International Stocks
See how our strategies connect investors to great companies
in both developed and emerging markets.
Two good reasons to look outside the U.S.:
Better diversification and access to great companies
3 Distinct Approaches to the International Opportunity
These high-quality active strategies take a selective approach to access the potential in three key
international sectors — from core strategies to specialized solutions like small caps and emerging markets.
ClearBridge International Growth Fund
One size definitely does not fit all when it comes to international stocks, given rapidly changing market and economic environments.
ClearBridge International Growth Fund (LMGNX) seeks to enhance diversification within its holdings by allocating across market caps and three distinct types of growth companies.
A Differentiated Approach to Growth May Enhance Potential
for Success in Many Environments
Source: ClearBridge: For informational purposes only, and is not representative of any specific allocation. Allocation percentages fluctuate over time.
Fund Highlights:
- Invests across market caps with a consistent, repeatable investment process based on valuations
- Overall 5-star Morningstar rating (Class I, as of 9/30/18)2
- Can provide a core international allocation for investors seeking to take advantage of global growth potential
Class I shares rated among 347 Foreign Large Growth Funds, based upon the risk-adjusted returns derived from a weighted average of the performance figures associated with 3-, 5- and 10-year (if applicable) Morningstar ratings2
International Equity Insight
Diversifying Risk in International Stocks
ClearBridge's Eliza Mazen explains why an active approach to diversifying international growth stocks may make more sense.
Royce International Premier Fund
International small caps may not be the first asset class that leaps to mind when it comes to diversifying your stock allocation. But their numbers outnumber U.S. stocks by more than 2:1, creating an investment universe too big to ignore.
Royce International Premier Fund (RIPNX) focuses on quality companies that Royce views as having discernible competitive advantages, paying close attention to risk to help enhance long-term return potential.
Compared with U.S. and Small-Caps, There are:
Source: FactSet as of 6/30/18. “U.S. Small-Cap” is represented by the Russell 2000 Index, and “International Small-Cap” by Russell Global ex-U.S. Small Cap Index. Past performance is no guarantee of future results.
Fund Highlights:
- Invests in premier smaller cap companies across both developed and emerging market countries through a unique, quality-focused approach
- 2018 Lipper Award Winner (Investment shares, RIPNX): Best among 148 international Smaller-Cap/Mid-Cap Growth Funds for the 3-year period ending 11/30/17 based on risk-adjusted performance3
- Complements a core international allocation through exposure to a much wider and diverse asset class
International Equity Insight
Putting International Small Caps on the Map
The case for a strategic allocation to international small cap is well supported by historical data.
Martin Currie Emerging Markets Fund
Did you know that by the year 2030, nine out of the world’s top 10 cities will be in emerging markets?4 From Mexico City to Beijing, the expanding urban population is contributing to the rise of cities and the middle class.
Martin Currie Emerging Markets Fund (MCEIX) seeks to take advantage of long-term demographic trends in EM countires that are driving GDP growth at a faster pace than in developed markets.
Changing Demographics Are Driving Growth in Emerging Markets
Source: International Monetary Fund, World Economic Outlook Database, October 2017.
Fund Highlights:
- Provides broad diversification across emerging market countries and sectors, with a focus on risk management
- Overall 5-star Morningstar rating (Class I as of 9/30/18)2
- Offers the potential for greater returns for those investors comfortable with a higher degree of volatility
Class I shares rated among 708 Diversified Emerging Markets Funds, based upon the risk-adjusted returns derived from a weighted average of the performance figures associated with 3-, 5- and 10-year (if applicable) Morningstar ratings2
International Equity Insight
The Emerging Market Trends that Matter
Many investors have historically been hesitant to invest in emerging markets, concerned about currency volatility, political instability and an overreliance on commodities. Yet this view is increasingly outdated as the sector evolves.
Is the Time Coming for International Leadership?
International and U.S. stocks have historically alternated periods of leadership over time. Maintaining a core international allocation as part of your total equity portfolio can help you participate when these shifts unfold and potentially diversify the political and economic risks associated with overreliance on one market.
Legg Mason equity managers ClearBridge Investments, Martin Currie and Royce & Associates believe demographic trends and market cyclicality continue to favor international markets long-term.
