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National Tax Free Fund

Summary

Summary

What is the National Tax Free Fund?

The Fund seeks to deliver a high level of income exempt from federal taxation by investing primarily in investment grade municipal bonds with select exposure to lower-rated municipal bonds.

Yield

Dividend Yield 1 as of 07/22/2016  

  Subsidized3 Un-Subsidized4
w/o sales charge - 3.41%
w/ sales charge - 3.34%

30-Day Standardized Yield 2 as of 06/30/2016  

3.34%

Fund Basicsas of 06/30/2016

Total Net Assets
$2.06 B
Inception Date
04/02/1984
Dividend Frequency
Monthly (Daily Accrual)
Number of Holdings
514
CUSIP
543902100
Minimum Initial Investment
$1,000+

Expense Ratioas of 06/30/2016

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 04/02/1984
w/o sales charge 5.72% 9.19% 6.51% 6.86% 4.97% 6.71%
Lipper Category Avg. General & Insured Municipal Debt Funds 4.33% 7.62% 5.55% 5.52% 4.47% -
Barclays Municipal Bond Index 4.33% 7.65% 5.58% 5.33% 5.13% -
w/ sales charge 3.35% 6.71% 5.71% 6.36% 4.73% 6.64%

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 04/02/1984
w/o sales charge 5.72% 9.19% 6.51% 6.86% 4.97% 6.71%
Lipper Category Avg. General & Insured Municipal Debt Funds 4.33% 7.62% 5.55% 5.52% 4.47% -
Barclays Municipal Bond Index 4.33% 7.65% 5.58% 5.33% 5.13% -
w/ sales charge 3.35% 6.71% 5.71% 6.36% 4.73% 6.64%

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

RELATED CONTENT

Are There Still Opportunities in Munis?
May 9, 2016

While the asset class has performed well in recent months, a number of indicators suggest that municipal bonds remain attractively valued.

Muni Matters: Taking the Measure of the Market
February 19, 2016

How did the municipal bond market perform during 2015, and why is it not easy to keep track of how the market is performing?

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

Credit Quality Distribution as of 06/30/2016 View Portfolio

Rating Assets
A-1/MIG1
A-2/MIG2
AAA
AA
A
BBB
< BBB
Not Rated

Investment Team

Daniel S. Solender
Daniel S. Solender, CFA

Partner & Director

29 Years of Industry Experience

Supported By 12 Investment Professionals and 12 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 07/22/2016  

  Subsidized3 Un-Subsidized4
w/o sales charge - 3.41%
w/ sales charge - 3.34%

30-Day Standardized Yield 2 as of 06/30/2016  

  Subsidized3 Un-Subsidized4
w/o sales charge 3.34% -

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 04/02/1984
w/o sales charge 5.72% 9.19% 6.51% 6.86% 4.97% 6.71%
Lipper Category Avg. General & Insured Municipal Debt Funds 4.33% 7.62% 5.55% 5.52% 4.47% -
Barclays Municipal Bond Index 4.33% 7.65% 5.58% 5.33% 5.13% -
w/ sales charge 3.35% 6.71% 5.71% 6.36% 4.73% 6.64%

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 04/02/1984
w/o sales charge 5.72% 9.19% 6.51% 6.86% 4.97% 6.71%
Lipper Category Avg. General & Insured Municipal Debt Funds 4.33% 7.62% 5.55% 5.52% 4.47% -
Barclays Municipal Bond Index 4.33% 7.65% 5.58% 5.33% 5.13% -
w/ sales charge 3.35% 6.71% 5.71% 6.36% 4.73% 6.64%

Fund Expense Ratio :

