ClearBridge Dividend Strategy ESG Portfolios invest primarily in dividend-paying stocks that offer the potential for income growth and capital appreciation over time. The investment team believes that companies that exhibit market leadership, coupled with solid balance sheets and strong dividend profiles, are attractive investment candidates for the long-term investor.
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.
Seeks growing dividend income and long-term capital appreciation in challenging markets
Total return portfolio focused on large-cap, high-quality companies that:
- Pay an attractive dividend
- Have the potential to significantly grow their dividends
- Provide consistent and competitive risk-adjusted returns achieved by capitalizing on the convergence between a company’s investment potential and its ESG attributes
Experience and judgement
- Proven, successful team investing in dominant franchises that pay an attractive dividend yield
Disciplined investment process
- Strong focus on income growth
- Portfolio management does not deviate from its investment approach
- Seek companies with predictable and superior margins and return on investment
- Avoid deep cyclicals, turnarounds and enterprises that cannot be reasonably analyzed
Defined risk management at security and portfolio level
- Constant monitoring and evaluation of outcomes at the security level
- Rigorous portfolio review to ensure fundamental and valuation case intact
- Strong focus on diversification across portfolio
Diversification does not guarantee a profit or protect against a loss.
Dividends and yields represent past performance. There is no assurance they will continue to be paid in the future.
There is no guarantee that the Portfolio's objectives will be met.
- Seek out large-cap companies with sustainable and growing dividends.
- Uses fundamental analysis to identify companies with strong balance sheets; dominant market positions; and reasonable valuations.
- Focus on companies with the potential for dividend growth through innovative products and services.
- Screens through: Business model evaluation, financial analysis and management analysis to find companies at attractive valuations.
- Combine bottom-up stock selection with top-down thematic overlay to construct a diversified, primarily largeand mid-cap portfolio with a target dividend yield that exceeds that of the S&P 500 Index.
- Re-examine a current holding when valuation is realized, fundamentals deteriorate, and/or cyclical shifts alter industry’s attractiveness; external and macroeconomic factors (such as management changes or legal issues) are also considered.
- At the firm level, the portfolio is subject to review by an independent risk committee.
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.
Co-Chief Investment Officer, Managing Director, Portfolio Manager
Michael Clarfeld, CFA
Managing Director, Portfolio Manager
Director, Portfolio Manager
Mary Jane McQuillen
Managing Director, Head of Environmental, Social and Governance Investment, Portfolio Manager
Peter Vanderlee, CFA
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.
What I Should Know
All investments involve risk, including loss of principal and there is no guarantee that investment objectives will be met. 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. While most investments are in U.S. companies, 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. Limited investments also may be made in non-dividend paying stocks that are not expected to pay a dividend in the near future. The managers may sometimes hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities.
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.
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.
gross return* (%)
|S&P 500 return
|Mar - Dec 2013||16.76||19.62||24.18||<5||100||n/m||n/a||n/a||2.0||0.0||85,024.7|
*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, 2016. 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 Dividend Strategy 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 dividend income, growth of dividend income and long-term capital appreciation by investing in stocks that either pay an existing dividend or are expected to pay a dividend in the near future. 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. The composite consists of the following percentages of non-fee-paying seed capital: 12/2013 - 3%, 12/2014 - 3%, 12/2015 - 2%, 12/2016 - 2%.
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 prior to 2016 because the composite did 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.
The S&P 500® Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks
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.