LHYPX | High Yield Fund Class P | Lord Abbett

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High Yield Fund

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Summary

Summary

What is the High Yield Fund?

The Fund seeks to deliver current income and the opportunity for capital appreciation by investing primarily in high yield corporate bonds.
 

A HERITAGE OF HIGH YIELD

Brings a 40+ year history of high-yield investing, focused on fundamental, bottom-up credit research.

AN OPPORTUNISTIC APPROACH

Provides the flexibility to adjust to the market environment and take advantage of opportunities across the credit spectrum.

STRONG TRACK RECORD

Has offered a track record of strong performance versus peers in up and down markets, demonstrating the strength of this active approach as a core high-yield holding over a full market cycle.

 

Yield

Dividend Yield 1 as of 05/17/2022  

w/o sales charge 5.53%

30-Day Standardized Yield 2 as of 04/30/2022  

5.50%

Fund Basicsas of 03/31/2022

Total Net Assets
$6.32 B
Inception Date
12/31/2002
Dividend Frequency
Monthly
Fund Expense Ratio
1.13%
Number of Holdings
713

Fund Expense Ratio :

1.13%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 12/31/2002
w/o sales charge -8.86% -6.18% 1.82% 2.58% 5.01% 6.80%
Lipper Category Avg. High Yield Funds -7.28% -4.65% 2.45% 3.11% 4.39% -
ICE BofA U.S. High Yield Constrained Index -7.96% -4.96% 2.61% 3.54% 5.19% 7.57%

Fund Expense Ratio :

1.13%

Fund Expense Ratio :

1.13%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 12/31/2002
w/o sales charge -5.40% -1.60% 3.71% 3.60% 5.47% 7.04%
Lipper Category Avg. High Yield Funds -4.07% -0.28% 4.14% 4.05% 4.85% -
ICE BofA U.S. High Yield Constrained Index -4.50% -0.30% 4.37% 4.54% 5.69% 7.81%

Fund Expense Ratio :

1.13%

RELATED CONTENT

A Powerful Trend That Could Support U.S. High Yield in 2022
December 6, 2021

We expect a surge in “rising stars”—upgrades of U.S. debt issues from high yield to investment grade—over the next two years.

Type Assets
High Yield Bonds
Bank Loans
Investment Grade Bonds
Equity
Convertibles
Other
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 03/31/2022 View Portfolio

Rating Assets
A
BBB
BB
B
<B
Not Rated

INVESTMENT TEAM

Steven F. Rocco
Steven F. Rocco, CFA

Partner & Co-Head of Taxable Fixed Income

20 Years of Industry Experience

Robert A. Lee
Robert A. Lee

Partner & Co-Head of Taxable Fixed Income

30 Years of Industry Experience

Christopher Gizzo
Christopher Gizzo, CFA

Managing Director, Deputy Director of Leveraged Credit

13 Years of Industry Experience

Karen  J. Gunnerson
Karen J. Gunnerson

Portfolio Manager

11 Years of Industry Experience

Supported By 70 Investment Professionals with 16 Years Avg. Industry Experience

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Performance

Performance

Dividend Yield 1 as of 05/17/2022  

w/o sales charge 5.53%

30-Day Standardized Yield 2 as of 04/30/2022  

  Subsidized3 Un-Subsidized4
w/o sales charge 5.50% 5.50%

Fund Expense Ratio :

1.13%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 12/31/2002
w/o sales charge -8.86% -6.18% 1.82% 2.58% 5.01% 6.80%
Lipper Category Avg. High Yield Funds -7.28% -4.65% 2.45% 3.11% 4.39% -
ICE BofA U.S. High Yield Constrained Index -7.96% -4.96% 2.61% 3.54% 5.19% 7.57%

Fund Expense Ratio :

1.13%

Fund Expense Ratio :

1.13%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 12/31/2002
w/o sales charge -5.40% -1.60% 3.71% 3.60% 5.47% 7.04%
Lipper Category Avg. High Yield Funds -4.07% -0.28% 4.14% 4.05% 4.85% -
ICE BofA U.S. High Yield Constrained Index -4.50% -0.30% 4.37% 4.54% 5.69% 7.81%

Fund Expense Ratio :

