LBNRX | Bond Debenture Fund Class R3 | Lord Abbett
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Bond Debenture Fund

Summary

Summary

What is the Bond Debenture Fund?

The Fund seeks to deliver high current income and long-term growth of capital by investing primarily in a variety of fixed income securities and select equity-related securities.

A PIONEER IN MULTI-SECTOR

Over four decades of multi-sector bond investing, emphasizing rigorous credit research.

A FLEXIBLE APPROACH

The flexibility to adjust allocations to take advantage of opportunities as market conditions change.

TIME-TESTED RESULTS

A long track record illustrates performance in many market environments.

 

Yield

Dividend Yield 1 as of 10/22/2021  

w/o sales charge 2.98%

30-Day Standardized Yield 2 as of 09/30/2021  

2.05%

Fund Basicsas of 09/30/2021

Total Net Assets
$26.68 B
Inception Date
09/28/2007
Dividend Frequency
Monthly
Fund Expense Ratio
1.08%
Number of Holdings
1031

Fund Expense Ratio :

1.08%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/28/2007
w/o sales charge 2.92% 9.20% 5.85% 5.65% 6.73% 6.04%
Lipper Category Avg. Multi-Sector Income Funds 1.96% 6.07% 5.12% 4.21% 4.72% -
Bloomberg U.S. Aggregate Bond Index -1.55% -0.90% 5.36% 2.94% 3.01% 4.10%

Fund Expense Ratio :

1.08%

Fund Expense Ratio :

1.08%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/28/2007
w/o sales charge 2.92% 9.20% 5.85% 5.65% 6.73% 6.04%
Lipper Category Avg. Multi-Sector Income Funds 1.96% 6.07% 5.12% 4.21% 4.72% -
Bloomberg U.S. Aggregate Bond Index -1.55% -0.90% 5.36% 2.94% 3.01% 4.10%

Fund Expense Ratio :

1.08%

RELATED CONTENT

Celebrating 50 Years for the Lord Abbett Bond Debenture Fund
April 8, 2021

April 1, 2021 marked the 50th anniversary of the Bond Debenture Fund, a significant achievement for Lord Abbett and a pioneering investment strategy in our industry.

Multi-Sector Fixed Income at Lord Abbett: A Brief History
March 18, 2021

Learn more about our Bond Debenture Fund's 50-Year track record.

U.S. Fixed Income: Big Changes in a Big Benchmark
February 16, 2021

Over time, the proportion of U.S. government debt in the Bloomberg Barclays U.S. Aggregate Bond Index has greatly increased. What might that mean for investors?

Type Assets
U.S. High Yield Corporate
U.S. Investment Grade Corporate
Equity
Non-U.S. Investment Grade Corporate
Bank Loans
CMBS
Non-U.S. High Yield Corporate
CLO
Sovereign
Municipals
ABS
Convertibles
MBS
Cash
Maturity Assets
Less than 1 year
1-3 years
3-5 years
5-7 years
7-10 years
Greater than 10 years

Credit Quality Distribution as of 09/30/2021 View Portfolio

Rating Assets
AAA
AA
A
BBB
BB
B
<B
Not Rated

INVESTMENT TEAM

Steven F. Rocco
Steven F. Rocco, CFA

Partner & Co-Head of Taxable Fixed Income

19 Years of Industry Experience

Andrew H. O'Brien
Andrew H. O'Brien, CFA

Partner & Portfolio Manager

22 Years of Industry Experience

Kewjin Yuoh
Kewjin Yuoh

Partner & Portfolio Manager

26 Years of Industry Experience

Robert S. Clark
Robert S. Clark, CFA

Portfolio Manager

23 Years of Industry Experience

Christopher Gizzo
Christopher Gizzo, CFA

Managing Director, Portfolio Manager

12 Years of Industry Experience

Robert A. Lee
Robert A. Lee

Partner & Co-Head of Taxable Fixed Income

29 Years of Industry Experience

Supported By 61 Investment Professionals with 16 Years Avg. Industry Experience

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Performance

Performance

Dividend Yield 1 as of 10/22/2021  

w/o sales charge 2.98%

30-Day Standardized Yield 2 as of 09/30/2021  

  Subsidized3 Un-Subsidized4
w/o sales charge 2.05% 2.05%

Fund Expense Ratio :

1.08%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/28/2007
w/o sales charge 2.92% 9.20% 5.85% 5.65% 6.73% 6.04%
Lipper Category Avg. Multi-Sector Income Funds 1.96% 6.07% 5.12% 4.21% 4.72% -
Bloomberg U.S. Aggregate Bond Index -1.55% -0.90% 5.36% 2.94% 3.01% 4.10%

