Last Place: The ClearBridge Aggressive Growth Fund

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The ClearBridge Aggressive Growth Fund: Overview

The ClearBridge Aggressive Growth Fund – Class A (SHRAX) had $12.1 billion worth of assets under management at the end of January 2016. As of December 2015, its assets were spread across 77 holdings and included stocks of UnitedHealth Group (UNH), Comcast (CMCSA), SanDisk (SNDK), Broadcom (BRCM), and Anadarko Petroleum (APC), which comprise a combined 24.3% of the fund’s portfolio.

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The ClearBridge Aggressive Growth Fund’s performance

From a purely NAV (net asset value) return standpoint, the SHRAX has had a terrible time recently. It placed dead last among the 12 funds in this review for the one-year period ended February 12, 2016, the month of January, and 2015. It was the only fund to underperform the S&P 500 in 2015 and to post negative returns for the year.

Other metrics

The SHRAX’s standard deviation, or the volatility of returns, in the one-year period ended February 12 was 18.3%. This was higher than the S&P 500’s 16.4%, but a little lower than the peer group’s average of 18.6%. The fund’s standard deviation remained on the higher side in 2015 as well.

The fund’s risk-adjusted returns, calculated by the Sharpe ratio, amounted to -0.83, worse than the S&P 500’s -0.47 for the one-year period ended February 12, and lagging behind all of its peers. For 2015, the fund was the only one to post a negative Sharpe ratio.

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The information ratio, calculated with the S&P 500 as the benchmark, was -1.1 for the one-year period ended February 12—the lowest among all its peers. The information ratio measures the fund manager’s consistency and ability to generate excess returns over a benchmark. However, we can’t evaluate a negative information ratio. For 2015, the fund was the only one to have a negative information ratio.

A note to investors

The fund had a poor 2015 and one-year period up until February 12, 2016. Its risk-adjusted measures can’t allow us to draw conclusions, but coupled with its poor point-to-point return performance, it indicates an unappetizing offering. Its alpha had been negative for both aforementioned periods as well. However, we would ask investors to evaluate the fund’s performance over several market cycles before deciding whether to invest in this fund. For those with a short investment horizon, the fund may not be suitable. In the next article, we’ll look at the T. Rowe Price Blue Chip Growth Fund (TRBCX).

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