fixed-income market in 2017 and attempt to answer the question “What went wrong?” Next week, we assess the accuracy of forecasts for the equity markets in 2017.)

The final quarter of 2016 was a challenging period for the U.S. bond market. Interest rates had jumped sharply in the post-election period on expectations of faster economic growth and inflation as a result of the policies of the new administration. The yield on the 10-year U.S. Treasury bond finished 2016 at 2.4%—more than 100 basis points (bps) above the historical low point reached in July of that year. Many had expected that this would continue into 2017: the call was for increasing inflationary pressure and higher interest rates, leading to a negative environment for bonds.

With the year 2017 now behind us, we can state the obvious: many of those expectations did not come to fruition, especially in terms of sector performance (see Chart 1).

 

Chart 1. Actual 2017 Results in the Fixed-Income Markets Were Better Than Forecast
2017 Total Returns 

Source: Bloomberg Barclays, JP Morgan, and ICE BofAML. US Treasury=Bloomberg Barclays U.S. Treasury Index. Agency MBS=Bloomberg Barclays U.S. MBS Index. CMBS=Bloomberg Barclays CMBS Index. US Aggregate=Bloomberg Barclays U.S. Aggregate Bond Index. Bank Loans=Credit Suisse Leveraged Loan Index. Municipals=Bloomberg Barclays Municipal Bond Index. IG Corporate=Bloomberg Barclays U.S. Corporate Bond Index. IG Corporate BBB=Bloomberg Barclays U.S. Corporate Bond Index - BBB. High Yield Corporate=Bloomberg Barclays U.S. High Yield Index. EM Corporate=JP Morgan CEMBI Broad Diversified. Long Muni (22 yrs.)=Bloomberg Barclays Long Municipal Bond (22 year+) Index. Municipals (BBB)=Bloomberg Barclays Municipal Bond Index -BBB. EM Sovereign (USD$)=JP Morgan EMBIG. High Yield Muni=Bloomberg Barclays High Yield Municipal Bond Index. High Yield Corp. CCC=ICE BofAML U.S. High Yield CCC Index. EM Sovereign (local)=JP Morgan Global Bond Index-EM.
*Municipal bond index returns do not reflect the additional effect of the tax-free status on municipal bond income. The municipal market can be affected by adverse tax, legislative, or political changes, and by the financial condition of the issuers of municipal securities. Income from municipal bonds may be subject to the alternative minimum tax. Federal, state and local taxes may apply.
Past performance is no guarantee of future results. Performance during other time periods may have been different or negative. Indexes are unmanaged, do not reflect the deduction of fees and expenses, and are not available for direct investment. For illustrative purposes only and does not represent the performance of any specific portfolio managed by Lord Abbett or any particular investment.

 

Investment Grade
Within investment-grade bonds, the move to higher rates did not come about, resulting in a solid year of returns across most segments of fixed income. The yield on the 10-year Treasury, for example, remained below its initial level for most of 2017, before increasing by more than 40 bps in the final weeks of the year owing to signs of faster economic growth, in the United States and abroad, and positive sentiment resulting from the enactment of tax reform. The Bloomberg Barclays U.S. Aggregate Bond Index (a common benchmark for the broad U.S. bond market) delivered a return of 3.5% for the year ended December 31, 2017. While not a huge return relative to the massive rally in U.S. equities, this represented a decent return, given the low level of market yields coming into 2017 and the expectations for higher rates.

 

Chart 2: In a Surprise to Many, 10-Year U.S. Treasury Bond Yields Ended 2017 Near Where They Began
10-year U.S. Treasury bond yield (year ended December 31, 2017)

Source: Bloomberg. 
Past performance is no guarantee of future results. Performance during other time periods may have been different or negative. Indexes are unmanaged, do not reflect the deduction of fees and expenses, and are not available for direct investment. For illustrative purposes only and does not represent the performance of any specific portfolio managed by Lord Abbett or any particular investment.

 

Corporate bonds outperformed government-related securities, with investment-grade (as represented by the Bloomberg Barclays U.S. Corporate Bond Index) and high-yield corporate bonds (as represented by the ICE BofAML U.S. Corporate High Yield Index) generated returns of 6.4% and 7.5%, respectively, compared to a 2.3% return for the representative benchmark Bloomberg Barclays U.S. Treasury Index.

