A US equity strategy that seeks long-term growth by investing in a concentrated all-cap portfolio of high-quality companies with outstanding ESG characteristics.
Builds on ClearBridge’s legacy and expertise in integrating ESG research as a core component of its fundamental research
Diversifies across positions, industries and market capitalisations with meaningful exposure to sustainable business models that address global challenges
Takes a long-term approach that facilitates company engagement to promote prudent financial management and best-in-class ESG practices
Philosophy and Process
ClearBridge believes that high-quality companies with a sustainable competitive advantage are likely to outperform through a full market cycle. The strategy leverages the firm’s 30+ years of experience engaging on ESG issues and its integration of ESG factors and ratings into the fundamental research process to uncover investment opportunities.
Quantitative screening and fundamental analysis, backed by ClearBridge’s extensive experience and resources, helps identify high-quality companies with attractive valuations, strong fundamentals, and management teams that allocate capital effectively.
ESG factors help shape conviction, influencing whether a particular company should be held, for how long and at what position size.
High quality, high conviction
The managers construct a concentrated US equity portfolio of high-conviction ideas with a multi-year time horizon while striving to maintain exposure across industries and market capitalisations to ensure the majority of risk is derived from stock selection.
A long-term view allows the investment team to engage directly with companies on ESG practices and take an active role in proxy voting, a critical aspect of active investment management.
The strategy is managed by Derek Deutsch, CFA and Mary Jane McQuillen, Head of ESG Investment at ClearBridge. The long-tenured managers are supported by Portfolio Analysts Benedict Buckley, CFA and Kimberly Gifford, CFA, as well as the Sector Analysts of the ClearBridge Fundamental Research Team, who integrate material and relevant ESG factors and sustainability coverage within their fundamental investment analysis.
Derek Deutsch, CFA
Managing Director, Portfolio Manager
Derek co-manages the Sustainability Leaders Strategy. Derek has 21 years of investment industry experience. He joined a predecessor organization in 1999 and spent six years as an equity research analyst responsible for the health care sector. Prior to joining the firm, Derek worked as a special assistant at the U.S. Department of Health and Human Services in Washington, D.C., and also as a journalist covering health care policy for the American Political Network. Derek earned a BA from Brown University and an MBA from Georgetown University. He is a member of the CFA Institute and of the CFA Society New York.
Mary Jane McQuillen
Managing Director, Head of Environmental, Social and Governance Investment, Portfolio Manager
Mary Jane co-manages the Sustainability Leaders Strategy as well as other ESG strategies at the firm. She has been with the ESG program at a predecessor firm since 1996 and is a member of the ClearBridge Investments Proxy Committee. Mary Jane received her MBA in Finance from Columbia Business School. She holds a BS in Finance from Fordham University. Mary Jane serves on the Board of Directors for the Sustainable Investments Institute (Si2). She is a former Board member of the IRRC Institute and the CFA Society New York. She is also a former Board member of the Forum for Sustainable and Responsible Investment (US SIF). Mary Jane is a member of the UN Principles for Responsible Investment (UN PRI) Listed Equities Steering Committee and the ESG Integration Sub-Committee.
ESG at the Core
ClearBridge Investments is a pioneer in ESG investing. Having established an ESG investment program in 1987, the firm was among the first — and largest — mainstream investment managers to commit to ESG investing. ClearBridge is structured to make a difference on your behalf with analyst-driven, ESG-focused portfolio company meetings, firm-wide integration of ESG principles, and active participation in prominent ESG member networks such as the Principles for Responsible Investing and the Forum for Sustainable and Responsible Investment.
What sets ClearBridge apart
Fully Integrated Process
ESG evaluation is not a separate process at ClearBridge. Their fundamental research process incorporates ESG perspectives that go beyond traditional passive negative screens and overlays.
Proprietary Rating System
Every company within the ClearBridge research universe receives a rating intended to signal to investment teams how well a company has executed against ESG practices. ClearBridge analysts assign companies one of four proprietary ESG ratings, ranging from AAA (highest) to B (lowest), based on company performance/behavior and a comparison with industry peers.
