LORD ABBETT STRATEGY UPDATEIncludes approximately $1.5 billion for which Lord Abbett provides investment models to managed account sponsors. AS OF MARCH 31, 2016 Independent, privately
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Lord Abbett mutual fund shares are distributed by Lord Abbett Distributor LLC.
Lord, Abbett & Co. LLC
Lord Abbett Distributor LLC
90 Hudson Street, Jersey City, NJ 07302-3973
This presentation has been prepared exclusively for use by analysts, institutional investors and their consultants, registered investment advisors, broker-dealers and sponsors of plans with a minimum of 100 participants. It is not intended for, and should not be used with, small plan sponsors, plan participants, or the
public in written or oral form or for any other purpose.
LORD ABBETT STRATEGY UPDATE
Short Duration Income
M a y 5 , 2 0 1 6
2
FIRM PROFILE
2
OUR FIRM
A singular focus on the management of
money since 1929
OUR MISSION
Delivering superior long-term investment
performance and a client experience that
exceeds expectations
OUR DIFFERENTIATORS
Independent Perspective
Commitment to Active Management
Intelligent Product Design
AT A GLANCE
*Includes approximately $1.5 billion for which Lord Abbett
provides investment models to managed account sponsors.
AS OF MARCH 31, 2016
Independent, privately held firm
59 partners
Assets under management: $126.9 billion*
▫ $32.9 billion in equity strategies and
$94.0 billion in fixed-income strategies
143 investment professionals with an
average of 17 years of industry experience
INVESTMENT-LED. INVESTOR-FOCUSED.
3
INVESTMENT TEAM
Walter H. Prahl, Ph.D. Partner & Director of Quantitative Research
31 Years
7 Additional Research Analysts 12 Years Average
Robert A. Lee
Partner & Deputy Chief Investment Officer
25 Years
Experienced investment team led by:
Kewjin Yuoh Partner & Portfolio Manager
Liquid & Securitized Products
22 Years
Andrew H. O’Brien, CFA Partner & Portfolio Manager
Corporates
18 Years
Jeffrey D. Lapin, J.D. Portfolio Manager
Bank Loans
19 Years
Leah G. Traub, Ph.D. Partner & Portfolio Manager
Currencies & Emerging Markets
15 Years
Alan R. Kurtz Portfolio Manager
Convertibles
16 Years
Steven Rocco, CFA Partner & Portfolio Manager
High Yield
15 Years
Portfolio Management
Specializing in the major sectors of
the Fixed Income market
14 Additional Investment Professionals 10 Years Average
Gregory S. Parker, CFA
Partner & Director of Credit Research
25 Years
19 Additional Research Analysts 15 Years Average
Andrew M. Khatri
Partner & Director of Trading
14 Years
8 Additional Traders 8 Years Average
Additional Resources:
Timothy Paulson Investment Strategist
17 Years
As of 04/07/2016. Years of industry experience, as of 01/01/2016.
Brian Arsenault Investment Strategist
22 Years
Giulio Martini Director of Strategic Asset Allocation
31 Years
3 Additional Investment Professionals 12 Years Average
4
Lord Abbett Short Duration Income Fund A research-driven strategy with the flexibility to invest across multiple fixed income sectors.
Designed to provide:
higher yield than a traditional short duration strategy
lower duration than a traditional core bond strategy
FIXED INCOME LINE-UP
The chart represents Lord Abbett’s assessment of the relative level of investment risk and potential investment return among the Lord Abbett taxable fixed-income Funds listed in the chart. The information is intended to graphically depict Lord Abbett’s overall assessment of relative risk and potential return. It is not intended to depict any specific risk measurement, such as standard deviation, for any particular product, nor is it to depict any performance of any particular product. In addition, the graphic above does not depict different types of investment risk and does not reflect that a portion of a Fund’s portfolio may be invested in securities that have higher investment risk relative to the overall portfolio. For example, a Fund may be depicted as having relatively lower risk because it had less exposure to interest rate changes; however, the Fund may hold higher yielding securities that have relatively higher credit risk.
