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Institutional Investor Advisor Individual Investor
Total AUM Avg. PM Years Experience Years Since Inception
$731.9M 22 5
As of September 30 2020

Strategy Average Annual Total Returns

(%, Gross of Fees)2
YTD 1 Year 3 Years 5 Years Since Inception
ClearBridge Sustainability Leaders Strategy Composite 14.04 24.67 18.30 15.98 13.31
Russell 3000 Index 5.41 15.00 11.65 13.69 10.87
As of September 30 2020

Overview

The Sustainability Leaders Strategy invests in high-quality companies across market capitalizations with strong or improving environmental, social and governance (ESG) attributes and makes an impact through company engagement.

Strategy Overview Concentrated all-cap portfolio of high-quality companies with outstanding ESG characteristics
Benchmark Russell 3000 Index
Total Strategy AUM $731.9M
Holdings Range 30-501
Objective Long-term growth of capital3

Investment Philosophy

The portfolio managers believe companies with positive ESG attributes may likely outperform their peers over the long term.

Meet Our Managers

Derek Deutsch, CFA

Portfolio Manager
21 Years experience
21 Years at ClearBridge

Mary Jane McQuillen

ESG Head, Portfolio Manager
24 Years experience
24 Years at ClearBridge

Strategy Facts

ClearBridge believes companies with positive ESG attributes are well positioned to outperform their peers over the long term.

Leverages the firm’s over 30 years of experience engaging with companies on ESG issues and its integration of ESG factors and ratings into a fundamental research approach that drives investment ideas.

Concentrated approach expresses the best ideas of portfolio managers Derek Deutsch and Mary Jane McQuillen.

Literature & Perspectives

Investment Process

  • Quantitative screening to identify companies with quality attributes of high returns on capital, strong balance sheets, efficient capital allocation and attractive valuations
  • Integrate fundamental research with proprietary analysis of environmental, social and governance factors to produce universe of companies displaying ESG leadership and compelling risk/reward attributes
  • Construct concentrated portfolio of high-conviction ideas with multi-year time horizon
  • Engage company managements to further ESG goals while continually monitoring portfolio using quantitative and fundamental tools 

Performance

A focus on best-in-class ESG practices enables the strategy to make a positive investment impact. 

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

YTD 1 Year 3 Years 5 Years Since Inception
ClearBridge Sustainability Leaders Strategy Composite 14.04 24.67 18.30 15.98 13.31
Russell 3000 Index 5.41 15.00 11.65 13.69 10.87

Characteristics

The Strategy's quality focus is reflected in return on equity (ROE) that is higher than its benchmark. 

Sector Weights1,2

Representative Portfolio Russell 3000 Index
Information Technology 28.88 27.21
Health Care 11.04 14.59
Consumer Discretionary 10.94 12.34
Industrials 10.39 8.99
Financials 9.92 9.90
Consumer Staples 8.33 6.30
Communication Services 7.86 9.81
Utilities 4.47 2.85
Materials 4.47 2.76
Real Estate 2.09 3.32
Energy 0.00 1.92
Cash 1.62 0.00
Portfolio Characteristics1,2
Characteristics Representative Portfolio Russell 3000 Index
P/E Ratio (trailing 12 mos.) 30.3 26.2
P/E Ratio (forward 12 mos.) 27.3 23.8
Price/Book 6.7 5.5
EPS Growth Next 3-5 Years (%) 11.6 12.9
Weighted Median Market Cap ($ bn) 67.4 108.4
Weighted Average Market Cap ($ bn) 328.0 373.5
ROE 24.1 21.8
Dividend Yield 1.2 1.7
Turnover (trailing 12 mos.) 53.4 --
Risk Statistics1
5 Year Risk Statistics Composite Russell 3000 Index
Annualized Returns (5 Years) 15.98 13.69
Standard Deviation (%) 14.38 15.47
Sharpe Ratio 1.03 0.84
Tracking Error (%) 3.75 --
R2 0.94 --
Alpha (%) 3.16 --
Beta 0.90 --
Top 10 Holdings1
Characteristics % of Total Representative Portfolio
Microsoft Corp 6.98
Apple Inc 6.43
Costco Wholesale Corp 2.97
Danaher Corp 2.77
Ball Corp 2.68
NIKE Inc 2.64
Home Depot Inc/The 2.61
Alphabet Inc 2.54
Progressive Corp/The 2.50
SolarEdge Technologies Inc 2.38
Total 34.50
Total Number of Holdings 50
  • 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  14.8% 14.6% 11.5% 10.8%
    Gross-of-fees  15.5% 15.4% 12.3% 11.6%
    Russell 3000 Index 6.5% 10.0% 10.0% 9.6%
  • 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 Sustainability Leaders Strategy will pursue its investment objective by investing in common stocks and other equity securities that meet the portfolio managers' financial and sustainability/environmental, social and governance ("ESG") criteria. The portfolio managers consider a sustainable company to be one that offers products and services that have a positive impact on society and has well-defined strategies in place to ensure longevity as an investment. Results are calculated in U.S. dollars. The Russell 3000® Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market. 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.