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U.S. News evaluated 215 Small Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
Note: Profile written for different share class.
The fund has returned 40.90 percent over the past year, 16.32 percent over the past three years, 28.85 percent over the past five years, and 12.43 percent over the past decade.
|Trailing Returns||Updated 03.31.2014|
|Year to date||1.7%|
|3 Years (Annualized)||16.3%|
|5 Years (Annualized)||28.9%|
|10 Years (Annualized)||12.4%|
Lord Abbett Developing Growth has come charging back over the past couple of years.
As of April 22, 2014, the fund has assets totaling almost $3.76 billion invested in 123 different holdings. Its portfolio consists primarily of shares of small companies.
After nearly falling apart in 2008, this fund, which invests heavily in post-startup companies, has generated some impressive returns. As a result, even counting 2008's 47 percent loss, the fund was still outpacing the majority of its peers over the trailing three-year period that wrapped up at the end of 2010. One factor that separates this fund from other small-growth rivals is its exposure to Asia. As of the end of 2010, Asian companies accounted for nearly 10 percent of the fund's stock portfolio. Another distinguishing characteristic is the fund's high trading volume. Its turnover ratio, a measure of how frequently management trades, currently sits at 92 percent. The fund has returned 40.90 percent over the past year and 16.32 percent over the past three years.
Historically, this fund has had its fair share of off years. Between 2000 and 2004, for instance, it finished in the bottom half of Morningstar's small-growth category in every year except for one. When the fund has a bad year, its aggressive nature is normally at fault. Says Morningstar: "Investors seeking a prudently aggressive broker-sold small-growth fund may want to give this one a look, as long as they can handle the volatility that's inherent in the strategy." In particular, the types of young companies in which the fund invests come with their fair share of risk. The fund has returned 28.85 percent over the past five years and 12.43 percent over the past decade.
According to the fund's prospectus: "To pursue its objective, the Fund primarily invests in the common stocks of companies demonstrating above-average, long-term growth potential. The Fund seeks to identify companies that it believes are strongly positioned in the developing growth phase, which the Fund defines as the period of swift development after a company's start-up phase when growth occurs at a rate rarely equaled by established companies in their mature years."
Role in Portfolio
Morningstar calls this fund a "supporting player."
Tom O'Halloran and Arthur Weise manage the fund.
Lord Abbett Developing Growth Fund has an expense ratio of 1.09 percent.
Like all stock funds, this one comes with some risks.