Municipal Bond Market Review

The unemployment rate declined from 8.4% in August to 7.9% as of September 30, 2020. Total nonfarm payroll employment increased by 661,000 in September 2020, reflecting the continued resumption of economic activity that had been curtailed due to the coronavirus pandemic. Real gross domestic product (GDP) for the nation decreased at an annual rate of 31.4%, during the second quarter of 2020, according to statistics released by the

United States Bureau of Economic Analysis. Despite a recent pick-up in economic activity, the country still faces an uphill battle in the recovery phase of the coronavirus-induced economic downturn.

Municipal bond issuance for the calendar year-to-date period ended September 30, 2020 totaled approximately $347 billion, a 23.6% increase in issuance compared with the prior calendar year-to-date period, ended September 30, 2019. Municipal yields decreased across the curve during

the 12-month period ended September 30, 2020. Bonds within the 5-15 year range and bonds with higher credit qualities significantly outperformed the broader municipal bond market (as represented by the Bloomberg Barclays Municipal Bond Index¹) during the 12-month period ended September 30, 2020.

The municipal market turned negative in mid-March amid volatility stemming from COVID-19 concerns. At the onset of the pandemic, investors feared a protracted slowdown in economic activity would weigh on the fundamentals of many municipalities and related enterprises. As a result, the market moved sharply lower as a 60-week streak of mutual fund inflows turned to outflows. As investors began to withdraw capital from funds rapidly, particularly high yield municipal funds, we saw portfolio managers across the market sell bonds to meet redemption requests. Bond prices quickly adjusted lower in order to reach levels that became attractive for non-retail buyers.

Beginning in early May, however, the municipal market has staged an impressive rebound and we believe investor demand has returned, as municipal mutual funds experienced 19 consecutive weeks of inflows before experiencing the first week of outflows. Looking forward, all eyes will be on the upcoming Presidential election, where we believe if the Republican Party maintains control of the Executive Branch, the Affordable Care Act (ACA)

may come under renewed pressure, potentially leading to higher numbers of uninsured patients and more unpaid hospital bills. Conversely, if the Democratic Party wins the election, we believe certain provisions of the ACA may be reinstated, leading to fewer unpaid bills and more proactive care. Finally, we believe infrastructure will be a key focus for Washington after the election, regardless of the outcome, potentially leading to an increase in municipal bond issuance. As a result of increased supply, municipal yields may face upward pressure. However, we believe the market is likely to absorb the elevated levels of supply.

Short Duration Tax Free Fund

The Short Duration Tax Free Fund returned 1.68%, reflecting performance at the net asset value (NAV) of class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays Municipal Bond Short 1-5 Year Index², returned 3.35% during the same period. As yields across the tax-free curve moved lower, the Fund’s slightly longer duration contributed to relative performance. The Fund’s relative overweight to bonds rated ‘BBB’ and lower detracted from relative performance partially due to headwinds caused by the coronavirus pandemic. With regard to sectors, an overweight allocation to the transportation sector contributed to

relative performance, while security selection in housing bonds detracted.

Intermediate Tax Free Fund

The Intermediate Tax Free Fund returned 1.93%, reflecting performance at the net asset value (NAV) of class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays 1-15 Year Municipal Bond Index,³ returned 4.19% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration led to a positive impact on relative performance. An overweight in bonds rated ‘BBB’ and lower led to a negative impact on relative performance amid volatility stemming from coronavirus concerns. With regard to sectors, tobacco bonds contributed to relative performance, while transportation credits detracted.

National Tax Free Fund

The National Tax Free Fund returned 2.06%, reflecting performance at the net asset value (NAV) of class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, returned 4.09% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration relative to the benchmark led to a positive impact on relative performance. The Fund’s overweight allocation to non-

investment grade bonds detracted from performance. An overweight allocation to tobacco bonds contributed to relative performance while security selection and an overweight in the health care sector detracted.

High Yield Municipal Bond Fund

The High Yield Municipal Bond Fund returned -0.09%, reflecting performance at the net asset value (NAV) of Class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays High Yield Municipal Bond Index,⁴ returned 1.27% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration relative to the benchmark led to a positive impact on relative performance. Security selection in bonds rated ‘BBB’ and lower detracted from relative performance. With regard to sectors, security selection and an overweight in the health care sector detracted as hospital systems dealt with the fallout from the COVID-19 pandemic, including being forced to provide lower margin basic care relative to high-margin elective procedures. Security selection in tobacco bonds led to a positive impact on relative performance.

Short Duration High Yield Municipal Bond Fund

The Short Duration High Yield Municipal Bond Fund returned -0.12%,

reflecting performance at the net asset value (NAV) of class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, a 50%/50% blend of the Bloomberg Barclays Municipal 1-8 Year Index and the Bloomberg Barclays High Yield Municipal 1-8 Year Index⁵, returned 2.95% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration relative to the benchmark led to a positive impact on relative performance. Security selection within ‘BBB’ and lower rated bonds led to a negative impact on relative performance. With regard to revenue sectors, security selection in health care credits detracted while an overweight allocation to and security selection in the government lease sector contributed to relative returns.