Gross 0.77%

Net 0.75%

Best returns

Durations Fund Returns Blended Index
3-Mo 11.04 11.06
1-Yr 28.84 27.46

Worst returns

Durations Fund Returns Blended Index
3-Mo -13.33 -5.36
1-Yr -15.24 -2.47
Year Fund Returns Barclays Municipal Bond Index
2015 3.28% 3.30%
2014 12.83% 9.05%
2013 -6.11% -2.55%
2012 13.75% 6.78%
2011 11.08% 10.70%
2010 2.20% 2.38%
2009 24.60% 12.91%
2008 -15.24% -2.47%
2007 -1.44% 3.36%
2006 4.57% 4.84%
2005 3.69% -
2004 3.85% -
2003 4.65% -
2002 8.83% -
2001 4.15% -
2000 12.71% -
1999 -5.56% -
1998 6.36% -
1997 10.02% -
1996 3.98% -
Year Q1 Q2 Q3 Q4 Yearly Returns
2016 2.14% 3.51% - - 5.57%
2015 1.24% -1.22% 1.35% 1.90% 3.28%
2014 4.72% 3.50% 2.28% 1.77% 12.83%
2013 0.58% -4.82% -1.93% 0.00% -6.11%
2012 4.76% 2.75% 3.78% 1.82% 13.75%
2011 -0.10% 5.03% 3.41% 2.38% 11.08%
2010 2.25% 1.57% 4.52% -5.86% 2.20%
2009 7.21% 5.87% 11.02% -1.11% 24.60%
2008 -1.89% 0.54% -6.18% -8.41% -15.24%
2007 0.72% -0.58% -0.55% -1.03% -1.44%
2006 0.26% -0.13% 3.19% 1.21% 4.57%
2005 0.19% 3.26% -0.38% 0.60% 3.69%
2004 1.71% -3.15% 3.95% 1.42% 3.85%
2003 0.92% 2.86% -0.84% 1.66% 4.65%
2002 1.01% 3.03% 5.02% -0.44% 8.83%
2001 1.60% 0.32% 2.88% -0.68% 4.15%
2000 3.45% 1.13% 2.09% 5.52% 12.71%
1999 1.03% -2.59% -2.39% -1.65% -5.56%
1998 1.05% 1.82% 3.27% 0.10% 6.36%
1997 -0.49% 3.56% 3.49% 3.14% 10.02%
1996 -1.79% 0.87% 2.40% 2.49% 3.98%
1995 7.66% 1.62% 2.71% 4.76% 17.71%
1994 -6.40% -0.27% 0.52% -2.26% -8.27%
1993 4.83% 3.39% 3.68% 0.60% 13.00%
1992 0.25% 4.14% 2.16% 1.95% 8.72%
1991 2.17% 2.00% 3.93% 3.88% 12.51%
1990 0.33% 2.36% 0.06% 4.35% 7.22%
1989 0.54% 5.79% -0.24% 3.21% 9.53%
1988 3.58% 2.40% 3.21% 2.89% 12.60%
1987 2.61% -5.00% -3.03% 6.14% 0.36%
1986 9.43% -0.87% 5.46% 4.96% 20.07%
1985 3.71% 8.30% -1.48% 8.13% 19.63%
1984 - - 5.84% 5.87% 6.19%

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

NAV Historical Prices

Date Net Asset Value

Portfolio

Portfolio

Type Assets
Transportation
IDR/PCR
Healthcare/Hospital
Education
Special Tax
GO State
GO Local
Lease
Pre-Refunded
Power
Water & Sewer
VRDN
Housing
Resource Recovery
Insured
Maturity Assets
<1 Year
1-4.99 Years
5-9.99 Years
10-19.99 Years
20-29.99 Years
>30 Years
State Assets
CA
NY
TX
PA
IL
NJ
IN
FL
MA
OH
Puerto Rico
AZ
GA
MI
MD
LA
VA
SC
HI
KY
CO
NE
AL
WA
NC
MO
CT
DC
OK
ME
Other U.S. Territories
DE
TN
VT
AR
OR
ND
IA
NV
MN
RI
WV

Credit Quality Distribution as of 06/30/2016

Rating Assets
A-1/MIG1
A-2/MIG2
AAA
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 continues to maintain an overweight in revenue bonds, including transportation and industrial revenue bonds, given the dedicated income stream and favorable return prospects.
  • The portfolio continues to maintain an overweight in lower rated bonds owing to attractive credit spreads and solid underlying credit quality.
  • The portfolio is overweight in high-tax states due to better liquidity and total return potential.

