Lord Abbett
U.S. Government & Government
Sponsored Enterprises Money Market
Fund
PROSPECTUS
NOVEMBER 1, 2024
CLASS
TICKER
A ..............
LACXX
C ..............
LCCXX
I ...............
LAYXX
The U.S. Securities and Exchange Commission has not approved or disapproved of these
securities or determined whether this prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.
INVESTMENT PRODUCTS: NOT FDIC INSURED–NO BANK GUARANTEE–MAY LOSE VALUE
TABLE OF CONTENTS
FUND SUMMARY
Investment Objective
2
Fees and Expenses
2
Principal Investment Strategies
3
Principal Risks
4
Performance
5
Management
7
Purchase and Sale of Fund Shares
7
Tax Information
8
Payments to Broker-Dealers and Other Financial Intermediaries
8
MORE INFORMATION ABOUT THE FUND
Investment Objective
9
Principal Investment Strategies
9
Principal Risks
10
Additional Information About Non-Principal Investment Strategies and Operational
Risks
12
Disclosure of Portfolio Holdings
17
Management and Organization of the Fund
18
INFORMATION FOR MANAGING YOUR FUND ACCOUNT
Choosing a Share Class
19
Sales Charges
21
Sales Charge Waivers
22
Financial Intermediary Compensation
23
Purchases
26
Exchanges
28
Redemptions
29
Account Services and Policies
32
Distributions and Taxes
36
FINANCIAL INFORMATION
Financial Highlights
38
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
2
FUND SUMMARY
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek high current income and
preservation of capital through investments in high quality, short-term, liquid
securities. These securities are commonly known as money market instruments.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Shareholder Fees
(1)
(Fees paid directly from your investment)
Class
A and C
I
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
None
(2)
None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption
proceeds, whichever is lower)
None
(3)
None
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
Class
A
C
I
Management Fees
0.15%
0.15%
0.15%
Distribution and Service (12b-1) Fees
None
None
None
Other Expenses
0.13%
0.13%
0.13%
Total Annual Fund Operating Expenses
0.28%
0.28%
0.28%
(1)
A shareholder transacting in share classes without a front-end sales charge may be required to pay a commission to its
financial intermediary. Please contact your financial intermediary for more information about whether such a commission
may apply to your transaction.
(2)
Class A or C shares purchased directly are not subject to any front-end sales charge. However, Class A or C shares
initially purchased without a front-end sales charge and subsequently exchanged for shares of another Lord Abbett Fund
are subject to any applicable front-end sales charge.
(3)
Class A or C shares purchased directly are not subject to any contingent deferred sales charge (“CDSC”). However,
Class A or C shares of the Fund that were obtained in exchange for Class A or C shares of another Lord Abbett Fund that
were subject to a CDSC of 1.00% at the time of exchange are subject to a CDSC unless the one-year CDSC period has
expired or a CDSC waiver applies. More information about the CDSC is provided in the "Sales Charges" section of the
prospectus.
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
3
Example
This Example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other mutual funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then redeem all of your shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund’s operating expenses remain the same. Class
C shares automatically convert to Class A shares after eight years. The expense
example for Class C shares for the ten year period reflects the conversion to Class A
shares. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
Class
1 Year
3 Years
5 Years
10 Years
Class A Shares
$
29
$
90
$
157
$
356
Class C Shares
$
29
$
90
$
157
$
356
Class I Shares
$
29
$
90
$
157
$
356
PRINCIPAL INVESTMENT STRATEGIES
The Fund is a money market fund that attempts to manage its portfolio to maintain a
stable share price of $1.00 in accordance with applicable rules of the U.S. Securities
and Exchange Commission (“SEC”). The Fund has adopted a policy to invest 99.5%
or more of its total assets in cash, U.S. Government securities, and/or repurchase
agreements that are collateralized fully (
i.e.,
collateralized by cash and/or U.S.
Government securities) in order to qualify as a “government money market fund”
under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940
Act”).
In addition, under normal conditions, the Fund invests at least 80% of its net assets,
plus the amount of any borrowings for investment purposes, in U.S. Government
securities and/or repurchase agreements that are collateralized by U.S. Government
securities. For purposes of these policies, “U.S. Government securities” include
securities issued or guaranteed as to principal or interest by the U.S. Government, or
by agencies or instrumentalities of the U.S. Government (collectively, “government
sponsored enterprises”).
The Fund’s investments in U.S. Government securities may include those backed by
the full faith and credit of the U.S. Government, which include direct obligations of
the U.S. Treasury (
e.g.
, U.S. Treasury bills, notes and bonds) and securities issued
by certain government sponsored enterprises such as the Government National
Mortgage Association (“Ginnie Mae”). The U.S. Government securities in which the
Fund invests also may include securities issued by government sponsored
enterprises, that are sponsored or chartered by Congress but whose securities are not
guaranteed by the U.S. Treasury or backed by the full faith and credit of the U.S.