Short Duration Income
Emerging Markets
Local Bond
Emerging Markets
Currency
Bond Debenture
Floating Rate
Total Return
Income Inflation Focused
Convertible Emerging Markets
Corporate Debt
Core Fixed
Income
High Yield
RELATIVE RISK
Strategy
AUM
$35.3B
Core Plus Bond
POTENTIAL
RETURN
5
Corporate, 24.7%
CMBS & ABS, 2.3%
Other1, 4.0%
Agency, 4.1%
MBS, 28.2%
Treasury, 36.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Source: Barclays. Past performance is no guarantee of future results. 1“Other” refers to sovereign, supranational, and local authorities. 2Represents modified adjusted duration of the Barclays U.S. Aggregate Bond Index. 3Represents
yield to maturity of the Barclays U.S. Aggregate Bond Index. Yield to maturity is the rate of return anticipated on a bond if held until it matures. Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. For illustrative purposes only and does not represent
any specific portfolio managed by Lord Abbett mutual fund or any particular investment. Indexes are unmanaged, do not reflect the deduction of fees and expenses,
and are not available for direct investment.
BARCLAYS U.S. AGGREGATE BOND INDEX (AS OF 03/31/2016)
69% of the
Barclays
Aggregate
Index is in U.S.
Government
Related
Securities
CHARACTERISTICS
Duration2 5.5 Yrs.
Yield3 2.17%
BREAKDOWN
BARCLAYS AGGREGATE: HIGH ON DURATION, LOW ON YIELD
6
SHORT MATURITIES HAVE CONSISTENTLY GENERATED POSITIVE RETURNS
0 Years of Negative Returns
Source: Morningstar.
1-3 Year U.S. Treasuries represented by the BofA Merrill Lynch 1-3 Year U.S. Treasury Index; 1-3 year U.S. Corporates represented by the BofA Merrill Lynch 1-3 Year Corporate Index. Shaded areas represent periods during which the Federal Reserve raised interest rates. The historical data are for illustrative purposes only, do not represent the performance of any specific portfolio managed by Lord Abbett or any particular investment, and are not intended to predict or depict future results. Investors may experience different results. Due to market volatility, the market may not perform in a similar manner in the future. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. Other time periods may have been different.
Past performance is no guarantee of future results. The value of an investment in fixed-income securities will change as interest rates fluctuate and in response to market movements. As interest rates fall, the prices of debt securities tend to rise. As rates rise, prices tend to fall. Treasuries are debt securities issued by the U.S. government and secured by its full faith and credit. Income from Treasury securities is exempt from state and local taxes.
U.S. SHORT MATURITY DEBT CALENDAR YEAR RETURNS (12/31/1979 -12/31/2015)
Periods of a Rising Fed Funds Rate
0%
5%
10%
15%
20%
25%
1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
1-3 Year U.S. Treasuries
-5%
0%
5%
10%
15%
20%
25%
1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
1-3 Year U.S. Corporates1 Year of Negative Returns
7
FOCUS ON CREDIT: CREDIT-SENSITIVE SECTORS OUTPERFORMED
Rolling 5-Year Returns as of 03/31/2016. Past performance is not a reliable indicator or guarantee of future results. 1BofAML 1-3 Year Corporate Index 2 Barclays 1-3 Year Government Index 3 Barclays 1-3 Year High Yield Index 4 Barclays 1-3.5 Year CMBS Index
Emphasis on credit sectors that have historically outperformed in the short
duration space
Flexible Approach
Diversified sector blend offers flexibility to capture opportunities and reduce
volatility
True Short Duration
Short effective duration and short spread duration
9
INVESTMENT APPROACH
Strategic
Design
Research-Driven
Security
Selection
Strategic
Design
Model-Informed
Sector
Allocation
Rigorous
Quantitative
Risk
Management
Short
Duration
Credit
Portfolio
10
Source: Barclays Live and Credit Suisse. Sector returns shown are Barclays indexes as follows: U.S. Aggregate Index, U.S. MBS Fixed Rate Index, U.S. Corporate Investment Grade Index, Municipal Bond Index, U.S. Corporate High Yield Index, U.S. Treasury Index, U.S. TIPS Index, ABS Index, and U.S. Agency Index. Credit Suisse Leveraged Loan Index used for leveraged loans. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. This historical table is an illustration of the most commonly used indexes representative of various sectors of the bond market and does not depict or predict the performance of any specific portfolio managed by Lord Abbett or any particular investment. Please note not all sectors are represented nor is this an asset allocation recommendation. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.
DIVERSIFICATION IN FIXED INCOME: BOND MARKET RETURNS VARY
U.S. FIXED-INCOME SECTOR RETURNS (AS OF 03/31/2016)
Data from 03/31/2008 -03/31/2016. Source: Lord Abbett. The Fund’s portfolio is actively managed and is subject to change. For historical data, bank loan allocations are included in the investment grade corporates or high yield corporates allocations.
