Which Stock Picks Haven’t Worked for the ClearBridge Aggressive Growth Fund?

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Nov. 20 2020, Updated 3:58 p.m. ET

Performance evaluation

The ClearBridge Aggressive Growth Fund Class A (SHRAX) rose by 7.2% in October 2015 over the previous month. In the three- and six-month periods that ended on October 30, the fund fell by 4.1% and 5.4%, respectively. In the YTD (year-to-date) period, the fund was down by 1.9%, while in the one-year period, it was down by 1.0%. However, from the end of October until November 19, the fund was down by 1.1%—the biggest drop among the nine funds in this review.

SHRAX is the only fund among the nine in this review that posted positive returns in just one of the five periods. It’s also the only fund of our nine that fell in the one-year period. This puts the fund in dead last place for all periods except for the one-month period.

Let’s look at what contributed to this poor performance by the fund.

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Portfolio composition and contribution to returns

SHRAX has been around for a while, having been launched in October 1983. The latest complete portfolio available for the fund is as of September 2015. Hence, for our analysis, we’ll take that portfolio as our base and consider valuation changes as they stood at the end of October 2015. All portfolio percentages mentioned from here on refer to weights according to changes in valuation between September and October.

The healthcare sector was the biggest positive contributor to the fund in the one-year period as of October 2015. UnitedHealth Group (UNH) was the biggest individual contributor to returns from this sector. Allergan (AGN) also contributed in good measure. However, Valeant Pharmaceuticals International (VRX) was a major negative contributor.

Stocks from the consumer discretionary sector followed healthcare in terms of positive contributions to returns. Cablevision Systems Corporation (CVC) and Comcast Corporation (CMCSK) led the consumer discretionary sector, but MSG Networks (MSGN) reduced some of the positive contributions.

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Reasons driving poor performance

The energy sector foiled the aforementioned and other positive contributions to SHRAX. Energy’s comparatively large portion of the pie coupled with falling energy prices hit the fund hard and caused it to post a decline in the one-year period ending on October 2015. The energy sector was led down by Anadarko Petroleum Corporation (APC) and Weatherford International (WFT).

The materials sector, which made up just 1.2% of the portfolio, emerged as the second-biggest negative contributor, driven down by Freeport-McMoRan (FCX).

Even the information technology sector, which has contributed positively to most of the funds’ returns, contributed negatively to SHRAX, driven down by Seagate Technology (STX). But positive contributions from Broadcom Corporation (BRCM) and Citrix Systems (CTXS) were not enough to undo the negative contributions.

In the next part of this series, we’ll look at the T. Rowe Price Blue Chip Growth Fund (TRBCX).

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