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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Lord Abbett High Yield Fund outperformed in Q2 2026 by focusing on higher-quality carry and AI-beneficiary credits while reducing Energy and CCC exposure. Despite Fed hawkishness and geopolitical tensions elevating inflation concerns, the manager remains constructive on high yield fundamentals given solid earnings and elevated credit quality."
The Lord Abbett High Yield Fund returned +2.92% in Q2 2026, outperforming its benchmark by 47 basis points. The quarter was shaped by resilient U.S. economic growth, the US-Iran conflict that elevated energy prices and inflation, and a hawkish Fed pivot toward potential rate hikes. Security selection within BB-rated bonds, particularly in Media and Transportation, contributed to outperformance, as did overweight positions in Aerospace & Defense driven by solid earnings and AI-beneficiary holdings in Technology & Electronics. Detractors included CCC and B-rated credit selection, underperformance in Cable & Satellite TV within Media, and Oil Field Equipment & Services within Energy. The Fund reduced risk exposure by shifting toward higher-quality BBs and Bs while trimming the CCC overweight. Sector positioning increased in Technology & Electronics and Leisure while reducing Energy and Healthcare. Despite near-term macro uncertainty and lingering geopolitical tensions, the manager remains constructive on high yield credit fundamentals, supported by elevated rating quality and solid earnings, while monitoring labor market and inflation indicators for potential volatility.
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