Lord Abbett Developing Growth Fund

Scorecard
5 / 5 Stars
Lipper
5 5 3 2 1
Zacks Investment Research
2 (Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
C+ (Hold)

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.

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Note: Profile written for different share class.

Performance

The fund has returned 56.54 percent over the past year, 19.32 percent over the past three years, 32.44 percent over the past five years, and 12.98 percent over the past decade. 

Trailing Returns Updated 02.28.2014
Year to date 7.1%
1 Year 56.5%
3 Years (Annualized) 19.3%
5 Years (Annualized) 32.4%
10 Years (Annualized) 13.0%

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Summary

Lord Abbett Developing Growth has come charging back over the past couple of years.

As of March 05, 2014, the fund has assets totaling almost $3.94 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 56.54 percent over the past year and 19.32 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 32.44 percent over the past five years and 12.98 percent over the past decade.  

Investment Strategy

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."

Management

Tom O'Halloran and Arthur Weise manage the fund.

Fees

Lord Abbett Developing Growth Fund has an expense ratio of 1.26 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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