12
HISTORICAL ALLOCATION RANGE
Short Duration Income Fund as of 03/31/2016. Historical average sector allocation is based on the allocation at each quarter-end from 03/31/2008– 03/31/2016. The Fund’s portfolio is actively managed and is subject to change. Bank loans are included in the investment grade corporates or high yield corporates sectors, as applicable. For informational purposes only.
CMBS
25% Low
54% High
Current 28%
Investment Grade Corporates
17% Low
37% High
Current 37%
High Yield Corporates
8% Low
24% High
Current 13%
ABS
0% Low
14% High
Current 13%
Treasury/Agency
0% Low
11% High
Current 3%
32% Avg.
29% Avg.
16% Avg.
8% Avg.
3% Avg.
Mortgages
1% Low
19% High
Current 4%
7% Avg.
13
CREDIT RESEARCH TEAM
Gregory S. Parker, CFA
Partner & Director of Credit Research, 25 Years
Paul A. Langlois, CFA Energy (Refiners, Pipelines, Storage);
Analysts are industry specialists; narrow breadth allows for deep focus
Team of 20 investment professionals with 16 years average industry experience
As of 04/07/2016. Years of industry experience, as of 01/01/2016.
Andrew Bernstein Energy
(Exploration & Production, Services)
20 Years
Sector Leader: Energy, Utilities, Materials
John M. Novak, CFA Industrials (Heavy Machinery, Transportation),
Consumer (Automotive)
20 Years
Sector Leader: Industrials, Health Care, Financials
Emanuela Scura Consumer (Retail, Food and Beverage, Apparel)
15 Years
Sector Leader: Consumer, TMT
14
CORPORATE CREDIT DEFAULT RATES
Short investment horizons result in significantly lower default probabilities and offer more
clarity regarding individual credit outlooks
Source: Moody’s US Municipal Bond Defaults and Recoveries 1970-2014. Chart presents two-year and ten-year average cumulative default rates (CDR) for corporate issuers over the period 1970-2014. CDRs are calculated by averaging the default experience of cohorts made up of Moody’s-rated credits formed at monthly frequencies throughout the study period. The average CDR represents the historically-observed probability that a credit with a particular rating that would have otherwise remained outstanding will default during a specified length of time. Because cohorts are formed at a monthly frequency and then averaged over, these rates are only conditional on a credit’s rating independent of its seasoning.
CUMULATIVE DEFAULT RATES
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
A Baa Ba B Caa
Cumulative Default Rate over a 2 year horizon Cumulative Default Rate over a 10 year horizon
15
CREDIT QUALITY DISTRIBUTION
The Fund's portfolio is actively managed and credit quality distribution may change significantly over time. Totals may not equal 100% due to rounding. Ratings (other than U.S. Treasury securities or securities issued or backed by U.S. agencies) provided by Standard & Poor’s, Moody’s, and Fitch. Where the rating agencies rate a security differently. Lord Abbett uses the median, but if there are only two ratings, the lower rating is used. A portion of the portfolio’s securities are not rated. Breakdown is not an S&P credit rating or an opinion of S&P as to the creditworthiness of such portfolio. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. *Source: BofA Merrill Lynch. Please see “Important Performance and Other Information”
Strategic Allocation creates a “quality barbell” around the 1 – 3 year Corporate Index
AS OF 03/31/2016
4.4 3.1
23.1
5.7
11.1
37.6
14.6
0.4 0.0 0.0 1.6
15.6
48.4
34.4
0.0 0.0 0%
10%
20%
30%
40%
50%
60%
U.S. Treasury Agency AAA AA A BBB <BBB Not Rated
% o
f P
ort
folio
Short Duration Income Fund BofA Merrill Lynch 1-3 Year U.S. Corporate Index*
16
PROPRIETARY MODELS
Risk Reporting
Multi-dimensional risk model. Quantifies relative risk exposures by
sector, sub-sector, issuer and issue including interest rates, volatility and
term structure.
Sector
Allocation
Security
Selection
Risk
Management
Sector Allocation Model
Allocation tool based on econometric modeling. Suggests optimal level
and composition of credit exposures with an overlay of qualitative
judgment to determine final allocations.
Credit Valuation Model
Fair value model based on multi-variable curve-fitting analysis of market
data. Identifies securities with attractive option-adjusted spreads to
prompt bottom-up, fundamental analysis.
17
TRUE SHORT DURATION
The strategy has historically maintained a short effective duration and a short spread
duration, limiting both interest rate and credit sensitivity
Past performance is not a reliable indicator or guarantee of future results.
