SUMMARY PROSPECTUS

 

Lord Abbett High Yield Fund

APRIL 1, 2013

 

 

 

 

 

 

 

 

 

 

 

CLASS/TICKER

CLASS A

 

LHYAX

 

CLASS F

 

LHYFX

 

CLASS R2

 

LHYQX

CLASS B

 

LHYBX

 

CLASS I

 

LAHYX

 

CLASS R3

 

LHYRX

CLASS C

 

LHYCX

 

CLASS P

 

LHYPX

 

 

 

 

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, 2013, as may be supplemented from time to time, are incorporated by reference into this summary prospectus.

INVESTMENT OBJECTIVE

The Fund’s investment objective is to seek a high 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 and hold shares of the Fund. 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 professional and in “Sales Charge Reductions and Waivers” on page 231 of the prospectus and “Purchases, Redemptions, Pricing, and Payments to Dealers” on page 8-1 of the statement of additional information (“SAI”).

 

 

 

 

 

 

 

 

 

Shareholder Fees (Fees paid directly from your investment)

 

Class

 

A

 

B

 

C

 

F, I, P, R2, and R3

 

Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)

 

2.25%

 

None

 

None

 

None

 

Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)

 

None (1)

 

5.00%

 

1.00% (2)

 

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)

 

Class

 

A

 

B

 

C

 

F

 

I

 

P

 

R2

 

R3

 

Management Fees

 

0.57%

 

0.57%

 

0.57%

 

0.57%

 

0.57%

 

0.57%

 

0.57%

 

0.57%

 

Distribution and Service (12b-1) Fees

 

0.20%

 

1.00%

 

0.88% (3)

 

0.10%

 

None

 

0.45%

 

0.60%

 

0.50%

 

Other Expenses

 

0.19%

 

0.19%

 

0.19%

 

0.19%

 

0.19%

 

0.19%

 

0.19%

 

0.19%

 

Total Annual Fund Operating Expenses

 

0.96%

 

1.76%

 

1.64%

 

0.86%

 

0.76%

 

1.21%

 

1.36%

 

1.26%

 

(1)

 

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 of the one-year anniversary of the purchase.

(2)

 

A CDSC of 1.00% may be assessed on Class C shares if they are redeemed before the first anniversary of their purchase.

(3)

 

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

The following 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 at the maximum sales charge, if any, 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, that dividends and distributions are reinvested, and that the Fund’s operating expenses remain the same. The example assumes a deduction of the applicable contingent deferred sales charge (“CDSC”) for the one-year, three-year, and five- year periods for Class B shares and for the one-year period for Class C shares. Class B shares automatically convert to Class A shares after approximately eight years. The expense example for Class B shares for the ten-year period reflects the conversion to Class A shares. The first example assumes that you redeem all of your shares at the end of the periods. Although your actual costs may be higher or lower, based on these assumptions, your costs (including any applicable CDSC) would be as shown below. The second example assumes that you do not redeem and instead keep your shares.

SUMMARY – HIGH YIELD FUND

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

$

321

 

 

 

 

$

524

 

 

 

 

$

744

 

 

 

 

$

1,377

 

 

 

 

$

321

 

 

 

 

$

524

 

 

 

 

$

744

 

 

 

 

$

1,377

 

 

Class B Shares

 

 

 

$

679

 

 

 

 

$

854

 

 

 

 

$

1,154

 

 

 

 

$

1,862

 

 

 

 

$

179

 

 

 

 

$

554

 

 

 

 

$

954

 

 

 

 

$

1,862

 

 

Class C Shares

 

 

 

$

267

 

 

 

 

$

517

 

 

 

 

$

892

 

 

 

 

$

1,944

 

 

 

 

$

167

 

 

 

 

$

517

 

 

 

 

$

892

 

 

 

 

$

1,944

 

 

Class F Shares

 

 

 

$

88

 

 

 

 

$

274

 

 

 

 

$

477

 

 

 

 