Fund Expense Ratio :

1.08%

Fund Expense Ratio :

1.08%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/28/2007
w/o sales charge 2.92% 9.20% 5.85% 5.65% 6.73% 6.04%
Lipper Category Avg. Multi-Sector Income Funds 1.96% 6.07% 5.12% 4.21% 4.72% -
Bloomberg U.S. Aggregate Bond Index -1.55% -0.90% 5.36% 2.94% 3.01% 4.10%

Fund Expense Ratio :

1.08%

Year Fund Returns Bloomberg U.S. Aggregate Bond Index
2020 7.16% 7.51%
2019 13.20% 8.72%
2018 -4.21% 0.01%
2017 8.90% 3.54%
2016 12.03% 2.65%
2015 -1.91% 0.55%
2014 4.13% 5.97%
2013 7.63% -2.02%
2012 13.07% 4.22%
2011 3.73% 7.84%
2010 12.83% -
2009 35.31% -
2008 -20.52% -
2007 4.62% -
Year Q1 Q2 Q3 Q4 Yearly Returns
2021 0.88% 1.98% 0.03% - 3.35%
2020 -11.98% 10.03% 4.28% 6.11% 7.16%
2019 6.76% 3.53% 0.54% 1.87% 13.20%
2018 -1.09% -0.23% 2.17% -4.99% -4.21%
2017 2.59% 1.90% 2.46% 1.67% 8.90%
2016 1.43% 4.38% 4.68% 1.09% 12.03%
2015 3.46% -0.50% -3.82% -0.93% -1.91%
2014 2.80% 2.48% -1.62% 0.47% 4.13%
2013 3.07% -1.52% 2.66% 3.29% 7.63%
2012 5.63% 0.21% 4.29% 2.43% 13.07%
2011 4.18% 0.82% -6.61% 5.74% 3.73%
2010 3.67% -1.22% 6.45% 3.50% 12.83%
2009 2.55% 12.73% 11.35% 5.12% 35.31%
2008 -2.96% 1.52% -7.96% -12.34% -20.52%
2007 2.60% 1.07% 1.32% -0.42% 4.62%

NAV Historical Prices

Date Net Asset Value

Portfolio

Portfolio

Type Assets
U.S. High Yield Corporate
U.S. Investment Grade Corporate
Equity
Non-U.S. Investment Grade Corporate
Bank Loans
CMBS
Non-U.S. High Yield Corporate
CLO
Sovereign
Municipals
ABS
Convertibles
MBS
Cash
Rating Assets
Less than 1 year
1-3 years
3-5 years
5-7 years
7-10 years
Greater than 10 years

