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Institutional Investor Advisor Individual Investor
Total AUM Avg. PM Years Experience Years Since Inception
$8.4B 32 50
As of March 31 2020

Strategy Average Annual Total Returns

(%, Gross of Fees)2
YTD 1 Year 3 Years 5 Years 7 Years 10 Years
ClearBridge Appreciation Composite -19.55 -5.72 5.95 7.00 9.37 10.42
S&P 500 Index -19.60 -6.98 5.10 6.73 9.62 10.53
As of March 31 2020

Overview

The Appreciation Strategy seeks to balance upside return potential with downside risk protection by investing in high-quality large cap stocks.  

Strategy Overview Primarily large cap growth and value stocks
Benchmark S&P 500 Index
Total Strategy AUM $8.4B
Holdings Range 80-1001
Objective Seeks long-term appreciation of capital3

Investment Philosophy

The managers seek to provide consistent and competitive risk-adjusted returns through a market cycle by balancing upside participation in good markets, while trying to limit downside risk during difficult markets.

Meet Our Managers

Scott Glasser

Co-Chief Investment Officer, Portfolio Manager
29 Years experience
27 Years at ClearBridge

Michael Kagan

Portfolio Manager
35 Years experience
26 Years at ClearBridge

Strategy Facts

An active focus on risk management has led to lower levels of risk and volatility than the benchmark over the same time periods.

Portfolio manager Scott Glasser has been a member of the Appreciation team since 1995.

Joining the team in 2009, portfolio manager Michael Kagan also brings a long tenure of investment experience.

Literature & Perspectives

  • Appreciation Strategy
    1Q20 Commentary: What makes a company robust in a slowdown are the same when demand stops — a strong balance sheet and a dominant franchise.
  • Appreciation Strategy
    4Q19 Commentary: Markets will be more dependent on a rebound in earnings to drive the next leg of market returns.
  • ClearBridge Economic & Market Outlook for 2020
    PMs Albert Grosman and Michael Kagan join Jeff Schulze to discuss positioning for the year ahead.
  • AssetTV Global Market Outlook for 2020
    A ClearBridge panel shares their views on recession and geopolitical risks and where they see opportunities as active managers in the year ahead.
  • Appreciation Strategy Update
    PM Michael Kagan weighs recession risks and details how the defensive-led rally favored the Appreciation Strategy's approach in the third quarter.

Investment Process

  • Screen large cap stocks with an emphasis on identifying dominant, high-quality companies
  • Evaluate stocks through proprietary research, pinpointing  companies with dominant market positions, proven management teams and superior balance sheets
  • Construct portfolio of stocks with attractive growth characteristics relative to their valuation levels
  • Continuously review holdings, monitoring risk, valuation and potential buys and sells

Performance

An emphasis on risk management has produced strong risk-adjusted returns.

Average Annual Total Returns (%, Gross of Fees)2

YTD 1 Year 3 Years 5 Years 7 Years 10 Years
ClearBridge Appreciation Composite -19.55 -5.72 5.95 7.00 9.37 10.42
S&P 500 Index -19.60 -6.98 5.10 6.73 9.62 10.53

Characteristics

The Strategy has typically taken on less risk than its benchmark, as measured by beta.

Sector Weights1,2

Representative Portfolio S&P 500 Index
Information Technology 25.94 25.48
23.48 25.35
Health Care 13.69 15.38
Communication Services 13.32 10.74
Financials 12.28 10.93
Industrials 7.92 8.22
Consumer Staples 7.03 7.79
Consumer Discretionary 6.94 9.80
Materials 6.43 2.43
Energy 3.16 2.65
Real Estate 2.01 3.01
Utilities 0.55 3.57
Unassigned 0.00 0.00
-19.55 -19.60
Cash 0.72 0.00
Portfolio Characteristics1,2
Characteristics Representative Portfolio S&P 500 Index
P/E Ratio (trailing 12 mos.) 17.5 17.4
P/E Ratio (forward 12 mos.) 17.5 16.7
Price/Book 6.0 5.7
EPS Growth Next 3-5 Years (%) 10.8 10.2
Weighted Median Market Cap ($ bn) 180.6 118.7
Weighted Average Market Cap ($ bn) 318.2 274.4
ROE 26.6 24.9
Dividend Yield 2.2 2.3
Turnover (trailing 12 mos.) 11.2 --
Risk Statistics1
10 Year Risk Statistics Composite S&P 500 Index
Annualized Returns (10 Years) 10.42 10.53
Standard Deviation (%) 12.26 13.30
Sharpe Ratio 0.83 0.78
Tracking Error (%) 2.05 --
R2 0.98 --
Alpha (%) 0.67 --
Beta 0.91 --
Top 10 Holdings1
Characteristics % of Total Representative Portfolio
Microsoft Corp 7.97
Apple Inc 4.55
Berkshire Hathaway Inc 3.45
Visa Inc 3.22
JPMorgan Chase & Co 3.11
Amazon.com Inc 2.88
Comcast Corp 2.84
Adobe Inc 2.72
Alphabet Inc 2.66
Home Depot Inc/The 2.62
Total 36.01
Total Number of Holdings 65
  • 1

    Source: FactSet. Representative portfolio characteristics, holdings, sector weightings and market cap are based on a representative portfolio and are subject to change at any time. Holdings, sector weightings, market cap and portfolio characteristics of individual client portfolios 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.

  • 2

    Past performance is no guarantee of future results. See GIPS endnotes. Performance is preliminary and subject to change.

  • 3

    There is no guarantee that the Strategy's objective will be met.

  • P/E ratios are weighted harmonic average. Price/Book is weighted average.

  • Performance source: Internal. Benchmark source: Standard & Poor’s.
  • Annualized Returns  1 Yr (3/31/20) 3 Yrs (3/31/20) 5 Yrs (3/31/20) 10 Yrs (3/31/20)
    Net-of-fees  -6.3% 5.3% 6.3% 9.7%
    Gross-of-fees  -5.7% 6.0% 7.0% 10.4%
    S&P 500 -7.0% 5.1% 6.7% 10.5%
  • ClearBridge Investments, LLC claims compliance with the Global Investment Performance Standards (GIPS®). 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. The ClearBridge Appreciation Composite invests primarily in medium and large capitalization companies, but may also invest in small capitalization companies. The manager seeks investments among a strong core of growth and value stocks, consisting primarily of blue chip companies dominant in their industries. Results are calculated in U.S. dollars. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. To receive a complete list and description of ClearBridge composites and/or a presentation that adheres to the GIPS standards, please contact ClearBridge Institutional Marketing.