TSCO - ClearBridge Multi Cap Growth Strategy Q1 2024 Portfolio Manager Commentary

2024-04-17 08:00:00 ET

Summary

• ClearBridge is a leading global asset manager committed to active management. Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.
• Historic mega cap concentration in large cap indexes and size limits for smaller cap indexes have caused our long-time benchmark, the Russell 3000 Growth Index, to become a less relevant measure of our stock selection and risk management efforts.
• We continue to target stocks in the roughly $10 billion to $100 billion capitalization range, a “mid cap plus” segment that has delivered superior median returns compared to both larger cap and smaller cap companies over the last 20+ years. Combined with dispersion that steadily increases at lower market caps, this creates a compelling opportunity for active managers.
• A narrow, momentum-driven market in the first quarter enabled us to harvest more profits from larger cap holdings and put the proceeds to work across four new ideas as well as build out recent additions.

By Evan Bauman & Aram Green

Positioning Efforts Focused on Smaller Cap Names - Market Overview

The positive momentum of 2023 extended into the first quarter as increased likelihood of an economic soft landing combined with a relatively favorable monetary backdrop sent stocks broadly higher. The S&P 500 Index advanced 10.56% for its best start since 2019, boosted by solid corporate earnings and continued enthusiasm for generative artificial intelligence ((AI)). After the market showed signs of broadening in the fourth quarter, mega cap growth stocks flexed their leadership yet again to start the year with the Russell Top 200 Growth Index (11.70%) being the best-performing segment for the quarter....

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