Many fixed-income observers had voiced concern about corporate credit coming into 2017, as spreads started the year below their long-term averages, after a strong rally in 2016. But the market surprised investors with continued spread tightening, as investment-grade corporate and high-yield corporate spreads tightened by 30 bps and 65 bps, respectively, as a result of positive economic growth and improving credit fundamentals.

High Yield
High yield is one area in particular that many pundits were sounding the alarm bells for going into 2017. A few headlines suffice to illustrate: “Why You Should Be Wary of Junk Bonds” (The Wall Street Journal, January 9, 2017); “Why Investors Should Worry about Junk” (WSJ, March 24, 2017); and “Investors View Junk Bonds as Most Overvalued in a Decade” (WSJ, March 14, 2017).

A common theme was that since the current credit cycle had gone on too long, and spreads were well below their long-term average, there was little opportunity left for high yield. But, as our regular readers know, Lord Abbett had a different view. Credit cycles don’t need to end due to old age or because spreads are below average. There have been periods when credit spreads remain below average for an extended period.

One year ago, we suggested that in an environment of continued positive economic growth, accompanied by low defaults, high yield could continue to do well: “In terms of ratings categories, we think the ‘BB’ rated segment of high yield is richly valued, while there remain some compelling opportunities within ‘CCC’ rated issues. Since we are positive on credit fundamentals and consider that valuations are still attractive, we think the ‘CCC’ rated category will remain appealing, at least in the near term.”

This view ultimately proved to be prescient, as high-yield bonds outperformed investment-grade bonds by a wide margin. Within high yield, the ‘CCC’ segment (as represented by the ICE BofAML CCC & Lower U.S. High Yield Index) led the way with a return of 10.6%, outperforming the broad high-yield index (as represented by the ICE BofAML U.S. High Yield Index) by more than 300 bps, for the year ended December 31, 2017.

There were bumps in the road along the way, especially during a period of credit-spread volatility in November 2017. Once again, many observers pointed to this pullback as a sign of the beginning of the end of the high-yield cycle. From our perspective, however, that episode was the result of sector-specific and company-specific issues concentrated in certain industries facing secular headwinds, rather than a symptom of broader high-yield credit market fundamentals. We have since seen relative stability return to the high-yield sector in the final weeks of 2017.

Not only did many of Wall Street’s experts miss the rally in high yield but also many investors did as well. According to Morningstar mutual fund flow data, high-yield bond mutual funds witnessed more than $20 billion in outflows in the first 11 months of 2017, for a total of more than $40 billion in outflows over the trailing five years. So, while the high-yield index has generated three times that of the return of the Barclays Aggregate over the past three years, many investors have not benefited. For those who say those investors were “chasing yield” in the high-yield market, it’s difficult to make that claim when looking at fund-flow data.

For 2018, our base case is for positive economic growth, and an environment of low defaults, leading to a positive backdrop for high-yield credit.

Emerging Market Debt
As we entered 2017, many had expressed concerns over the outlook for emerging market debt. Emerging market bonds experienced selling pressure after the November 2016 election, based on fears that higher U.S. interest rates, a strong dollar, and new trade policies could negatively impact emerging market countries. (See, for example, “Investors Soured on Emerging Markets in 2016—U.S. Dollar Strength May Trigger Further Stress in Emerging Markets, Analysts Say,” The Wall Street Journal, January 4, 2017.)  

But many of these fears were not realized: long-term Treasury yields stabilized and the dollar strength of 2016 turned into dollar weakness in 2017. As a result, global bonds, and emerging market debt in particular, generated strong returns. U.S. dollar-denominated emerging market corporate bonds generated returns of 8.0%, while the longer-duration emerging market sovereign bond index rallied by more than 9%. Emerging market sovereign debt denominated in local currencies led the way, with returns in excess of 15% on the year.

