uploads///Portfolio Breakdown of the SHRAX

What Portfolio Moves Did SHRAX Make prior to 1Q16?


Apr. 25 2016, Published 4:04 p.m. ET

ClearBridge Aggressive Growth Fund

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’s literature also says, “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’s website describes the fund’s management as “patient.” It intends to grow capital by investing in a high-conviction portfolio of companies with new or innovative technologies, products, and services.

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SHRAX’s assets were invested across 76 holdings as of March 2016, one less than a quarter ago. It was managing assets worth $12.6 billion as of March’s end. Its equity holdings included UnitedHealth Group (UNH), Seagate Technology (STX), SanDisk (SNDK), Tyco International (TYC), and Weatherford International (WFT). These stocks made up a combined 18.2% of SHRAX’s portfolio.

Historical portfolios

For this analysis, we’ll be considering SHRAX’s holdings as of December 2015, as that is its latest available sectoral breakdown. Its holdings post-December reflect valuation-driven changes to its portfolio, not its actual holdings.

Unlike a lot of other mutual funds in this review, healthcare is SHRAX’s biggest sectoral holding, making up close to one-third of the fund’s assets. Information technology, consumer discretionary, and energy form the rest of the fund’s core portfolio.

Healthcare and information technology form a total of over half of SHRAX’s assets. Meanwhile, the energy sector commands 11% of the fund’s assets. The fund is not invested in the consumer staples or utilities sectors. It initiated exposure to the telecommunications services sector in 3Q15.

The fund considers the Russell 3000 Growth Index to be its benchmark. Compared to the Russell 3000, SHRAX is overweight in the healthcare sector, which makes up twice the percentage it forms in the Russell 3000. It’s also sharply overweight in the energy sector, which forms just half a percent of the benchmark.

SHRAX is underweight in every other sector, most notably the industrials and financials sectors. Note that the fund’s website claims that its fund managers are “benchmark agnostic.”

Has this unique positioning helped or hurt SHRAX’s performance in 1Q16? Let’s look at that in the next article.


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