Will the U.S. outperform the world forever?
Source: FactSet, as of 6/30/18. Past performance is no guarantee of future returns. All investments involve risk, including loss of principal. Chart shows performance of S&P 500 vs. MSCI EAFE. The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S. The MSCI EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australia. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
Insights on International Equity
ClearBridge Investments
Diversifying Risk in International Stocks
International stocks are gaining traction with investors — but passive strategies may not be the best guide to opportunity. ClearBridge's Eliza Mazen explains why an active approach to diversifying international growth stocks may make more sense.
Royce & Associates
Putting International Small Caps on the Map
The case for a strategic allocation to international small cap is well supported by historical data.
Martin Currie
The Emerging Market Trends that Matter
Many investors have historically been hesitant to invest in emerging markets, concerned about currency volatility, political instability and an overreliance on commodities. Yet this view is increasingly outdated as the sector evolves.
Footnotes:
1Source: Bloomberg. As of December 31, 2017, the U.S. represented 36.5% of world equity market capitalization. World market capitalization represented by Bloomberg World Exchange Market Capitalization Index, ex-U.S. U.S. market capitalization represented by U.S. portion of Bloomberg World Exchange Market Capitalization Index.
2 The Morningstar Rating™ for funds, or “star rating”, is as of September 30, 2018 and is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history, and subject to change monthly. Current monthly ratings can be found at leggmason.com. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total return, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total return. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads. Class I shares of ClearBridge International Growth Fund were rated against 347, 313 and 222 Foreign Large Growth funds over the 3-, 5- and 10-year periods, respectively. With respect to these funds, Class I shares of the Fund received Morningstar Ratings of 5, 5, and 5 for the 3-, 5- and 10-year periods, respectively. Class I shares of Martin Currie Emerging Markets Fund were rated against 708, N/A and N/A Diversified Emerging Markets funds over the 3-, 5- and 10-year periods, respectively. With respect to these funds, Class I shares of the Fund received Morningstar Ratings of 5, N/A, and N/A for the 3-, 5- and 10-year periods, respectively. Ratings shown are for the highest and lowest rated share classes only, when available. Morningstar Rating is for the specified share class(es) only; other classes may have different performance characteristics. A 4- or 5-star rating does not necessarily imply that a fund achieved positive results for the period. Overall ranking shown for Class I shares which are not generally available to retail investors.
3Source: Lipper, as of 6/30/18, based on mutual fund assets under management international and emerging market equities.
From Thomson Reuters Lipper Awards, ©2018 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
The 2018 Lipper Fund Award winners are selected based on the highest risk-adjusted performance among funds within a given category. The calculation periods extend over 36, 60 and 120 months. The highest Lipper Leader for Consistent Return (Effective Return) value within each eligible classification determines the fund classification winner over three, five or 10 years. A high Lipper rating does not necessarily imply that a fund had the best total performance or that the fund achieved positive results for that period. Lipper Inc. is a major independent mutual fund tracking organization. Other share classes may have different performance characteristics. Past performance is no guarantee of future results.
4Source: "World’s Cities in 2016 - Data Booklet", by United Nations, Department of Economic and Social Affairs, Population Division.
Disclosures
International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. Any information, statement or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as, investment advice, forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional
IMPORTANT INFORMATION: All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Please see each product’s web page for specific details regarding investment objective, risks, performance and other important information. Review this information carefully before you make any investment decision.
Carefully consider a fund’s investment objectives, risks, charges and expenses before investing. Please view the prospectus or summary prospectus for this and other information. Read it carefully.
FINANCIAL ADVISORS: Please note that not all share classes may be available for sale at your firm. Please call the Legg Mason Sales Desk 1-800-822-5544 or your Legg Mason Sales contact for more information.
Active management does not ensure gains or protect against market declines.
Equity securities are subject to price fluctuation and possible loss of principal.
Diversification does not guarantee a profit or protect against loss.
Outperformance does not imply positive results.
The information presented here is general in nature and does not constitute legal advice on any particular matter. Please note that all references to third-party corporations and websites do not constitute a recommendation or endorsement by Legg Mason Investor Services, LLC.