Government. These government sponsored enterprises include, but are not limited
to, the Federal Home Loan Banks (“FHLBanks”), Federal National Mortgage
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
4
Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie
Mac”), and Federal Farm Credit Banks Funding Corporation (“Federal Farm Credit
Banks”).
The Fund may invest a substantial portion of its assets in securities issued by these
government sponsored enterprises.
The Fund, like all other money market funds, is subject to the diversification,
liquidity, credit quality, maturity, and other requirements of Rule 2a-7 under the
1940 Act.
The Fund seeks to remain fully invested in accordance with its investment objective.
In response to adverse economic, market, or other unfavorable conditions, or to meet
regulatorily-imposed liquidity requirements, however, the Fund may temporarily
invest its assets in cash in a defensive manner. The Fund also may increase its
investments in cash in unusual circumstances, such as unusually large cash inflows
(whether through the purchase of Fund shares or the sale of securities) or anticipated
increases in redemptions. Although the Fund seeks to be fully invested, to the extent
that the Fund invests in cash, the Fund may not achieve its investment objective.
The Fund may sell a security to satisfy redemption requests, increase cash, or for a
variety of other reasons, such as when the Fund believes the security seems less
likely to benefit from the current market and economic environment, shows signs of
deteriorating fundamentals, or when selling the security is required to comply with
SEC requirements regarding the quality, maturity, duration, and diversification of
the Fund’s portfolio.
PRINCIPAL RISKS
As with any investment in a mutual fund, investing in the Fund involves risk. While
the Fund seeks to preserve capital by investing in high quality, short-term, liquid
securities, the value of such securities will fluctuate in response to economic
conditions and market movements.
In addition to the risks of overall market movements and risks that are specific to an
individual security, the principal risks of investing in the Fund, which could
adversely affect its performance, include:
•
Interest Rate Risk
: A rise in prevailing interest rates generally will cause the
price of a fixed rate debt security to fall. Generally, the longer the maturity of a
security or weighted average maturity of the Fund, the more sensitive its price is
to a rise in interest rates. The Fund’s yield may vary in response to changes in
interest rates and other market factors. A wide variety of market factors can
cause interest rates to rise, including central bank monetary policy, rising
inflation, and changes in general economic conditions.
•
Credit Risk:
Many securities in which the Fund invests are not supported by
the full faith and credit of the U.S. Government, even though they are issued by
government sponsored enterprises. There can be no assurance that the U.S.
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
5
Government will provide financial support to government sponsored enterprises
if it is not legally required to do so. In these situations, the Fund is exposed to
the credit risk of the issuing government sponsored enterprise, which may fail to
make timely payments of principal or interest, or may default on such payments.
•
Mortgage-Related Securities Risk:
Mortgage-related securities issued by
government sponsored enterprises may be particularly sensitive to changes in
prevailing interest rates and economic conditions, including delinquencies and
defaults. The prices of mortgage-related securities, depending on their structure
and the rate of payments, can be volatile. They are subject to prepayment risk
(higher than expected prepayment rates of mortgage obligations due to a fall in
market interest rates) and extension risk (lower than expected prepayment rates
of mortgage obligations due to a rise in market interest rates). These risks
increase the Fund’s overall interest rate risk. Some mortgage-related securities
receive government or private support, but there is no assurance that such
support will remain in place.
•
Issuer Concentration Risk:
Because the Fund may invest most of its assets in
securities issued or guaranteed by a small number of government sponsored
enterprises that are not backed by the full faith and credit of the U.S.
Government, it may be more exposed to developments affecting an individual
government sponsored enterprise than a fund that invests more widely.
•
Repurchase Agreement Risk:
If the other party to a repurchase agreement
defaults on its obligation under the agreement, the Fund may suffer delays and
incur costs or lose money in exercising its rights under the agreement, or may be
prevented from exercising such rights. If the seller fails to repurchase the
security and the market value of the security declines, the Fund will lose money.
•
Portfolio Management Risk:
If the strategies used and investments selected by
the Fund’s portfolio management team fail to produce the intended result, the
Fund may suffer losses or underperform other funds with the same investment
objective or strategies, even in a favorable market.
You could lose money by investing in the Fund. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it cannot guarantee it will
do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation (“FDIC”) or any other government agency. The Fund’s
sponsor is not required to reimburse the Fund for losses, and you should not expect
that the sponsor will provide financial support to the Fund at any time, including
during periods of market stress.
For more information on the principal risks of the Fund, please see the ‘‘More
Information About the Fund – Principal Risks’’ section in the prospectus.
PERFORMANCE
The bar chart and table below provide some indication of the risks of investing in the
Fund by illustrating the variability of the Fund’s returns. The performance
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
6
information reflects the impact of the Fund’s voluntary expense limitation in effect
during a portion of the periods shown. If Lord Abbett had not agreed to limit
expenses, returns would have been lower. Each assumes reinvestment of dividends
and distributions. The Fund’s past performance is not necessarily an indication of
how the Fund will perform in the future.
