ClearBridge International Growth EAFE Strategy Q4 2024 Commentary

2025-01-10 04:10:00 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 outperformed the benchmark for the quarter and full year, supported by strong results from our stable and emerging growth holdings that belied a weak macro backdrop across Europe and a transitional period in Japan.
• We remained active in repositioning the portfolio, adding seven new positions in the quarter and exiting three, with a focus on luxury goods, health care and augmenting our Japanese exposure.
• Compared to bullish sentiment in the U.S., international markets are priced for little progress. We believe this creates an overlooked opportunity for active growth investors, with several catalysts that could support mean reversion in the year ahead.

By Elisa Mazen, Michael Testorf, CFA & Pawel Wroblewski, CFA

Emerging Growth Stocks on the Mend

Market Overview

After robust performance in the first half of the year, international equities continued to struggle in the fourth quarter due to market concerns about tariff wars and potentially other punitive measures that could be levied by the second Trump administration. The stronger U.S. dollar ( USDOLLAR , DXY ) and negative sentiment over the current state of political affairs in Europe also weighed on the largest developed markets. The benchmark MSCI EAFE Index declined 8.11% in the quarter to finish the year up just 3.82%. The MSCI Emerging Markets Index fell 8.01% to finish 2024 up 7.50%....

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