ClearBridge International Growth ADR ESG Portfolios were designed to allow investors to diversify their portfolios by participating in the potential growth of international markets. The portfolios invest approximately 80-90% in larger companies and primarily in ADRs.
The ESG Investment Program actively incorporates environmental, social and governance (ESG) factors into the fundamental research platform and into the stock-selection process. In addition, ongoing company engagement and shareholder advocacy are key components of the Program.
A few examples of the ESG considerations include:
- Innovative workplace policies, employee benefits and programs
- Environmental management system strength, eco-efficiency and life-cycle analysis
- Community involvement, strategic philanthropy and reputation management
- Strong corporate governance and independence on the board
ClearBridge is a Signatory to the UN Principles for Responsible Investment, and is affiliated with the Investor Network on Climate Risk, the Carbon Disclosure Project, the Interfaith Center on Corporate Responsibility, the Global Impact Investing Network, and the US Forum for Sustainable and Responsible Investment.
- Long-term capital appreciation, complemented by issuer and portfolio risk management. Our strategy aims to outperform the MSCI EAFE Index over a full market cycle.
- To actively evaluate a company’s ESG drivers of business performance to gauge its level of social awareness.
We believe that:
- International equities may vary significantly from fair value due to macroeconomic/exogenous factors and company-specific endogenous issues.
- Through fundamental analysis, we seek to identify companies with superior capital appreciation prospects and competitive risk-adjusted returns achieved by capitalizing on the convergence between a company’s investment potential and its ESG management aspects.
- Core international developed market portfolio
- Low turnover — seeks tax efficiency
Diversification does not guarantee a profit or protect against a loss.
There is no guarantee that the Portfolio's objectives will be met.
We seek to:
Define the investment universe
Consider companies that have strong balance sheets, good management, offer unique products or services, or have strong niche positions locally or globally.
Apply fundamental analysis
Use a bottom-up approach to evaluate current and future prospects and ensure that accounting compliance, data accuracy and global comparability goals are met.
Select securities and construct portfolio
Build a diversified portfolio with approximately 30 to 50 stocks across 10 to 20 countries. Complement larger core holdings (approximately 80-90%) with tactical investments (approximately 10-20%) in smaller companies that have met our ESG criteria.
Re-examine a current holding when unit growth/earnings deteriorate, valuation exceeds expectations, and when there is an adverse acquisition or a loss of franchise or market share.
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. There is no guarantee investment objectives will be achieved.
meet your managers
Global investment manager with over 50 years of experience and long-tenured portfolio managers who seek to build income, high active share or low volatility portfolios.
Managing Director, Head of Global Growth, Portfolio Manager
Director, Portfolio Manager
Mary Jane McQuillen
Managing Director, Head of Environmental, Social and Governance Investment, Portfolio Manager
Michael Testorf, CFA
Managing Director, Portfolio Manager
Pawel Wroblewski, CFA
Director, Portfolio Manager
Active share is a measure of the percentage of stock holdings in a manager's portfolio that differs from the benchmark index.
What I Should Know
All investments involve risk, including loss of principal and there is no guarantee that investment objectives will be met. The managers invest the portfolios primarily in ADRs, but may also make limited investments in U.S.-traded stocks of non-U.S. and U.S. companies engaged in significant non-U.S. business. These limited investments may include U.S.-traded stocks that result from the conversion of ADRs, as well as other U.S.-traded stocks. The portfolios' investments in non-U.S. companies may include companies in developed and emerging markets which involve risks in addition to those ordinarily associated with investing in U.S.-traded stocks, including the potentially negative effects of currency fluctuation, political and economic developments, foreign taxation and differences in audition and other financial standards. These risks are magnified in emerging markets. Investments may be made in small- and mid-cap companies, which involve a higher degree of risk and volatility than investments in large-cap companies. ADRs are U.S. traded securities that represent shares of a foreign-based corporation held by a custodian and they entitle the shareholder to all dividends, net of any applicable local withholding taxes, and capital gains that would be paid on the company’s ordinary shares.
IMPORTANT INFORMATION: Past performance is no guarantee of future results. Management and performance of individual accounts may vary for reasons that include the existence of different implementation practices and model requirements in different investment programs.
Pure Gross performance shown does not reflect the deduction of investment management fees and certain transaction costs, which will reduce portfolio performance. Net performance includes the deduction of a 3% annual wrap fee for equity and balanced portfolios and a 1.5% annual wrap fee for fixed income portfolios. These deducted fees amounts are the maximum anticipated wrap fees. Actual fees may vary. For fee schedules, contact your financial professional or, if you enter into an agreement directly with Legg Mason Private Portfolio Group, LLC ("LMPPG"), refer to LMPPG's Form ADV disclosure document. Returns reflect the reinvestment of dividends and other earnings.
An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.
Please see GIPS® endnotes for important additional information regarding the portfolio performance shown and for effects of fees.
Performance Source: Legg Mason
Hypothetical growth of dollars: For illustrative purposes only. Assumes no withdrawals or contributions. The performance results shown were calculated assuming reinvestment of dividends and income and take into account both realized and unrealized capital gains and losses.
