SHRAX
ClearBridge Aggressive Growth-A
Aggressive Growth Strategy with a Tech Focus
ClearBridge Aggressive Growth-A (SHRAX) is designed for investors seeking capital appreciation through aggressive growth strategies. The fund primarily invests in common stocks of companies that are expected to experience earnings growth surpassing the average of those in the S&P 500. With a significant allocation to the technology sector, comprising 36.95% of its portfolio, SHRAX is well-positioned to capitalize on the rapid advancements and growth potential within this industry. This focus aligns with the fund’s objective to achieve superior returns by targeting high-growth sectors and companies.
At A Glance
Executive Summary
SHRAX offers aggressive growth with a tech-heavy portfolio, outperforming peers in 1-year returns but with higher risk metrics.
High 1-year return of 32.39%. Strong tech sector allocation at 36.95%. Potential for capital appreciation in large-cap stocks.
Higher expense ratio of 1.14%. Negative risk metrics like Sharpe Ratio. Max drawdown of -11.0% indicates volatility.
Performance Analysis: A Year of Strong Returns
In the past year, SHRAX has delivered an impressive return of 32.39%, showcasing its potential for high capital appreciation. This performance, while slightly below the S&P 500’s 37.62% return, still places SHRAX among the top performers in its category. The fund’s aggressive growth strategy has paid off, particularly in a year where technology and healthcare sectors have seen significant gains. However, investors should note that the fund’s performance over longer periods, such as the three-year and ten-year returns, are more modest at 0.42% and 6.32%, respectively, indicating potential volatility and the importance of timing in investment.
Risk Metrics: Understanding the Volatility
SHRAX exhibits a higher risk profile, as evidenced by its risk metrics. The fund’s beta of 1.09 suggests it is slightly more volatile than the market, while its negative alpha of -5.27% indicates underperformance relative to its benchmark. The Sharpe Ratio of -0.34 and Treynor Ratio of -4.84 further highlight the fund’s risk-adjusted return challenges. Additionally, the fund experienced a maximum drawdown of -11.0%, which underscores the potential for significant losses during market downturns. These metrics suggest that while SHRAX offers high growth potential, it also comes with increased risk, making it suitable for investors with a higher risk tolerance.
Sector Allocation: Heavy Emphasis on Technology and Healthcare
The sector allocation of SHRAX reveals a strong emphasis on technology and healthcare, which together account for over 54% of the fund’s portfolio. This strategic allocation reflects the fund’s focus on industries with high growth potential. Technology, at 36.95%, is the largest sector, driven by holdings in companies like Broadcom Inc and Autodesk Inc. Healthcare follows with 17.81%, featuring investments in Vertex Pharmaceuticals Inc and UnitedHealth Group Inc. This concentration in high-growth sectors aligns with the fund’s aggressive growth objective, but also introduces sector-specific risks that investors should consider.
Top Holdings: A Closer Look at Key Investments
SHRAX’s top holdings provide insight into its investment strategy and potential for growth. The fund’s largest positions include Broadcom Inc (7.28%), Vertex Pharmaceuticals Inc (7.14%), and Autodesk Inc (5.72%). These companies are leaders in their respective industries, offering strong growth prospects. Broadcom, a major player in the semiconductor industry, benefits from increasing demand for technology infrastructure. Vertex Pharmaceuticals is at the forefront of innovative treatments in healthcare, while Autodesk is a leader in design software. These strategic investments highlight SHRAX’s focus on companies with robust growth potential and market leadership.
Comparative Analysis: How SHRAX Stacks Up Against Peers
When compared to similar funds, SHRAX demonstrates competitive performance, particularly in its one-year return of 32.39%. This is comparable to Riverbridge Growth-Inst’s 38.56% and Cantor Growth Equity-A’s 34.28%. However, SHRAX’s expense ratio of 1.14% is higher than its peers, such as AMG Montrusco Bolton LargeCap Growth-N with an expense ratio of 0.91%. Despite this, SHRAX’s focus on high-growth sectors and its aggressive strategy may justify the higher costs for investors seeking substantial capital appreciation. The fund’s beta of 1.09 also indicates a slightly higher risk compared to some peers, which investors should weigh against potential returns.
Investor Suitability: Who Should Consider SHRAX?
SHRAX is best suited for investors with a high risk tolerance who are seeking aggressive growth opportunities. The fund’s focus on technology and healthcare sectors, along with its aggressive growth strategy, makes it ideal for those looking to capitalize on high-growth industries. However, the fund’s higher expense ratio and risk metrics, such as a negative Sharpe Ratio and significant drawdown potential, suggest that it may not be suitable for conservative investors or those seeking stable, long-term returns. Investors should consider their risk appetite and investment horizon when evaluating SHRAX as part of their portfolio.
Conclusion: A High-Risk, High-Reward Opportunity
In conclusion, ClearBridge Aggressive Growth-A (SHRAX) offers a compelling opportunity for investors seeking high-risk, high-reward investments. With a strong focus on technology and healthcare, the fund is positioned to benefit from growth in these dynamic sectors. While its recent performance has been strong, potential investors should be mindful of the fund’s volatility and higher expense ratio. SHRAX is particularly suitable for those with a long-term investment horizon and a willingness to accept higher risk in pursuit of substantial capital appreciation. As always, investors should conduct thorough due diligence and consider their individual financial goals before investing.
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Futher Reading
https://finance.yahoo.com/quote/SHRAX/”>Yahoo: ClearBridge Aggressive Growth-A
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