1.13%

Year Fund Returns ICE BofA U.S. High Yield Constrained Index
2021 5.88% 5.35%
2020 4.26% 6.07%
2019 14.66% 14.41%
2018 -5.36% -2.27%
2017 8.20% 7.48%
2016 15.59% 17.49%
2015 -2.38% -4.61%
2014 3.12% 2.51%
2013 9.52% 7.41%
2012 16.26% 15.55%
2011 2.84% -
2010 13.98% -
2009 50.31% -
2008 -23.52% -
2007 2.29% -
2006 9.81% -
2005 1.09% -
2004 10.38% -
2003 20.78% -
Year Q1 Q2 Q3 Q4 Yearly Returns
2022 -5.40% - - - -11.03%
2021 1.79% 3.02% 0.58% 0.38% 5.88%
2020 -16.73% 10.86% 5.56% 6.98% 4.26%
2019 7.35% 3.82% 0.23% 2.64% 14.66%
2018 -1.09% -0.21% 2.47% -6.42% -5.36%
2017 2.75% 1.91% 2.37% 0.94% 8.20%
2016 1.94% 5.26% 5.48% 2.12% 15.59%
2015 3.10% 0.68% -4.22% -1.82% -2.38%
2014 2.84% 3.30% -1.97% -0.98% 3.12%
2013 4.01% -1.06% 2.44% 3.90% 9.52%
2012 6.65% 0.32% 4.96% 3.53% 16.26%
2011 3.73% 1.02% -7.09% 5.62% 2.84%
2010 4.84% -0.94% 6.22% 3.33% 13.98%
2009 6.03% 17.20% 14.11% 6.01% 50.31%
2008 -3.29% 1.95% -8.00% -15.69% -23.52%
2007 2.92% 0.12% 0.59% -1.31% 2.29%
2006 2.50% -0.05% 2.89% 4.18% 9.81%
2005 -1.78% 1.50% 0.81% 0.60% 1.09%
2004 1.03% -0.32% 4.36% 5.03% 10.38%
2003 3.27% 8.28% 2.51% 5.36% 20.78%

NAV Historical Prices

Date Net Asset Value

Portfolio

Portfolio

Rating Assets
High Yield Bonds
Bank Loans
Investment Grade Bonds
Equity
Convertibles
Other
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 03/31/2022

