uploads///Portfolio Breakdown of the SHRAX

Inside the Portfolio Changes in the ClearBridge Aggressive Growth Fund so Far in 2016


Jul. 22 2016, Published 7:55 p.m. ET

Fund overview

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 fund management as “patient” managers who intend to grow capital by investing in a high-conviction portfolio of companies with new or innovative technologies, products, and services.

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The fund’s assets were invested across 78 holdings as of June 2016, and it was managing assets worth $11.4 billion as of the end of June. Its June equity holdings included UnitedHealth Group (UNH), Tyco International (TYC), Seagate Technology (STX), Citrix Systems (CTXS), and Weatherford International (WFT), which make up a combined 18.1% of the fund’s portfolio.

Portfolio changes

Unlike a lot of other mutual funds in this review, SHRAX has healthcare as its biggest sectoral holding, making up over one-third of the fund’s assets. Information technology, consumer discretionary, and energy make up the rest of the fund’s core portfolio. The top three sectors combined make up nearly three-fourths of the portfolio.

Notably, SHRAX is the only fund in this review that has double-digit exposure to the energy sector. The fund is not invested in the consumer staples and utilities sectors. It initiated exposure to the telecom services sector in 3Q15.

The fund considers Russell 3000 Growth Index as its benchmark. Compared to that index, the fund is markedly overweight in the healthcare sector, which makes up twice the percentage it forms in the benchmark. It’s also sharply overweight in the energy sector, which makes just 0.6% of the benchmark. It’s underweight in every other sector, but most notably in industrials, tech, and financials. We should point out that the fund website claims fund managers to be “benchmark agnostic.”

Over the past three years until June 2016, exposure to healthcare and tech stocks in the fund has risen. However, SHRAX’s exposure to tech stocks is not as large as some of its peers.

But has this unique positioning helped or hurt SHRAX’s performance so far in 2016? Let’s investigate in the next article.


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