What Saved the Day for the ClearBridge Aggressive Growth Fund?


Jul. 22 2016, Published 7:56 p.m. ET

Performance evaluation

The ClearBridge Aggressive Growth Fund Class A (SHRAX) has risen by 1.6% YTD (year-to-date) in 2016. This places it right in the middle of the pack of 12 funds chosen for this review. The one-year period until July 15 has not been good for the fund because it stands dead last among its peers, but 2016 has generally been better for the fund.

We have graphed its performance against two ETFs: the iShares S&P 500 Growth ETF (IVW) and the iShares Russell 1000 Growth ETF (IWF). Let’s look at what has contributed to this average performance by the fund YTD in 2016.

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Portfolio composition and contribution to returns

Although industrials make up 7% of the portfolio, stock picks from the sector have helped it emerge as the biggest positive contributor in the year so far. Tyco International (TYC) has been the biggest positive contributor, followed by ADT Corp (ADT) and L-3 Communications Holdings (LLL). ADT was acquired earlier this year, and the absence of any major negative contributor has been an immense help to the sector.

The fund’s high exposure to the energy sector has been helpful as the sector has emerged as the second-biggest positive contributor. Anadarko Petroleum (APC) and Newfield Exploration (NFX) have energized the sector, but Weatherford International (WFT) has weighed on the sector’s returns. Meanwhile, Freeport-McMoRan (FCX) has helped the materials sector up.

The healthcare sector has been a sore point for the fund in 2016 so far. Allergan (AGN) and Biogen (BIIB) have been the chief detractors from the sector. However, UnitedHealth Group (UNH) has saved further problems for the sector due to its high positive contribution.

Investor takeaways

SHRAX is an intriguing offering, given its unique sectoral composition, with healthcare the most invested in sector and staples entirely absent. Energy stocks have a sizable exposure, and so it can be used in tandem with another fund that has tech and staples stocks as major sectors. This combined offering will provide you complete exposure to the US equity market. The fund has not done too badly in 2016, but there’s not much to write home about either.

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


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