On the last day of 2009, Lord Abbett
reduced net expense ratios for two of its funds – the International Core Equity Fund and the International Dividend Income Fund, the Jersey City-based investment manager revealed on Wednesday.
| Mike Weldon |
Class A shares of both the international core equity fund and international dividend income fund now come with an expense ratio of 112 basis points. Previously, Class A shares of the international core equity fund carried an expense ratio of 143 bps, while the international dividend income fund was offered at 135 bps.
“We've been undergoing a thorough review of every area of our business for the past four or five years,” Mike Weldon
, partner and managing director at Lord Abbett told The MFWire
in an interview. "We've gone through and restructured products, lowered fees, adjusted yields...we've reviewed and made the necessary changes to several of our funds as part of an ongoing process to make sure we have the right products at the right price," he added.
The core equity fund, which invests in stocks of large and mid-sized international companies perceived to be undervalued, is the older and larger of the two, having been launched in 2003 and currently holding roughly $939 million in assets. Meanwhile, the $325 million dividend income fund (as of December 31 2009) was unveiled in 2008, seeking to invest in international companies with sustainable dividends, high yields, and below-average valuations.
A further impetus for reducing Class A share fees was attracting investors eyeing opportunities in international markets.
“Lots of investors and advisors are focusing more on international markets. Over half the world's market cap is now outside the U.S. as well as a majority of dividend-paying stocks. We were very excited to have launched the international dividend income fund in the summer of 2008 and both that fund's performance and the performance of the international core equity fund have been in the top quartile. We want to make sure that we're offering the right products in the international space,” Weldon explained.
The move comes as numerous firms and investors have been trumpeting the attractive investment opportunities abroad of late compared to their domestic market brethren – a trend that is perhaps predictable in light of the banner year emerging markets and many international bond funds had in 2009, coupled with the lackluster growth of the US economy in the aftermath of the financial crisis.
Company Press Release
*LORD ABBETT LOWERS EXPENSE RATIOS ON*
*TWO INTERNATIONAL EQUITY FUNDS
Jersey City, NJ – January 20, 2010 – Lord, Abbett & Co. LLC (“Lord Abbett”), an independent, privately held
investment management firm, announced that effective December 31, 2009, it reduced the net expense ratios on both
the *Lord Abbett International Core Equity Fund (LICAX) *and the *Lord Abbett International Dividend Income*
*Fund (LIDAX) *Class A shares to 1.12%. The net expense ratios had been 1.43% on International Core Equity and
1.35% on International Dividend Income. The new expense ratios are lower than both the Morningstar and Lipper
peer group averages of Class A shares in their respective categories, as of December 31, 2009.
The International Core Equity Fund, established in 2003, invests in the stocks of large and mid-sized international
companies poised for significant appreciation where valuations may potentially expand and growth may exceed
expectations. The Fund currently manages approximately $939 million in assets.
The International Dividend Income Fund, created in 2008, seeks international companies with high yields, sustainable
dividends, and below-average valuations to construct a portfolio that potentially rewards investors in two ways: high
dividend income and capital appreciation. When Lord Abbett launched the Fund, it was one of the first mutual funds
of its kind to offer an international dividend strategy. Current assets in this Fund are $325 million.
Historically, both funds have delivered attractive performance in their respective categories. As of December 31,
2009, the International Core Equity Fund finished in the 35th percentile or better in both its Morningstar and Lipper
peer groups for the one-, three-, and five-year periods,* and the International Dividend Income Fund finished its first
year in the top quintile of both its Morningstar and Lipper peer groups.**
The lower expense ratios come during a time when Lord Abbett sees greater opportunities for investors in the
international markets. “Today, more than half of the world’s market cap and almost three times the number of public
companies are outside the United States,” said *Mike Weldon, Lord Abbett Partner & Director of Marketing.*
“Yet few investors are aware of this breadth and, as a result, typically allocate less than 20% of their portfolios to
international markets.” Weldon added: “The international markets also offer greater dividend potential to investors,
and access to industry sectors, like building products and shipping, that may no longer exist in the United States.”
**Lord Abbett International Core Equity Fund: *For the one-, three-, and five-year periods ended December 31, 2009, the Fund
(Class A) ranked in the 27th percentile (108 out of 399), the 27th percentile (86 out of 320), and the 23rd percentile (62 out of 270)
respectively, in the Lipper International Large-Cap Core category; and in the 35th percentile (286 out of 823), the 28th percentile
(178 out of 635), and the 28th percentile (131 out of 462) respectively, in the Morningstar Foreign Large Blend category.
***Lord Abbett International Dividend Income Fund: *For the one-year period ended December 31, 2009, the Fund (Class A)
ranked in the 18th percentile (23 out of 130) in the Lipper International Multi-Cap Value category; and in the 11th percentile (36
out of 340) in the Morningstar Foreign Large Value category.
Sources: Morningstar Inc. and Lipper, Inc.
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