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California Tax Free Fund

Summary

Summary

What is the California Tax Free Fund?

The Fund seeks to deliver a high level of income exempt from federal and state taxation by investing primarily in California municipal bonds.

Yield

Dividend Yield 1 as of 06/28/2016  

  Subsidized3 Un-Subsidized4
w/o sales charge - 3.16%
w/ sales charge - 3.09%

30-Day Standardized Yield 2 as of 05/31/2016  

3.17%

Fund Basicsas of 05/31/2016

Total Net Assets
$312.79 M
Inception Date
09/03/1985
Dividend Frequency
Monthly
Fund Gross Expense Ratio
0.82%
Fund Net Expense Ratio
0.81%
Number of Holdings
229
CUSIP
543902852
Minimum Initial Investment
$1,000+

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/03/1985
w/o sales charge 5.72% 9.77% 7.28% 7.21% 4.90% 6.13%
Lipper Category Avg. California Municipal Debt Funds - - - - - -
Barclays Municipal Bond Index - - - - - -
w/ sales charge 3.37% 7.28% 6.45% 6.73% 4.66% 6.05%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/03/1985
w/o sales charge 5.72% 9.77% 7.28% 7.21% 4.90% 6.13%
Lipper Category Avg. California Municipal Debt Funds - - - - - -
Barclays Municipal Bond Index - - - - - -
w/ sales charge 3.37% 7.28% 6.45% 6.73% 4.66% 6.05%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

RELATED CONTENT

Principles of Portfolio Construction: Lord Abbett Municipal Bond Strategy
Principles of Portfolio Construction: Lord Abbett Municipal Bond Strategy
November 5, 2014

Daniel Solender, Lord Abbett Partner & Director of Municipal Bonds, discusses the philosophy and methodology that guides portfolio construction in the firm’s municipal bond strategy.

Type Assets
Transportation
Healthcare/Hospital
Special Tax
IDR/PCR
GO State
Education
Lease
GO Local
Power
Water & Sewer
Pre-Refunded
Insured
Housing
Resource Recovery
Other
Maturity Assets
1-4.99 Years
5-9.99 Years
10-19.99 Years
20-29.99 Years
>30 Years

Credit Quality Distribution as of 05/31/2016

Rating Assets
Transportation
Healthcare/Hospital
Special Tax
IDR/PCR
GO State
Education
Lease
GO Local
Power
Water & Sewer
Pre-Refunded
Insured
Housing
Resource Recovery
Other

Investment Team

Daniel S. Solender
Daniel S. Solender, CFA

Partner & Director

29 Years of Industry Experience

Supported By 14 Investment Professionals and 11 Years Avg. Industry Experience

Contact a Representative

To contact your representative, enter your zip code and select your channel below.

Performance

Performance

Dividend Yield 1 as of 06/28/2016  

  Subsidized3 Un-Subsidized4
w/o sales charge - 3.16%
w/ sales charge - 3.09%

30-Day Standardized Yield 2 as of 05/31/2016  

  Subsidized3 Un-Subsidized4
w/o sales charge 3.17% 3.17%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/03/1985
w/o sales charge 5.72% 9.77% 7.28% 7.21% 4.90% 6.13%
Lipper Category Avg. California Municipal Debt Funds - - - - - -
Barclays Municipal Bond Index - - - - - -
w/ sales charge 3.37% 7.28% 6.45% 6.73% 4.66% 6.05%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 09/03/1985
w/o sales charge 5.72% 9.77% 7.28% 7.21% 4.90% 6.13%
Lipper Category Avg. California Municipal Debt Funds - - - - - -
Barclays Municipal Bond Index - - - - - -
w/ sales charge 3.37% 7.28% 6.45% 6.73% 4.66% 6.05%

Fund Expense Ratio :

