Best Mid/SMID Cap Strategy
ClearBridge Mid Cap Growth featuring Brian Angerame, Managing Director and Portfolio Manager at ClearBridge Investments
Link to this WEBINAR
In the 11th episode of the SMArtX 2021 Virtual Awards Webinar Series, SMArtX CEO Evan Rapoport sits down with Brian Angerame, Managing Director and Portfolio Manager at ClearBridge Investments, to discuss winning Best Mid/SMID Cap Strategy in this year’s awards.
Evan and Brian talk about the power of being prepared and anticipating changes, why mid cap is a strong asset class, and why all of this is important to advisors.
About the Strategy
The ClearBridge Mid Cap Growth portfolios seek long-term capital appreciation and consistently superior returns relative to the Russell Mid Cap Growth Index. The portfolio managers seek to achieve these objectives by investing in a group of mid capitalization equity securities selected for their long-term growth potential.
The portfolio managers follow an investment process that seeks out companies with growth potential, competitive advantage, and capital discipline. They generally diversify portfolio investments across several economic sectors, investing primarily in companies having market capitalizations within the capitalization range of the Russell Mid Cap Growth Index.
The Portfolio Managers invest with discipline, consistency, transparency, and risk awareness. They believe that mid cap growth stock prices may deviate significantly from fair value over the short term, due to the mis-pricing of risk in the market, the deluge of short-term data, and market illiquidity.
What Sets Them Apart
ClearBridge was able to weather the storm that was 2020 by making smart decisions before the pandemic, testing their portfolio during it, and doubling down on the companies they were already invested in that showed major growth during the pandemic.
Once the pandemic began, ClearBridge “bomb tested” their portfolio. They went stock-by-stock and assessed each stock to find out if they had the balance sheet or access to capital to continue to run the business. That process helped ClearBridge identify which companies were likely to thrive in the turbulent times ahead and which ones needed to be trimmed away.
As a result of ClearBridge’s great decision-making pre-pandemic, they already had stock in companies like DocuSign, which flourished in 2020. ClearBridge wasn’t just lucky; they owned good companies that had sustainable competitive advantages heading into the pandemic, and some of those companies proved even more valuable once the world moved to a more virtual space.
Many of the companies ClearBridge is invested in have actually emerged from the COVID pandemic stronger than when they went in. That’s a testament to ClearBridge’s processes.
How is This Applicable to Advisors?
Depending on the individual risk tolerances of the client, ClearBridge Mid Cap Growth can be a smaller portion or a sizable chunk of an advisor’s portfolio.
According to Brian Angerame, Managing Director and Portfolio Manager at ClearBridge, this type of asset class isn’t a “flash in the pan” and has actually out-performed both small and large cap over prolonged time periods.
“You don’t get lucky for 15, 20, or 25 years,” Angerame says. “We’ve weeded out the riskier stuff. Still plenty of growth, but it’s not starved for growth like the big behemoths.”
ClearBridge is confident that over long periods of time, this will remain fertile territory for finding great growth and innovation. They will continue to look at which stocks are being undervalued moving forward and which will continue to grow post-pandemic.
About ClearBridge Investments
ClearBridge Investments is a leading global equity manager committed to delivering long-term results through active management. They have followed this approach for more than 50 years and continue to offer investment solutions that emphasize differentiated stock selection to move their clients forward. Their investment decisions are supported by a robust research platform that conducts in-depth fundamental analysis of individual securities.