$

1,061

 

 

 

 

$

88

 

 

 

 

$

274

 

 

 

 

$

477

 

 

 

 

$

1,061

 

 

Class I Shares

 

 

 

$

78

 

 

 

 

$

243

 

 

 

 

$

422

 

 

 

 

$

942

 

 

 

 

$

78

 

 

 

 

$

243

 

 

 

 

$

422

 

 

 

 

$

942

 

 

Class P Shares

 

 

 

$

123

 

 

 

 

$

384

 

 

 

 

$

665

 

 

 

 

$

1,466

 

 

 

 

$

123

 

 

 

 

$

384

 

 

 

 

$

665

 

 

 

 

$

1,466

 

 

Class R2 Shares

 

 

 

$

138

 

 

 

 

$

431

 

 

 

 

$

745

 

 

 

 

$

1,635

 

 

 

 

$

138

 

 

 

 

$

431

 

 

 

 

$

745

 

 

 

 

$

1,635

 

 

Class R3 Shares

 

 

 

$

128

 

 

 

 

$

400

 

 

 

 

$

692

 

 

 

 

$

1,523

 

 

 

 

$

128

 

 

 

 

$

400

 

 

 

 

$

692

 

 

 

 

$

1,523

 

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 105.74% of the average value of its portfolio.

PRINCIPAL INVESTMENT STRATEGIES

Under normal market 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 lower-rated debt securities (commonly referred to as “high yield” or “junk” bonds), including corporate debt securities and convertible securities. The Fund may invest up to 20% of its net assets in foreign (including emerging market) securities that primarily are traded outside of the U.S. In addition, the Fund may invest up to 20% of its net assets in municipal securities. The Fund also may invest in senior loans, including bridge loans, novations, assignments, and participations.

In addition, the Fund may invest in derivatives. Currently, the Fund expects to invest in derivatives consisting principally of futures, forwards, options, and swaps. The Fund may use derivatives in order to seek to enhance returns, to attempt to hedge some of its investment risk, to manage portfolio duration, or as a substitute position for holding the underlying asset on which the derivative instrument is based.

The Fund seeks to achieve high total return through an actively managed, diversified portfolio of investments. The Fund seeks to purchase lower-rated securities with unusual values that the Fund believes present the potential for higher return.

The Fund engages in active and frequent trading of its portfolio securities.

SUMMARY – HIGH YIELD FUND

3

The Fund generally will sell a security when the Fund believes the security is less likely to benefit from the current market and economic environment, shows signs of deteriorating fundamentals, or has reached its valuation target, among other reasons. The Fund seeks to remain fully invested in accordance with its investment objective; however, in response to adverse economic, market or other unfavorable conditions, the Fund may invest its assets in a temporary defensive manner.

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 the Fund’s performance or increase volatility, include:

 

•

 

 

 

Portfolio Management Risk: If the strategies used and securities selected by the Fund’s portfolio management 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 rising market.

 

•

 

 

 

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. Typically, shorter-term bonds are less volatile than longer-term bonds; however, longer-term bonds typically offer higher yields and more stable interest income than shorter-term bonds. Fixed income securities are subject to risks including interest rate risk, credit risk, and liquidity risk, all of which are described more fully below.

 

•

 

 

 

High-Yield Securities Risk: High-yield bonds typically pay a higher yield than higher-rated bonds, but may have greater price fluctuations and have a higher risk of default than higher-rated bonds. High-yield bonds may be subject to greater credit and liquidity risks than higher-rated bonds, which may make high- yield bonds more difficult to sell at a reasonable price or at all, especially during periods of increased market volatility or significant market decline. Some issuers of high-yield bonds may be more likely to default as to principal and interest payments after the Fund purchases their securities. High-yield bonds are considered predominantly speculative by traditional investment standards. The prices of high-yield bonds in general may decline during periods of uncertainty or market turmoil.

