ClearBridge Mid Cap Growth Portfolios

Investment Overview

ClearBridge Mid Cap Growth Portfolios are designed for investors seeking long-term capital appreciation through investing in medium sized companies with the potential for solid future earnings growth.

 

Investment Philosophy

We believe that:

  • Mid cap stock prices may vary significantly from fair value, in the short run, due to the mispricing of risk in the market, the deluge of short-term data, lesser sell side coverage, and market illiquidity
  • Our investment process is market cap relevant, style pure, and risk aware
 

Portfolio Positioning

Designed for investors seeking opportunities within medium-capitalization growth markets.

 

Key Differentiators

  • A portfolio management team averaging over 21 years of investment industry experience
  • A concentrated portfolio that includes only those stocks in which the managers have the greatest conviction
  • Stock selection based on “bottom up” fundamental analysis, supported by a rigorous approach to valuation 
  • A disciplined, consistent, transparent and risk-aware investment process 

Points of differentiation

  • High-conviction, concentrated, low-turnover approach
  • Bottom-up driven investment decisions
 

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.

 

 

Investment
Process

Idea generation:

  • Identify companies with growth characteristics, attractive valuation, prudent capital deployment, and high earnings quality 
  • Focus on stocks with strong growth trends, capital adequacy and stability and compelling valuation.

Fundamental analysis: Research process:

  • Take deliberate approach to understand company fundamentals, key competitors, and industry structure. 
  • Focus on share takers with unit growth via innovative products and services

Portfolio construction: Spectrum of growth:

  • Focus on companies across spectrum of growth: Hyper Growth, Middle Growers and Steady Growers (40-70 names) 
  • Maintain high active share. 
  • Monitor sector weightings and correlations among current holdings.

Risk management: Address on three levels:

  • Security level 
  • Portfolio level 
  • Investment manager level

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.


Meet Your Managers

Brian Angerame

Managing Director, Portfolio Manager

Derek Deutsch, CFA

Managing Director, Portfolio Manager

Aram Green

Managing Director, Portfolio Manager

Jeffrey Russell, 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.

To find out more about the ClearBridge Mid Cap Growth 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.  In addition to investments in large-capitalization companies, investments may be made in speculative and/or small-cap and mid-cap companies which involve a higher degree of risk and volatility than investments in larger, more established companies. In addition, because the investments may be concentrated in a limited number of industries and companies, the portfolios may involve heightened risk.  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. 

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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.

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Holdings, sector weightings, market capitalization and portfolio characteristics are subject to change at any time and are based on a representative portfolio. Holdings, sector weightings, market capitalization and portfolio characteristics of individual client portfolios in the program may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed. 

Portfolio characteristics (Source: FactSet)

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ClearBridge Mid Cap Growth SMA GIPS® Endnotes Inception date: July 2014. Composite creation date: June 2014.
Period Total
net
return
(%)
Total
*pure
gross
return
(%)
Russell Midcap Growth 
return
(%)
Number
of
portfolios
Bundled
fee
portfolios
(%)
Composite
dispersion
(%)
Composite
3 Yr.
St. Dev.
Benchmark
3 Yr.
St.Dev.
Composite
assets
($mm)
Firm
assets
(%)
Total
firm
assets
($mm)
2017 19.69 23.23 25.27 <5 0 n/m 13.08 11.04 1,008.3 0.8 119,187.1
2016 0.61 3.63 7.33 <5 0 n/m n/a n/a 799.2 0.8 100,936.9
2015 -2.58 0.35 -0.20 16 100 0.30 n/a n/a 3.4 0.0 92,536.4
Jul - Dec 2014 3.97 5.51 5.07 6 100 n/m n/a n/a 1.4 0.0 100,721.5

*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 Mid Cap Growth SMA composite consists of discretionary wrap accounts with an account minimum of US $25,000.  Accounts within the composite seek long-term capital appreciation and consistently superior returns relative to the Russell Mid Cap Growth Index. Portfolios are diversified across several economic sectors, investing primarily in companies having market capitalizations within the capitalization range of the Russell Midcap Growth Index.  The main risks of this strategy are General Investment Risk, Industry and Issuer Concentration Risk, Mid Cap 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.  As of December 1, 2016 the composite data was calculated using the ClearBridge Mid Cap Growth composite which is comprised of institutional accounts.  Net total returns were calculated by reducing the institutional gross of fee performance by the highest bundled fee of 3.00%.  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 Midcap® Growth Index measures the performance of the mid-cap growth segment of the U.S. equity universe.

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.

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