Lord Abbett Securities Trust | |||||||||||||
PROSPECTUS | |||||||||||||
| |||||||||||||
CLASS |
TICKER |
CLASS |
TICKER |
CLASS |
TICKER |
||||||||
LORD
ABBETT |
A |
ALFAX |
I |
ALFYX |
R4 |
ALFKX |
|||||||
C |
ALFCX |
P |
N/A |
R5 |
ALFTX |
||||||||
F |
ALFFX |
R2 |
ALFQX |
R6 |
ALFVX |
||||||||
F3 |
ALFOX |
R3 |
ALFRX |
||||||||||
LORD
ABBETT |
A |
LFGAX |
I |
LFGIX |
R5 |
LFGTX |
|||||||
C |
LFGCX |
R2 |
N/A |
R6 |
LFGVX |
||||||||
F |
LFGFX |
R3 |
LFGQX |
||||||||||
F3 |
LFGOX |
R4 |
LFGSX |
||||||||||
LORD
ABBETT |
A |
LAFLX |
I |
LIFLX |
R5 |
LFLTX |
|||||||
C |
LCFLX |
R2 |
N/A |
R6 |
LVFLX |
||||||||
F |
LFFLX |
R3 |
LQFLX |
||||||||||
F3 |
LOFLX |
R4 |
LSFLX |
||||||||||
LORD
ABBETT |
A |
LFVAX |
I |
LMVYX |
R5 |
LMVVX |
|||||||
C |
LFVCX |
R2 |
N/A |
R6 |
LMVWX |
||||||||
F |
LFSFX |
R3 |
N/A |
||||||||||
F3 |
LMVOX |
R4 |
N/A |
||||||||||
LORD
ABBETT |
A |
LDFVX |
I |
LAVYX |
R4 |
LAVSX |
|||||||
C |
GILAX |
P |
LAVPX |
R5 |
LAVTX |
||||||||
F |
LAVFX |
R2 |
LAVQX |
R6 |
LAVVX |
||||||||
F3 |
LDFOX |
R3 |
LAVRX |
||||||||||
LORD
ABBETT |
A |
LGCAX |
I |
LGCYX |
R5 |
LGCVX |
|||||||
C |
LGCCX |
R2 |
N/A |
R6 |
LGCWX |
||||||||
F |
LGCFX |
R3 |
LGCRX |
||||||||||
F3 |
LGCOX |
R4 |
LGCSX |
||||||||||
LORD
ABBETT FUND |
A |
LGLAX |
I |
LGLIX |
R5 |
LGLUX |
|||||||
C |
LGLCX |
R2 |
LGLQX |
R6 |
LGLVX |
||||||||
F |
LGLFX |
R3 |
LGLRX |
||||||||||
F3 |
LGLOX |
R4 |
LGLSX |
||||||||||
LORD
ABBETT |
A |
LHCAX |
I |
LHCIX |
R5 |
LHCTX |
|||||||
C |
LHCCX |
R2 |
N/A |
R6 |
LHCVX |
||||||||
F |
LHCFX |
R3 |
LHCQX |
||||||||||
F3 |
LHCOX |
R4 |
LHCSX |
||||||||||
CLASS |
TICKER |
CLASS |
TICKER |
CLASS |
TICKER |
|||||||||
LORD
ABBETT |
A |
LICAX |
I |
LICYX |
R4 |
LICSX |
||||||||
C |
LICCX |
P |
LICPX |
R5 |
LICTX |
|||||||||
F |
LICFX |
R2 |
LICQX |
R6 |
LICVX |
|||||||||
F3 |
LICOX |
R3 |
LICRX |
|||||||||||
LORD
ABBETT |
A |
LAIEX |
I |
LINYX |
R4 |
LINSX |
||||||||
C |
LINCX |
P |
LINPX |
R5 |
LINTX |
|||||||||
F |
LINFX |
R2 |
LINQX |
R6 |
LINVX |
|||||||||
F3 |
LOIEX |
R3 |
LINRX |
|||||||||||
LORD
ABBETT |
A |
LIDAX |
I |
LAIDX |
R5 |
LIRTX |
||||||||
C |
LIDCX |
R2 |
LIDRX |
R6 |
LIRVX |
|||||||||
F |
LIDFX |
R3 |
LIRRX |
|||||||||||
F3 |
LIDOX |
R4 |
LIRSX |
|||||||||||
LORD
ABBETT FUND |
A |
LAMGX |
I |
LMIYX |
R5 |
N/A |
||||||||
C |
LCMGX |
R2 |
N/A |
R6 |
N/A |
|||||||||
F |
LFMGX |
R3 |
N/A |
|||||||||||
F3 |
N/A |
R4 |
N/A |
|||||||||||
LORD
ABBETT |
A |
LVOAX |
I |
LVOYX |
R4 |
LVOSX |
||||||||
C |
LVOCX |
P |
LVOPX |
R5 |
LVOTX |
|||||||||
F |
LVOFX |
R2 |
LVOQX |
R6 |
LVOVX |
|||||||||
F3 |
LVOOX |
R3 |
LVORX |
|||||||||||
The Lord Abbett Micro Cap Growth Fund generally is not available for purchase by new investors, except as described in this prospectus. Please see the section “Information about the Availability of Micro Cap Growth Fund” for more information. 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 |
Payments to Broker-Dealers and Other Financial Intermediaries |
MORE INFORMATION ABOUT THE FUNDS |
Additional Information About Investment and Operational Risks |
|
INFORMATION FOR MANAGING YOUR FUND ACCOUNT |
FINANCIAL INFORMATION |
APPENDIX |
Appendix
A: Intermediary-Specific Sales Charge |
A- 1 |
B- 1 |
FUND SUMMARY |
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.
