SUMMARY PROSPECTUS
Lord Abbett Convertible Fund
APRIL 1, 2025
CLASS/TICKER
CLASS A ............
LACFX
CLASS I...........
LCFYX
CLASS R4 .......
LCFSX
CLASS C............
LACCX
CLASS P .........
LCFPX
CLASS R5 .......
LCFTX
CLASS F ............
LBFFX
CLASS R2 .......
LBCQX
CLASS R6 .......
LCFVX
CLASS F3 ..........
LOCFX
CLASS R3 .......
LCFRX
Before you invest, you may want to review the Fund’s prospectus and statement of additional
information, which contain more information about the Fund and its risks. You can find the
Fund’s prospectus, statement of additional information and other information about the Fund at
www.lordabbett.com/documentsandliterature. You can also get this information at no cost by
calling 888-522-2388 (Option #2) or by sending an email request to literature@lordabbett.com.
The current prospectus and statement of additional information dated April 1, 2025 as may be
supplemented from time to time, are incorporated by reference into this summary prospectus.
SUMMARY – CONVERTIBLE FUND
2
INVESTMENT OBJECTIVE
The Fund’s investment objective is to seek current income and the opportunity for
capital appreciation to produce a high total return.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund.
You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the tables
and examples below.
You may qualify for sales charge discounts if you and certain
members of your family invest, or agree to invest in the future, at least $100,000 in
the Lord Abbett Family of Funds. More information about these and other discounts
is available from your financial intermediary and in “Sales Charge Reductions and
Waivers” on page 291 of the prospectus, Appendix A to the prospectus, titled
“Intermediary-Specific Sales Charge Reductions and Waivers,” and “Purchases,
Redemptions, Pricing, and Payments to Dealers” on page 9-1 of Part II of the
statement of additional information (“SAI”).
Shareholder Fees
(1)
(Fees paid directly from your investment)
Class
A
C
F, F3, I, P, R2, R3, R4, R5, and R6
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
2.25%
None
None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption
proceeds, whichever is lower)
None
(2)
1.00%
(3)
None
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
Class
A
C
F
F3
I
P
Management Fees
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
Distribution and Service (12b-1) Fees
0.20%
0.81%
(4)
0.10%
None
None
0.45%
Other Expenses
0.19%
0.19%
0.19%
0.12%
0.19%
0.19%
Total Annual Fund Operating Expenses
1.09%
1.70%
0.99%
0.82%
0.89%
1.34%
SUMMARY – CONVERTIBLE FUND
3
Annual Fund Operating Expenses
(continued)
(Expenses that you pay each year as a percentage of the value of your investment)
Class
R2
R3
R4
R5
R6
Management Fees
0.70%
0.70%
0.70%
0.70%
0.70%
Distribution and Service (12b-1) Fees
0.60%
0.50%
0.25%
None
None
Other Expenses
0.19%
0.19%
0.19%
0.19%
0.12%
Total Annual Fund Operating Expenses
1.49%
1.39%
1.14%
0.89%
0.82%
(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)
A contingent deferred sales charge (“CDSC”) of 1.00% may be assessed on certain Class A shares purchased or
acquired without a sales charge if they are redeemed before the first day of the month in which the one-year anniversary
of the purchase falls.
(3)
A CDSC of 1.00% may be assessed on Class C shares if they are redeemed before the first anniversary of their
purchase.
(4)
The 12b-1 fee the Fund will pay on Class C shares will be a blended rate calculated based on (i) 1.00% of the Fund’s
average daily net assets attributable to shares held for less than one year and (ii) 0.80% of the Fund’s average daily net
assets attributable to shares held for one year or more. All Class C shareholders of the Fund will bear 12b-1 fees at the
same rate.
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
If Shares Are Redeemed
If Shares Are Not Redeemed
1 Year
3 Years
5 Years
10 Years
1 Year
3 Years
5 Years
10 Years
Class A Shares
$
334
$
564
$
812
$
1,524
$
334
$
564
$
812
$
1,524
Class C Shares
$
273
$
536
$
923
$
1,847
$
173
$
536
$
923
$
1,847
Class F Shares
$
101
$
315
$
547
$
1,213
$
101
$
315
$
547
$
1,213
Class F3 Shares
$
84
$
262
$
455
$
1,014
$
84
$
262
$
455
$
1,014
Class I Shares
$
91
$
284
$
493
$
1,096
$
91
$
284
$
493
$
1,096
Class P Shares
$
136
$
425
$
734
$
1,613
$
136
$
425
$
734
$
1,613
Class R2 Shares
$
152
$
471
$
813
$
1,779
$
152
$
471
$
813
$
1,779
Class R3 Shares
$
142
$
440
$
761
$
1,669
$
142
$
440
$
761
$
1,669
Class R4 Shares
$
116
$
362
$
628
$
1,386
$
116
$
362
$
628
$
1,386
Class R5 Shares
$
91
$
284
$
493
$
1,096
$
91
$
284
$
493
$
1,096
Class R6 Shares
$
84
$
262
$
455
$
1,014
$
84
$
262
$
455
$
1,014
SUMMARY – CONVERTIBLE FUND
4
Portfolio Turnover.
