ClearBridge Large Cap Growth ESG Catholic Portfolios

Investment Overview

The ClearBridge Large Cap Growth ESG Catholic Portfolios are designed for investors seeking long-term capital appreciation aligned with Catholic values, investing in large-capitalization companies with the potential for high future earnings growth.
 

The ESG Investment Program actively incorporates environmental, social and governance (ESG) factors into the fundamental research platform and 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

Seeks to:

  • Focus on consistent growth of capital while managing volatility
  • Outperform the Russell 1000 Growth Index1 over a full market cycle, and with less potential risk
  • Perform well in rising markets and outperform the Russell 1000 Growth Index in declining markets
  • Actively evaluate a company’s “non-financial” drivers of business performance to gauge its level of social awareness and consistency with Catholic values
     

Investment Philosophy

  • Invest in leadership companies where we believe the market price underestimates the magnitude of future growth
  • Use stock selection as the primary driver – identify category leaders with characteristics to sustain that position
  • Find secular tailwinds to support multi-year investment opportunities, allowing for compounding of earnings and cash flow
  • Perform rigorous analysis to understand company fundamentals, key competitive dynamics and industry structure 

Believe that the best business models win over time

  • Identify barriers to entry and prefer companies with innovation prowess, regardless of size 
  • Look for businesses that protect and grow market share consistently 
  • Gravitate to self-funding business models with significant recurring revenue 

Seek businesses with the ability to generate superior free cash flow over time 

  • Stress test the sustainability of profitability and growth

Take a disciplined approach to valuation

 

KEY DIFFERENTIATORS

  • High-conviction, concentrated, low-turnover approach
  • Bottom-up driven investment decision
  • Diversification across growth spectrum (cyclical, stable, select)
     

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.

 

 

Investment
Process

Idea generation

  • Sector analysts and PMs each propose companies with attractive business models and good long-term growth prospects for further review.
  • Idea generation is an ongoing and continual process.

Fundamental analysis

  • Analysts and PMs work together to understand the durability of a company’s growth and profit.
  • Meet with target company management, competitors and industry experts.
  • Determine appropriate entry price.

Portfolio construction

  • Own companies with a range of growth and volatility.
  • Monitor sector weightings and correlations among current holdings.

Risk management/Evaluation discipline

Assess risk regularly, and re-examine a current holding when fundamentals decline, full value is reached, or a decline in company’s social/environmental performance causes it to violate social and Catholic values screens.

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.


Peter Bourbeau

Managing Director, Portfolio Manager

Mary Jane McQuillen

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

Margaret Vitrano

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 Large Cap Growth ESG Catholic 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.  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. 

Top

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.

Top

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. 

Top
ClearBridge Large Cap Growth ESG Catholic SMA GIPS® Endnotes Inception date: January 2013. Composite creation date: December 2012.
Period Total net return
(%)
Total pure
gross* return (%)
R1000G return (%) Number of
portfolios
Bundled fee
portfolios (%)
Composite
dispersion (%)
Composite 3 Yr.St. Dev. Benchmark 3Yr. St. Dev. Composite
assets ($mm)
Firm assets (%) Total firm
assets ($mm)
2016 6.28 9.45
7.08 7 100 n/m 11.06
11.31 10.7
0.0 100,936.9
2015 6.82
10.01
5.67 <5
100 n/m
10.89
10.85 9.5
0.0 92,536.4
2014 11.72 15.04
13.05 <5
100 n/m
n/a
n/a
8.4
0.0 100,721.5
2013 32.61
36.50
33.48 <5
100 n/m
n/a
n/a 1.6
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.

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, 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.

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 Large Cap Growth ESG Catholic 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.  In addition, the portfolios are constructed to be in line with USCCB socially responsible guidelines, as directed by the client.  Accounts within the composite seek consistent growth of capital while minimizing volatility.  Investments are primarily made in U.S. companies, with an objective of outperforming the Russell 1000 Growth Index.  The main risks of this strategy are General Investment 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 prior to 2015 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.

Benchmark Information:
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

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.

Certain SMA products may not be available at all firms. 

Top