The bar chart shows changes in the performance of the Fund’s Class A shares from
calendar year to calendar year. Performance for the Fund’s other share classes will
vary due to the different expenses each class bears. Updated performance
information is available at www.lordabbett.com or by calling 888-522-2388.
Bar Chart (per calendar year) - Class A Shares*
+
0
.
0
2
%
+
0
.
0
2
%
+
0
.
0
2
%
+
0
.
2
3
%
+
1
.
1
4
%
+
1
.
8
0
%
+
0
.
2
4
%
+
0
.
0
6
%
+
1
.
3
5
%
+
4
.
8
4
%
1
4
1
5
1
6
1
7
1
8
1
9
2
0
2
1
2
2
2
3
Best
Quarter
4th
Q
2023
+1.30%
Worst
Quarter
2nd
Q
2021
+0.00%
*
The
year-to-date
return
for
Class
A
shares
as
of
September
30,
2024
was
3.83%.
For the Fund’s current 7-day yield, call toll-free 888-522-2388. The table below
shows the Fund’s Class A, C, and I shares performance over time. The Fund’s
average annual total returns include applicable sales charges.
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
7
Average Annual Total Returns
(for the periods ended December 31, 2023)
Class
1 Year
5 Years
10 Years
Class A Shares
4.84%
1.64%
0.96%
Class C Shares
(1)
4.83%
1.64%
0.96%
Class I Shares
4.82%
1.64%
0.96%
Lipper Average
Lipper U.S. Government Money Market Funds Average
(reflects no deduction for fees, expenses, or taxes)
4.81%
1.65%
1.03%
(1)
Class C shares convert to Class A shares eight years after purchase. Class C share performance does not reflect the
impact of such conversion to Class A shares.
MANAGEMENT
Investment Adviser.
The Fund’s investment adviser is Lord, Abbett & Co. LLC
(“Lord Abbett”).
PURCHASE AND SALE OF FUND SHARES
The minimum initial and additional amounts shown below vary depending on the
class of shares you buy and the type of account. Certain financial intermediaries may
impose different restrictions than those described below. Class I shares are only
available for purchase by Lord Abbett and its affiliates, including Lord Abbett
sponsored employee benefit plans. See ‘‘Choosing a Share Class – Investment
Minimums’’ in the prospectus for more information.
Investment Minimums — Initial/Additional Investments
Class
A and C
I
General and IRAs without
Invest-A-Matic Investments
Initial: $1,000
Additional: No minimum
N/A
Invest-A-Matic Accounts
(1)
Initial: $250
Additional: $50
N/A
IRAs, SIMPLE and SEP
Accounts with Payroll
Deductions
No minimum
N/A
(1)
There is no minimum initial investment for Invest-A-Matic accounts held directly with the Fund, including Individual
Retirement Accounts (“IRAs”).
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
8
Initial Investment Minimums — by Exchange or Dividend Reinvestment
Class
A and C
Regular Account
$1,000
IRAs
$250
You may sell (redeem) shares through your securities broker, financial professional
or financial intermediary on any business day the Fund calculates its net asset value
(‘‘NAV’’). If you have direct account access privileges, you may redeem your shares
by contacting the Fund in writing at Lord Abbett Funds Service Center, P.O. Box
534489, Pittsburgh, PA 15253-4489 (regular mail) or Attention: 534489, 500 Ross
Street 154-0520, Pittsburgh, PA 15262 (overnight mail), by calling 888-522-2388 or
by accessing your account online at www.lordabbett.com.
TAX INFORMATION
The Fund’s distributions, if any, generally are taxable to you as ordinary income,
unless you are a tax-exempt investor or investing through a tax-advantaged
arrangement, such as a 401(k) plan or an IRA. Any withdrawals from such a tax-
advantaged arrangement may be taxable to you.
PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL
INTERMEDIARIES
If you purchase Fund shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and the Fund’s distributor or its affiliates may pay the
intermediary for the sale of Fund shares and related services. These payments may
create a conflict of interest by influencing the broker-dealer or other financial
intermediary and your individual financial professional to recommend the Fund over
another investment. Ask your individual financial professional or visit your financial
intermediary’s website for more information.
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
9
MORE INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek high current income and
preservation of capital through investments in high quality, short-term, liquid
securities. These securities are commonly known as money market instruments.
PRINCIPAL INVESTMENT STRATEGIES
The Fund is a money market fund that attempts to manage its portfolio to maintain a
stable share price of $1.00 in accordance with applicable rules of the SEC. The Fund
has adopted a policy to invest 99.5% or more of its total assets in cash, U.S.
Government securities, and/or repurchase agreements that are collateralized fully
(
i.e.,
collateralized by cash and/or U.S. Government securities) in order to qualify as
a ‘‘government money market fund’’ under Rule 2a-7 under the 1940 Act.
In addition, under normal conditions, the Fund invests at least 80% of its net assets,
plus the amount of any borrowings for investment purposes, in U.S. Government
securities and/or repurchase agreements that are collateralized by U.S. Government
securities.