|
(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 |
|
|
|
| |
Maximum
Deferred Sales Charge (Load) |
|
|
|
|
|
| ||||||
(Expenses that you pay each year as a percentage of the value of your investment) |
| ||||||
Class |
A |
C |
F |
F3 |
I |
P |
|
Management Fees(4) |
|
|
|
|
|
|
|
Distribution and Service (12b-1) Fees |
|
|
|
|
|
|
|
Other Expenses |
|
|
|
|
|
|
|
Acquired Fund Fees and Expenses |
|
|
|
|
|
|
|
Total Annual Fund Operating Expenses |
|
|
|
|
|
|
|
PROSPECTUS – Alpha Strategy 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(4) |
|
|
|
|
|
|
Distribution and Service (12b-1) Fees |
|
|
|
|
|
|
Other Expenses |
|
|
|
|
|
|
Acquired Fund Fees and Expenses |
|
|
|
|
|
|
Total Annual Fund Operating Expenses |
|
|
|
|
|
|
(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) |
Lord, Abbett & Co. LLC (“Lord Abbett”) presently is waiving the Fund’s entire management fee on a voluntary basis. This voluntary management fee waiver may be discontinued at any time without notice. |
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 |
1 Year |
3 Years |
5 Years |
10 Years |
| ||||||||
Class A Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class C Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class F Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class F3 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class I Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class P Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R2 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R3 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R4 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R5 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R6 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
PROSPECTUS – Alpha Strategy Fund
4
The Fund is a “fund of funds” that invests in affiliated mutual funds (the “underlying funds”) managed by Lord Abbett. Under normal conditions, through the underlying funds, the Fund indirectly invests in the equity securities of U.S. and foreign micro-cap, small, and mid-sized companies. The Fund uses a “blend” strategy to gain investment exposure to both growth and value stocks, or to stocks with characteristics of both.
Equity securities in which an underlying fund may invest include common stocks, preferred stocks, equity interests in trusts (including real estate investment trusts and privately offered trusts), partnerships, joint ventures, limited liability companies and vehicles with similar legal structures, and other instruments with similar economic characteristics.
Securities of foreign companies include emerging market companies, American Depositary Receipts (“ADRs”), and other similar depositary receipts. In addition to ADRs, the Fund generally defines foreign companies as those whose securities are traded primarily on non-U.S. securities exchanges.
In addition to investing in the underlying funds, the Fund may invest directly in any type of derivative as part of its investment strategies or for risk management purposes. Currently, the Fund may invest in derivatives consisting principally of futures, forwards, options, and swaps. To the extent that the Fund invests directly in derivatives, the Fund intends to do so primarily for non-hedging purposes. The market value of the Fund’s directly held positions in derivatives, determined at the time of the most recent position established, will not exceed 50% of the Fund’s net assets. The Fund currently expects, however, that the market value of such instruments, determined at the time of the most recent position established, will not exceed 35% of the Fund’s net assets under normal conditions. These percentage limitations exclude Fund assets indirectly invested in derivatives through the underlying funds.
The Fund’s portfolio management team generally employs a bottom-up investment approach emphasizing long-term value. The investment team may also consider the risks and return potential presented by environmental, social, and governance (“ESG”) factors in investment decisions. The Fund may sell or reallocate its investments among the underlying funds for a variety of reasons, such as to secure gains, limit losses, redeploy assets, increase cash, or satisfy redemption requests, among others. The Fund may deviate from the investment strategy described above
PROSPECTUS – Alpha Strategy Fund
5
for temporary defensive purposes. The Fund may miss certain investment opportunities if defensive strategies are used and thus may not achieve its investment objective.
