SHAPX
ClearBridge Appreciation-A
Introduction to ClearBridge Appreciation-A
ClearBridge Appreciation-A (SHAPX) is a mutual fund designed to achieve long-term capital appreciation by investing primarily in large-cap, blue chip companies. Managed by Franklin Templeton Investments, this fund targets medium to large capitalization firms, with occasional investments in smaller companies. The fund’s strategy focuses on companies that are leaders in their respective industries, providing a stable foundation for growth-oriented investors. With an expense ratio of 0.93%, SHAPX offers a competitive option for those seeking exposure to established market players.
At A Glance
Executive Summary
SHAPX focuses on blue chip large-cap stocks with a 0.93% expense ratio, offering strong 1-year returns of 31.53% against the S&P 500 benchmark.
Invests in dominant blue chip companies; Strong 1-year return of 31.53%; Diversified sector allocation with tech focus.
Higher expense ratio compared to peers; Negative alpha indicating underperformance; Limited exposure to small-cap growth opportunities.
Performance Analysis: A Year of Growth
In the past year, ClearBridge Appreciation-A has delivered an impressive 31.53% return, showcasing its potential for growth in a volatile market. This performance, while slightly below the S&P 500 Total Return Index’s 37.62%, highlights the fund’s ability to capture significant market gains. The fund’s annualized returns over five years stand at 13.86%, indicating consistent performance over time. Despite a negative alpha of -6.13%, which suggests underperformance relative to its benchmark, the fund’s beta of 0.84 indicates lower volatility, making it a potentially attractive option for risk-averse investors.
Portfolio Composition: Blue Chip Dominance
The portfolio of SHAPX is heavily weighted towards large-cap stocks, with a significant 53.75% allocation to extra-large companies. Notable holdings include Microsoft Corp (8.20%), Apple Inc (5.98%), and NVIDIA Corp (4.12%), reflecting a strong emphasis on technology. This sector accounts for 28.80% of the fund’s total allocation, underscoring its commitment to investing in industry leaders. The fund also maintains a diversified sector allocation, with significant investments in financials (16.28%) and healthcare (12.63%), providing a balanced approach to growth.
Risk Metrics: Navigating Market Volatility
SHAPX exhibits a beta of 0.84, indicating lower volatility compared to the broader market, which can be appealing to investors seeking stability. However, the fund’s negative alpha of -6.13% and Sharpe ratio of -0.58 suggest challenges in achieving risk-adjusted returns. The fund’s R-squared value of 95.35% shows a high correlation with its benchmark, the S&P 500 Total Return Index, meaning its performance closely follows market trends. Despite a max drawdown of -7.6%, the fund’s downside risk is relatively contained, with a downside risk (UI) of 1.71.
Competitive Comparison: Standing Among Peers
When compared to similar funds, SHAPX holds its ground with a strong 1-year return of 31.53%. However, its expense ratio of 0.93% is higher than some peers, such as Sit Dividend Growth-I (SDVGX) with an expense ratio of 0.70%. Despite this, SHAPX’s focus on blue chip stocks provides a unique value proposition. Its beta of 0.84 is lower than many competitors, indicating less volatility. While funds like Invesco Rising Dividends-A (OARDX) offer slightly higher yields, SHAPX’s diversified sector allocation and focus on industry leaders make it a compelling choice for growth-focused investors.
Sector Allocation: Technology at the Forefront
Technology plays a pivotal role in SHAPX’s sector allocation, comprising 28.80% of the portfolio. This focus on tech giants like Microsoft and Apple positions the fund to benefit from ongoing technological advancements and market trends. The fund’s allocation to financials (16.28%) and healthcare (12.63%) further diversifies its exposure, reducing sector-specific risks. This strategic allocation allows SHAPX to capitalize on growth opportunities across various industries, while maintaining a balanced risk profile. The fund’s minimal exposure to utilities and real estate reflects its growth-oriented strategy.
Investor Suitability: Who Should Consider SHAPX?
SHAPX is well-suited for investors seeking long-term capital appreciation through exposure to large-cap, blue chip companies. Its focus on industry leaders provides a stable investment foundation, appealing to those with a moderate risk tolerance. The fund’s lower beta suggests reduced volatility, making it an attractive option for risk-averse investors. However, its higher expense ratio and negative alpha may deter cost-conscious investors. Overall, SHAPX is ideal for those looking to invest in established market players with a growth-oriented approach, while maintaining a diversified sector exposure.
Conclusion: A Compelling Growth Opportunity
ClearBridge Appreciation-A stands out as a robust option for investors seeking growth through blue chip investments. Its strong 1-year return of 31.53% and diversified sector allocation make it a compelling choice for those looking to capitalize on market leaders. While the fund’s higher expense ratio and negative alpha present challenges, its focus on technology and large-cap stocks offers significant growth potential. SHAPX is particularly suitable for investors with a moderate risk appetite, seeking to balance stability with the opportunity for capital appreciation in a dynamic market environment.
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Futher Reading
https://finance.yahoo.com/quote/SHAPX/”>Yahoo: ClearBridge Appreciation-A
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