The Fund will provide shareholders with at least 60 days’ notice of any change in
this policy. In contrast to the Fund’s 99.5% policy, the Fund’s 80% policy does not
include cash or repurchase agreements collateralized by cash. For purposes of these
policies, “U.S. Government securities” include securities issued or guaranteed as to
principal or interest by the U.S. Government or by government sponsored
enterprises.
The Fund’s investments in U.S. Government securities may include those backed by
the full faith and credit of the U.S. Government, which include direct obligations of
the U.S. Treasury (e.g., U.S. Treasury bills, notes, and bonds) and securities issued
by certain government sponsored enterprises such as Ginnie Mae. The U.S.
Government securities in which the Fund invests also may include securities issued
by other government sponsored enterprises that are sponsored or chartered by
Congress but whose securities are not guaranteed by the U.S. Treasury or backed by
the full faith and credit of the U.S. Government. These government sponsored
enterprises include, but are not limited to, the FHLBanks, Fannie Mae, Freddie Mac,
and the Federal Farm Credit Banks. The Fund may invest a substantial portion of its
assets in securities issued by these government sponsored enterprises.
The Fund, like all other money market funds, is subject to the diversification,
liquidity, credit quality, maturity, and other requirements of Rule 2a-7 under the
1940 Act.
As a ‘‘government money market fund’’ under Rule 2a-7, the Fund will (1) be
permitted to use the amortized cost method of valuation to seek to maintain a $1.00
share price and (2) not be subject to discretionary or mandatory liquidity fees on
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
10
Fund redemptions which might apply to other types of money market funds should
certain triggering events specified in Rule 2a-7 occur. The Board has reserved its
ability to change this policy with respect to discretionary liquidity fees, but such
change would only become effective after the Fund's disclosure has been updated to
reflect its new policy.
The Fund seeks to remain fully invested in accordance with its investment objective.
In response to adverse economic, market, or other unfavorable conditions, or to meet
regulatorily-imposed liquidity requirements, however, the Fund may temporarily
invest its assets in cash in a defensive manner. The Fund also may increase its
investments in cash in unusual circumstances, such as unusually large cash inflows
(whether through the purchase of Fund shares or the sale of securities) or anticipated
increases in redemptions. Although the Fund seeks to be fully invested, to the extent
that the Fund invests in cash, the Fund may not achieve its investment objective.
The Fund may sell a security if it no longer meets the Fund’s investment criteria or
for a variety of other reasons, such as to comply with SEC requirements regarding
the quality, maturity, duration, and diversification of the Fund’s portfolio, to secure
gains, limit losses, increase cash, or satisfy redemption requests, among others. 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 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.
Lord Abbett is registered with the U.S. Commodity Futures Trading Commission as
a commodity pool operator (“CPO”) under the Commodity Exchange Act (“CEA”).
However, with respect to the Fund, Lord Abbett has filed a claim of exclusion from
the definition of the term CPO and therefore, Lord Abbett is not subject to
registration or regulation as a pool operator under the CEA with respect to the Fund.
PRINCIPAL RISKS
In addition to the risks of overall market movements and risks that are specific to an
individual security, the principal risks you assume when investing in the Fund are
described below. The Fund attempts to manage these risks through careful security
selection and continual portfolio review and analysis, but there can be no assurance
or guarantee that these strategies will be successful in reducing risk. Please see the
statement of additional information (‘‘SAI’’) for a further discussion of strategies
employed by the Fund and the risks associated with an investment in the Fund.
•
Interest Rate Risk
: A rise in prevailing interest rates generally will cause the
price of a fixed rate debt security to fall. Generally, the longer the maturity of a
security or weighted average maturity of the Fund, the more sensitive its price is
to a rise in interest rates. The Fund’s yield may vary in response to changes in
interest rates, monetary policy and other market factors. During periods when
the Fund holds low-yielding securities, the Fund may have little or no net
investment income and the Fund’s yield may decline substantially. A wide
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
11
variety of market factors can cause interest rates to rise, including central bank
monetary policy, rising inflation, and changes in general economic conditions.
Periods of low interest rates increase the exposure of bond investors to the risks
associated with rising interest rates.
•
Credit Risk:
Many securities in which the Fund invests are not supported by
the full faith and credit of the U.S. Government, even though they are issued by
government sponsored enterprises. This means that the U.S. Government is not
legally required to pay principal and interest to the Fund when these securities
mature. For example, Ginnie Mae securities are backed by the full faith and
credit of the U.S. Government, while Fannie Mae, Freddie Mac, Farmer Mac,
FHLBank, and Federal Farm Credit Banks securities are not. There can be no
assurance that the U.S. Government will provide financial support to
government sponsored enterprises if it is not legally required to do so. In these
situations, the Fund is exposed to the credit risk of the issuing government
sponsored enterprise, which may fail to make timely payments of principal or
interest, or may default on such payments.
