ClearBridge Opportunity Portfolios

Overview | Performance | Portfolio Characteristics

Overview

The ClearBridge Opportunity Portfolios were designed for investors seeking appreciation by investing opportunistically across all market capitalizations. The managers employ quantitative and fundamental analyses in identifying stocks they believe have a higher probability of outperforming across several sectors and industries.

Investment Objective

The Opportunity Portfolios strategy seeks to:

maximize capital appreciation.

Investment Philosophy

The managers invest primarily in companies which they believe have key "value" attributes.They may consider stock price relative to earnings, book value, strong or rapidly improving balance sheets and/or cash flows and return on invested capital, among other factors, to select companies which have the potential for high capital appreciation.

Key Differentiators

Incorporates a bottom-up and top-down approach that combines quantitative and technical screening with fundamental and theme analysis.
Emphasizes franchises believed to have operating leverage rather than those with financial (balance sheet) leverage.
Willing to hold significant cash.
Concentrated portfolio that at times can significantly overweight or underweight benchmark sectors.
Opportunistically invests in companies across all market capitalizations and may invest in those experiencing "special situations."¹
Experienced management team led by veteran managers John Goode and Peter Hable who have over 42 and 28 years of industry experience, respectively.

Investment Process

We seek to:

Define the investment universe

apply quantitative parameters to identify an initial universe of companies, which may include common stocks in the Russell 3000 Index, ETFs and ADRs;

Identify market sectors that appear to be incorrectly priced

Utilize quantitative analysis to help determine which sectors or industries should be overweighted;

Determine buy-list

emphasize individual securities that have key "value" attributes;

Incorporate technical analyses to gauge stock performance

evaluate how well or inadequately a stock has performed, the time period of the outperformance or underperformance, and whether insiders are buying or selling shares in the company;

Construct portfolio and review holdings continuously

build a concentrated portfolio of stocks across market capitalizations, sectors and industries in the market; and
continually review and manage all accounts for risk at every stage in the investment process

Investment Risks

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

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.

Investments may include ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. markets and sectors. In addition, a client will bear a proportionate share of the separate fees and expensed incurred by any ETF in which the clients' account is invested.

The managers may sometimes hold significant portion of portfolio assets in cash equivalents while waiting for buying opportunities.

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

John Goode

Managing Director

Senior Portfolio Manager
43 years of investment industry experience

Peter Hable

Managing Director

Senior Portfolio Manager
29 years of investment industry experience

Recent Commentary

CBA Opportunity Portfolios Commentary 1Q12

Related Resources

Fact Card

Conference Calls

¹ The portfolio may invest in "special situations" without regard to market capitalization. The managers define special situations as companies undergoing unusual or possibly one-time developments that, in their opinion, make them attractive for investment. Such developments may include, but are not limited to, actual or anticipated: sale or termination of an unprofitable part of the company's business; change in the company's management or in management's philosophy; basic change in the industry in which the company operates; introduction of new products or technologies; acquisition or merger activities; or reorganizations or restructurings.

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.