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Institutional Investor Advisor Individual Investor
Total AUM Avg. PM Years Experience Years Since Inception
$2.8B 24 6
As of June 30 2020

Strategy Average Annual Total Returns

(%, Gross of Fees)2
YTD 1 Year 3 Years 5 Years Since Inception
ClearBridge SMID Cap Growth Composite 14.00 22.26 21.48 14.00 14.46
Russell 2500 Growth Index 2.02 9.21 12.10 9.57 11.54
As of June 30 2020

Overview

The SMID Cap Growth Strategy targets attractively priced small and mid cap growth companies with large exploitable opportunities.

Strategy Overview Small cap growth and mid cap growth stocks
Benchmark Russell 2500 Growth Index
Total Strategy AUM $2.8B
Holdings Range 50-801
Objective Long-term growth of capital3

Investment Philosophy

The portfolio managers look for quality growth companies with large exploitable opportunities.

Meet Our Managers

Brian Angerame

Portfolio Manager
26 Years experience
20 Years at ClearBridge

Aram Green

Portfolio Manager
19 Years experience
14 Years at ClearBridge

Matthew Lilling, CFA

Portfolio Manager
14 Years experience
10 Years at ClearBridge

Jeffrey Russell, CFA

Portfolio Manager
39 Years experience
30 Years at ClearBridge

Strategy Facts

Portfolio reflects the combined expertise of ClearBridge’s Small Cap Growth and Mid Cap Growth teams.

Invests in a mix of early-stage, established, and industry-leading growth companies with a multi-year time horizon.

Targets quality stocks with strong balance sheets, high returns on capital and high free cash flow.

Literature & Perspectives

  • SMID Cap Growth Strategy
    2Q20 Commentary: We continue to closely evaluate existing holdings and source new ideas, using volatility to add companies participating in secular growth trends.
  • SMID Cap Growth Strategy
    1Q20 Commentary: Companies with financial flexibility, pricing power and enduring business models should be in the best shape in the recovery from this unprecedented slowdown.
  • SMID Cap Growth Strategy
    4Q19 Commentary: Strong investor flows and a relaxing of a multitude of market risks sparked a vigorous finish to the year for equities.
  • Growth Opportunities in Digital Transformation
    PM Aram Green and Analyst Hilary Frisch discuss how software is transforming the way businesses compete.
  • SMID Cap Growth Strategy
    3Q19 Commentary: We remained active in repositioning the portfolio, adding several innovative companies in the health care and technology sectors.

Investment Process

  • From an investment universe of stocks with market caps from $500 million to the largest member of the Russell 2500 Growth Index, generate investment ideas through company meetings, financial analysis and collaboration among portfolio managers and analysts
  • Conduct fundamental research to gauge attractiveness from an industry, financial structure, management and valuation standpoint
  • Construct portfolio of 50 to 80 high conviction growth stocks diversified by end market, business model and growth profile, focusing on innovative products and services
  • Ongoing portfolio review, with attention to valuation and risk management 

Performance

A mix of small and mid cap growth stocks has led to competitive results over multiple time periods.  

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

YTD 1 Year 3 Years 5 Years Since Inception
ClearBridge SMID Cap Growth Composite 14.00 22.26 21.48 14.00 14.46
Russell 2500 Growth Index 2.02 9.21 12.10 9.57 11.54

Characteristics

The Strategy targets higher multiple companies with above-average earnings growth.

Sector Weights1,2

Representative Portfolio Russell 2500 Growth Index
Information Technology 33.19 29.51
Health Care 21.08 30.05
Consumer Discretionary 15.92 11.38
Industrials 15.23 11.45
Real Estate 6.07 2.88
Consumer Staples 3.10 2.96
Financials 2.47 4.40
Communication Services 1.35 2.76
Materials 1.11 3.28
Energy 0.32 0.11
Utilities 0.00 1.22
Cash 0.16 0.00
Portfolio Characteristics1,2
Characteristics Representative Portfolio Russell 2500 Growth Index
P/E Ratio (trailing 12 mos.) 37.6 27.9
P/E Ratio (forward 12 mos.) 44.9 29.6
Price/Book 8.2 8.1
EPS Growth Next 3-5 Years (%) 27.6 16.7
Weighted Median Market Cap ($ bn) 10.1 4.0
Weighted Average Market Cap ($ bn) 12.4 5.0
ROE 2.9 3.5
Dividend Yield 0.2 0.5
Turnover (trailing 12 mos.) 16.6 --
Risk Statistics1
5 Year Risk Statistics Composite Russell 2500 Growth Index
Annualized Returns (5 Years) 14.00 9.57
Standard Deviation (%) 19.79 19.71
Sharpe Ratio 0.70 0.51
Tracking Error (%) 4.29 --
R2 0.95 --
Alpha (%) 4.26 --
Beta 0.98 --
Top 10 Holdings1
Characteristics % of Total Representative Portfolio
Wix.com Ltd 4.12
DocuSign Inc 4.02
Trex Co Inc 3.91
Etsy Inc 3.44
Insulet Corp 3.33
MercadoLibre Inc 3.32
Fortinet Inc 3.28
SBA Communications Corp 3.09
Copart Inc 2.81
Inphi Corp 2.65
Total 33.97
Total Number of Holdings 58
  • 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: Russell Investments. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication.

  • Annualized Returns 1 Yr (6/30/20) 3 Yrs (6/30/20) 5 Yrs (6/30/20) Since Inception (6/30/20)
    Net-of-fees  21.2% 20.5% 13.0% 13.5%
    Gross-of-fees  22.3% 21.5% 14.0% 14.5%
    Russell 2500 Growth 9.2% 12.1% 9.6% 11.5%
  • 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 SMID Cap Growth composite invests in a diverse portfolio of small and mid cap securities whose market caps are generally within the range of the benchmark. Results are calculated in U.S. dollars. The Russell 2500 Growth Index measures the performance of the small to mid-cap growth segment of the U.S. equity universe. 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.