Looking forward to 2018, we believe the backdrop for emerging markets remains positive. According to Lord Abbett portfolio manager John Morton, “Our long-held positive stance toward emerging-market [EM] corporate debt has been supported by two factors: a benign global backdrop and an improving macro outlook for many EM economies, particularly in terms of growth. With 2018 drawing near, we maintain our constructive view of the EM corporate story.”

Municipal Bonds
The challenging period of the fourth quarter of 2016 was even more difficult for municipal bonds. In addition to the fears of higher rates and inflation affecting U.S. Treasury securities, municipals also faced questions about the potential change in tax benefits due to tax reform, leading to reduced demand, and the potential for higher issuance due to infrastructure spending, leading to increased supply. This mix of potential issues led to significant mutual-fund outflows. During the two-month period following the November 2016 election, for example, municipal bond mutual funds experienced $28 billion in net outflows, according to Morningstar.

But Lord Abbett had a different view. Yes, there was the potential for higher interest rates, but history has proven that basing investment decisions on a prediction of future interest-rate moves is inherently risky.  Yes, too, there was the potential for tax reform, but history has illustrated that changes in tax code have very little correlation with municipal-bond performance. And, yes, significant fund outflows can cause temporary price pressure on bond prices, but history has suggested that, over time, fundamentals beat out technical factors, and periods of large outflows are typically a good time to invest.

Given that underlying credit fundamentals remained sound, and year-end selling led to higher yields and credit spreads, we thought it was an opportune time to put money to work in municipals, and so noted that “the market is full of uncertainty, but given the long-term return profile, the higher yields and more attractive relative value available in the market today, investors may want to take another look at allocating to tax-free bonds.”

Municipal investors were rewarded in 2017, with the 5.5% return of the Barclays Municipal Bond Index, soundly beating the 3.5% return of the taxable Barclays Aggregate Index—and that’s before the benefit of municipal’s tax-exempt status. Lower-rated municipals led the way, with the Barclays High Yield Municipal Index rallying 9.7%, well ahead of the high-yield corporate bond market. The reversal of fortune in municipals is a good illustration that a long-term strategic allocation to municipals is a more prudent approach than trying to time the market, making tactical buy and sell decisions based on the headline of the day. [All data are for the 12-month period ended December 31, 2017.]

Recently, Daniel Solender, Lord Abbett partner and director, said: “We believe 2018 likely will be a positive year for the municipal-bond market, although expected returns likely will not be as high as they were during 2017.” While the new tax bill creates some level of uncertainty, one impact is definitely a positive for municipals. Solender further said, “While many tax exemptions are going away or are being capped, the municipal bond-interest tax exemption is staying. Because there are now fewer tax-exempt investment alternatives, we expect demand for municipal bonds to increase.”

At the same time, supply is expected to be lower in the early 2018, as a large amount of supply was pulled forward to 2017. Solid credit fundamentals, paired with attractive relative value and supply/demand dynamics, should continue to provide a good environment for municipal bond investors.

Conclusion
Every new year brings with it a new series of market predictions. As fixed-income performance in 2017 illustrated, those predictions do not always come to fruition. Perhaps it would be best to not over-react and restructure your portfolio based on the consensus forecast of the day. Visit us next week to see how the equity market experts fared in 2017.

 

This Market View 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.

A Note about Risk: 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. Bonds may also be subject to other types of risk, such as call, credit, liquidity, interest-rate, and general market risks. 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. Moreover, the specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan’s value. 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 municipal market can be affected by adverse tax, legislative, or political changes, and by the financial condition of the issuers of municipal securities. Income from the municipal bonds held could be declared taxable because of changes in tax laws. Certain sectors of the municipal bond market have special risks that can affect them more significantly than the market as a whole. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

Glossary of Terms

Treasuries are debt securities issued by the U.S. government and secured by its full faith and credit. Income from Treasury securities is exempt from state and local taxes. Although U.S. government securities are guaranteed as to payments of interest and principal, their market prices are not guaranteed and will fluctuate in response to market movements.

basis point is one one-hundredth of a percentage point.

The Bloomberg Barclays U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The Index covers the U.S. investment-grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Total return comprises price appreciation/depreciation and income as a percentage of the original investment.

