ClearBridge Small Cap Value Portfolios

Highlights

  • Invests primarily in small-cap equities with attractive valuations.
  • Seeks long-term capital growth using both quantitative and fundamental methods to select stocks.
  • Emphasizes individual security selection, while diversifying among industries and sectors.
 

Investment
Process

Define an initial investment universe

  • Consider small-capitalization stocks with products and services that give the company a competitive advantage; and skilled management committed to a long-term vision. To a limited extent, large- and medium-capitalization stocks may also be considered for investment.

Conduct quantitative screening

  • Create a subset of companies warranting further analysis by screening for significant cash flow, strong balance sheets and high return on equity.

Perform fundamental research

  • Narrow list to investable candidates across sectors. 
  • Differentiate stocks with intrinsic value from those with price depreciation that may be mistaken for value stocks.

Construct portfolio and manage risk

  • Build a diversified portfolio of companies that meet investment guidelines.
  • Manage risk by careful attention to sector diversification and individual security weights.

Review and monitor portfolio continuously

  • Re-examine a current holding when fundaments deteriorate or reach full growth potential, technical factors deteriorate, or there is unusual insider buying/selling.

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

Tim Daubenspeck

Director, Portfolio Manager

Miguel del Gallego, 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.

To find out more about the ClearBridge Small Cap Value 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.  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.  Investments may include ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. markets and sectors. In addition, a client will bear a proportionate share of the separate fees and expensed incurred by any ETF in which the clients’ account is invested.  The managers may sometimes hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities. 

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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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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. 

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ClearBridge Small Cap Value SMA GIPS® Endnotes Inception date: January 2006. Composite creation date: June 2008.
Period Total
net
return
(%)
Total
pure
gross
return*
(%)
R2000V
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 22.06 25.67 31.74 7 100 n/m 14.26 15.72 2.7 0.0 100,936.9
2015 -9.50 -6.76 -7.47 <5 100 n/m 11.00 13.65 0.1 0.0 92,536.4
2014 -0.73 2.25 4.22 15 100 0.72 10.39 12.98 9.2 0.0 100,721.5
2013 25.50 29.20 34.52 14 100 n/m 14.43 16.05 7.5 0.0 85,024.7
2012 10.39 13.68 18.05 35 100 0.38 19.01 20.17 6.2 0.0 54,624.3
2011 -6.55 -3.72 -5.50 41 100 0.30 24.63 26.42 6.8 0.0 50,870.8
2010 21.53 25.13 24.50 44 100 0.92 n/a n/a 6.2 0.0 55,366.5
2009 35.06 39.03 20.58 52 100 1.38 n/a n/a 6.0 0.0 53,522.7
2008 -32.65 -30.55 -28.92 71 100 2.69 n/a n/a 6.3 0.0 50,614.9
2007 -2.14 0.81 -9.78 106 100 0.72 n/a n/a 12.3 0.0 47,112.0

*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 Small Cap Value SMA composite consists of discretionary wrap accounts with an account minimum of US $25,000. Accounts within the composite seek long-term capital growth. Portfolios are primarily invested in U.S. equity securities of small capitalization companies that are believed to have a high probability of outperforming small cap value stocks in general. Limited investments may be made in large and mid-sized companies. The main risks of this strategy are General Investment Risk, Small Cap Risk and Non-U.S. Investment Risk. Prior to June 2008, the minimum was $5,000.

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. Total firm assets for 2007 represents the CBI-Retail firm. 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, calcul ating performance, and preparing compliant presentations are available upon request. Past performance is not necessarily indicative of future results.

Benchmark Information:
The Russell 2000® Value Index consists of those securities in the Russell 2000 Index with a less-than-average growth orientation

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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