Lord Abbett Short Duration Credit
Effective & Spread Duration Since 12/31/2007
0
1
2
3
4
5
De
c-0
7
Ma
r-0
8
Jun-0
8
Sep-0
8
De
c-0
8
Ma
r-0
9
Jun-0
9
Sep-0
9
De
c-0
9
Ma
r-1
0
Jun-1
0
Sep-1
0
De
c-1
0
Ma
r-1
1
Jun-1
1
Sep-1
1
De
c-1
1
Ma
r-1
2
Jun-1
2
Sep-1
2
De
c-1
2
Ma
r-1
3
Jun-1
3
Sep-1
3
De
c-1
3
Ma
r-1
4
Jun-1
4
Sep-1
4
De
c-1
4
Ma
r-1
5
Jun-1
5
Sep-1
5
De
c-1
5
Ma
r-1
6
Years
Effective Duration Spread Duration
2.2 Years
2.0 Years
18
DURATION DISTRIBUTION
Data as of 03/31/2016. *Source: BofA Merrill Lynch. Past performance is not a reliable indicator or guarantee of future results.
Short Duration Income Fund
BofA Merrill Lynch 1-3 Year U.S. Corporate Index*
Average Effective Duration 2.0 Years 1.9 Years
Average Life 2.5 Years 2.0 Years
Spread Duration 2.2 Years 2.0 Years
26.4
13.8
7.6 9.9 8.6
10.3 7.7
6.3 5.1 3.2
0.9 0.1 0%
10%
20%
30%
0.0-0.5years
0.5-1.0years
1.0-1.5years
1.5-2.0years
2.0-2.5years
2.5-3.0years
3.0-3.5years
3.5-4.0years
4.0-4.5years
4.5-5.0years
5.0-5.5years
5.5-6.0years
EFFECTIVE DURATION
13.8 15.7
9.4 9.3 10.4 11.3
7.7 9.6
7.5 4.5
0.6 0.2 0.0 0%
10%
20%
30%
0.0-0.5years
0.5-1.0years
1.0-1.5years
1.5-2.0years
2.0-2.5years
2.5-3.0years
3.0-3.5years
3.5-4.0years
4.0-4.5years
4.5-5.0years
5.0-5.5years
5.5-6.0years
6.0-6.5years
SPREAD DURATION
19
0.50
1.50
2.50
3.50
4.50
5.50
6.50
7.50
0.50 1.50 2.50 3.50 4.50 5.50 6.50 7.50
Sh
ort
Dura
tio
n In
co
me
Fu
nd
Cla
ss I S
ha
re (
%)
Morningstar Category Average Performance (%)
CONSISTENT RETURNS VS. CATEGORY
Source: Lord Abbett and Morningstar , Inc. Note: Short Duration Income Fund Class A share returns (NAV) vs. Morningstar Short-Term Bond Category Average . Morningstar peer group average returns are based on all share classes within the category and include the reinvested dividends and capital gains, if any, and exclude sales charges. Performance during other time periods may have been different or negative. Due to market volatility the Fund may not perform in a similar manner in the future. The performance data quoted reflect past performance and are no guarantee of 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 the original cost. You can obtain performance data current to the most recent month-end by calling Lord Abbett at 888-522-2388 or referring to lordabbett.com.
EXCESS RETURNS VS. SHORT TERM BOND CATEGORY AVERAGE (ROLLING 3 YEAR RETURNS: 01/01/08 – 03/31/2016)
In 64 Rolling 3-year periods from
2008 – 2016, the strategy has
outperformed the Morningstar Category
Average 100% of the time.
20
AVERAGE ANNUAL RATES OF RETURN (A SHARES)
Performance data quoted reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance 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 referring to lordabbett.com. †The Fund implemented its current investment strategy effective 12/14/2007. The performance of the Fund for periods prior to 12/14/2007 is not representative of the Fund's current investment strategy. The change in investment approach may affect the Fund's performance in the future. *All results are calculated in accordance with the SEC mandated standard methodology, but do not reflect deduction of any front-end sales charges (which are waived for certain defined contribution plans and certain mutual fund advisory programs.) If those charges were deducted, the returns would be lower. All results are based on changes in net asset value and assume reinvestment of all distributions. 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 Average Annual Total Returns. If the CDSC was included, performance would be lower. Please see the Prospectus for more information on redemptions that may be subject to a CDSC. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. Returns for periods of less than one year are not annualized.**Source: BofA Merrill Lynch. ***Source: Lipper Analytical Services. Lipper Funds Averages are based on a universe of funds with similar investment objectives as the Fund. Lipper peer group average returns are based on all share classes within the category and include the reinvested dividends and capital gains, if any, and exclude sales charges. Please see "Important Performance and Other Information."