The Fund pays transaction costs, such as commissions, when it
buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover
rate may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in the
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was 145% of
the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
Under normal conditions, the Fund pursues its investment objective by investing at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes, in a diversified portfolio of convertible securities issued by U.S. and
foreign companies. Convertible securities may include corporate bonds, debentures,
notes, preferred stocks, and any other securities that can be exchanged for equity
securities or provide an opportunity for equity participation. For purposes of this
80% policy, the Fund also may gain exposure to convertible securities through
derivatives or other ‘synthetic’ means.
The Fund may invest in both investment grade convertible securities and lower-rated
(commonly referred to as “high-yield” or “junk”) convertible securities or, if
unrated, determined by Lord Abbett to be of comparable quality. The Fund may
invest in companies of all sizes and may from time to time invest a significant
amount of its assets in securities of small and mid-sized companies and below
investment grade securities.
The Fund may invest up to 20% of its net assets in non-convertible debt or equity
securities. In addition, the Fund may invest up to 20% of its net assets in foreign
securities. The Fund defines foreign securities as securities of non-U.S. issuers that
are denominated in non-U.S. currencies.
The Fund will not invest more than 25% of its total assets in any industry; however,
this limitation does not apply to mortgage-backed securities, privately issued
mortgage-related securities, or securities issued by the U.S. Government, its agencies
and instrumentalities.
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. Specifically, the Fund expects to employ a variety of
options strategies for the Fund, including purchasing and selling put and call options,
as well as utilizing “spreads” and other option combinations. In “spread”
transactions, the Fund buys and writes a put or buys and writes a call on the same
underlying instrument with the options having different expiration dates. The Fund
may also take advantage of the pricing inefficiencies of an embedded option through
the purchase of a convertible bond. Such convertible arbitrage strategies seek to take
advantage of the pricing inefficiencies of the embedded option in a convertible bond.
Convertible arbitrage involves purchasing a portfolio of convertible securities,
generally convertible bonds, and hedging a portion of the equity risk by selling short
SUMMARY – CONVERTIBLE FUND
5
the underlying common stock. 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. For example, the Fund may
invest in or sell short U.S. Treasury futures, securities index futures, other futures,
and/or currency forwards to adjust the Fund’s exposure to the direction of interest
rates, or for other portfolio management reasons.
The portfolio management team uses fundamental, bottom-up analysis to identify
convertible securities that it believes are undervalued and that potentially may
increase total return and reduce downside risk. The portfolio management team will
work toward reducing risk through portfolio diversification, credit analysis,
assessment of risk/return potential, and attention to current developments and trends
in interest rates and economic conditions. The investment team may also consider
the risks and return potential presented by environmental, social, and governance
(“ESG”) factors in investment decisions. The Fund engages 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, or shows signs of
deteriorating fundamentals, among other reasons. The Fund may deviate from the
investment strategy described above for temporary defensive purposes. The Fund
may miss certain investment opportunities if defensive strategies are used and thus
may not achieve its investment objective.
PRINCIPAL RISKS
As with any investment in a mutual fund, investing in the Fund involves risk,
including the risk that you may receive little or no return on your investment. When
you redeem your shares, they may be worth more or less than what you paid for
them, which means that you may lose a portion or all of the money you invested in
the Fund. The principal risks of investing in the Fund, which could adversely affect
its performance, include:
•
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.
•
Market Risk:
The market values of securities will fluctuate, sometimes sharply
and unpredictably, based on overall economic conditions, governmental actions
or intervention, market disruptions caused by trade disputes, tariffs or other
factors, political developments, and other factors. Prices of equity securities tend
to rise and fall more dramatically than those of debt securities.