•
Mortgage-Related Securities Risk:
Mortgage-related securities issued by
government sponsored enterprises may be particularly sensitive to changes in
prevailing interest rates and economic conditions, including delinquencies and
defaults. The prices of mortgage-related securities, depending on their structure
and the rate of payments, can be volatile. Like other debt securities, when
interest rates rise, the value of mortgage-related securities generally will decline;
however, when interest rates are declining, the value of mortgage- related
securities with prepayment features may not increase as much as other fixed
income securities. Alternatively, rising interest rates may cause prepayments to
occur at a slower-than-expected rate, extending the duration of a security and
typically reducing its value. Early repayment of principal on some mortgage-
related securities may deprive the Fund of income payments above current
market rates. The payment rate thus will affect the price and volatility of a
mortgage-related security. The value of some mortgage-related securities may
fluctuate in response to the market’s perception of the creditworthiness of the
government sponsored enterprises that issue them.
•
Issuer Concentration Risk:
Because the Fund may invest most of its assets in
securities issued or guaranteed by a small number of government sponsored
enterprises that are not backed by the full faith and credit of the U.S.
Government, it may be more exposed to developments affecting an individual
government sponsored enterprise than a fund that invests more widely.
•
Repurchase Agreement Risk:
If the other party to a repurchase agreement
defaults on its obligation under the agreement, the Fund may suffer delays and
incur costs or lose money in exercising its rights under the agreement, or may be
prevented from exercising such rights. If the seller fails to repurchase the
security and the market value of the security declines, the Fund will lose money.
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
12
•
Money Market Fund Regulatory Risk
: Money market funds and the securities
they invest in are subject to comprehensive regulations. The enactment of new
legislation or regulations, as well as changes in interpretation and enforcement
of current laws, may affect the manner of operation, performance, yield,
expenses and/or continued viability of money market funds. The SEC has
adopted amendments to money market fund regulation that, as applicable to
government money market funds (including the Fund), increase the minimum
daily and weekly liquid asset requirements, permit government money market
funds to impose discretionary liquidity fees, and permit government money
market funds to engage in certain practices in order to seek to maintain a stable
net asset value per share in a negative interest rate environment, among other
changes. There can be no assurance that these changes will not adversely impact
the Fund and its shareholders, including by resulting in lower yields for the
Fund.
•
Portfolio Management Risk:
The strategies used and investments selected by
the Fund’s portfolio management team may fail to produce the intended result
and the Fund may not achieve its objective. The securities selected for the Fund
may not perform as well as other securities that were not selected for the Fund.
As a result, the Fund may suffer losses or underperform other funds with the
same investment objective or strategies, and may generate losses even in a
favorable market.
You could lose money by investing in the Fund. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it cannot guarantee it will
do so. An investment in the Fund is not insured or guaranteed by the FDIC or any
other government agency. The Fund’s sponsor is not required to reimburse the Fund
for losses, and you should not expect that the sponsor will provide financial support
to the Fund at any time, including during periods of market stress.
ADDITIONAL INFORMATION ABOUT INVESTMENT AND
OPERATIONAL RISKS
In addition to the principal investment risks described above, the Fund may also be
subject to other investment and operational risks, including:
•
Cyber Security Risk:
As the use of technology has become more prevalent in
the course of business, Lord Abbett and other service providers have become
more susceptible to operational and information security risks. Cyber incidents
can result from deliberate attacks or unintentional events and include, but are
not limited to, gaining unauthorized access to electronic systems for purposes of
misappropriating assets, personally identifiable information (“PII”) or
proprietary information (
e.g.
, trading models and algorithms), corrupting data,
or causing operational disruption, for example, by compromising trading
systems or accounting platforms. Other ways in which the business operations
of Lord Abbett, other service providers, or issuers of securities in which Lord
Abbett invests a shareholder’s assets may be impacted include interference with
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
13
a shareholder’s ability to value its portfolio, the unauthorized release of PII or
confidential information, and violations of applicable privacy, recordkeeping
and other laws. A shareholder and/or its account could be negatively impacted
as a result.
While Lord Abbett has established internal risk management security protocols
designed to identify, protect against, detect, respond to and recover from cyber
security incidents, there are inherent limitations in such protocols including the
possibility that certain threats and vulnerabilities have not been identified or
made public due to the evolving nature of cyber security threats. Furthermore,
Lord Abbett cannot control the cyber security systems of third-party service
providers or issuers. Any problems relating to the performance and effectiveness
of security procedures used by the Fund or its service providers to protect the
Fund’s assets, such as algorithms, codes, passwords, multiple signature systems,
encryption and telephone call-backs, may have an adverse impact on the Fund
or its investors. Furthermore, as the Fund’s assets grow, it may become a more
appealing target for cybersecurity threats such as hackers and malware.
Geopolitical tensions could increase the scale and sophistication of deliberate
cybersecurity attacks, particularly those from nation-states or from entities with
nation-state backing. There currently is no insurance policy available to cover
all of the potential risks associated with cyber incidents. Unless specifically
agreed by Lord Abbett separately or required by law, Lord Abbett is not a
guarantor against, or obligor for, any damages resulting from a cyber security-
related incident.
