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Total Return Fund

Summary

Summary

What is the Total Return Fund?

The Fund seeks to deliver current income and the opportunity for capital appreciation by investing primarily in U.S. investment grade corporate, government, and mortgage- and asset-backed securities, with select allocations to high yield and foreign debt securities.

EXPERIENCED INVESTMENT TEAM

Managed through collaboration among 40+ investment professionals in portfolio management, credit research, and trading.

DISCIPLINED, FLEXIBLE APPROACH

Utilizes a blend of fundamental research and quantitative analysis in seeking to add value through sector rotation, security selection, and rigorous risk management.

CONSISTENT, RISK-ADJUSTED RETURNS

Has offered a track record of generating above-average returns with below-average risk in a variety of market environments, versus its peers in the Morningstar Intermediate-Term Bond Category.

Yield

Dividend Yield 1 as of 03/24/2017  

  Subsidized3 Un-Subsidized4
w/o sales charge 2.55% 2.42%
w/ sales charge 2.49% 2.36%

30-Day Standardized Yield 2 as of 02/28/2017  

  Subsidized3 Un-Subsidized4
w/o sales charge 2.25% 2.14%

Expense Ratioas of 02/28/2017

Fund Basicsas of 02/28/2017

Total Net Assets
$3.10 B
Inception Date
08/31/2000
Dividend Frequency
Monthly (Daily Accrual)
Number of Holdings
558
CUSIP
543916845
Minimum Initial Investment
$1,500+

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 08/31/2000
w/o sales charge 1.21% 4.17% 2.78% 2.95% 4.94% 5.47%
Lipper Category Avg. Core Bond Funds 1.00% 2.62% 2.32% 2.30% 3.90% -
Bloomberg Barclays U.S. Universal Index 1.13% 3.20% 2.97% 2.74% 4.52% 5.30%
w/ sales charge -1.11% 1.78% 2.01% 2.48% 4.70% 5.33%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 08/31/2000
w/o sales charge 4.05% 4.05% 3.14% 3.11% 4.96% 5.45%
Lipper Category Avg. Core Bond Funds 3.00% 3.02% 2.70% 2.41% 3.93% -
Bloomberg Barclays U.S. Universal Index 3.91% 3.91% 3.28% 2.78% 4.57% 5.28%
w/ sales charge 1.75% 1.75% 2.35% 2.65% 4.72% 5.30%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

RELATED CONTENT

Bonds: Can You Get More from Your Core?
March 20, 2017

The move to higher rates has led many investors to review their core fixed-income allocations.

Fixed Income: Which Sectors Can Benefit from an Active Approach?
December 5, 2016

In the fixed-income market, when it comes to selecting active versus passive strategies, low cost does not always mean good value.

Type Assets
U.S. Government Related
ABS
MBS
Investment Grade Corporate
High Yield Corporate
Sovereign
CMBS
Bank Loans
Other
Cash
Maturity Assets
Less than 1 year
1-2.99 years
3-4.99 years
5-6.99 years
7-9.99 years
Greater than 10 years

Credit Quality Distribution as of 02/28/2017 View Portfolio

Rating Assets
U.S. Treasury
Agency
AAA
AA
A
BBB
<BBB

Investment Team

Kewjin Yuoh
Kewjin Yuoh

Partner & Portfolio Manager

23 Years of Industry Experience

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

Partner & Portfolio Manager

19 Years of Industry Experience

Steven F. Rocco
Steven F. Rocco, CFA

Partner & Portfolio Manager

16 Years of Industry Experience

Leah G. Traub
Leah G. Traub, Ph.D.

Partner & Portfolio Manager

16 Years of Industry Experience

Robert A. Lee
Robert A. Lee

Partner & Chief Investment Officer

26 Years of Industry Experience

Supported By 52 Investment Professionals and 13 Years Avg. Industry Experience

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Performance

Performance

Dividend Yield 1 as of 03/24/2017  

  Subsidized3 Un-Subsidized4
w/o sales charge 2.55% 2.42%
w/ sales charge 2.49% 2.36%

30-Day Standardized Yield 2 as of 02/28/2017  

  Subsidized3 Un-Subsidized4
w/o sales charge 2.25% 2.14%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 08/31/2000
w/o sales charge 1.21% 4.17% 2.78% 2.95% 4.94% 5.47%
Lipper Category Avg. Core Bond Funds 1.00% 2.62% 2.32% 2.30% 3.90% -
Bloomberg Barclays U.S. Universal Index 1.13% 3.20% 2.97% 2.74% 4.52% 5.30%
w/ sales charge -1.11% 1.78% 2.01% 2.48% 4.70% 5.33%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