The Bloomberg Barclays U.S. Corporate Bond Index includes all publicly held issued, fixed-rate, nonconvertible investment-grade corporate debt. The index is composed of both U.S. and Brady bonds.

The Bloomberg Barclays U.S. High Yield Index covers the universe of U.S. fixed rate, non-investment grade debt.

The Bloomberg Barclays Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term investment-grade tax-exempt bond market. Bloomberg Barclays Municipal Bond Index – BBB is a component of that Index.

The Bloomberg Barclays High Yield Municipal Bond Index is an unmanaged index consisting of noninvestment-grade, unrated, or below Ba1 bonds.

The Bloomberg Barclays U.S. Treasury Index is the U.S. Treasury component of the Bloomberg Barclays U.S. Government Index. The index includes public obligations of the U.S. Treasury with a remaining maturity of one year or more.

The Credit Suisse Leveraged Loan Index is designed to mirror the investable universe of the U.S. dollar-denominated leveraged loan market.

The ICE BofAML CCC & Lower US High Yield Index is a subset of The BofA Merrill Lynch U.S. High Yield Index including all securities rated CCC1 or lower.

The ICE BofAML U.S. High Yield Index tracks the performance of US dollar-denominated below –investment-grade corporate debt publicly issued in the U.S. domestic market.

Source ICE Data Indices, LLC (“ICE”), used with permission. ICE PERMITS USE OF THE ICE BofAML INDICES AND RELATED DATA ON AN "AS IS" BASIS, MAKES NO WARRANTIES REGARDING SAME, DOES NOT GUARANTEE THE SUITABILITY, QUALITY, ACCURACY, TIMELINESS, AND/OR COMPLETENESS OF THE ICE BofAML INDICES OR ANY DATA INCLUDED IN, RELATED TO, OR DERIVED THEREFROM, ASSUMES NO LIABILITY IN CONNECTION WITH THE USE OF THE FOREGOING, AND DOES NOT SPONSOR, ENDORSE, OR RECOMMEND LORD ABBETT, OR ANY OF ITS PRODUCTS OR SERVICES.

The JPM Emerging Markets Bond Index Global (EMBI® Global) tracks total returns for US dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds.

The JPM Government Bond Index-Emerging Markets (GBI-EM) The is the first comprehensive, global local Emerging Markets index, and consists of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure. Variations of the index are available to allow investors to select the most appropriate benchmark for their objectives. 

A Note about Indexes: Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. Indexes depicted herein are for illustrative purposes only and do not represent any specific portfolios managed by Lord Abbett or any particular investments. Other indexes may not have performed in the same manner under similar conditions.

The credit quality of the securities in a portfolio is 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.

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.

The opinions in Market View are as of the date of publication, are subject to change based on subsequent developments, and may not reflect the views of the firm as a whole. The material is not intended to be relied upon as a forecast, research, or investment advice, is not a recommendation or offer to buy or sell any securities or to adopt any investment strategy, and is not intended to predict or depict the performance of any investment. Readers should not assume that investments in companies, securities, sectors, and/or markets described were or will be profitable. Investing involves risk, including possible loss of principal. This document is prepared based on the information Lord Abbett deems reliable; however, Lord Abbett does not warrant the accuracy and completeness of the information. Investors should consult with a financial advisor prior to making an investment decision.

MARKET VIEW PDFs


  Market View
  U.S. Market Monitor

CONTRIBUTING STRATEGIST

RELATED FUND
The Lord Abbett Intermediate Tax Free mutual fund seeks to deliver a high level of income exempt from federal taxation. View portfolio and performance.
RELATED FUND
The Lord Abbett Short Duration Income Fund seeks to deliver a high level of current income consistent with the preservation of capital. Learn more.
RELATED FUND
The Lord Abbett Bond Debenture Fund seeks to deliver high current income and long-term growth of capital. View prospectus and more.
RELATED FUND
The Lord Abbett High Yield Fund has offered a track record of strong performance versus peers in up and down markets. Learn more.
RELATED FUND
The Lord Abbett Floating Rate mutual fund seeks to deliver a high level of current income by investing primarily in a variety of below investment grade loans.

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