Attribution Analysis of US Mutual Funds through November 2015
ClearBridge Aggressive Growth Fund
According to the fund’s management, the ClearBridge Aggressive Growth Fund – Class A (SHRAX) “invests primarily in common stocks of companies the portfolio managers believe are experiencing, or will experience, growth in earnings exceeding the average rate of earnings growth of the companies which comprise the S&P 500 Index.
“The fund may invest in the securities of large, well-known companies offering prospects of long-term earnings growth. However, because higher earnings growth rates are often achieved by small to medium capitalization companies, a significant portion of the fund’s assets may be invested in the securities of such companies.”
The fund website describes the fund’s management as “patient” who intend to grow capital by investing in a high-conviction portfolio of companies with new or innovative technologies, products, and services.
The ClearBridge Aggressive Growth Fund’s assets were invested in 78 holdings in stocks, bonds, and cash as of November 2015. The fund managed $14.04 billion in assets as of the end of November. As of November, the portfolio’s top ten equity holdings included UnitedHealth Group Incorporated (UNH), Comcast Corporation (CMCSA), Anadarko Petroleum Corporation (APC), SanDisk Corp. (SNDK), and Broadcom Corp. (BRCM), comprising a combined 23.9% of the fund’s portfolio.
Historical portfolios
For this analysis, we will consider the fund’s holdings as of September 2015. The post-September holdings reflect the valuation-driven changes to the portfolio, not the actual holdings.
Unlike other mutual funds in this review, the SHRAX has healthcare as its biggest sectoral holding, making up 32.5% of the fund’s assets. The information technology sector—which has generally emerged as the top sectoral holding for most funds in this review—comes in at the second spot with a little over a fifth of the fund’s assets invested in the sector. The consumer discretionary sector rounds out the top three sectors.
Interestingly, the fund is not invested in the consumer staples sector at all. Also, it does not have any exposure to the utilities sector. It just invested in the telecom services sector in September 2015, and the sector forms 1.0% of the portfolio. The energy sector makes up a sizable ~11% of the fund’s assets.
Over the one-year period ended November 2015, fund managers have increased exposure to the consumer discretionary sector. On the other hand, the healthcare sector has seen some reduction in weight. The energy sector has seen no change, which shows the managers’ conviction in those stocks. They have been persistent with their stock picks, and several sectors have not seen any addition or reduction to the securities held over the course of the year.