Advocacy via active proxy voting and engagement with company management. As high-conviction investors who own companies for the long haul, ClearBridge is positioned to help guide and influence company management on issues related to ESG.
Learn how ClearBridge seeks to improve outcomes through active company ownership in their 2020 Impact Report.
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Mary Jane McQuillen
Environmental, Social and Governance Investment Focus
ESG investing, also known as Environment Social and Governance investing is a term that we believe best represents today how we can integrate financial analysis, as well as the important factors around environmental, social and governance issues. And our experience has shown that we can construct diversified investment portfolios that actively integrate environmental, social and governance factors in the investment, stock selection and research processes.
These are actively managed strategies, fairly concentrated, so typically, we would start with the universe of that particular benchmark. Say, for example, the Russell 3000 and financially screen down to a small universe or a subset of opportunities that we want to take a closer look at. When in doing so, we will conduct the fundamental analysis and our analysts, who cover various sectors, would be involved as well and work with portfolio managers to isolate those companies that we want to look at more closely, specifically with regard to environmental, social and governance factors.
For the Clearbridge ESG Investment Program, there are two unique aspects. One is the fundamental research platform whereby the sector analysts are given a responsibility to not only cover and understand the financial attributes and characteristics of the companies under their coverage, but also the environment, social and governance attributes. And those two are aligned such that we believe the sector analysts are most or best suited to identify those issues and to integrate them into their analysis with regard to their upside and downside and where they see the risks and where they see the opportunities. The second aspect that is unique with the program is that the sector analysts and the PMs can also actively engage the companies that we are investing in. So this is not just a one time, let us invest in these companies because we have done some research, this is a longer term proposition where we have a relationship as owners on behalf of our clients to really understand and continually move and grow with the company sustainability strategy as well as their investment growth.
It should be noted that the value of investments and the income from them may go down as well as up.
Investment in company shares: The fund invests in shares of companies, and the value of these shares can be negatively affected by changes in the company, its industry or the economy in which it operates.
Environmental, social and governance (ESG) policy: The fund follows an ESG investment policy that may limit the number of investment opportunities available to the fund which may affect its performance compared to other funds that do not employ such investment policies.
Geographical focus: This fund invests primarily in the United States, which means that it is more sensitive to local economic, market, political or regulatory events in the United States, and will be more affected by these events than other funds that invest in a broader range of regions.
Concentrated fund: The fund invests in fewer companies than other funds which invest in shares usually do. This means that the fund does not spread its risk as widely as other funds and will therefore be affected more if an individual company has significant losses.
Fund operations: The fund is subject to the risk of loss resulting from inadequate or failed internal processes, people or systems or those of third parties such as those responsible for the custody of its assets.
For further explanation on the risks associated with an investment in the fund, please refer to the section entitled “Risk Factors” in the base prospectus and “Primary Risks” in the fund supplement.
This material is not intended for any person or use that would be contrary to local law or regulation. This material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. Information provided herein is current to the date of this communication and subject to change. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situations or needs of investors.
The Legg Mason ClearBridge US Equity Sustainability Leaders Fund is a sub-fund of Legg Mason Global Funds plc (‘LMGF plc’). LMGF is an open-ended investment company with variable capital, organised as an undertaking for collective investment in transferable securities (‘UCITS’). LMGF is authorised in Ireland by the Central Bank of Ireland.Information has been prepared from sources believed reliable. It is not guaranteed in any way by any Legg Mason, Inc. company or affiliate (together ‘Legg Mason’). Before investing you should read the application form Prospectus and KIID. The fund documents may be obtained free of charge in English, French, German, Italian and Spanish from LMGF plc’s registered office at Riverside Two, Sir John Rogerson’s Quay, Grand Canal Dock, Dublin 2, Ireland, from LMGF plc’s administrator, BNY Mellon Fund Services (Ireland) Limited, or from www.leggmasonglobal.com.
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