Lord Abbett slashes commissions on multiasset funds

Fees eliminated altogether for large accounts as part of a rebranding of the funds to make them more attractive to advisers

Jan 14, 2014 @ 12:01 am

By Jason Kephart

Lord Abbett & Co. has reduced the sales charge on its multiasset mutual funds by up to 50% and eliminated them altogether for large accounts as part of a rebranding of the funds to make them more attractive to advisers moving out of traditional fixed income.

To avoid sales charges in the four multiasset funds, the account size minimum has dropped to $500,000, from $1 million, and all smaller accounsts have seen their sales charges greatly reduced. Accounts with between $250,001 and $499,999, for example, have had sales charges dropped to 1.25%, from 2.75%, and accounts with less than $100,000 now face a 2.25% sales charge, down from 4.75%.

That puts the sales charges of the multiasset funds, such as the $1.8 billion Lord Abbett Multi-Asset Balanced Opportunity Fund (LABFX), in line with the sales charges for traditional fixed-income funds at Lord Abbett.

“We're seeing more advisers transition out of traditional fixed income and into multiassets,” said Steve Lipper, an investment strategist at Lord Abbett.

Traditional fixed-income funds did see $86 billion of outflows in 2013, the most net withdrawals in a year since 2004, according to research firm TrimTabs.

Last year, net inflows into fixed-income alternatives, such as nontraditional bond funds that can invest across a range of investment grades and durations, topped $50 billion, according to Morningstar Inc.

The Lord Abbett multiasset funds are not unlike nontraditional bond funds, except for the fact that they add equities to the mix, too.

The $1.4 billion Lord Abbett Multi-Asset Income Fund (ISFAX) has a strategic allocation to 75% bonds, including below investment grade, and 25% dividend-paying equities. The fund returned 10% in 2013; the average taxable bond fund lost 1.46%.

The multiasset fund family at Lord Abbett also includes the $1 billion Lord Abbett Multi-Asset Growth Fund (LWSAX) and the $228 million Lord Abbett Multi-Asset Global Opportunity Fund (LAGEX).

Part of the rebranding included changing the names of the four funds. The Lord Abbett Multi-Asset Balanced Opportunity Fund was formerly the Balanced Strategy Fund, the Lord Abbett Multi-Asset Income Fund was called the Diversified Income Fund, the Multi-Asset Growth Fund was the Growth & Income Strategy Fund and the Multi-Asset Global Opportunity Fund was the Global Allocation Fund.

The funds don't have a static allocation to their multiasset building blocks.

Mr. Lipper said the asset allocation teams currently are sticking to what worked in 2013, as they think it's poised to repeat itself, although not to the same magnitude. That means skewing towards stocks over bonds, U.S. over international, and bonds with credit risk over bonds with duration risk.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

How 401(k) advisers can use 'centers of influence' to grow their business

Leveraging relationships with accounting, benefits, and property and casualty insurance firms can help deliver new business leads for retirement plan advisers.

Latest news & opinion

Things are looking up: IBDs soared in 2017

With revenue up, interest rates rising and regulation easing, IBDs are soaring.

SEC advice rule may give RIAs leg up over broker-dealers

Experts say advisers will be able to point to their role as fiduciaries as a differentiator in the advice market.

Brokers accept proposed SEC rule on who can call themselves an adviser

Some say the rule will clear up investor confusion, but others say the SEC didn't go far enough.

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print