California Tax Free Fund

The California Tax Free Fund returned 2.36%, reflecting performance at the net asset value (NAV) of class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, returned 4.09% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration relative to the benchmark led to a positive impact on relative performance. The Fund’s overweight allocation to bonds rated below ‘BBB’ detracted from relative performance. With regard to

sectors, an overweight allocation to and security selection within the health care sector detracted from relative performance. The sector detracted as hospital systems dealt with the fallout from the coronavirus pandemic, including being forced to provide lower margin basic care relative to high-margin elective procedures. An overweight allocation to tobacco bonds contributed to relative performance.

New Jersey Tax Free Fund

The New Jersey Tax Free Fund returned 1.92%, reflecting performance at the net asset value (NAV) of class A Shares with all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, returned 4.09% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration relative to the benchmark led to a positive impact on relative performance. The Fund’s exposure to bonds rated ‘BBB’ and lower detracted from relative performance. With regard to sectors, security selection in the government lease sector led to a negative impact on relative performance and an overweight in the tobacco sector contributed.

New York Tax Free Fund

The New York Tax Free Fund returned 1.21%, reflecting performance at the net asset value (NAV) of class A Shares with

all distributions reinvested, for the 12-month period ended September 30, 2020. The Fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, returned 4.09% during the same period. As yields across the tax-free curve moved lower, the Fund’s longer duration relative to the benchmark led to a positive impact on relative performance. The Fund’s underweight allocation to bonds rated ‘AA’ and ‘A’ led to a negative impact on relative performance. With regard to

sectors, security selection and an overweight allocation in the industrial development sector detracted from relative performance, while an overweight to tobacco credits contributed.

Each Fund’s portfolio is actively managed and, therefore, its holdings and the weightings of a particular issuer or particular sector as a percentage of portfolio assets are subject to change. Sectors may include many industries.

¹  The Bloomberg Barclays Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. Bonds must be rated investment-grade (Baa3/BBB- or higher) by at least two ratings agencies. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31, 1990, and must be at least one year from their maturity date.

²  The Bloomberg Barclays Municipal Bond Short 1-5 Year Index is the Muni Short 1-5 year component of the Municipal Bond index. The Bloomberg Barclays Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. The index is a broad measure of the municipal bond market with maturities of at least one year. To be included in the index, bonds must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Moody’s, S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be investment grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31, 1990, and must be at least one year from their maturity date.

³  The Bloomberg Barclays 1-15 Year Municipal Bond index is the 1-15 year component of the Municipal Bond index. The Bloomberg Barclays Municipal Bond Index is a rules-based, market-value-weighted index

engineered for the long-term tax-exempt bond market. The index is a broad measure of the municipal bond market with maturities of at least one year. To be included in the index, bonds must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Moody’s, S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31, 1990, and must be at least one year from their maturity date.

⁴  The Bloomberg Barclays High Yield Municipal Bond Index is an unmanaged index consisting of noninvestment-grade, unrated or below Ba1 bonds.

⁵  The Bloomberg Barclays 1-8 Year Municipal Bond Index is the 1-8 year component of the Municipal Bond index. The Bloomberg Barclays Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. The index is a broad measure of the municipal bond market with maturities of at least one year. Bonds must have an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The Bloomberg Barclays 1-8 Year High Yield Municipal Bond Index is the 1-8 year component of the High Yield Municipal Bond index. The Bloomberg Barclays High Yield Municipal Bond Index is an unmanaged index consisting of noninvestment-grade, unrated or below Ba1 bonds. Unless otherwise specified, indexes reflect total return,

with all dividends reinvested. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.

Important Performance and Other Information

Performance data quoted in the following pages reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance quoted. The investment return and principal value of an investment in the Funds will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month end by calling Lord Abbett at 888-522-2388 or referring to www.lordabbett.com.

Except where noted, comparative Fund performance does not account for the deduction of sales charges and would be different if sales charges were included. Each Fund offers classes of shares with distinct pricing options. For a full description of the differences in pricing alternatives, please see each Fund’s prospectus.

During certain periods shown, expense waivers and reimbursements were in place. Without such waivers

and expense reimbursements, the Funds’ returns would have been lower.

The annual commentary above discusses the views of the Funds’ management and various portfolio holdings of the Funds as of September 30, 2020. These views and portfolio holdings may have changed after this date. Information provided in the commentary is not a recommendation to buy or sell securities. Because the Funds’ portfolio is actively managed and may change significantly, the Funds may no longer own the securities described above or may have otherwise changed their positions in the securities. For more recent information about the Funds’ portfolio holdings, please visit www.lordabbett.com.

A Note about Risk: See Notes to Financial Statements for a discussion of investment risks. For a more detailed discussion of the risks associated with each Fund, please see each Fund’s prospectus.

Mutual funds are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, banks, and are subject to investment risks including possible loss of principal amount invested.