AS OF 03/31/2016
1.24 0.71
1.45
2.73
4.40 4.52
1.22 1.39 1.55 2.14
3.36 3.73
0.80 0.34
0.67
1.39
2.12 2.57
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1Q 2016 1 Year 3 Years 5 Years Since 12/14/2007† 10 Years
% R
etu
rn
Short Duration Income Fund Class A Shares* BofA Merrill Lynch 1-3 Year U.S. Corporate Index**
Lipper Short Investment Grade Debt Funds Average***
Expense Ratio: 0.60%
21
AVERAGE ANNUAL RATES OF RETURN (I SHARES)
Performance data quoted reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance 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 referring to lordabbett.com. †The Fund implemented its current investment strategy effective 12/14/2007. The performance of the Fund for periods prior to 12/14/2007 is not representative of the Fund's current investment strategy. The change in investment approach may affect the Fund's performance in the future. *Average Annual Total Returns are based on changes in net asset value and assume reinvestment of all distributions and do not reflect deduction of any front-end sales charges which are not applicable for Class I Shares, if these charges were included returns would be lower. Class I Shares are not subject to sales charges and are available only to institutional investors and certain others, including retirement plans. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. Returns for periods of less than one year are not annualized.**Source: BofA Merrill Lynch. ***Source: Lipper Analytical Services. Lipper Funds Averages are based on a universe of funds with similar investment objectives as the Fund. Lipper peer group average returns are based on all share classes within the category and include the reinvested dividends and capital gains, if any, and exclude sales charges. Please see "Important Performance and Other Information."
AS OF 03/31/2016
1.29 0.90
1.64
2.97
4.66 4.80
1.22 1.39 1.55 2.14
3.36 3.73
0.80 0.34
0.67
1.39
2.12 2.57
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1Q 2016 1 Year 3 Years 5 Years Since 12/14/2007† 10 Years
% R
etu
rn
Short Duration Income Fund Class I Shares* BofA Merrill Lynch 1-3 Year U.S. Corporate Index**
Lipper Short Investment Grade Debt Funds Average***
redistributed for any purpose and may only be used for non-commercial, personal purposes. The information contained herein is not represented or warranted to
be accurate, correct, complete or timely. Morningstar, Inc., shall not be responsible for investment decisions, damages, or other losses resulting from the use of
this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an "expert"
Performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the
performance data quoted. The investment return and principal value of an investment in any fund will fluctuate as the prices of the individual securit ies in which
they invest fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Different investments carry different risk.
Index Information: Indexes are unmanaged, do not reflect the deduction of fees or expenses, and an investor cannot invest directly in an index.
A Note About Risk
Short Duration Income Fund: The Fund is subject to the general risks associated with investing in debt securities, including market, credit, liquidity, and interest
rate risk. The value of an investment will change as interest rates fluctuate and in response to market movements. When interest rates fall, the prices of debt
securities tend to rise, and when interest rates rise, the prices of debt securities are likely to decline. Debt securities are subject to credit risk, which is the risk that
the issuer will fail to make timely payments of interest and principal to the Fund. The Fund may invest in high yield, lower-rated debt securities, sometimes called
junk bonds and may involve greater risks than higher rated debt securities. These securities carry increased risks of price volatility, illiquidity, and the possibility of
default in the timely payment of interest and principal. The Fund may invest in foreign or emerging market securities, which may be adversely affected by
economic, political, or regulatory factors and subject to currency volatility and greater liquidity risk. The Fund may invest in derivatives, which are subject to
greater liquidity, leverage, and counterparty risk. These factors can affect Fund performance.
24
IMPORTANT PERFORMANCE AND OTHER INFORMATION
Investors should carefully consider the investment objectives, risks, charges, and expenses of
the Lord Abbett Funds. This and other important information is contained in the fund’s summary
prospectus and/or prospectus. To obtain a prospectus or summary prospectus on any Lord
Abbett mutual fund, contact your investment professional, Lord Abbett Distributor LLC at (888)
522-2388 or visit us at lordabbett.com. Read the prospectus carefully before you invest.
Mutual funds are not insured by the FDIC, are not deposits or other obligations of, or guaranteed
by banks, and are subject to investment risks including possible loss of principal amount
invested. Lord Abbett Distributor LLC is the principal underwriter of the Lord Abbett Mutual