•
Artificial Intelligence Risk:
Lord Abbett may utilize AI in its business
operations, and the challenges with properly managing its use could result in
reputational harm, competitive harm, and legal liability, and/or an adverse effect
on Lord Abbett’s business operations. If the content, analyses, or
recommendations that AI applications assist Lord Abbett in producing are or are
alleged to be deficient, inaccurate, or biased, the Fund may be adversely
affected. Additionally, AI tools used by Lord Abbett may produce inaccurate,
misleading or incomplete responses that could lead to errors in Lord Abbett’s
and its employees’ decision-making, portfolio management or other business
activities, which could have a negative impact on the performance of the Fund.
Such AI tools could also be used against Lord Abbett or the Fund and its
investments in criminal or negligent ways. Lord Abbett’s competitors or other
third parties could incorporate AI into their products more quickly or more
successfully, which could impair Lord Abbett’s ability to compete effectively.
Legal and regulatory changes, particularly related to information privacy and
data protection, may have an impact on AI, and may additionally impact Lord
Abbett and the Fund.
•
Large Shareholder Risk:
To the extent a large number of shares of the Fund is
held by a single shareholder or group of related shareholders (
e.g.
, an
institutional investor, another Lord Abbett Fund or multiple accounts advised by
a common adviser) or a group of shareholders with a common investment
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
14
strategy, the Fund is subject to the risk that a redemption by those shareholders
of all or a large portion of their Fund shares will adversely affect the Fund’s
performance by forcing the Fund to sell portfolio securities, potentially at
disadvantageous prices, to raise the cash needed to satisfy the redemption
request. In addition, the funds and other accounts over which Lord Abbett has
investment discretion that invest in the Fund may not be limited in how often
they may purchase or sell Fund shares. Certain Lord Abbett Funds or accounts
may hold substantial percentages of the shares of the Fund, and asset allocation
decisions by Lord Abbett may result in substantial redemptions from (or
investments in) the Fund. These transactions may adversely affect the Fund’s
performance to the extent that the Fund is required to sell investments (or invest
cash) when it would not otherwise do so. Redemptions of a large number of
shares also may increase transaction costs or, by necessitating a sale of portfolio
securities, have adverse tax consequences for Fund shareholders. Additionally,
redemptions by a large shareholder also potentially limit the use of any capital
loss carryforwards and other losses to offset future realized capital gains (if any)
and may limit or prevent the Fund’s use of tax equalization.
•
Operational Risk:
The Fund also is subject to the risk of loss as a result of
other services provided by Lord Abbett and other service providers, including
pricing, administrative, accounting, tax, legal, custody, transfer agency, and
other services. Operational risk includes the possibility of loss caused by
inadequate procedures and controls, human error, and system failures by a
service provider, each of which may negatively affect the Fund’s performance.
For example, trading delays or errors could prevent the Fund from benefiting
from potential investment gains or avoiding losses. In addition, a service
provider may be unable to provide an NAV for the Fund or share class on a
timely basis. Similar types of operational risks also are present for issuers of
securities in which the Fund invests, which could result in material adverse
consequences for such issuers, and may cause the Fund’s investment in such
securities to lose value.
•
Business Continuity Risk:
Lord Abbett has developed a Business Continuity
Program (the “Program”) that is designed to minimize the disruption of normal
business operations in the event of an adverse incident impacting Lord Abbett,
its affiliates, or the Fund. While Lord Abbett believes that the Program should
enable it to reestablish normal business operations in a timely manner in the
event of an adverse incident, there are inherent limitations in such programs
(including the possibility that contingencies have not been anticipated and
procedures do not work as intended) and, under some circumstances, Lord
Abbett, its affiliates, and any vendors used by Lord Abbett, its affiliates, or the
Fund could be prevented or hindered from providing services to the Fund for
extended periods of time. These circumstances may include, without limitation,
acts of God, acts of governments, any act of declared or undeclared war or of a
public enemy (including acts of terrorism), power shortages or failures, utility or
communication failure or delays, labor disputes, strikes, shortages, supply
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
15
shortages, system failures or malfunctions. The Fund’s ability to recover any
losses or expenses it incurs as a result of a disruption of business operations may
be limited by the liability, standard of care, and related provisions in its
contractual arrangements with Lord Abbett and other service providers.
•
Market Disruption and Geopolitical Risk:
Geopolitical and other events (e.g.,
wars, terrorism, natural disasters, infectious illness outbreaks, epidemics or
pandemics) may disrupt securities markets and adversely affect global
economies and markets, thereby decreasing the value of the Fund’s investments.
Sudden or significant changes in the supply or prices of commodities or other
economic inputs may have material and unexpected effects on both global
securities markets and individual countries, regions, sectors, companies, or
industries, which could significantly reduce the value of the Fund’s investments.
