In today’s fast paced investment world, it’s often tempting for investors to search for the “next hot thing,” or to seek out an investment approach they think could be the future of innovative investing.
But what about looking for veteran money managers whose investment disciplines have withstood the test of time? ClearBridge Investments, a money manager with 45 plus years of experience.1 Below, we’ll take a closer look at the firm and its Multi-Cap Growth strategy.
ClearBridge Investments Association with
Legg Mason
In December 2005, ClearBridge Investments was created following Legg Mason’s transaction with Citigroup. ClearBridge serves as the largest equity manager within Legg Mason’s various offerings, but it’s important to note that it operates with investment independence—maintaining its own investment strategies, philosophies, and investment decision-making authority.2
ClearBridge Investments Strategy Overview
ClearBridge Investments is a bottom-up stock selector, meaning it emphasizes individual companies and their growth prospects/attributes when building a portfolio.1
When considering stocks for the portfolio, ClearBridge looks for inefficiently priced companies with strong fundamentals, incentive-driven management teams, dominant positions in niche markets, innovative technologies, and/or goods and services consumers are practically compelled to use.1
In order to find these types of stocks, ClearBridge takes the approach of looking at companies of virtually any size—small, mid, or large cap (though they do set a minimum company size at $300 million, which is relatively small)—so long as they think the company has potential for above average long-term earnings and/or cash flow growth.2
The resulting portfolio will typically hold between 25-35 stocks, and the companies are ones that management intends to hold not for a quarter or two, but for many years so that earnings and/or cash flow growth can compound over time. This may reduce portfolio turnover over time.
Stocks in the portfolio then undergo continuous review, as managers examine companies for excessive valuations and/or long-term deterioration of fundamentals. The Portfolio Managers are also looking for new ideas, and may replace a stock if they find another with better risk/return prospects.2
The ClearBridge Multi-Cap Strategy Maintains Flexibility
Because ClearBridge takes a bottom-up, stock picker approach, it maintains flexibility to invest in just about any type of company out there, regardless of industry or size.1 This is different from a money manager that focuses on one particular category of stocks, like, for instance, a small-cap focused fund. For a manager that has a mandate to invest in only small-cap names, for example, he or she may have to sell a small cap holding that eventually grows into a large cap stock, even if they think it will continue to perform well. At ClearBridge, they have the flexibility to keep that position regardless of its changing market capitalization.
If you’d like to see a full performance report for the ClearBridge Multi-Cap Growth Portfolio, you can request it by clicking here. One of our Wealth Managers will be happy to assist you.
Learn More About ClearBridge Investments and Other Managers Like Them.
If you want to learn more about the ClearBridge Multi-Cap Growth portfolios, or you want to explore whether it might be a good investment for you, please give us a call at (800) 541-7774 so one of our Wealth Managers can help you.
At WrapManager, we conduct research on money manager strategies which we’re happy to share with you at your request. We can also analyze your portfolio and recommend money managers to you based on your goals. Call us today to get started, or click here.
Sources:
1 ClearBridge Investments
2 PSN Enterprise
Strategy descriptions listed represent a brief outline of the portfolio’s objective. There is no guarantee that any manager or product will be successful in achieving the objective described. The strategy used by the money manager listed is not suitable for all investors. This material does not represent a personalized recommendation and does not reflect individual investor’s risk and return goals nor does it serve as the receipt of, or a substitute for, personalized advice from WrapManager, Inc. or any other investment professional.