· Underlying Funds Risk: The assets of the Fund are invested principally in the underlying funds. As a result, the investment performance of the Fund is directly related to the investment performance of the underlying funds in which it invests. The Fund is exposed to the same risks as the underlying funds in direct proportion to the allocation of its assets among the underlying funds. To the extent that the Fund invests a significant portion of its assets in a single underlying fund it may be more susceptible to risks associated with that fund and its investments. It is possible that the holdings of underlying funds may contain securities of the same issuers, thereby increasing the Fund’s exposure to such issuers. There can be no assurance that the investment objective of any underlying fund will be achieved. In addition, the Fund’s shareholders will indirectly bear their proportionate share of the underlying funds’ fees and expenses, as well as their proportionate share of the Fund’s fees and expenses.
· Affiliated Underlying Funds Risk: The Fund invests principally in underlying funds advised by Lord Abbett, which presents certain conflicts of interest. Generally, Lord Abbett will receive more revenue from investing in the underlying funds than it would if it invested in unaffiliated funds. In addition, Lord Abbett is subject to conflicts of interest in allocating portfolio assets among the various underlying funds because the fees payable to Lord Abbett by underlying funds differ. Lord Abbett may have an incentive to select underlying funds that will result in the greatest net management fee revenue to Lord Abbett and its affiliates, even if that results in increased expenses for the Fund. In addition, the Fund’s investments in affiliated underlying funds may be beneficial to Lord Abbett in managing the underlying funds, by helping the underlying funds achieve economies of scale or by enhancing cash flows to the underlying funds. If the Fund invests in an underlying fund with higher expenses, the Fund’s performance would be lower than if the Fund had invested in an underlying fund with comparable performance but lower expenses.
· New Underlying Funds Risk: The Fund may invest in underlying funds that are recently organized. There can be no assurance that a new underlying fund will reach or maintain a sufficient asset size to effectively implement its
PROSPECTUS – Alpha Strategy Fund
6
investment strategy. In addition, until the Fund achieves sufficient scale, the Fund may experience proportionally higher expenses than it would experience if it invested in a fund with a larger asset base.
· 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 or other factors, political developments, and other factors. Prices of equity securities tend to rise and fall more dramatically than those of debt securities.
· Equity Securities Risk: Equity securities, as well as equity-like securities such as convertible debt securities, may experience significant volatility. Such securities may fall sharply in response to adverse events affecting overall markets, a particular industry or sector, or an individual company’s financial condition.
· Industry and Sector Risk: Although the Fund does not employ an industry or sector focus, its exposure to specific industries or sectors will increase from time to time based on the portfolio management team’s perception of investment opportunities. If the Fund is overweight in a single industry or sector relative to its benchmark index, the Fund will face an increased risk that the value of its portfolio will decrease because of events disproportionately affecting that industry or sector. Furthermore, investments in particular industries or sectors may be more volatile than the broader market as a whole.
· Micro-Cap, Small, and Mid-Sized Company Risk: Investments in micro-cap, small, and mid-sized companies may involve greater risks than investments in larger, more established companies. Securities of micro-cap, small, and mid-sized companies tend to be more sensitive to changing economic, market, and industry conditions and tend to be more volatile and less liquid than equity securities of larger companies, especially over the short term. The securities of micro-cap, small, and mid-sized companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the ability to sell these securities in the future.
· Blend Style Risk: Growth stocks typically trade at higher multiples of current earnings than other stocks. Growth stocks often are more sensitive to market fluctuations than other securities because their market prices are highly sensitive to future earnings expectations. At times when it appears that these expectations may not be met, prices of growth stocks typically fall. Growth stocks may be more volatile than securities of slower-growing issuers. The prices of value stocks may lag the stock market for long periods of time if the market fails to recognize the company’s intrinsic worth. Value investing also is subject to the
PROSPECTUS – Alpha Strategy Fund
7
risk that a company judged to be undervalued may actually be appropriately priced or even overpriced. A portfolio that combines growth and value styles may diversify these risks and lower its volatility, but there is no assurance this strategy will achieve that result.
· Foreign and Emerging Market Company Risk: Investments in foreign companies and in U.S. companies with economic ties to foreign markets generally involve special risks. These companies may be more vulnerable to economic, political, and social instability and subject to less government supervision, lack of transparency, inadequate regulatory and accounting standards, and foreign taxes. Foreign company securities also include ADRs, which may be less liquid than the underlying shares in their primary trading market. Foreign securities also may subject the Fund’s investments to changes in currency exchange rates. Emerging market securities generally are more volatile than other foreign securities, and are subject to greater liquidity, regulatory, and political risks. Investments in emerging markets may be considered speculative and generally are riskier than investments in more developed markets. Emerging markets are more likely to experience hyperinflation and currency devaluations. Securities of emerging market companies may have far lower trading volumes and less liquidity than securities of issuers in developed markets. Companies with economic ties to emerging markets may be susceptible to the same risks as companies organized in emerging markets.