Wars, terrorist attacks, natural disasters, infectious illness outbreaks, epidemics
or pandemics could result in unplanned or significant securities market closures
or declines. Securities markets also may be susceptible to market manipulation
or other fraudulent trading practices, which could disrupt the orderly functioning
of markets, increase overall market volatility, or reduce the value of investments
traded in them, including investments of the Fund. Instances of fraud and other
deceptive practices committed by senior management of certain companies in
which the Fund invests may undermine Lord Abbett’s due diligence efforts with
respect to such companies, and if such fraud is discovered, negatively affect the
value of the Fund’s investments. Financial fraud also may impact the rates or
indices underlying the Fund’s investments.
Raising the U.S. Government debt ceiling has become increasingly politicized.
Any failure to increase the total amount that the U.S. Government is authorized
to borrow could lead to a default on U.S. Government obligations. A default by
the U.S. Government would be highly disruptive to the U.S. and global
securities markets and could significantly reduce the value of the Fund’s
investments. Similarly, political events within the United States at times have
resulted, and may in the future result, in a shutdown of government services,
which could adversely affect the U.S. economy, decrease the value of many
Fund investments, and increase uncertainty in or impair the operation of the
U.S. or other securities markets.
On January 31, 2020, the United Kingdom (“UK”) left the European Union
(“EU”) (commonly known as “Brexit”). An agreement between the UK and the
EU governing their future trade relationship became effective on January 1,
2021, but critical aspects of the relationship remain unresolved and subject to
further negotiation and agreement. Brexit has resulted in volatility in European
and global markets and could have negative long-term impacts on financial
markets in the UK and throughout Europe. There is still considerable
uncertainty relating to the potential consequences of the exit, how the
negotiations for new trade agreements will be conducted, and whether the UK’s
exit will increase the likelihood of other countries also departing the EU. Any
further exits from the EU, or the possibility of such exits, or the abandonment of
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
16
the euro, the common currency of the EU, may cause additional market
disruption globally and introduce new legal and regulatory uncertainties.
Substantial government interventions (e.g., currency controls) also could
adversely affect the Fund. War, terrorism, economic uncertainty, and related
geopolitical events have led, and in the future may lead, to increased short-term
market volatility and may have adverse long-term effects on U.S. and world
economies and markets generally. Likewise, sanctions threatened or imposed by
jurisdictions, including the United States, against a country or entities or
individuals in another country (such as sanctions imposed against Russia,
Russian entities and Russian individuals in connection with Russia’s invasion of
Ukraine in 2022) may impair the value and liquidity of securities issued by
issuers in such country and may result in the Fund using fair valuation
procedures to value such securities. Even if the Fund does not have significant
investments in securities affected by sanctions, sanctions, or the threat of
sanctions (including any retaliatory responses to such sanctions), may cause
volatility in regional and global markets and may negatively impact the
performance of various sectors and industries, as well as companies in other
countries, including through global supply chain disruptions, increased
inflationary pressures and reduced economic activity, which could have a
negative effect on the performance of the Fund. Furthermore, if after investing
in the Fund an investor is included on a sanctions list, the Fund may be required
to cease any further dealings with the investor’s interest in the Fund until such
sanctions are lifted or a license is sought under applicable law to continue
dealings. Although Lord Abbett expends significant effort to comply with the
sanctions regimes in the countries where it operates, one of these rules could be
violated by Lord Abbett’s or the Fund's activities or investors, which would
adversely affect the Fund.
In addition, natural and environmental disasters, (e.g., earthquakes, tsunamis,
hurricanes), infectious illness outbreaks, epidemics or pandemics, and systemic
market dislocations such as those occurring in connection with the 2008 Global
Financial Crisis, have been highly disruptive to economies and markets,
adversely affecting individual companies and industries, securities markets,
interest rates, credit ratings, inflation, investor sentiment, and other factors
affecting the value of the Fund’s investments. During such market disruptions,
the Fund’s exposure to the risks described elsewhere in the “Principal Risks”
section of the prospectus will likely increase. Market disruptions and sudden
government interventions can also prevent the Fund from implementing its
investment strategies and achieving its investment objective. To the extent the
Fund has focused its investments in the stock index of a particular region,
adverse geopolitical and other events in that region could have a
disproportionate impact on the Fund.
Adverse developments that affect financial institutions or the financial services
industry generally, or concerns or rumors about any events of these kinds or
other similar risks, may reduce liquidity in the market generally or have other
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
17
adverse effects on the economy, the Fund or issuers in which the Fund invests.
In addition, issuers in which the Fund invests and the Fund may not be able to
identify all potential solvency or stress concerns with respect to a financial
institution or to transfer assets from one bank or financial institution to another
in a timely manner in the event such bank or financial institution comes under
stress or fails.
The impacts and effects of infectious illness outbreaks, epidemics or pandemics
(such as the COVID-19 outbreak), may be short term or may continue for an
extended period of time. For example, a global pandemic or other widespread
health crises could negatively affect the global economy, the economies of
individual countries, and the financial performance of individual issuers, sectors,
industries, asset classes, and markets in significant and unforeseen ways. Health
crises caused by outbreaks of disease may also exacerbate other pre-existing
political, social, and economic risks in certain countries or globally. The
foregoing could disrupt the operations of the Fund and its service providers,
adversely affect the value and liquidity of the Fund’s investments, and
negatively impact the Fund’s performance and your investment in the Fund.
