ClearBridge Large Cap Value Strategy Portfolio Manager Commentary Q3 2018

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Includes: ANTM, BUD, CVS, DE, FCX, FOX, HAL, HON, JPM, KMB, MLM, MSFT, MSI, NOV, PFE, SYF
by: ClearBridge Investments
Summary

ClearBridge is a leading global asset manager committed to active management. Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.

Equities delivered a strong third quarter, as investors shrugged off disruptions from escalating trade disputes between the U.S. and major trade partners, China in particular, focusing instead on economic strength and earnings growth. We reduced the portfolio’s overall cyclicality by lowering exposure to consumer credit, as we are 10 years into an economic recovery, and lowered energy exposure as oil prices rebounded.

We continue to maintain a disciplined investment approach that focuses on companies with strong business franchises that have differentiated and competitively positioned products and services and ultimately have better pricing power and higher returns than their peers. We think these companies should outperform over time.

The ClearBridge Large Cap Value Strategy underperformed its Russell 1000 Value Index benchmark during the third quarter. The main contributors to Strategy performance came from the health care, financials and IT sectors, while the detractors came from the materials and energy sectors.