Portfolio Details as of 06/30/2016

Total Net Assets
$2.06 B
Number of Issues
514
Average Coupon
5.3%
Average Effective Maturity
17.7 Years
Average Effective Duration
6.47 Years

Dividends & Cap Gains

Dividends & Cap Gains

Dividend Payments

For
YTD Dividends Paidas of 07/22/2016
$0.203
Dividend Frequency
Monthly (Daily Accrual)
Record Date Ex-Dividend Date Reinvest & Payable Date Dividend Reinvest Price
Daily Daily 06/30/2016 $0.03341 $11.79
Daily Daily 05/31/2016 $0.03357 $11.58
Daily Daily 04/30/2016 $0.03418 $11.55
Daily Daily 03/31/2016 $0.03404 $11.49
Daily Daily 02/29/2016 $0.03457 $11.46
Daily Daily 01/31/2016 $0.03398 $11.47

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 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
12/10/1998 12/18/1998 - - $0.1900 $11.75

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 07/22/2016

  Sales Charge Dealer's Concession Prices at Breakpoint
Less than $100,000 2.25% 2.00% $12.02
$100,000 to $249,999 1.75% 1.50% $11.96
$250,000 to $499,999 1.25% 1.00% $11.90
$500,000 to $999,999 0.00% 1.00% $11.75
$1,000,000 to $5,000,000 0.00% 1.00% $11.75

Expense Ratioas of 06/30/2016

Fund Review

Fund Review

Market Review as of 06/30/2016

The U.S. municipal bond market (as represented by the Barclays Municipal Bond Index[1]) continued to advance in the second quarter, surpassing the returns of other notable asset classes during the period, including large-cap equities (as represented by the S&P 500 Index[2]), international equities (as represented by the MSCI EAFE Index[3]), and taxable investment-grade bonds (as represented by the Barclays U.S. Aggregate Bond Index[4]).

Total issuance was slightly ahead of the second quarter of the prior year, with refunding issues exceeding new capital issuance during the period, as issuers continue to take advantage of low market rates.  Investor demand for municipal bonds remained strong, as investors sought income in a low-yield environment as well as greater insulation from global factors that have introduced volatility to other parts of the market.  Consequently, year-to-date municipal fund flows, based on information from Lipper U.S. fund flows, exceeded $33 billion at the end of the quarter. In terms of maturity and quality, the demand for incremental yield has resulted in longer-maturity municipal bonds outperforming shorter-maturity municipal bonds and lower-quality bonds generally outperforming higher-quality bonds during the second quarter. 

High-profile issuers, such as Illinois and New Jersey, remained in the spotlight during the past quarter, as these issuers continue to struggle with pension and budget issues.  In the case of Puerto Rico, the commonwealth has marked the headlines with defaults, the most recent of which was on general obligation debt, a type of debt that has not experienced a default in decades. In order to help manage the situation in Puerto Rico and address its debt crisis, Congress approved a financial rescue bill on June 30, which will place the island’s finances under the control of a federally appointed oversight board. Despite the aforementioned defaults, Puerto Rico bonds, in general, have outperformed the broad municipal bond market (as represented by the Barclays Municipal Bond Index) as well as the Barclays High Yield Municipal Bond Index[5] during the second quarter and YTD period. Isolated pockets of distress aside, overall creditworthiness continues to improve, as many states’ finances experienced rising revenues, while maintaining balanced budgets.

