NVDA - ClearBridge Small Cap Strategy Q1 2024 Portfolio Manager Commentary

2024-04-10 10:40:00 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.
• Markets appear to have devolved into speculation, with bitcoin and companies with no earnings showing strong performance and yields declining on the mere prospect of 2024 rate cuts.
• The ClearBridge Small Cap Strategy underperformed the benchmark Russell 2000 Index in the first quarter by 177 bps.
• MicroStrategy also ended the quarter with a market weighting of 0.95% of the index, one of the largest positions ever, and a market cap over $27 billion.

By Albert Grosman & Brian Lund, CFA

Surging Tech Overshadows Small Cap Risks

Market Overview

The ClearBridge Small Cap Strategy underperformed the benchmark Russell 2000 Index in the first quarter by 177 bps, precisely the amount that the two largest-capitalization stocks in the index - Super Micro Computer ( SMCI ) and MicroStrategy ( MSTR ) - contributed to the index's performance. Our decision not to own Super Micro Computer and, to a lesser extent, bitcoin-related companies like MicroStrategy, overshadowed positive contributions from our companies in the energy and materials sectors....

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