ClearBridge Value Equity Strategy Portfolio Manager Commentary Q4 2018

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Includes: ACM, ADNT, AES, AGN, AIG, ALXN, APA, AZO, BUD, DVN, ECA, EXC, FB, GOOG, GOOGL, HAL, JCI, LEN, LOW, MRK, NTAP, RGLD, RLGY, TAP, TDG, VWAGY
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.

As fear crept into the market in 2018 it did not do it quietly. Valuation multiples compressed by over 20% as growth expectations for 2019 were almost cut in half.

We focus on opportunities where market perceptions of stocks are too extremely negative, and the resulting overreaction creates an exploitable difference between price and value.

If we are broadly correct that recession fears are overdone, we think we are well-positioned as extremely depressed expectations rebound. This is especially true if dual fiscal and monetary policy ends up driving rates higher, as we believe it will.

The ClearBridge Value Equity Strategy had a negative return during the fourth quarter, underperforming the Strategy’s benchmark.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.