SUMMARY – HIGH YIELD FUND

4

 

•

 

 

 

Credit Risk: The issuer of a debt security owned by the Fund may fail to make timely payments of principal or interest, or may default on such payments. A debt security may decline in value if the issuer becomes less creditworthy, even when interest rates are falling. These risks are greatest for high yield debt securities, which have lower credit ratings.

 

•

 

 

 

Liquidity Risk: There may be few available buyers or sellers for a security, preventing the Fund from transacting in a timely manner or at an advantageous price, and subjecting the security to greater price fluctuations. The market for high-yield bonds generally is less liquid than the market for higher-rated securities.

 

•

 

 

 

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.

 

•

 

 

 

Convertible and Other Equity-Related 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.

 

•

 

 

 

Municipal Securities Risk: Government actions, including actions by local, state and regional governments, could have an adverse effect on municipal bond prices. In addition, the Fund’s performance may be affected by local, state, and regional factors depending on the states in which the Fund’s investments are issued.

 

•

 

 

 

Government Securities Risk and Mortgage-Related 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”)). 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. Mortgage-related securities may be particularly sensitive to changes in economic conditions, including delinquencies and/or defaults. 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

SUMMARY – HIGH YIELD FUND

5

 

 

 

 

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.

 

•

 

 

 

Foreign Company Risk: The Fund’s investment exposure to foreign companies (and American Depositary Receipts (“ADRs”)) generally is subject to the risk that the securities may be adversely affected by political, economic and social volatility, currency exchange fluctuations, lack of transparency, or inadequate regulatory and accounting standards. Because the Fund’s definition of foreign securities focuses on where the security is principally traded rather than where the issuer is organized and/or operated, the percentage of the Fund’s assets that is exposed to foreign market risks may exceed the percentage of the Fund’s assets that the Fund defines as representing foreign securities. Emerging market securities generally are more volatile than other foreign securities, and are subject to greater liquidity, regulatory, and political risks.

 

•

 

 

 

Senior Loan Risk: The Fund’s investments in floating or adjustable rate senior loans are subject to increased credit and liquidity risks. Senior loan prices also may be adversely affected by supply-demand imbalances caused by conditions in the senior loan market or related markets. Below investment grade senior loans, like high-yield debt securities, or junk bonds, usually are more credit than interest rate sensitive, although the value of these instruments may be affected by interest rate swings in the overall fixed income market.

 

•

 

 

 

Derivatives Risk: Derivatives are subject to certain risks, including the risk that the value of the derivative may not correlate with the value of the underlying security, rate, or index in the manner anticipated by portfolio management. Derivatives may be more sensitive to changes in economic or market conditions and may become illiquid. Derivatives are subject to leverage risk, which may increase the Fund’s volatility, and counterparty risk, which means that the counterparty may fail to perform its obligations under the derivative contract.

 

•

 

 

 

High Portfolio Turnover Risk: High portfolio turnover may result in increased brokerage fees or other transaction costs, reduced investment performance, and higher taxes.

An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. For more information on the principal risks of the Fund, please see the “More Information About the Funds – Principal Risks” section in the prospectus.

SUMMARY – HIGH YIELD FUND

6

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. Each assumes reinvestment of dividends and distributions. The Fund’s past performance, before and after taxes, 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. This chart does not reflect the sales charge applicable to Class A shares. If the sales charge were reflected, returns would be lower. 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

 

 

 

Best Quarter 2nd Q ’09 +17.32%

 

Worst Quarter 4th Q ’08 -15.68%


The table below shows how the Fund’s average annual total returns compare to the returns of a securities market index with investment characteristics similar to those of the Fund. The Fund’s average annual total returns include applicable sales charges.

