WSC - ClearBridge SMID Cap Growth Strategy Q2 2024 Commentary

2024-07-26 00:20:00 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.
• The Strategy underperformed its benchmark as negative stock selection in the industrials sector overcame positive contributions from holdings in financials, consumer staples and IT.
• Bouts of volatility and contradictory signals around the health of the economy as well as broader market consolidation resulted in a retreat in SMID stocks.
• We are finding many opportunities of oversold companies with great business models, strong growth prospects and stellar balance sheets trading at attractive free cash flow yields.

By Brian Angerame, Jeffrey Bailin, CFA, Aram Green & Matthew Lilling, CFA

Uncertainties Weigh on SMID Growth Market Overview

The second quarter proved a tale of two markets, as large cap market indexes saw rising concentration in mega cap tech companies and positive returns, while mid and small cap stocks faced a broad retreat. As a result, the Russell 1000 Index returned 3.57%, continuing its streak of outperforming the Russell 2500 Index, which returned -4.28%. Growth stocks held up only marginally better than their value counterparts, with the benchmark Russell 2500 Growth Index returning -4.22% compared to the -4.31% of the Russell 2500 Value Index....

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