Fund Review as of 3/31/2016

The Fund returned 2.14%, reflecting performance at the net asset value (NAV) of Class A shares, with all distributions reinvested, for the three-month period ended March 31, 2016. The Fund’s benchmark, the Barclays Municipal Bond Index1, returned 1.67% in the same period. The Fund’s average annual total returns, which reflect performance at the maximum 2.25% sales charge applicable to Class A share investments and includes the reinvestment of all distributions, as of March 31, 2016, are: one year: 1.89%; five years: 6.68%; and 10 years: 4.36%. Expense ratio, gross: 0.77%, and net (excluding interest and related expenses): 0.75%.

Performance data quoted represent past performance, which does not guarantee future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month-end by calling Lord Abbett at 888-522-2388 or visiting us at www.lordabbett.com.

The strongest driver of outperformance, for the quarter, was the Fund’s overweight to bonds with maturities between 25- and 30-years. Bonds with maturities of twenty-five years and longer outperformed, as strong demand for the incremental yield available in longer bonds persisted during the period. Consequently, bonds with maturities shorter than 5 years underperformed. Lower-rated bonds generally outperformed, as strong demand for incremental yield persisted amid improving overall creditworthiness. ‘AAA’ rated bonds underperformed, as bonds within this credit-quality range did not participate in spread tightening experienced by lower rated credits. With regard to sectors, health care and tobacco settlement bonds outperformed, as both sectors benefited from the demand from incremental yield, aided by hospitals’ successful adaptation of the Affordable Care Act and higher consumption statistics relative to previous forecasts, respectively. The Fund’s allocation to state and local general obligation bonds detracted from performance, as these sectors underperformed. The local general obligation sector underperformed due to the high quality nature of the underlying bonds, while state general obligation bonds lagged due to the negative impact of a few large issuers facing financial pressures.

Please refer to www.lordabbett.com under the “Portfolio” tab for a complete list of holdings of the Fund, including the securities discussed above.

Outlook

During the first quarter, amid continued global market volatility, municipal investors experienced strong performance when compared to many other asset classes. Despite the general slowdown of municipal fund flows towards tax season in past years, demand picked up significantly during the period, a continuation of the trend seen in the fourth quarter of 2015, as the combination of solid relative performance and a low rate environment turned more attention toward municipal debt. Demand for municipals is likely to continue, given municipal yields continue to provide investors with compelling taxable-equivalent income, default rates that remain low, and overall creditworthiness that continues to improve. Although supply during the period persisted at a relatively high level when compared with last year’s pace, new-issue supply fell short of expectations for the quarter. It is likely that refunding activity will increase in the upcoming quarter and new-issue supply will continue at a reasonable pace, as issuers become more confident in financing bonds for infrastructure needs. 

The treasury and municipal yield curves are likely to move in a similar direction going forward, given that both markets are impacted by future Federal Reserve action amid a slow growth, low inflationary environment. Both markets might also continue to maintain the relative steepness of their respective yield curves, contingent on gradual and measured future activity from the Fed. While lower rated bonds have posted strong returns in past years, credit quality trends suggest that lower quality bonds may continue to outperform in the quarters to come, due to demand for incremental yield in a low interest rate environment and steady economic growth amid low inflation, supporting the credit quality of municipal issuers. In addition, a continuation of a combination of light new issue supply and investor demand may lead to attractive returns for lower rated bonds going forward. Longer maturities are also expected to outperform as the yield curve may flatten further, given the current steepness of the yield curve amid muted inflation and subdued economic growth.

Although a few high-profile issuers, such as New Jersey and Illinois, are hampered by challenges and will likely continue to remain under pressure, as a result of pension reform and funding of pension liabilities, it is important to focus on overall state health and creditworthiness, which is expected to remain strong. With respect to the financial health at the state level, it is essential to distinguish between the isolated challenges and the strong overall health of states. 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 taxable-equivalent returns to investors. 

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Summary Prospectus
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Statutory Prospectus
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Prospectus (XBRL)
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SAI
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Annual Report
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Semi-Annual Report
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Fact Sheet
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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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