· 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.
· Derivatives Risk: The risks associated with derivatives may be different from and greater than the risks associated with directly investing in securities and other investments. Derivatives may increase the Fund’s volatility and reduce its returns. Derivatives may not perform as expected and the Fund may not realize the intended benefits. Whether the Fund’s use of derivatives is successful may depend on, among other things, the portfolio managers’ ability to correctly forecast market movements, company and industry valuation levels and trends, changes in foreign exchange and interest rates, and other factors. If the portfolio managers incorrectly forecast these and other factors, the Fund’s performance could suffer. In addition, given their complexity, derivatives are subject to the risk that improper or misunderstood documentation may expose the Fund to losses.
· 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,
PROSPECTUS – Alpha Strategy Fund
8
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.
The
bar chart shows changes in the performance of the Fund’s Class A shares from
calendar year to calendar year.
|
The table below shows how the Fund’s average annual total returns compare to the returns of securities market indices with investment characteristics similar to those
PROSPECTUS – Alpha Strategy Fund
9
of
the Fund as well as to a broad-based securities market index.1
1The Fund has adopted the S&P 500® Index as its broad-based securities market index.
PROSPECTUS – Alpha Strategy Fund
10
|
| ||||||
(for the periods ended December 31, 2023) |
| ||||||
Class |
1 Year |
5 Years |
10 Years |
Life of Class |
Inception
|
| |
Class A Shares |
|
|
|
|
|
| |
|
Before Taxes |
|
|
|
- |
|
|
|
After Taxes on Distributions |
|
|
|
- |
|
|
|
After Taxes on Distributions and Sale of Fund Shares |
|
|
|
- |
|
|
Class C Shares(1) |
|
|
|
- |
|
| |
Class F Shares |
|
|
|
- |
|
| |
Class F3 Shares |
|
|
- |
|
|
| |
Class I Shares |
|
|
|
- |
|
| |
Class R2 Shares |
|
|
|
- |
|
| |
Class R3 Shares |
|
|
|
- |
|
| |
Class R4 Shares |
|
|
- |
|
|
| |
Class R5 Shares |
|
|
- |
|
|
| |
Class R6 Shares |
|
|
- |
|
|
| |
Index |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
| ||||
|
|
|
|
|
|
| |
|
|
|
| ||||
|
|
|
|
|
|
| |
|
|
|
| ||||
Lipper Average |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
(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.
PROSPECTUS – Alpha Strategy Fund
11
Portfolio Managers.
Portfolio Managers/Title |
Member
of |
Giulio Martini, Partner and Director of Strategic Asset Allocation |
2015 |
Matthew R. DeCicco, Partner and Director of Equities |
2022 |
Jahiz Barlas, Portfolio Manager |
2023 |
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. 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(1) and C |
F, F3, P, R2, R3, R4, R5, and R6 |
I |
General and IRAs without Invest-A-Matic Investments |
Initial:
$1,500 |
N/A |
Initial:
$1 million |
Invest-A-Matic Accounts(2) |
Initial:
$250 |
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 |
(1) There is no investment minimum for Class A shares purchased by investors maintaining an account with a financial intermediary that has entered into an agreement with Lord Abbett Distributor LLC (“Lord Abbett Distributor”) to offer Class A shares through a load-waived network or platform, which may or may not charge transaction fees. (2) There is no minimum initial investment for Invest-A-Matic accounts held directly with the Fund, including IRAs. |
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.
PROSPECTUS – Alpha Strategy Fund
12
OTHER IMPORTANT INFORMATION REGARDING FUND SHARES
For important information about taxes and payments to broker-dealers and other financial intermediaries, please turn to the “Tax Information” and “Payments to Broker-Dealers and Other Financial Intermediaries” sections of the prospectus.