Gross 0.82%

Net 0.81%

Best returns

Durations Fund Returns Blended Index
3-Mo 10.78 7.12
1-Yr 22.86 24.65

Worst returns

Durations Fund Returns Blended Index
3-Mo -11.88 -5.36
1-Yr -13.46 -2.47
Year Fund Returns Barclays Municipal Bond Index
2015 3.64% 3.30%
2014 13.20% 9.05%
2013 -3.92% -2.55%
2012 11.88% 6.78%
2011 11.18% 10.70%
2010 0.99% 2.38%
2009 20.07% 12.91%
2008 -13.46% -2.47%
2007 -0.56% 3.36%
2006 4.19% 4.84%
2005 3.95% -
2004 4.46% -
2003 3.68% -
2002 7.63% -
2001 4.40% -
2000 14.86% -
1999 -6.35% -
1998 6.11% -
1997 8.85% -
1996 3.43% -
Year Q1 Q2 Q3 Q4 Yearly Returns
2016 1.95% - - - 5.72%
2015 1.11% -1.26% 1.70% 2.07% 3.64%
2014 4.66% 3.61% 2.38% 1.97% 13.20%
2013 0.48% -3.91% -0.73% 0.25% -3.92%
2012 4.49% 1.78% 3.42% 1.72% 11.88%
2011 -0.74% 5.27% 3.63% 2.68% 11.18%
2010 1.59% 1.40% 4.53% -6.21% 0.99%
2009 6.14% 4.21% 10.78% -2.00% 20.07%
2008 -2.47% 1.36% -5.84% -7.03% -13.46%
2007 0.61% -0.94% 0.04% -0.26% -0.56%
2006 0.25% -0.24% 2.97% 1.17% 4.19%
2005 0.32% 3.10% -0.03% 0.53% 3.95%
2004 2.03% -2.95% 4.01% 1.43% 4.46%
2003 0.69% 2.98% -1.69% 1.70% 3.68%
2002 0.03% 3.01% 5.49% -0.99% 7.63%
2001 1.78% -0.68% 4.28% -0.97% 4.40%
2000 4.00% 1.41% 3.32% 5.39% 14.86%
1999 0.71% -2.95% -2.06% -2.14% -6.35%
1998 0.83% 1.57% 3.42% 0.19% 6.11%
1997 -0.81% 3.11% 3.53% 2.78% 8.85%
1996 -1.96% 0.57% 2.48% 2.36% 3.43%
1995 7.75% 2.21% 2.16% 4.36% 17.41%
1994 -7.30% -0.36% 0.35% -3.46% -10.50%
1993 5.07% 3.47% 3.93% 0.82% 13.87%
1992 0.17% 4.58% 2.03% 2.01% 9.01%
1991 1.91% 2.69% 4.31% 3.89% 13.41%
1990 0.47% 2.36% 0.01% 4.27% 7.23%
1989 0.64% 6.08% -0.13% 3.02% 9.85%
1988 2.92% 2.21% 2.97% 2.75% 11.27%
1987 2.88% -6.58% -4.12% 6.92% -1.45%
1986 8.50% -0.68% 5.52% 4.54% 18.87%
1985 - - - 8.05% 4.99%

Growth of $10,000 as of 04/30/2016

NAV Historical Prices

Date Net Asset Value

Portfolio

Portfolio

Type Assets
Transportation
Healthcare/Hospital
Special Tax
IDR/PCR
GO State
Education
Lease
GO Local
Power
Water & Sewer
Pre-Refunded
Insured
Housing
Resource Recovery
Other
Maturity Assets
1-4.99 Years
5-9.99 Years
10-19.99 Years
20-29.99 Years
>30 Years
By State Assets
CA
Other U.S. Territories
Puerto Rico

CREDIT QUALITY DISTRIBUTION as of 05/31/2016

Rating Assets
A-2/MIG2
AA
A
BBB
< BBB
Not Rated

Portfolio Positioning as of 3/31/2016

  • Relative to its benchmark, the Barclays Municipal Bond Index, the portfolio is overweight in the 12- to 19-year maturity range, as longer bonds exhibited relative value given the composition of new issue supply.
  • The portfolio is overweight in bonds rated ‘A’ and lower due to attractive spreads and solid credit fundamentals.
  • The portfolio continues to maintain an overweight in revenue bonds, including special tax-backed and health care, given the dedicated income stream and favorable return prospects. 

Portfolio Details as of 05/31/2016

Total Net Assets
$312.79 M
Number of Issues
229
Average Coupon
5.2%
Average Effective Maturity
18.7 Years
Average Effective Duration
7.15 Years

Dividends & Cap Gains

Dividends & Cap Gains

Dividend Payments

For
YTD Dividends Paidas of06/28/2016
$0.154
Dividend Frequency
Monthly (Daily Accrual)
Record Date Ex-Dividend Date Reinvest & Payable Date Dividend Reinvest Price
Daily Daily 05/31/2016 $0.03009 $11.21
Daily Daily 04/30/2016 $0.03070 $11.17
Daily Daily 03/31/2016 $0.03063 $11.10
Daily Daily 02/29/2016 $0.03160 $11.08
Daily Daily 01/31/2016 $0.03172 $11.09

Upcoming Dividend Payment Dates

This section lists all anticipated income and Capital Gain distribution dates and any actual distributions are subject to adequacy of earnings and must be approved by the Board of Directors/Trustees. Please note that dates are subject to change.

Record Date Ex-Dividend Date Reinvest & Payable Date
Daily Daily 06/30/2016
Daily Daily 07/31/2016
Daily Daily 08/31/2016
Daily Daily 09/30/2016
Daily Daily 10/31/2016
Daily Daily 11/30/2016
Daily Daily 12/31/2016

Capital Gains Distributions

For
Record Date Reinvest & Payable Date Long-term Short-term * Total Reinvest Price
09/08/1993 09/15/1993 - - $0.3500 $11.60

Upcoming Capital Gain Distribution

This section lists all anticipated income and Capital Gain distribution dates and any actual distributions are subject to adequacy of earnings and must be approved by the Board of Directors/Trustees. Please note that dates are subject to change.

