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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Lord Abbett Floating Rate Fund outperformed its benchmark by 87 basis points in Q2 2026, driven by strong CCC-rated credit selection in Consumer Durables and Telecommunications. The manager remains constructive on leveraged loans despite rising defaults, targeting high-carry opportunities amid hawkish Fed policy and resilient US growth."
The Lord Abbett Floating Rate Fund returned +2.75% in the second quarter of 2026, outperforming its benchmark by 87 basis points. The Fund benefited from credit selection within CCC-rated loans, particularly overweight positions in Consumer Durables and Apparel and Telecommunications sectors. The quarter was shaped by resilient US economic growth, a shift toward hawkish monetary policy as the Fed emphasized price stability, and geopolitical developments including the US-Iran conflict and subsequent June ceasefire. The leveraged loan market returned +1.88%, with lower-quality CCCs outperforming higher-rated tiers. Default activity increased, with the par-weighted US loan default rate finishing at approximately 2.29%. The manager remains constructive on leveraged loans given economic resilience and elevated yields, continuing to focus on high-carry opportunities while maintaining balanced sector exposure. The Fund increased B-rated exposure while reducing select BB and CCC holdings. Key overweights include Utilities, Materials, and Telecommunication Services, while underweights include Consumer Services, Software and Services, and Media and Entertainment. The manager monitors labor market and inflation indicators for potential volatility.
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