Legg Mason Large Cap Growth Balanced Tax-Favored Portfolios seek long-term capital appreciation through investments in large-capitalization stocks with potential for solid long term performance. The portfolios use municipal bonds to limit portfolio volatility and offer a balanced approach to diversification.
The strategy seeks to:
- Focus on consistent, long-term growth of capital while seeking to minimize volatility
- Perform well in improving markets and outperform a mix of 60% Russell 1000 Growth and 40% Bloomberg Barclays Muni. 5-Year Index in difficult markets
- Provide competitive returns regardless of which investment style is in favor
We believe that:
- Ownership of high-quality, large-company stocks can provide the potential for solid long-term performance.
- When combined with the traditional stability of municipal bonds, large cap stocks have the potential to manage volatility during turbulent markets
Equity investment process
Fixed Income investment process
- 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
Interest rate exposure/Duration weighting
Western Asset’s investment team comprehensively analyzes a variety of domestic and international macroeconomic factors to establish a duration target
- 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
Term structure weighting
The Firm carefully employs strategies in an attempt to take advantage of changes in the yield curve’s shape and shifts in the relationship between short-, intermediate-, and long-maturity securities.
- Own companies with a range of growth and volatility
- Maintain high active share
- Monitor sector weightings and correlations among current holdings
Western Asset believes that the value can be added to a portfolio by actively rotating among, and within, different sectors of the bond market. The investment team studies the fundamental factors that influence sector spread relationships.
Risk management/Evaluation discipline
Assess risk regularly
Using a bottom-up process, the Firm seeks to identify companies with changing credit characteristics and securities that are undervalued and out of favor due to unusual circumstances.
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
One of the world’s leading global fixed income managers. Founded in 1971, the firm is known for team management, proprietary research and long-term fundamental value approach.
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.
Managing Director, Portfolio Manager
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. 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. Fixed income securities are subject to interest rate and credit risk, which is a possibility that the issuer of a security will be unable to make interest payments and repay the principal on its debt. As interest rates rise, the price of fixed income securities falls. Fixed income securities are subject to illiquidity risk, which is the risk that securities may be difficult to sell at certain prices when no market participants are willing to purchase the securities at such prices. A general rise in interest rates may lead to increased portfolio volatility.
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.
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.
Legg Mason Large Cap Growth Balanced Tax-Favored Portfolios composite performance has the approximate target allocation of: 60% equity and 40% fixed income components. The Index Mix is comprised of 60% Russell 1000 Growth Index and 40% Bloomberg Barclays 5-Year Municipal Bond indices, rebalanced monthly. Unlike the indices included in the Index Mix, investment styles included in balanced portfolios are not automatically rebalanced each month.
Performance returns for periods prior to January 2006 are based on the performance of a composite of accounts from a formerly-affiliated sponsor channel, which represented an overwhelming majority of the strategy’s retail assets under management during such periods. Such pre-2006 returns were calculated on an equal-weighted basis where each portfolio contributed an equal weight to the resulting composite return regardless of its asset size. Performance returns for periods subsequent to January 2006 are based on the composite performance of all discretionary retail managed accounts in the strategy. Such post-2005 returns were calculated on an asset-weighted basis where each portfolio contributed to the resulting composite return proportionately based on asset size.
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.
*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.
Legg Mason Private Portfolio Group, LLC ("LMPPG") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Legg Mason Private Portfolio Group, LLC has been independently verified for the periods January 1, 2013 - December 31, 2017. 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.
Legg Mason Private Portfolio Group, LLC is a wholly-owned subsidiary of Legg Mason, Inc. LMPPG, together with their Subadvisers ClearBridge Investments, LLC ("ClearBridge") and Western Asset, provides investment advisory services primarily in investment programs sponsored by Sponsor Firms. The investment advisory services LMPPG and the Subadvisers provide differ depending on the type of Sponsor Firm investment program in which a client participates. ClearBridge and Western Asset claim compliance with the Global Investment Performance Standards (GIPS®) and have been independently verified through December 31, 2017. 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 composi te presentation. LMPPG has used a sub advisor for all periods presented.
The Legg Mason Large Cap Growth Balanced Taxable 60/40 composite consists of discretionary wrap accounts with an account minimum of US $25,000. The strategy seeks long-term capital appreciation through investments in large-capitalization stocks with potential for solid long-term performance. The portfolios use fixed income to manage portfolio volatility and to provide income and total return. The main risks of this strategy are General Investment Risk, Credit Risk, and Interest Rate 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. 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. Data prior to January 2013 is not displayed because that data is non GIPS compliant. The three-year annualized ex-post standard deviation is not available prior to 2015 because the composite did not have 36 months of GIPS compliant 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 composite uses the following blended benchmark 60% Russell 1000® Growth / 40% Bloomberg Barclays US Intermediate Treasury which is rebalanced monthly.
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
The Bloomberg Barclays U.S Intermediate Treasury Bond Index is comprised of all public obligations of the U.S. Treasury.
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.