Credit Quality Distribution as of 09/30/2021

Rating Assets
AAA
AA
A
BBB
BB
B
<B
Not Rated

Portfolio Positioning as of 06/30/2021

  • The Fund holds meaningful positions in the consumer services, transportation, retail, and leisure sectors. We are constructive on the transportation and leisure sectors as part of the reopening theme, bolstered by continued strength in vaccination efforts over the quarter and demand for air travel picking up, while the increased constructive view on retail and consumer services comes on the back of continued stimulus and ongoing improvement in labor markets. We also maintained the Fund’s automotive sector exposure because we believe people will be using less public transport in light of pandemic-related fears and continue to shift from urban living to less public suburban living. We view the automotive sector as a cyclical sector that is shifting to a secular grower with pent up demand in the sector bolstering near term performance. Further, we believe the automotive sector will be protected on the downside if there is a resurgence in COVID-19 cases due to secular tailwinds. Throughout the quarter, we increased the portfolio’s energy allocation as well. The sector should benefit from the ongoing global economic recovery and increased consumer activity. Exposure to E&P primarily was in BB securities issued by larger, well-capitalized operators that we believe are best positioned to be rewarded as potential rising stars over the coming year(s). However, we continued to add selectively to mid/low B-rated and CCC-rated energy credits over the last few months, which continued into June. This strategy primarily reflected attractive relative valuations as lower quality credit tiers outperformed higher quality tiers within the high yield cohort.
  • As a reminder, we expressed our conviction in the innovation theme in 2020 predominantly in convertible bonds and equity of issuers in the information technology and health care sectors. Towards the end of the first quarter of 2021, we started to reduce the Fund’s growth holdings via convertible bonds as rising rates and the reflationary environment favored cyclicality and value. Towards the end of the second quarter, we reversed course and began to add back to growth as the sell-off in recent months provided an attractive re-entry point. The stabilization of rates and the market’s general acceptance of near-term inflation expectations being transitory also bolstered our outlook on growth.
  • We remain cautious on Emerging Markets as many emerging economies are further behind in vaccine distribution. In addition, as we move through the rest of the year, we believe that overall, this is not a relatively attractive area given generally tighter valuations. That being said, we have been participating in a number of new issues as we look for idiosyncratic opportunities.
  • We continued adding CLOs and bank loans where we are finding new issue convexity and see improved supply/demand technicals for floating rate products.
  • Beyond corporate bonds, the Fund maintained allocations to bank loans and convertibles bonds, and more modest allocations to asset-backed securities (ABS), CMBS, sovereign debt, and municipals. We believe select exposures to these sectors offer attractive risk-reward opportunities, potential portfolio diversification benefits and avenues for liquidity.
  • We continue to have a broadly constructive view on high yield credit while also acknowledging that current spread levels are now marginally tighter than their pre-COVID levels. The portfolio is positioned for modest spread compression going forward, with a skew towards lower rated segments of the market. Call constraints are placing an upside limit on price appreciation more so in BBs and Bs, relative to CCCs, exacerbated by the recent rally in benchmark yields. As a result, we see a return profile primarily driven by carry in 2H21. We continue to be active in the new issue market given positive convexity opportunities there, while monitoring for the emergence of negative trends in underwriting quality. We expect another record year of issuance in the high yield market, but believe technicals will remain favorable as we see up to 10% of the face value of the high yield market transitioning to investment grade over the coming 12-18 months, and activity remaining skewed to refinancing, all amidst a global dearth of yield in fixed income.
  • The current economic landscape is a favorable environment for high yield issuers supported by solid economic growth (albeit likely to peak on a y/y basis in Q2) and a positive earnings outlook with low projected default rates.  Using the approach of looking to the distress ratio as a guide, we estimate default loss over the coming 12 months of approximately 1% or less, falling from a peak of over 6% in late 2020. Additionally, the pace of upgrades has been meaningfully larger than the pace of downgrades. We believe the declining intensity in the default cycle over time along with the uplift in credit quality are key ingredients that further support our continued positive outlook on the U.S. high yield bond sector broadly. We also continue to see modest upside in select fallen angels, many of which we believe should regain investment grade status over the coming year or two. 
  • The portfolio’s positioning currently reflects this overall risk posture which has continued to take advantage of reflationary themes in the economy, with meaningful positions in energy, leisure, basic industry and retail. While investor tilts over the last 6 months make this stance far less of an out of consensus view than when we had set them in 2020, valuations suggest positioning is not yet fully reflective of the fuller broadening of investor support we expect to come in these sectors.

Portfolio Details as of 09/30/2021

Total Net Assets
$26.68 B
Number of Issues
1031
Average Coupon
4.63%
Average Life
9.25 Years
Average Maturity
10.4 Years
Average Effective Duration
4.58 Years

Dividends & Cap Gains

Dividends & Cap Gains

Dividend Payments

For
YTD Dividends Paidas of 10/22/2021
$0.193
Dividend Frequency
Monthly (Daily Accrual)
Record Date Ex-Dividend Date Reinvest & Payable Date Dividend Reinvest Price
Daily Daily 09/30/2021 $0.02103 $8.44
Daily Daily 08/31/2021 $0.02101 $8.52
Daily Daily 07/31/2021 $0.02106 $8.50
Daily Daily 06/30/2021 $0.02213 $8.50
Daily Daily 05/31/2021 $0.02262 $8.46
Daily Daily 04/30/2021 $0.02151 $8.46
Daily Daily 03/31/2021 $0.02105 $8.40
Daily Daily 02/28/2021 $0.02228 $8.46
Daily Daily 01/31/2021 $0.02054 $8.41

Upcoming Dividend Payment Dates

Record Date Ex-Dividend Date Reinvest & Payable Date
Daily Daily 10/31/2021
Daily Daily 11/30/2021
Daily Daily 12/31/2021

Capital Gains Distributions

For
Record Date Reinvest & Payable Date Long-term Short-term * Total Reinvest Price
12/17/2018 12/18/2018 $0.0841 - $0.0841 $7.53
07/30/2018 07/31/2018 - $0.0398 $0.0398 $7.96

Upcoming Capital Gain Distribution

Record Date Ex-Dividend Date
12/16/2021 12/17/2021

Fees & Expenses

Fees & Expenses

Expense Ratioas of 09/30/2021

1.08%

Fund Documents

Fund Documents

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Portfolio Holdings 1Q
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The 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. 

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