The Lord Abbett Intermediate Tax Free Fund achieved a 1.61% return in the fourth quarter of 2025, surpassing its benchmark. This performance was driven by strategic positioning in the yield curve. The broader municipal bond market also saw positive returns amid significant inflows throughout the year.
The Lord Abbett Intermediate Tax Free Fund, ticker LISAX, delivered a return of 1.61% for the quarter ending December 31, 2025. This figure reflects the net asset value of class I shares, with all distributions reinvested. The fund outperformed the Bloomberg Municipal Bond Index, which returned 1.56% over the same period.
Throughout 2025, municipal bond funds recorded approximately $54 billion in inflows, spread across various duration ranges. Long-term funds led the categories in attracting investments. The fund's relative performance was primarily attributed to its yield curve positioning, particularly an overweight allocation to intermediate maturities.
In the market review, short-term rates rose during the quarter, while rates on intermediate and longer maturities showed different movements, though details on the latter were not fully specified in the commentary. Looking ahead to 2026, the commentary highlights several potential tailwinds for the municipal market, including a more dovish stance from the Federal Reserve, robust municipal fundamentals, and starting yields near a decade-high.
This performance underscores the resilience of intermediate-term municipal bonds in a shifting rate environment. The commentary, published on February 24, 2026, provides insights into the sector's dynamics at the close of 2025.