PROSPECTUS – Alpha Strategy Fund
13
FUND SUMMARY |
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.
|
(Fees paid directly from your investment) |
| |||
Class |
|
A |
C |
F, F3, I, R2, R3, R4, R5, and R6 |
|
Maximum
Sales Charge (Load) Imposed on Purchases |
|
|
|
| |
Maximum
Deferred Sales Charge (Load) |
|
|
|
|
|
| |||||
(Expenses that you pay each year as a percentage of the value of your investment) |
| |||||
Class |
A |
C |
F |
F3 |
I |
|
Management Fees |
|
|
|
|
|
|
Distribution and Service (12b-1) Fees |
|
|
|
|
|
|
Other Expenses |
|
|
|
|
|
|
Total Annual Fund Operating Expenses |
|
|
|
|
|
|
Fee Waiver and/or Expense Reimbursement(4) |
( |
( |
( |
( |
( |
|
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(4) |
|
|
|
|
|
|
PROSPECTUS – Focused Growth Fund
14
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 |
|
|
|
|
|
|
Distribution and Service (12b-1) Fees |
|
|
|
|
|
|
Other Expenses |
|
|
|
|
|
|
Total Annual Fund Operating Expenses |
|
|
|
|
|
|
Fee Waiver and/or Expense Reimbursement(4) |
( |
( |
( |
( |
( |
|
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(4) |
|
|
|
|
|
|
(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) |
For the period from March 1, 2024 through February 28, 2025, Lord, Abbett & Co. LLC (“Lord Abbett”) has contractually agreed to waive its fees and reimburse expenses to the extent necessary to limit total net annual operating expenses, excluding any applicable 12b-1 fees, acquired fund fees and expenses, interest-related expenses, taxes, expenses related to litigation and potential litigation, and extraordinary expenses, to an annual rate of 0.65% for each of Class F3 and R6 shares and to an annual rate of 0.80% for each other class. This agreement may be terminated only by the Fund’s Board of Trustees. |
(5) |
For the period from March 1, 2024 through February 28, 2025, Lord Abbett Distributor LLC (“Lord Abbett Distributor”) has contractually agreed to waive the Fund’s 0.10% Rule 12b-1 fee for Class F shares. This agreement may be terminated only by the Fund’s Board of Trustees. |
(6) |
These amounts have been updated from fiscal year amounts to reflect current fees and expenses. |
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, giving effect to the fee waiver and expense reimbursement arrangement described above. 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:
PROSPECTUS – Focused Growth Fund
15
Class |
|
|
| ||||||||||||||
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
| ||||||||
Class A Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class C Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class F Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class F3 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class I Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R2 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R3 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R4 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R5 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R6 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
The Fund invests in equity securities of companies that the portfolio management team believes demonstrate above-average, long-term growth potential in all market capitalization ranges. Under normal conditions, the Fund invests at least 50% of its net assets in companies having a market capitalization at the time of purchase that falls within the market capitalization range of companies in the Russell 1000® Index.
Equity securities in which the Fund may invest include common stocks, preferred stocks, equity interests in trusts (including real estate investment trusts and privately offered trusts), partnerships, joint ventures, limited liability companies and vehicles with similar legal structures, other instruments convertible or exercisable into the foregoing, and other investments with similar economic characteristics.
The Fund may invest up to 10% of its net assets in securities of foreign companies, including emerging market companies, American Depositary Receipts (“ADRs”), and other similar depositary receipts. In addition to ADRs, the Fund generally defines foreign companies as those whose securities are traded primarily on non-U.S. securities exchanges. The Fund considers emerging market countries to include countries that are not currently classified as a developed market by Morgan Stanley Capital International (“MSCI”).
The Fund engages in active and frequent trading of its portfolio securities.
The Fund utilizes a focused investment strategy and is non-diversified under the Investment Company Act of 1940, as amended (the “1940 Act”), and may invest a
PROSPECTUS – Focused Growth Fund
16
greater portion of its assets in the securities of a single issuer or in the securities of fewer issuers than a diversified mutual fund.
The investment team may also consider the risks and return potential presented by environmental, social, and governance (“ESG”) factors in investment decisions. 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.
· 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 or other factors, political developments, and other factors. Prices of equity securities tend to rise and fall more dramatically than those of debt securities.
· Equity Securities Risk: Equity securities, as well as equity-like securities such as convertible debt securities, may experience significant volatility. Such securities may fall sharply in response to adverse events affecting overall markets, a particular industry or sector, or an individual company’s financial condition.
· Industry and Sector Risk: Although the Fund does not employ an industry or sector focus, its exposure to specific industries or sectors will increase from time to time based on the portfolio management team’s perception of investment opportunities. If the Fund is overweight in a single industry or sector relative to its benchmark index, the Fund will face an increased risk that the value of its portfolio will decrease because of events disproportionately affecting that industry or sector. Furthermore, investments in particular industries or sectors may be more volatile than the broader market as a whole.
· Focused Investing Risk: To the extent that the Fund invests its assets in the securities of a small number of issuers, the Fund will be subject to greater
PROSPECTUS – Focused Growth Fund
17
volatility with respect to its investments than a fund that invests in the securities of a larger number of issuers.