Record Date Ex-Dividend Date
12/20/2016 12/21/2016

Fees & Expenses

Fees & Expenses

Sales Charge Schedule as of 06/28/2016

  Sales Charge Dealer's Concession Prices at Breakpoint
Less than $100,000 2.25% 2.00% $11.68
$100,000 to $249,999 1.75% 1.50% $11.62
$250,000 to $499,999 1.25% 1.00% $11.56
$500,000 to $999,999 0.00% 1.00% $11.42
$1,000,000 to $5,000,000 0.00% 1.00% $11.42

Expense Ratioas of 05/31/2016

Fund Gross Expense Ratio Fund Net Expense Ratio
0.82% 0.81%

Fund Review

Fund Review

Market Review as of 3/31/2016

The U.S. municipal bond market (as represented by the Barclays Municipal Bond Index1) continued to advance in the first quarter, surpassing the returns of other notable asset classes during the period. With respect to issuance during the quarter, total issuance slightly lagged that of the first quarter of the prior year. While refunding issues exceeded new capital issuance during the period, refunding issues fell short of expectations, despite the continued low interest rate environment.

Investor demand for municipal bonds remained strong, as these bonds posted attractive returns on a relative basis. Consequently, municipal fund flows, based on information from Lipper U.S. fund flows, exceeded $14 billion at the end of the quarter. Longer maturity municipal bonds outperformed shorter maturity municipal bonds, however, municipal bonds generally underperformed Treasuries of similar maturities across the yield curve, as yield ratios increased during the period.

Lower quality bonds generally outperformed higher quality bonds during the first quarter, due to the incremental yield available in such credits. The high yield municipal market outperformed investment grade municipals, and with the exception of a few issuers, overall municipal credit quality remained stable in an economic environment marked by steady, albeit slow growth and low inflation.

High-profile issuers, such as Illinois, Puerto Rico, and New Jersey, continued to remain in the spotlight during the past quarter, as struggles over pension issues and the political constraints caused by budget balancing activities endured. Despite isolated pockets of distress, overall creditworthiness continues to improve, as most states’ finances experienced rising revenues, while maintaining balanced budgets. At the federal level, there was no new legislation that had a material impact on the municipal market.

Outlook

During the third quarter, investors were concerned with the timing and magnitude of future interest-rate hikes by the U.S. Federal Reserve, amid global market volatility. While these concerns posed challenges for the market, municipal returns overall surpassed that of other notable asset classes during the period. While demand remained subdued during the third quarter, it is likely that it may increase going forward, as the combination of strong relative performance and a low-rate environment has turned more attention toward municipal debt. Municipal yields continue to provide investors with compelling taxable-equivalent income, and default rates remain low. Although supply thus far in 2015 persisted at a relatively high level when compared with last year’s pace, the majority of issuance was for refunding purposes. Going forward, the volume of supply likely will depend on the direction of future interest-rate moves.

While yield ratios of municipals to Treasuries are still higher when compared with pre-crisis levels, Treasury rates have experienced more volatility in recent periods. The Federal Reserve has communicated concerns of developments overseas and pressure on inflation in the short term. This suggests that interest rates may remain low in the near term, which is a positive environment for municipal bonds. While lower-rated bonds have posted strong returns in past years, credit-quality trends suggest that lower-quality bonds could outperform in the quarters to come, as demand for incremental yield in a low interest-rate environment and steady economic growth have supported credit quality of municipal issuers. While the pace and the magnitude of interest-rate changes will determine which maturities will outperform in the upcoming quarters, it is likely that longer maturities will outperform, as longer bonds may provide a significant income advantage to investors, given the steepness of the yield curve.

With respect to the financial health at the state level, it is important to distinguish between the isolated fiscal challenges and the strong overall health of states. Many states have experienced rising revenues, with the exception of those states that are heavily dependent upon energy. State governments have displayed effective fiscal management, as they continue to balance their budgets while keeping expense increases minimal. Although a few high-profile issuers, such as New Jersey and Illinois, are hampered by challenges, including pension reform and funding of pension liabilities, it is important to focus on overall creditworthiness, which is expected to remain strong. While the dynamic of the municipal bond market has changed considerably over the past few years, municipal bonds overall have continued to offer the combination of a high credit-quality profile and strong tax-equivalent returns to investors.

Fund Documents

Fund Documents

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Publish Date:11/03/2015
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Statutory Prospectus
Publish Date:11/03/2015
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Publish Date:11/03/2015
SAI
Publish Date:11/03/2015
Annual Report
Publish Date:11/03/2015
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Publish Date:11/03/2015
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Publish Date:11/03/2015

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Class A  Except as noted below, returns with sales charges reflect a maximum sales charge of 5.75% for equity funds, 2.25% for all tax-free income funds, fixed income funds and multi-asset class funds. There are also ongoing 12b-1 service fees (and, in certain cases, distribution fees).

Class A Shares purchased subject to a front-end sales charge have no contingent deferred sales charge (CDSC). However, certain purchases of Class A shares made without a front-end sales charge may be subject to a CDSC of 1% if the shares are redeemed before the first day of the month in which the one year anniversary of the purchase falls. The CDSC is not reflected in the performance with maximum sales charge.

The Barclays Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. The index is a broad measure of the municipal bond market with maturities of at least one year. To be included in this index, bonds must have a minimum credit rating of at least Baa, an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31, 1990, and must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds with floating rates, and derivatives, are excluded from the index.

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