Investment advisor: Lord Abbett
Launch date: May 28, 2020
Expense ratio: Class A 0.65%, Class C 1.29%, Class F 0.45%, Class F3 0.44%, Class I 0.45%, Class R3 0.95%, Class R4 0.7%, Class R5 0.45%, Class R6 0.44%
Fundamental investment strategy:
The Fund’s investment objective is total return.
Under normal conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in bonds and other fixed income securities. The Fund considers bonds and other fixed income securities to include, among other types of investments, investment grade debt securities, debt securities issued by public sector or government sponsored entities, corporate debt securities, high-yield securities (commonly referred to as “below investment grade” or “junk” bonds), loans (including bridge loans, novations, assignments, and participations), which may be fixed or floating rate, foreign (including emerging market) debt securities, all types of mortgage-related and other asset-backed securities, including those that are non-investment grade, which may be backed by a government agency or privately-issued, and equity-related debt securities such as convertible bonds, preferred stocks, and debt securities with warrants.
Following an assessment of climate impact, the portfolio management team will select securities using a bottom-up analysis of an issuer’s management quality, credit risk, and relative market position, industry dynamics, and its evaluation of conditions within the broader economy. The portfolio management team develops a macroeconomic outlook of the current economic environment and credit markets and allocates the Fund’s assets using fundamental research and quantitative tools. The portfolio management team attempts to reduce risk through portfolio diversification, credit analysis and attention to current developments and trends in interest rates and economic conditions. The Fund may engage in active and frequent trading of its portfolio securities.
The Fund may sell a security when the Fund believes the security is less likely to benefit from the current market and economic environment, shows signs of deteriorating fundamentals, no longer meets the Fund’s investment criteria, to increase cash, or to satisfy redemption requests, among other reasons. In considering whether to sell a security, the Fund may evaluate factors including, but not limited to, the condition of the economy, changes in the issuer’s competitive position or financial condition, changes in the outlook for the issuer’s industry, the Fund’s valuation target for the security, and the impact of the security’s duration on the Fund’s overall duration.
The Fund may invest up to 30% of its net assets in high-yield securities (commonly referred to as “below investment grade” or “junk” bonds). High-yield securities are debt securities that are rated BB/Ba or lower by an independent rating agency, or that are unrated but determined by Lord Abbett to be of comparable quality. The Fund does not have any maturity or duration restrictions and may invest in securities of any maturity or duration.
The Fund may use derivatives to hedge against risk or to gain investment exposure. Currently, the Fund expects to invest in derivatives consisting principally of futures, forwards, options, and swaps. The Fund may engage in a variety of foreign currency related transactions, including entering into forward foreign currency contracts to hedge against foreign currency fluctuations or to gain exposure to foreign currencies. The Fund is not required to hedge its non-dollar investments back to the U.S. dollar through the use of derivatives, but may do so as part of its strategy. The Fund may use derivatives to seek to enhance returns, to attempt to hedge some of its investment risk, to manage portfolio duration, as a substitute for holding the underlying asset on which the derivative instrument is based, or for cash management purposes. The market value of derivatives providing economic exposure substantially similar to the securities referenced in the Fund’s 80% policy, as described above, will be counted for purposes of measuring the Fund’s compliance with its 80% policy.
Sustainable investing approach:
The Fund will invest in the securities of issuers the Fund’s portfolio management team believes have, or will have, a positive impact on the climate through an issuer’s operations or the products and services provided by the issuer. When considering a potential investment and its impact on the climate, Lord Abbett may consider a variety of factors, including whether an issuer contributes to efforts relating to clean energy, energy efficiency, sustainable transportation, clean water and resource management, or low carbon solutions, or such other factors that the portfolio management team may determine are relevant. The factors Lord Abbett considers can change over time. In its evaluation of these factors, Lord Abbett may utilize its internal research relating to climate factors, third party research and data providers, its assessment of an issuer’s alignment with international commitments deemed relevant by Lord Abbett, and information made available by the issuer such as carbon emissions and intensity data. Lord Abbett will use its own assessments of environmental and climate-oriented issues and may also reference standards as set forth by recognized global organizations.
The Fund’s investments will generally include labeled and unlabeled “green” bonds, which may be issued by sovereigns, government-related entities, and corporates (non-government). Labeled green bonds are bonds that earmark proceeds for climate and environmental projects. Labeled green bonds are often verified by a third party, which certifies that the bond will fund projects that include environmental benefits. Unlabeled green bonds (or climate-aligned bonds) are securities whose proceeds are supposed to be used for climate-aligned projects and initiatives but are issued without formal certifications.
Lord Abbett may also consider other environmental, social, and governance (“ESG”) factors in investment decisions. The Fund generally will not invest in the securities of any issuer determined by Lord Abbett to be engaged principally in the fossil fuel and natural gas-related production or distribution sectors, including distribution/retail, equipment and services, extraction and production, petrochemicals, pipelines and transportation and refining, and the production or distribution of coal and coal fired generation. However, green labeled bonds from issuers involved in fossil fuel and natural gas-related sectors may be permitted.
The Fund will also not invest in the securities of any issuer determined by Lord Abbett to be engaged principally in the manufacture of alcoholic beverages, tobacco products or military equipment, the operation of gambling casinos, or in the production or trade of pornographic materials.
Notes of Explanation: For mutual funds, expense ratio may vary by share class and launch date applies to the launch date of the earliest share class. Sources: Fund prospectus or other offering document, as disclosed.
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