DUOL - ClearBridge Small Cap Growth Strategy Q2 2024 Portfolio Manager Commentary

2024-04-09 11:00:00 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.
• We are seeing underlying improvements from companies we do own in the portfolio, with several being recent portfolio additions or subjects of repositioning work executed in 2023.
• Extreme and unprecedented concentration in the benchmark Russell 2000 Growth Index, highlighted by the performance of Super Micro Computer, was the primary headwind to relative Strategy performance.
• The Strategy saw strong performance from investments in consumer discretionary and consumer staples, along with solid contributions from several industrial holdings.
• The first quarter represented another period of fruitful new idea generation, with the addition of nine new positions across health care, consumer discretionary, consumer staples, software and materials.

By Jeffrey Bailin, CFA & Aram Green

Benchmark Concentration Even More Severe in Small Growth

Market Overview

Entering 2024, we were hopeful that, after a year of extreme relative underperformance versus large cap peers, conditions were aligning for a broadening market more favorable for small cap stocks. Thus far, it has been more of the same, as large has outperformed small, paced by growth over value across market capitalizations. The benchmark Russell 2000 Growth Index returned 7.58% in the first quarter but the positive performance obscured a stark dichotomy within the small cap growth universe....

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