ClearBridge Multi Cap Growth Portfolios

Overview | Performance | Portfolio Characteristics

Overview

The Multi Cap Growth (MCG) Portfolios seek out growth company stocks with the potential for above-average long-term earnings and/or cash flow growth.

Investment Objective

The strategy seeks to:

achieve long-term capital appreciation through investment in large-, mid- and small- capitalization stocks that have the potential for above average long-term earnings and/or cash flow growth;
select companies that can be held for long periods of time.

Investment Philosophy

We believe that:

An all-capitalization portfolio that seeks a low turnover ¹ approach to portfolio construction, allowing earnings and/or cash flow to compound—does not force sell decision based upon market capitalization
Intensive, bottom-up investment process seeks inefficiently priced companies with strong fundamentals, incentive-driven management teams, dominant positions in niche markets and/or goods or services customers are practically compelled to use.

Key Differentiators

Lead portfolio manager Richard Freeman has 35 years of investment industry experience
Richard believes a true growth portfolio should consist of stocks that can be held not for a quarter or two, but for many years so that earnings and/or cash flow growth can compound over time
Portfolios typically concentrated in generally 25 - 35 stocks
Sector concentrations can be significant, but are a by-product of the bottom-up fundamental research-driven stock selection process

Portfolio Positioning

Designed for investors seeking a growth portfolio with the ability to invest in all market capitalizations
Offers a long-term buy-and-hold strategy, which may reduce portfolio turnover

Investment Process

We seek to:

Define the investment universe

consider companies across the market capitalization spectrum that we believe have the potential for above-average long-term earnings and/or cash flow growth;

Perform bottom-up fundamental analysis

emphasize companies with significant franchise value, material ownership stake by management, strong balance sheets and/or ubiquitous products or services;

Determine buy-list

identify companies that may be inefficiently priced and/or overlooked by Wall Street at time of position initiation;

Maintain concentrated portfolio with long-term horizon

construct a low-turnover portfolio of generally 25 - 35 holdings concentrated by industry and issuer. Allow earnings and/or cash flow growth to compound; and

Review holdings continuously

re-examine a current holding when long-term deterioration in company or industry fundamentals is seen as a significant possibility, valuation is excessive or a new idea provides better risk/return prospects.

Investment Risks

All investments involve risk, including loss of principal and there is no guarantee that investment objectives will be met.

In additon to investments in large-capitalization companies, investments may be made in speculative and/or small-cap and mid-cap companies which involve a higher degree of risk and volatility than investments in larger, more established companies. In addition, because the investments may be concentrated in a limited number of industries and companies, the portfolios may involve heightened risk.

Investments may also be made in ADRs and other securities of non-U.S. companies in developed and emerging markets which involve risks in addition to those ordinarily associated with investing in domestic securities, including the potentially negative effects of currency fluctuation, political and economic developments, foreign taxation and differences in auditing and other financial standards. These risks are magnified in emerging markets.

Certain limits on the amount of investment in any one company may cause individual MCG investment portfolios to vary from each other and thus the performance results of such portfolios may also vary from each other, particularly when combined with the price volatility of stocks in such portfolios.

Management Team

Established in 2005, ClearBridge Advisors has over 45 years of asset management experience. The firm is known for its research-driven, fundamental approach to investing, offering actively managed U.S. equity products in a wide range of capitalizations and styles.

Investment Management

Richard Freeman

Managing Director

Senior Portfolio Manager
36 years of investment industry experience

Evan Bauman

Managing Director

Portfolio Manager
16 years of investment industry experience

Recent Commentary

CBA Multi Cap Growth Portfolios Commentary 1Q12

Related Resources

Fact Card

¹ Market, security and/or other investment considerations may result in higher turnover from time to time. Also, all capitalization ranges will not necessarily be represented in an individual account.

The investment process may change over time. The characteristics set forth above are intended as a general illustration of some of the criteria the strategy team considers in selecting securities for client portfolios.

Client portfolios are managed based on investment instructions or advice provided by one or more of the following Legg Mason-affiliated investment management firms, as indicated in portfolio names or otherwise: ClearBridge Advisors, LLC, Western Asset Management Company and Global Currents Investment Management, LLC. Management is implemented by Legg Mason Private Portfolio Group, LLC or, in the case of certain programs, by the program sponsor or its designee.

All investments involve risk, including possible loss of principal.