•
Fixed Income Securities Risk:
The Fund is subject to the general risks and
considerations associated with investing in debt securities, including the risk
that issuers will fail to make timely payments of principal or interest or default
SUMMARY – CONVERTIBLE FUND
6
altogether. Lower-rated securities in which the Fund may invest may be more
volatile and may decline more in price in response to negative issuer
developments or general economic news due to their increased credit risk
relative to other fixed-income investments. In addition, as interest rates rise, the
Fund’s investments typically will lose value.
•
Convertible Securities Risk:
Convertible securities are subject to the risks
affecting both equity and fixed income securities, including market, credit,
liquidity, and interest rate risk. Convertible securities tend to be more volatile
than other fixed income securities, and the markets for convertible securities
may be less liquid than markets for common stocks or bonds. A significant
portion of convertible securities have below investment grade credit ratings and
are subject to increased credit and liquidity risks.
•
High Yield Securities Risk:
High yield securities (commonly referred to as
“junk” bonds) typically pay a higher yield than investment grade securities, but
may have greater price fluctuations and have a higher risk of default than
investment grade securities. The market for high yield securities may be less
liquid due to such factors as interest rate sensitivity, negative perceptions of the
junk bond markets generally, and less secondary market liquidity. This may
make such securities more difficult to sell at an acceptable price, especially
during periods of financial distress, increased market volatility, or significant
market decline.
•
Credit Risk:
Debt securities are subject to the risk that the issuer or guarantor
of a security may not make interest and principal payments as they become due
or may default altogether. In addition, if the market perceives a deterioration in
the creditworthiness of an issuer, the value and liquidity of securities issued by
that issuer may decline. To the extent that the Fund holds below investment
grade securities, these risks may be heightened. Insured debt securities have the
credit risk of the insurer in addition to the credit risk of the underlying
investment being insured.
•
Interest Rate Risk:
As interest rates rise, prices of bonds (including tax-exempt
bonds) generally fall, typically causing the Fund’s investments to lose value.
Additionally, rising interest rates or lack of market participants may lead to
decreased liquidity in fixed income markets. Interest rate changes generally
have a more pronounced effect on the market value of fixed-rate instruments,
such as corporate bonds, than they have on floating rate instruments, and
typically have a greater effect on the price of fixed income securities with longer
durations. 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.
•
Call Risk:
A substantial portion of bonds are “callable,” meaning they give the
issuer the right to call or redeem the bonds before maturity. Issuers may call
outstanding bonds when there is a decline in interest rates, when credit spreads
SUMMARY – CONVERTIBLE FUND
7
change, or when the issuer’s credit quality improves. As interest rates decline,
these bond issuers may pay off their loans early by buying back the bonds, thus
depriving the Fund of above market interest rates.
•
Government Securities Risk:
The Fund invests in securities issued or
guaranteed by the U.S. Government or its agencies and instrumentalities (such
as the Government National Mortgage Association (“Ginnie Mae”), the Federal
National Mortgage Association (“Fannie Mae”), or the Federal Home Loan
Mortgage Corporation (“Freddie Mac”)). Different types of U.S. government
securities are subject to different levels of credit risk, including the risk of
default, depending on the nature of the particular government support for that
security. Unlike Ginnie Mae securities, securities issued or guaranteed by U.S.
Government-related organizations, such as Fannie Mae and Freddie Mac, are
not backed by the full faith and credit of the U.S. Government and no assurance
can be given that the U.S. Government would provide financial support.
•
Foreign Currency Risk:
Investments in securities that are denominated or
receiving revenues in foreign currencies are subject to the risk that those
currencies will decline in value relative to the U.S. dollar, or, in the case of
hedged positions, that the U.S. dollar will decline in value relative to the
currency being hedged. Foreign currency exchange rates may fluctuate
significantly over short periods of time.
•
Mortgage-Related and Other Asset-Backed Securities Risk:
Mortgage-
related securities, including commercial mortgage-backed securities (“CMBS”)
and other privately issued mortgage-related securities, and other asset-backed
securities may be particularly sensitive to changes in prevailing interest rates
and economic conditions, including delinquencies and defaults. The prices of
mortgage-related and other asset-backed 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.
•
Liquidity/Redemption Risk:
The Fund may lose money when selling securities
at inopportune times to fulfill shareholder redemption requests. The risk of loss
may increase depending on the size and frequency of redemption requests,
whether the redemption requests occur in times of overall market turmoil or
declining prices, and whether the securities the Fund intends to sell have
decreased in value or are illiquid. The Fund may be less able to sell illiquid
securities at its desired time or price. It may be more difficult for the Fund to
value its investments in illiquid securities than more liquid securities.