YTD 1-YR 3-YR 5-YR 10-YR Since Inception 08/31/2000
w/o sales charge 4.05% 4.05% 3.14% 3.11% 4.96% 5.45%
Lipper Category Avg. Core Bond Funds 3.00% 3.02% 2.70% 2.41% 3.93% -
Bloomberg Barclays U.S. Universal Index 3.91% 3.91% 3.28% 2.78% 4.57% 5.28%
w/ sales charge 1.75% 1.75% 2.35% 2.65% 4.72% 5.30%

Fund Expense Ratio :

Gross 0.81%

Net 0.68%

Year Fund Returns Bloomberg Barclays U.S. Universal Index
2016 4.05% 3.91%
2015 -0.64% 0.43%
2014 6.12% 5.56%
2013 -1.40% -1.35%
2012 7.73% 5.53%
2011 7.20% 7.40%
2010 7.59% 7.16%
2009 15.67% 8.60%
2008 -1.22% 2.38%
2007 5.68% 6.50%
2006 4.15% -
2005 2.30% -
2004 4.28% -
2003 5.01% -
2002 8.73% -
2001 9.35% -
2000 5.63% -
Year Q1 Q2 Q3 Q4 Yearly Returns
2017 - - - - 1.00%
2016 2.82% 2.71% 1.14% -2.59% 4.05%
2015 1.58% -1.50% 0.05% -0.74% -0.64%
2014 2.33% 2.50% 0.06% 1.11% 6.12%
2013 0.49% -2.81% 0.49% 0.47% -1.40%
2012 1.82% 1.94% 2.71% 1.04% 7.73%
2011 1.01% 2.09% 2.38% 1.53% 7.20%
2010 2.42% 2.75% 3.31% -1.05% 7.59%
2009 2.42% 5.52% 6.23% 0.75% 15.67%
2008 1.08% -0.04% -2.05% -0.19% -1.22%
2007 1.48% -0.75% 2.63% 2.24% 5.68%
2006 -0.38% -0.28% 3.62% 1.18% 4.15%
2005 -0.37% 3.02% -0.71% 0.39% 2.30%
2004 2.33% -2.29% 3.11% 1.15% 4.28%
2003 1.50% 3.00% -0.12% 0.56% 5.01%
2002 0.10% 2.26% 3.47% 2.65% 8.73%
2001 3.41% 0.54% 4.68% 0.47% 9.35%
2000 - - - 4.70% 5.63%

Growth of $10,000 as of 02/28/2017

NAV Historical Prices

Date Net Asset Value

Best returns

Durations Fund Returns Blended Index
3-Mo 7.56 3.7
1-Yr 22.33 14.18

Worst returns

Durations Fund Returns Blended Index
3-Mo -6.86 -2.91
1-Yr -5.45 -1.1

Portfolio

Portfolio

Rating Assets
U.S. Government Related
ABS
MBS
Investment Grade Corporate
High Yield Corporate
Sovereign
CMBS
Bank Loans
Other
Cash
Rating Assets
Less than 1 year
1-2.99 years
3-4.99 years
5-6.99 years
7-9.99 years
Greater than 10 years

Credit Quality Distribution as of 02/28/2017

Rating Assets
U.S. Treasury
Agency
AAA
AA
A
BBB
<BBB

Portfolio Positioning as of 12/31/2016

  • We maintained the portfolio’s up-in-quality bias and emphasized higher-beta sectors early in the quarter.  Following the U.S. presidential election, we lowered the portfolio’s aggregate risk exposure as spreads tightened and the potential for event-risk to cause near-term volatility increased.
  • As risk assets rallied during the quarter, we reduced the portfolio’s allocation to credit-sensitive sectors, particularly investment grade corporates, realizing profits. Within investment grade corporates the portfolio remains overweight to ‘BBB’ rated corporate debt. We view this portion of the corporate sector positively, as these companies are less likely to increase leverage to fund mergers and acquisitions or share buybacks.  
  • We believe that the U.S. economy will continue to grow at a modest pace. As a result of this view, coupled with our view on valuations, we are constructive on domestically focused asset classes. More specifically, we believe asset-backed securities (ABS) present a unique opportunity to find pockets of relative value and attractive risk-adjusted spread, while providing additional liquidity.  
  • Given our expectation for increased volatility, we lowered the portfolio’s exposure to agency mortgage-backed securities (MBS). Within the portfolio’s agency MBS allocation, the portfolio is allocated to favored coupons of Fannie Mae- and Freddie Mac-backed securities.   