· Growth Investing Risk: Growth stocks typically trade at higher multiples of current earnings as compared to other stocks, which may lead to inflated prices. Growth stocks often are more sensitive to market fluctuations than other securities because their market prices are highly sensitive to future earnings expectations. At times when it appears that these expectations may not be met, prices of growth stocks typically fall. Growth stocks may be more volatile than securities of slower-growing issuers.
· Large Company Risk: Larger, more established companies may be less able to respond quickly to certain market developments. In addition, larger companies may have slower rates of growth as compared to successful, but less well-established, smaller companies.
· Mid-Sized and Small Company Risk: Investments in mid-sized and small companies may involve greater risks than investments in larger, more established companies. Securities of mid-sized and small companies tend to be more sensitive to changing economic, market, and industry conditions and tend to be more volatile and less liquid than equity securities of larger companies, especially over the short term. The securities of mid-sized and small companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the ability to sell these securities in the future.
· Foreign and Emerging Market Company Risk: Investments in foreign companies and in U.S. companies with economic ties to foreign markets generally involve special risks. These companies may be more vulnerable to economic, political, and social instability and subject to less government supervision, lack of transparency, inadequate regulatory and accounting standards, and foreign taxes. Foreign company securities also include ADRs, which may be less liquid than the underlying shares in their primary trading market. Foreign securities also may subject the Fund’s investments to changes in currency exchange rates. Emerging market securities generally are more volatile than other foreign securities, and are subject to greater liquidity, regulatory, and political risks. Investments in emerging markets may be considered speculative and generally are riskier than investments in more developed markets. Emerging markets are more likely to experience hyperinflation and currency devaluations. Securities of emerging market companies may have far lower trading volumes and less liquidity than securities of issuers in developed markets. Companies with economic ties to emerging markets may be susceptible to the same risks as companies organized in emerging markets.
· Non-Diversification Risk: The Fund is a non-diversified mutual fund under the 1940 Act. This means that the Fund may invest a greater portion of its assets in,
PROSPECTUS – Focused Growth Fund
18
and own a greater amount of the voting securities of, a single issuer or guarantor than a diversified fund. As a result, the value of the Fund’s investments may be more adversely affected by a single economic, political or regulatory event than the value of the investments of a diversified mutual fund.
· 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.
· High Portfolio Turnover Risk: High portfolio turnover may result in increased transaction costs, reduced investment performance, and higher taxes resulting from increased realized capital gains, including short-term capital gains taxable as ordinary income when distributed to shareholders.
The
bar chart shows changes in the performance of the Fund’s Class A shares from
calendar year to calendar year.
PROSPECTUS – Focused Growth Fund
19
|
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 as well as to a broad-based securities market
index.1
1 The Fund as adopted the S&P 500® Index as its broad-based securities market index.
PROSPECTUS – Focused Growth Fund
20
|
| ||||
(for the periods ended December 31, 2023) |
| ||||
Class |
1 Year |
Life of Class |
Inception
|
| |
Class A Shares |
|
|
|
| |
|
Before Taxes |
|
|
|
|
|
After Taxes on Distributions |
|
|
|
|
|
After Taxes on Distributions and Sale of Fund Shares |
|
|
|
|
Class C Shares(1) |
|
|
|
| |
Class F Shares |
|
|
|
| |
Class F3 Shares |
|
|
|
| |
Class I Shares |
|
|
|
| |
Class R3 Shares |
|
|
|
| |
Class R4 Shares |
|
|
|
| |
Class R5 Shares |
|
|
|
| |
Class R6 Shares |
|
|
|
| |
Index |
|
|
|
| |
|
|
|
|
| |
|
| ||||
|
|
|
|
| |
|
|
(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.
Portfolio Managers.
Portfolio Managers/Title |
Member
of |
F. Thomas O’Halloran, Partner and Portfolio Manager |
2019 |
Vernon T. Bice, Portfolio Manager |
2019 |
Matthew R. DeCicco, Partner and Director of Equities |
2019 |
PROSPECTUS – Focused Growth Fund
21
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. 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. See “Choosing a Share Class – Investment Minimums” in the prospectus for more information.
Investment Minimums — Initial/Additional Investments | |||
Class |
A(1) and C |
F, F3, R2, R3, R4, R5, and R6 |
I |
General and IRAs without Invest-A-Matic Investments |
Initial:
$1,500 |
N/A |
Initial:
$1 million |
Invest-A-Matic Accounts(2) |
Initial:
$250 |
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 |
(1) There is no investment minimum for Class A shares purchased by investors maintaining an account with a financial intermediary that has entered into an agreement with Lord Abbett Distributor to offer Class A shares through a load-waived network or platform, which may or may not charge transaction fees. (2) There is no minimum initial investment for Invest-A-Matic accounts held directly with the Fund, including IRAs. |
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.