The after-tax returns of Class A shares included in the table below are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In some cases, the return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to a tax benefit resulting from realized losses on a sale of Fund shares at the end of the period that is used to offset other gains. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Fund shares through

SUMMARY – HIGH YIELD FUND

7

tax-deferred arrangements such as 401(k) plans or Individual Retirement Accounts (“IRAs”). After-tax returns for other share classes are not shown in the table and will vary from those shown for Class A shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Annual Total Returns
(for the periods ended December 31, 2012)

 

Class

 

1 Year

 

5 Years

 

10 Years

 

Life of Class

 

Inception
Date for
Performance

 

Class A Shares

 

Before Taxes

 

13.88%

 

9.12%

 

8.99%

 

–

 

 

 

After Taxes on Distributions

 

10.38%

 

5.86%

 

5.96%

 

–

 

 

 

After Taxes on Distributions and Sale of Fund Shares

 

9.07%

 

5.81%

 

5.89%

 

–

 

 

 

Class B Shares

 

10.49%

 

8.49%

 

8.65%

 

–

 

 

 

Class C Shares

 

14.77%

 

8.82%

 

8.49%

 

–

 

 

 

Class F Shares

 

16.63%

 

9.73%

 

–

 

9.01%

 

9/28/2007

 

Class I Shares

 

16.70%

 

9.87%

 

9.56%

 

–

 

 

 

Class P Shares

 

16.26%

 

9.39%

 

9.02%

 

–

 

 

 

Class R2 Shares

 

16.01%

 

9.33%

 

–

 

8.59%

 

9/28/2007

 

Class R3 Shares

 

16.12%

 

9.43%

 

–

 

8.70%

 

9/28/2007

 

Index

 

BofA Merrill Lynch High Yield Master II
Constrained Index
(reflects no deduction for fees, expenses, or taxes)

 

15.55%

 

10.14%

 

10.38%

 

9.43%

 

9/28/2007

MANAGEMENT

Investment Adviser. The Fund’s investment adviser is Lord, Abbett & Co. LLC.

Portfolio Managers.

 

 

 

Portfolio Manager/Title

 

Member of
the Investment
Management
Team Since

 

Christopher J. Towle, Partner and Director

 

1998

 

Steven F. Rocco, Partner and Portfolio Manager

 

2010

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.

SUMMARY – HIGH YIELD FUND

8

Class B shares no longer are available for purchase by new or existing investors and only will be issued in connection with (i) an exchange of Class B shares from another Lord Abbett Fund or (ii) a reinvestment of a dividend and/or capital gain distribution. For Class I shares, the minimum investment shown below applies to certain types of institutional investors, but does not apply to registered investment advisers or retirement and benefit plans otherwise eligible to invest in Class I shares. Class P shares are closed to substantially all new investors. See “Choosing a Share Class – Investment Minimums” in the prospectus for more information.

 

 

 

 

 

 

 

 

 

Investment Minimums — Initial/Additional Investments

 

Class

 

A and C

 

F, P, R2, and R3

 

I

 

General and IRAs without Invest-A-Matic Investments

 

$1,500/No minimum

 

No minimum

 

$1 million minimum

 

Invest-A-Matic Accounts

 

$250/$50

 

N/A

 

N/A

 

IRAs, SIMPLE and SEP Accounts with Payroll Deductions

 

No minimum

 

N/A

 

N/A

 

Fee-Based Advisory Programs and Retirement and Benefit Plans

 

No minimum

 

No minimum

 

No minimum

You may sell (redeem) shares through your securities broker, financial professional or financial intermediary. If you have direct account access privileges, you may redeem your shares by contacting the Fund in writing at P.O. Box 219336, Kansas City, MO 64121, by calling 888-522-2388 or by accessing your account online at www.lordabbett.com.

TAX INFORMATION

A Fund’s distributions, if any, generally are taxable to you as ordinary income, capital gains or a combination of the two, and also may be subject to state and local taxes. Certain taxes on distributions may not apply to tax exempt investors or tax deferred accounts, such as a 401(k) plan or an IRA.

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.

SUMMARY – HIGH YIELD FUND

9

 

NOTES:

 

 

 

Investment Company Act File Number: 811-07988

 

 

 

 

 

00087956   LAHY-7SUM
(4/13)

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