ClearBridge International Value ADR ESG Portfolios

Investment Overview

The ClearBridge International Value ADR ESG Portfolios seek to provide a value-based, international equity strategy that will outperform the MSCI EAFE (Net) Index USD over 3-5 years, with similar risk to the index. Investments are made from the universe of non-U.S. companies, including emerging markets, with publicly traded ADR securities listed on the major U.S. exchanges and that have market capitalizations greater than $100 million.

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.

Investment Objective

The strategy seeks to outperform the MSCI EAFE (Net) Index USD over a full market cycle of 3-5 years, investing internationally through ADRs.

Investment Philosophy

Focusing on a small number of companies trading at low prices relative to their dynamic intrinsic values leads to enhanced stock selection over time.


Designed for investors seeking international diversification in developed and emerging markets across all market sectors and capitalizations.


Find quality companies trading at low prices relative to dynamic intrinsic values

  • Eliminate businesses with undesirable characteristics
  • Focus on limited number of companies with the greatest chance for success
  • Look to capitalize on the convergence between a company’s investment potential and its environmental, social and governance (ESG) practices

Opportunistic approach to security selection, enhanced by major dislocation in the markets

Defined risk management at security and portfolio levels

  • De-risk stock selection via deep understanding of a select list of mispriced businesses
  • Rigorous ongoing review of existing holdings to ensure investment case remains intact
  • Diversification of business models and customer bases throughout portfolio
  • Explicit limits at portfolio, sector and country/region levels

Diversification does not guarantee a profit or protect against a loss.

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.

There is no guarantee that the Portfolio's objectives will be met.




Universe of securities

Identify publicly traded ADRs across 11 macro sectors in both developed and emerging markets, each with a market capitalization greater than $100 million and sufficient liquidity.

Quantitative modeling

Seek stocks selling below their normal valuation levels by employing a quantitative model that compares current valuations (as measured by price-to-earnings, price-to-book and price-to-cash flow ratios) to historical valuations.

Company elimination

Seek to eliminate stocks with negative characteristics and barriers to success. These factors could include a declining quality of financial characteristics, deteriorating industry conditions or competitive position, or a lack of confidence in company management.

Fundamental analysis and client portfolio

  • Use a comprehensive fundamental research process to understand the business of each company and focus on long-term value, rather than short-term price or earnings forecasts.
  • Construct the portfolio consisting of 60-85 holdings. Positions are weighted based upon upside potential, downside risk, our fundamental conviction, and the impact on diversification.

Sell discipline

A security is typically reviewed for sale if:

  • It appreciates to our predetermined target price;
  • A change in company fundamentals results in a failure to meet one of the four criteria of our Focus List elimination process; or
  • Value Trap screen triggers a comprehensive reassessment

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

With a legacy dating back over 50 years, ClearBridge Investments is a leading global equity manager committed to delivering differentiated long-term results through authentic active management.

Paul D. Ehrlichman

Managing Director, Head of Global Value Equity, Portfolio Manager

Sean M. Bogda, CFA

Managing Director, Portfolio Manager

Mary Jane McQuillen

Managing Director, Head of Environmental, Social and Governance Investment, Portfolio Manager

Safa R. Muhtaseb, CFA

Managing Director, Portfolio Manager

Grace Su

Managing 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.

To find out more about the ClearBridge International Value ADR ESG Portfolios, talk to your financial advisor.


What I Should Know
Before Investing

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.  The managers’ environmental social and governance (ESG) investment strategies may limit the types and number of investment opportunities available and, as a result, may underperform strategies that are not subject to such criteria.


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 Franklin Resources, Inc affiliated sub-advisers: ClearBridge Investments, LLC. 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.


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. 

ClearBridge International Value ADR ESG SMA GIPS® Endnotes Strategy Inception Date: July 2016. Composite Creation Date: June 2016. Reporting Currency: USD.
Total Return (Net, %)
Total Return (*Pure Gross, %)
Benchmark Return (%)
Number of Portfolios
% of Bundled Fee Portfolios in the Composite
Composite Dispersion (%)
Composite 3 Yr. St. Dev. (%)
3 Yr. St. Dev. (%)
Composite Assets at End of Period (USD million)
Percentage of Firm Assets
Total Firm Assets at End of Period (USD million)
2019 10.59 13.89 22.01 78 100 1.32 14.31 10.96 23.6 0.0 128,740.4
2018 -23.92 -21.58 -13.79 183 100 0.48 n/a n/a 42.1 0.0 106,083.4
2017 19.39 22.92 25.03 11 100 n/m n/a n/a 4.1 0.0 119,187.1
Jul - Dec 2016 8.33 9.92 5.67
<5 100 n/m

*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.

Compliance Statement:
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, 2018. 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.

Firm Information:
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.

Composite Information:
The ClearBridge International Value 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 to provide a value-based, international equity strategy that will outperform the MSCI EAFE Index over 3-5 years with risk similar to the Index.  Investments are primarily in ADRs of companies in both developed and emerging markets.  ClearBridge uses WM/Reuters daily FX rates taken at 4 p.m. London time, which may vary from Benchmark indices' exchange rates periodically.  The strategy is implemented by Legg Mason Private Portfolio Group, LLC (LMPPG).  LMPPG claims compliance with the Global Investment Performance Standards (GIPS®).  LMPPG has been independently verified for the periods January 1, 2013 - December 31, 2018.  LMPPG is a wholly-owned subsidiary of Legg Mason, Inc and together with it s sub-advisers, including ClearBridge, provides investment services primarily in investment programs sponsored by Sponsor Firms. To obtain a compliant presentation and/or the firm's list of composite descriptions, please contact  The main risks of this strategy are General Investment Risk, Small Cap Risk, Mid Cap Risk, ESG Investing Risk, and Non-U.S. Investment Risk.

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.  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.  The three-year annualized ex-post standard deviation is not available because the composite does not have 36 months of data.  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.

Benchmark Information:
The MSCI EAFE® Index is an equity index which captures large and mid cap representation across developed market countries around the world, excluding the US and Canada.  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.  Benchmark returns are not covered by the report of independent verifiers.

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, performance and other important information. Review this information carefully before you make any investment decision.

Certain SMA products may not be available at all firms.