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.