Portfolio Details as of 02/28/2017

Total Net Assets
$3.10 B
Number of Issues
558
Average Coupon
3.16%
Average Life
7.7 Years
Average Effective Duration
5.65 Years

Dividends & Cap Gains

Dividends & Cap Gains

Dividend Payments

For
YTD Dividends Paidas of 03/24/2017
$0.043
Dividend Frequency
Monthly (Daily Accrual)
Record Date Ex-Dividend Date Reinvest & Payable Date Dividend Reinvest Price
Daily Daily 02/28/2017 $0.02188 $10.34
Daily Daily 01/31/2017 $0.02188 $10.28

Upcoming Dividend Payment Dates

Record Date Ex-Dividend Date Reinvest & Payable Date
Daily Daily 03/31/2017
Daily Daily 04/30/2017
Daily Daily 05/31/2017
Daily Daily 06/30/2017
Daily Daily 07/31/2017
Daily Daily 08/31/2017
Daily Daily 09/30/2017
Daily Daily 10/31/2017
Daily Daily 11/30/2017
Daily Daily 12/31/2017

Capital Gains Distributions

For
Record Date Reinvest & Payable Date Long-term Short-term * Total Reinvest Price
12/15/2016 12/16/2016 - $0.0324 $0.0324 $10.17

Upcoming Capital Gain Distribution

Record Date Ex-Dividend Date
12/14/2017 12/15/2017

Fees & Expenses

Fees & Expenses

Sales Charge Schedule as of 03/24/2017

  Sales Charge Dealer's Concession Prices at Breakpoint
Less than $100,000 2.25% 2.00% $10.54
$100,000 to $249,999 1.75% 1.50% $10.48
$250,000 to $499,999 1.25% 1.00% $10.43
$500,000 to $999,999 0.00% 1.00% $10.30
$1,000,000 to $5,000,000 0.00% 1.00% $10.30

Expense Ratioas of 02/28/2017

Fund Review

Fund Review

Market Review as of 12/31/2016

Most rate-sensitive categories of the U.S. fixed income market posted negative returns for the fourth quarter of 2016. Spread sectors outperformed during the quarter driven by strong technicals, continued stability in commodity prices, and the search for yield.

In U.S. economic data, inflation continued to rise, with the Consumer Price Index (CPI)1 registering a year-over-year increase of 1.7% as of November 2016. Excluding volatile food and energy prices, CPI increased at a rate of 2.1% for the same period. The U.S. Federal Reserve’s (Fed) preferred measure of inflation, the Personal Consumption Expenditure (PCE) Core Index, remains below the Fed’s target of 2.0%.2

Meanwhile, the U.S. Bureau of Labor Statistics reported that non-farm payrolls increased by 156,000 in December, with the unemployment rate ending 2016 at 4.7%. Over the course of the year average hourly earnings rose by 2.9%.3

In December, the Fed raised its target for short-term interest rates by 0.25%, to a range of 0.50% - 0.75%, as economic data continued to suggest a strengthening domestic economy.4

Fund Review as of 12/31/2016

The Fund* modestly outperformed its benchmark, the Barclays U.S. Universal Index,5 for the quarter ended December 31, 2016.

We maintained the Fund’s up-in-quality bias and emphasized higher-beta sectors early in the quarter.  Following the U.S. presidential election, we lowered the Fund’s aggregate risk exposure as spreads tightened and the potential for event-risk to cause near-term volatility increased.

Security selection within the investment grade corporate sector was the largest contributor to performance during the quarter.  More specifically, performance was driven by an overweight to ‘BBB’ rated securities. Within investment grade corporates we favor ‘BBB’ rated securities as these companies are least likely to increase leverage to fund mergers and acquisitions or share buybacks. In addition, security selection and an overweight to high yield corporates contributed to relative performance. High yield corporates benefited from a continued search for yield and stabilizing energy prices.

An overweight to asset-backed securities (ABS) detracted from performance. Notwithstanding,  we continue to view the ABS market positively as it presents a unique opportunity to find pockets of relative value and attractive risk-adjusted spread, while providing additional liquidity.  Additionally, security selection within mortgage-backed securities (MBS) detracted from performance. Exposure to negatively convex higher coupon securities was a drag on performance as interest rates moved sharply higher.

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

We remain generally optimistic that the U.S. economy will continue to grow at a moderate pace given expectations for tax cuts, increased infrastructure spending, and deregulation. These market elements, along with a tighter labor market, create the potential for inflationary pressures to build. Furthermore, we view credit-sensitive sectors of the market as representing attractive relative value, although we believe there is the potential for episodes of spread widening. Therefore, we believe it is prudent to maintain a higher credit quality bias in order to be opportunistic during periods of volatility.

Fund Documents

Fund Documents

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Summary 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
Semi-Annual Report
Publish Date:11/03/2015
Fact Sheet
Publish Date:11/03/2015
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 Bloomberg Barclays U.S. Universal Index represents the union of the U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index, and the non-ERISA portion of the CMBS Index. Municipal debt, private placements, and non-dollar-denominated issues are excluded from the Universal Index. The only constituent of the index that includes floating-rate debt is the Emerging Markets Index.

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