IMPORTANT INFORMATION: Separately Managed Accounts (SMAs) are investment services provided by Legg Mason Private Portfolio Group, LLC (LMPPG), a federally registered investment adviser. Client portfolios are managed based on investment instructions or advice provided by one or more of the following Legg Mason-affiliated sub-advisers: ClearBridge Investments, and Western Asset Management Company. Management is implemented by LMPPG, the designated sub-adviser or, in the case of certain programs, the program sponsor or its designee.
Professional money management may not be suitable for all investors. Factual information relating to the securities discussed was obtained from sources believed to be reliable, but there can be no guarantee as to its accuracy. It should not be assumed that investments made in the future will be profitable or will equal the performance of the securities discussed in the material.
Portfolio characteristics (Source: FactSet)
Source: FactSet. Portfolio characteristics are based on a model portfolio, not an actual client account. The model portfolio is a hypothetical portfolio whereby the portfolio characteristics are based on simulated trading and account activity of a client account invested in this strategy. The model portfolio assumes no withdrawals, contributions or client-imposed restrictions.
Portfolio characteristics of individual client accounts may differ from those of the model portfolio as a result of account size, client-imposed restrictions, the timing of client investments, market conditions, contributions, withdrawals and other factors.
|Period||Total Return (Net, %)
||Total Return (*Pure Gross, %)
||Benchmark Return (%)
|% of Bundled Fee Portfolios in the Composite
|Composite 3 Yr. St. Dev. (%)||Benchmark 3Yr. St. Dev. (%)||Total
Composite Assets at End of Period (USD million)
|Percentage of Firm Assets
||Total Firm Assets at End of Period (USD million)
|Sep -Dec 2009||7.09||8.13||6.09||<5||100||n/m||n/a||n/a||0.6||0.0||55,522.7|
*Pure gross of fee returns do not reflect the deduction of any expenses, including transaction costs, and are presented as supplemental to the net of fee returns.
n/m - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year.
ClearBridge Investments, LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. ClearBridge Investments, LLC has been independently verified for the periods January 1, 1997 - December 31, 2017. The verification reports are available upon request.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.
ClearBridge Investments, LLC ("ClearBridge") is a wholly owned subsidiary of Legg Mason, Inc. ("Legg Mason"). The investment advisory business now known as ClearBridge was registered in September 2005 to facilitate Legg Mason's acquisition of substantially all the equity asset management businesses known as Citigroup Asset Management. These former businesses serve as the foundation of ClearBridge and its claim of GIPS compliance for institutional accounts through predecessor firms, effective as of January 1997. In June 2008, ClearBridge combined this business with its retail business to form a single GIPS firm. As of April 1, 2013 and January 1, 2016, ClearBridge's affiliates, Global Currents Investment Management, LLC, and ClearBridge, LLC, respectively, have become part of the ClearBridge GIPS firm.
The ClearBridge International Growth ADR ESG SMA composite consists of discretionary wrap accounts with an account minimum of US $25,000. The managers actively integrate criteria inclusive of environmental, social and governance (ESG) issues into the portfolio construction of the strategy. Accounts within the composite seek long-term growth of capital by investing in well managed businesses whose intrinsic value does not appear to be recognized by the markets. Investments are primarily in ADRs of companies in both developed and emerging markets. The strategy is implemented by Legg Mason Private Portfolio Group, LLC (LMPPG). LMPPG claims compliance with the Global Investment Performance Standards (GIPS®) and has been independently verified for the periods January 1, 2013 - December 31, 2017. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the fir m's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The main risks of this strategy are General Investment Risk, Non-U.S. Investment Risk, Small Cap Risk, ESG Investing Risk, and Mid Cap Risk. In December 2013 the word "Growth" was added to the composite name. The composite consists of the following percentages, as of each year end, of non-fee-paying seed capital: 2013 - .6%, 2014 - .6%, 2015 - .3%.
Input and Calculation Data:
The fee schedule currently in effect is 3.00% on all assets. Net of fee composite returns are calculated by reducing each monthly composite pure gross rate of return by the highest "bundled" fee charged (3.00%) annually, prorated to a monthly ratio. The "bundled" fee includes transaction costs, investment management, custodial, and other administrative fees. Effective January 1, 2013, the number of portfolios reflects a change from prior periods due to an aggregation of accounts as reported by one sponsor. As of January 2014, the internal dispersion of annual returns is measured by the asset-weighted standard deviation of portfolio returns included in the composite for the entire year. For prior years, the equal-weighted standard deviation was used. The three-year annualized ex-post standard deviation is not available prior to 2012 because the composite did not have 36 months of data. The composite employed a 10% significant cash flow policy which was discontinued in January 2012. A list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Past performance is not necessarily indicative of future results.
The MSCI EAFE® measures total market performance, including price appreciation and income from net-dividend payments. The "Net" Index series assumes that dividends are reinvested after the deduction of withholding tax. The index uses withholding tax rates applicable to Luxembourg holding companies.
All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Please see each product’s webpage for specific details regarding investment objective, risks associated with hedge funds, alternative investments and other risks, performance and other important information. Review this information carefully before you make any investment decision.