Advancements in technology may also adversely impact markets and the overall
performance of the Fund. For instance, the economy may be significantly
impacted by the advanced development and increased regulation of technology.
As the use of technology grows, liquidity and market movements may be
affected. As technology is used more widely in the asset management industry,
the profitability and growth of Fund holdings may be impacted, which could
significantly impact the overall performance of the Fund.
•
Valuation Risk:
The valuation of the Fund’s investments involves subjective
judgment. There can be no assurance that the Fund will value its investments in
a manner that accurately reflects their current market values or that the Fund
will be able to sell any investment at a price equal to the valuation ascribed to
that investment for purposes of calculating the Fund’s NAV. Incorrect
valuations of the Fund’s portfolio holdings could result in the Fund’s
shareholder transactions being effected at an NAV that does not accurately
reflect the underlying value of the Fund’s portfolio, resulting in the dilution of
shareholder interests.
DISCLOSURE OF PORTFOLIO HOLDINGS
A description of the Fund’s policies and procedures regarding the disclosure of the
Fund’s portfolio holdings is available in the SAI. Further information is available at
www.lordabbett.com.
The Fund will disclose on Lord Abbett’s website, within five business days after the
end of each month, a schedule of portfolio holdings and information regarding the
Fund. This information will be posted at www.lordabbett.com. In addition, the Fund
will file with the SEC on Form N-MFP, within five business days after the end of
each month, more detailed portfolio holdings information. The Fund’s Forms
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
18
N-MFP will be available on the SEC’s website and Lord Abbett’s website also will
contain a link to these filings, when available. Lord Abbett’s website also will
disclose the following information for the Fund as of the end of each business day
for the previous six months: (1) the percentage of the Fund’s total assets invested in
daily and weekly liquid assets; (2) the Fund’s daily net inflows and outflows; and
(3) the Fund’s current market-based NAV per share.
MANAGEMENT AND ORGANIZATION OF THE FUND
Board of Directors.
The Board oversees the management of the business and affairs
of the Fund. The Board appoints officers who are responsible for the day-to-day
operations of the Fund and who execute policies authorized by the Board. At least 75
percent of the Board members are not “interested persons” (as defined in the 1940
Act) of the Fund.
Investment Adviser.
The Fund’s investment adviser is Lord Abbett, which is
located at 30 Hudson Street, Jersey City, NJ 07302-4804. Founded in 1929, Lord
Abbett manages one of the nation’s oldest mutual fund complexes and manages
approximately $213.5 billion in assets across a full range of mutual funds,
institutional accounts, and separately managed accounts, including $1.3 billion for
which Lord Abbett provides investment models to managed account sponsors as of
September 30, 2024.
Management Fee
. Lord Abbett is entitled to a management fee of 0.15% based on
the Fund’s average daily net assets.
For the fiscal year ended June 30, 2024, the effective annual rate of the management
fee paid to Lord Abbett was 0.15% of the Fund’s average daily net assets.
In addition, Lord Abbett provides certain administrative services to the Fund
pursuant to an Administrative Services Agreement in return for a fee at an annual
rate of 0.04% of the Fund’s average daily net assets. The Fund pays all of its
expenses not expressly assumed by Lord Abbett.
Each year the Board considers whether to approve the continuation of the existing
management and administrative services agreements between the Fund and Lord
Abbett. A discussion regarding the basis for the Board’s approval is available in the
Fund’s Form N-CSR for the fiscal year ended June 30
th
.
PROSPECTUS – U.S. Government & Government Sponsored Enterprises Money Market Fund
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INFORMATION FOR MANAGING YOUR FUND
ACCOUNT
CHOOSING A SHARE CLASS
Each class of shares represents an investment in the same portfolio of securities, but
each has different expenses, eligibility requirements, dividends, and yields. Class A
or C shares purchased directly are not subject to any front-end sales charge or a
CDSC. However, Class A or C shares initially purchased without a front-end sales
charge and subsequently exchanged for shares of another Lord Abbett Fund are
subject to any applicable front-end sales charge and Class A or C shares acquired by
exchange from another Lord Abbett Fund are subject to any applicable CDSC, as
described below.
You may purchase shares at the NAV per share next determined after we receive
your purchase order submitted in good order. You should read this section carefully
to determine which class of shares is best for you and discuss your selection with
your financial intermediary.
Key Features of Share Classes.
The following table compares key features of each
share class. You should review the fee table and example at the front of this
prospectus carefully before choosing your share class. As a general matter, share
classes with relatively lower expenses tend to have relatively higher dividends. Your
financial intermediary can help you decide which class meets your goals. Not all
share classes may be available for purchase in all states or available through your
financial intermediary. Please check with your financial intermediary for more
information about the availability of share classes. Your financial intermediary may
receive different compensation depending upon which class you choose.