OTHER IMPORTANT INFORMATION REGARDING FUND SHARES
For important information about taxes and payments to broker-dealers and other financial intermediaries, please turn to the “Tax Information” and “Payments to Broker-Dealers and Other Financial Intermediaries” sections of the prospectus.
PROSPECTUS – Focused Growth Fund
22
FUND SUMMARY |
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.
|
(Fees paid directly from your investment) |
| |||
Class |
|
A |
C |
F, F3, I, R2, R3, R4, R5, and R6 |
|
Maximum
Sales Charge (Load) Imposed on Purchases |
|
|
|
| |
Maximum
Deferred Sales Charge (Load) |
|
|
|
|
|
| |||||
(Expenses that you pay each year as a percentage of the value of your investment) |
| |||||
Class |
A |
C |
F |
F3 |
I |
|
Management Fees |
|
|
|
|
|
|
Distribution and Service (12b-1) Fees |
|
|
|
|
|
|
Other Expenses |
|
|
|
|
|
|
Total Annual Fund Operating Expenses |
|
|
|
|
|
|
Fee Waiver and/or Expense Reimbursement(5) |
( |
( |
( |
( |
( |
|
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(5) |
|
|
|
|
|
|
PROSPECTUS – Focused Large Cap Value Fund
23
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 |
|
|
|
|
|
|
Distribution and Service (12b-1) Fees |
|
|
|
|
|
|
Other Expenses |
|
|
|
|
|
|
Total Annual Fund Operating Expenses |
|
|
|
|
|
|
Fee Waiver and/or Expense Reimbursement(5) |
( |
( |
( |
( |
( |
|
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(5) |
|
|
|
|
|
|
(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) |
These amounts have been updated from fiscal year amounts to reflect current fees and expenses. |
(5) |
For the period from March 1, 2024 through February 28, 2025, Lord, Abbett & Co. LLC (“Lord Abbett”) has contractually agreed to waive its fees and reimburse expenses to the extent necessary to limit total net annual operating expenses, excluding any applicable 12b-1 fees, acquired fund fees and expenses, interest-related expenses, taxes, expenses related to litigation and potential litigation, and extraordinary expenses, to an annual rate of 0.67% for each of Class F3 and R6 shares and to an annual rate of 0.71% for each other class. This agreement may be terminated only by the Fund’s Board of Trustees. |
(6) |
For the period from March 1, 2024 through February 28, 2025, Lord Abbett Distributor LLC (“Lord Abbett Distributor”) has contractually agreed to waive the Fund’s 0.10% Rule 12b-1 fee for Class F shares. This agreement may be terminated only by the Fund’s Board of Trustees. |
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, giving effect to the fee waiver and expense reimbursement arrangement described above. 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:
PROSPECTUS – Focused Large Cap Value Fund
24
Class |
|
|
| ||||||||||||||
|
1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years |
| ||||||||
Class A Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class C Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class F Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class F3 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class I Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R2 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R3 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R4 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R5 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Class R6 Shares |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
Under normal conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities of large companies. A large company is defined as a company having a market capitalization at the time of purchase that falls within the market capitalization range of companies in the Russell 1000® Index. The Fund seeks to invest in securities of companies that the portfolio management team believes are undervalued by the market and are selling at reasonable prices in relation to the portfolio management team’s assessment of their potential or intrinsic value.
Equity securities in which the Fund may invest include common stocks, preferred stocks, equity interests in trusts (including real estate investment trusts and privately offered trusts), partnerships, joint ventures, limited liability companies and vehicles with similar legal structures, other instruments convertible or exercisable into the foregoing, and other investments with similar economic characteristics.
The Fund also may invest up to 10% of its net assets in debt securities. This limit does not apply to the Fund’s investment in convertible debt securities. The Fund may invest in debt securities of any credit quality, maturity, or duration.
The Fund may invest up to 20% of its net assets in securities of foreign companies, including emerging market companies, American Depositary Receipts (“ADRs”), and other similar depositary receipts. In addition to ADRs, the Fund generally
PROSPECTUS – Focused Large Cap Value Fund
25
defines foreign companies as those whose securities are traded primarily on non-U.S. securities exchanges.
The Fund engages in active and frequent trading of its portfolio securities.
The Fund utilizes a focused investment strategy and is non-diversified under the Investment Company Act of 1940, as amended (the “1940 Act”). That means that the Fund may invest a greater portion of its assets in the securities of a single issuer or in the securities of fewer issuers than a diversified mutual fund.
The investment team may also consider the risks and return potential presented by environmental, social, and governance (“ESG”) factors in investment decisions. 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.