Rating Assets
A
BBB
BB
B
<B
Not Rated

Portfolio Positioning as of 3/31/2022

  • The Fund’s allocation to the Basic Industry sector remained the largest overweight sector. We continued to favor the long-term picture for the sector as the Fund remained tilted towards more cyclical positioning. Within the sector, we continued to favor securities in the Metals and Mining subsector, and increased exposure to Steel Products. Both of these segments have been mostly supported by higher inflation and rising commodity prices and should continue to be boosted particularly given commodity supply constraints as a result of the Russia-Ukrainian conflict. However, we trimmed several positions associated with Building & Construction and Building Material throughout the quarter. Issuers in these subsectors faced increased headwinds given higher input costs from supply chain shortages as well as a shortage in labor supply. Additionally, housing affordability dampened in the latter half of the quarter due to rising mortgage rates, leading to a weaker consumer demand outlook.
  • We increased exposure to the Energy sector within the Fund, which remained the second largest overweight. Energy exposure remained primarily in the Exploration & Production (E&P) subsector, which had been a direct beneficiary of increased U.S. energy demand as the U.S. reopened from initial COVID-19-related restrictions. Separately, these securities benefited from a favorable technical relationship in oil prices given elevated demand and constrained supply. While we remain constructive on the E&P space, we began to explore other subsectors within the sector, including Gas Distribution, where there may be more attractive relative value. However, we remain constructive on the sector as a whole which should be supported by higher oil prices, especially given an expected supply shortage as a result of Western sanctions on Russian produced crude oil.
  • The Fund’s allocation to the Retail sector decreased over the quarter due to inflationary headwinds. We expect this sector to face increased headwinds as inflation remains elevated. Not only have retailers experienced higher input costs and ongoing supply chain challenges, but U.S. consumers have begun to curb consumption on goods given the rising prices. Furthermore, retail sales were boosted by consumers receiving robust fiscal stimulus in 2021, most of which is now expired. Within the sector, we have moved away from positions in the Specialty Retail segment that have higher exposure to low-end consumers which we expect to be affected more substantially by inflation as they have less flexibility to absorb these prices.
  • We meaningfully added to Fund’s allocation to the Healthcare sector. Recessionary risks ticked up in March given the combination of red-hot inflation, an increasingly hawkish Fed stance, and the war in Ukraine. As a result, we have migrated the Fund to a moderately more defensive posture with a focus on the Healthcare sector. Within Healthcare, we primarily targeted health facilities, which should benefit from an expected increase in volumes as individuals resume more nonmandatory procedures. These higher volumes should offset cost pressures from tight labor markets, yet we continue to monitor these positions given a decrease in volumes.
  • The Telecommunications sector remained the Fund’s largest underweight. The industry also continued to struggle with secular issues with traditional wireline companies particularly at risk as their customer base continued to erode. Meanwhile, in our view, the wireless subsector within Telecommunications remained fully valued and more valuable investments reside in other sectors.
  • We moved the Fund’s credit risk towards up-in-quality securities towards the end of the quarter. In the beginning of the quarter, we focused on moving the Fund towards less-rate sensitive credits, particularly CCC-rated securities, as interest rates rose, and the Fed communicated an increasingly hawkish stance. However, we quickly moved back into higher quality credit, particularly into BB- and BBB-rating buckets, in response to the start of the Russian-Ukrainian war as growth outlooks dampened and the probability of recessionary risks moved higher. Separately, these higher quality high yield credits exhibited more attractive relative valuations, given the recent widening in spreads from the selloff of more duration sensitive bonds within high yield, as well as the upgrade pressure from the volume of potential rising stars. We simultaneously rotated away from CCC-rated credit and reduced the Fund’s overall credit exposure given the increased recessionary risks in the U.S. and global economies.
  • The Fund maintained modest allocations to out-of-index sectors, such as bank loans and investment grade bonds. We believe select exposures to these sectors offer attractive risk-reward opportunities, potential Fund diversification benefits and avenues for liquidity. However, we reduced select allocations to U.S. equities and convertible bonds throughout the quarter as these comprised of growth-related sectors which suffered from increased risk-off sentiment. Separately, we did continue to increase the Fund’s bank loan allocation given their floating rate exposure.

Portfolio Details as of 03/31/2022

Total Net Assets
$6.32 B
Number of Issues
713
Average Coupon
5.52%
Average Maturity
7.31 Years
Average Effective Duration
4.03 Years

Dividends & Cap Gains

Dividends & Cap Gains

Dividend Payments

Dividend Payments

For
YTD Dividends Paidas of 05/17/2022
$0.121
Dividend Frequency
Monthly (Daily Accrual)
Record Date Ex-Dividend Date Reinvest & Payable Date Dividend Reinvest Price
Daily Daily 04/30/2022 $0.03054 $6.81
Daily Daily 03/31/2022 $0.03139 $7.10
Daily Daily 02/28/2022 $0.03047 $7.22
Daily Daily 01/31/2022 $0.02895 $7.36

Upcoming Dividend Payment Dates

Record Date Ex-Dividend Date Reinvest & Payable Date
Daily Daily 05/31/2022
Daily Daily 06/30/2022
Daily Daily 07/31/2022
Daily Daily 08/31/2022
Daily Daily 09/30/2022
Daily Daily 10/31/2022
Daily Daily 11/30/2022
Daily Daily 12/31/2022

Capital Gains Distributions

For
Record Date Reinvest & Payable Date Long-term Short-term * Total Reinvest Price
12/16/2021 12/17/2021 - $0.0100 $0.0100 $7.56

Upcoming Capital Gain Distribution

Record Date Ex-Dividend Date
12/19/2022 12/20/2022

Fees & Expenses

Fees & Expenses

Expense Ratioas of 04/30/2022

1.13%

Fund Documents

Fund Documents

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The ICE BofA Merrill Lynch U.S. High Yield Constrained Index is a capitalization-weighted index of all US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and Fitch), at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100 million. The index caps individual issuer at 2%. Index constituents are capitalization-weighted, based on their current amount outstanding, provided the total allocation to an individual issuer does not exceed 2%. Issuers that exceed the limit are reduced to 2% and the face value of each of their bonds is adjusted on a pro-rata basis. The face values of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis. In the event there are fewer than 50 issuers in the Index, each is equally weighted and the face values of their respective bonds are increased or decreased on a pro-rata basis.

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