Lord Abbett Innovation Growth A USD Acc |
Morningstar's Take
|11/05/2023by Drew Carter
| Benjamin Ebel and Steven Wortman have joined the management team at Lord Abbett Growth Leaders, the firm announced. The strategy is still led by Tom O'Halloran, with assistance from equities head Matt DeCicco and comanager Vernon Bice. Ebel and Wortman were added to reflect their contributions to the team. Ebel, a tech and telecom analyst, and Wortman, who covers consumer, industrials, and financials, were named comanagers in September 2022 on Lord Abbett Growth Opportunities LMGAX. In September 2020, Ebel was named a comanager on Lord Abbett Developing Growth LAGWX, and Wortman joined Lord Abbett Micro Cap Growth LMIYX at that time. They've spent 17 and 16 years at the firm, respectively. Because the move doesn't indicate a substantial change in resources, the strategy's Average People rating still applies, as do the Morningstar Analyst Ratings of Neutral for most share classes and the Negative rating on its Ireland-domiciled vehicle's most expensive share class. |
| The Lord Abbett Growth Equity strategy’s team and process don’t stand out, limiting its Morningstar Medalist Rating to Neutral across share classes of both the U.S. and Ireland-domiciled funds. Experienced managers here recently boosted resources, but the team still hasn’t found its footing. Tom O’Halloran joined as a manger in 2001 and has led the strategy since March 2003. Matt DeCicco became a manager much later (December 2017) but he was a longtime analyst on this strategy before that. DeCicco now oversees the firm’s entire equity team, and in an August 2022 reshuffle he dealt himself a good hand here. DeCicco added three analysts (one a replacement), bringing the team to 11 strong, up from nine previously. Experienced healthcare analyst Heidi Lawrence was a nice addition as healthcare typically plays a major role in the portfolio. Still, the team remains modestly sized among large-cap competitors, and its expertise has been much more clearly demonstrated among smaller stocks. The process leans on momentum in fast-growing companies, so investors should be prepared to ride out both highs and lows. The managers blend fundamental stock data with technical trading inputs, favoring firms within the Russell 1000 Growth Index's market-cap range with strong growth potential and rising stock prices. They look to buy stocks after positive news in hopes of capitalizing on an unfolding trend. Momentum data also informs sell decisions. O’Halloran monitors holdings' technical data (such as 150-day moving average prices) to pick points to add and trim, with the portfolio typically trading at a higher valuation than its benchmark. Turnover typically tops 100%. The technology sector dominates here, claiming about 42% of the portfolio, on par with the benchmark. Healthcare has long been a distant second; however, recently consumer discretionary rose from an underweight position to become the second-largest sector in the portfolio and its largest active weight. This is somewhat concerning, as stock-picking in the sector has historically underperformed. The portfolio overall has underperformed as well since inception, and the extreme out- and underperformance year by year may cause investors to bail out at the worst times. Investors can do better. |
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| Morningstar Pillars | |
| People | Average |
| Parent | Average |
| Process | Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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