· 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 or other factors, political developments, and other factors. Prices of equity securities tend to rise and fall more dramatically than those of debt securities.
· Equity Securities Risk: Equity securities, as well as equity-like securities such as convertible debt securities, may experience significant volatility. Such securities may fall sharply in response to adverse events affecting overall markets, a particular industry or sector, or an individual company’s financial condition.
· Industry and Sector Risk: Although the Fund does not employ an industry or sector focus, its exposure to specific industries or sectors will increase from time to time based on the portfolio management team’s perception of investment opportunities. If the Fund is overweight in a single industry or sector relative to
PROSPECTUS – Focused Large Cap Value Fund
26
its benchmark index, the Fund will face an increased risk that the value of its portfolio will decrease because of events disproportionately affecting that industry or sector. Furthermore, investments in particular industries or sectors may be more volatile than the broader market as a whole.
· Focused Investing Risk: To the extent that the Fund invests its assets in the securities of a small number of issuers, the Fund will be subject to greater volatility with respect to its investments than a fund that invests in the securities of a larger number of issuers.
· Real Estate Risk: An investment in a real estate investment trust (“REIT”) generally is subject to the risks that impact the value of the underlying properties or mortgages of the REIT. These risks include loss to casualty or condemnation, and changes in supply and demand, interest rates, zoning laws, regulatory limitations on rents, property taxes, and operating expenses. Other factors that may adversely affect REITs include poor performance by management of the REIT, changes to the tax laws, or failure by the REIT to qualify for favorable tax treatment under the Internal Revenue Code of 1986, as amended (the “Code”), and changes in local, regional, or general economic conditions.
· Large Company Risk: Larger, more established companies may be less able to respond quickly to certain market developments. In addition, larger companies may have slower rates of growth as compared to successful, but less well-established, smaller companies.
· Value Investing Risk: The prices of value stocks may lag the stock market for long periods of time if the market fails to recognize the company’s intrinsic worth. Value investing also is subject to the risk that a company judged to be undervalued may actually be appropriately priced or even overpriced.
· Foreign and Emerging Market Company Risk: Investments in foreign companies and in U.S. companies with economic ties to foreign markets generally involve special risks. These companies may be more vulnerable to economic, political, and social instability and subject to less government supervision, lack of transparency, inadequate regulatory and accounting standards, and foreign taxes. Foreign company securities also include ADRs, which may be less liquid than the underlying shares in their primary trading market. Foreign securities also may subject the Fund’s investments to changes in currency exchange rates. Emerging market securities generally are more volatile than other foreign securities, and are subject to greater liquidity, regulatory, and political risks. Investments in emerging markets may be considered speculative and generally are riskier than investments in more developed markets. Emerging markets are more likely to experience hyperinflation and currency devaluations. Securities of emerging market companies may have far lower trading volumes and less liquidity than securities of issuers in developed markets. Companies with economic ties to emerging
PROSPECTUS – Focused Large Cap Value Fund
27
markets may be susceptible to the same risks as companies organized in emerging markets.
· 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 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 than higher rated securities. In addition, as interest rates rise, the Fund’s investments typically will lose value.
· 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.
· 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
PROSPECTUS – Focused Large Cap Value Fund
28
portion of convertible securities have below investment grade credit ratings and are subject to increased credit and liquidity risks.
· Non-Diversification Risk: The Fund is a non-diversified mutual fund under the 1940 Act. This means that the Fund may invest a greater portion of its assets in, and own a greater amount of the voting securities of, a single issuer or guarantor than a diversified fund. As a result, the value of the Fund’s investments may be more adversely affected by a single economic, political or regulatory event than the value of the investments of a diversified mutual fund.
· 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.
· High Portfolio Turnover Risk: High portfolio turnover may result in increased transaction costs, reduced investment performance, and higher taxes resulting from increased realized capital gains, including short-term capital gains taxable as ordinary income when distributed to shareholders.
The
bar chart shows changes in the performance of the Fund’s Class A shares from
calendar year to calendar year.
PROSPECTUS – Focused Large Cap Value Fund
29
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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 as well as to a broad-based securities maket
index.1
1 The Fund has adopted the S&P 500® Index as its broad-based securities market index.
PROSPECTUS – Focused Large Cap Value Fund
30
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(for the periods ended December 31, 2023) |
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Class |
1 Year |
Life of Class |
Inception
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Class A Shares |
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Before Taxes |
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After Taxes on Distributions |
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After Taxes on Distributions and Sale of Fund Shares |
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Class C Shares(1) |
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Class F Shares |
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Class F3 Shares |
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Class I Shares |
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Class R3 Shares |
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Class R4 Shares |
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Class R5 Shares |
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Class R6 Shares |
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Index |
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