Global, International and Emerging
Market Asset Manager of the Year
International Growth ADR SMA
After a careful review of some 50 strategies that encompass international, global and emerging marketequities, this year’s award selectioncommittee chose the ClearBridgeInternational Growth AmericanDepository Receipt Separately ManagedAccount as the category’s award winner.
Several factors have worked in theportfolio’s favor. For instance, it gainedover 34% in 2019 — outperforming theMSCI EAFE Index by some 12% andputting it in the 14th percentile vs. itsnon-U.S. developed growth peers.
“During the year, the team’s tilt
toward companies with low earnings
variance was rewarded as stock pick-
ing was positive in nearly all sectors,”
according to Envestnet analysts. “The
team’s nearly 10% overweight to the IT
sector and stock picking within the sec-
tor propelled results.”
Looking at the financial sector, the
ClearBridge team had an underweight
position in European banks and a tilt
toward Asian insurance companies. Its
holding in the London Stock Exchange
jumped over 100% last year.
Since 2013, this group has producedyearly alpha of over 5% and had anupside/downside capture ratio of104%/70%, Envestnet says. This put itin the top decile of its peers over the lastthree- and five-year periods.
The portfolio team believes marketparticipants incorrectly assume “a nor-malization of earnings over a two-to-five year period … by over-emphasizingnear-term earnings and underestimating the magnitude and/or duration ofearnings growth, creating mispricing,”said Envestnet analysts.
Elisa Mazen leads the portfolio,
and its holdings are aligned with three
growth buckets — emerging, secular and
structural. “We are fundamental inves-
tors and believe we’re very good at buy-
ing growth stocks that will outperform
the market significantly,” Mazen said.
The team delivers results via a bottom-up process. As for its outperformance in 2019, “The driver was stockselection, which validates our philosophy, process and all we do,” she said.
Mazen points to gamemaker
Nintendo of Japan: “We had added it
back in 2018. We felt that that was a very
interesting story that was not being fully
understood.” Last year, it “was a signifi-
cant performer,” she explained “That’s
continued to be the case into 2020.”
As the team became concerned about
the length of the economic cycle, it felt
“our more cyclically oriented stocks
were very fully priced” and started to
sell some holdings — most notably in
energy — in late 2019, she said. “We
felt there was a transition from certain
energy [resources] to alternative fuels
that’s far more interesting.” It recently added some holdings, such as a renewable
energy firm in Portugal.
The portfolio also invested in technology firms that, like Nintendo, benefitted frompandemic-related behaviors of sheltering in place and working from home.“They’re veryhigh-growth stocks, and we feel they will compound at very high rates,” she explained.
Healthcare was another area for new holdings over the past year and a half.Overall, its diverse holdings also “did protect nicely on the downside,” Mazen added.“That’s something we think is a hallmark of our strategy, though … we’ve also donequite well during the up period.” — Janet Levaux
“We are fundamental
investors and believe
we’re very good at buying
growth stocks that will
outperform the market
significantly.” Elisa Mazen
Title: Managing Director,Portfolio Manager
Years with present firm: 12
Year in Financial Services: 35
Investment/asset class focus:
International/Global Growth Equities
Asset Management Firm:
ClearBridge Investments, LLC
Firm’s headquarters: New York,
with U.S. offices in Baltimore,
San Francisco, and Wilmington,
Delaware, as well overseas locations
in London and Sydney.
Year firm was founded: 2005,
Number of employees as of
though ClearBridge’s roots go back
some 50 years through a number of
March 31, 2020: 217
AUM as of March 31, 2020: