LBGAX
ClearBridge MidCap Growth-A
Introduction to ClearBridge MidCap Growth-A
The ClearBridge MidCap Growth-A fund, with ticker symbol LBGAX, is designed to achieve long-term capital growth by investing primarily in medium capitalization companies. Managed by Franklin Templeton Investments, this fund allocates at least 80% of its net assets to equity securities of mid-cap firms, with the flexibility to invest up to 25% in foreign companies. As a growth-oriented fund, LBGAX aims to capitalize on the potential of mid-sized companies that are poised for expansion, making it an attractive option for investors seeking growth opportunities in the mid-cap sector.
At A Glance
Executive Summary
LBGAX offers a robust 39.67% 1-year return with a focus on mid-cap equities, outperforming its benchmark with a 2.00% alpha.
Strong 1-year return of 39.67%. High exposure to technology sector. Outperforms benchmark with 2.00% alpha.
Higher expense ratio of 1.21%. Potential volatility with 1.14 beta. Limited yield at 0.00%.
Impressive Recent Performance
LBGAX has demonstrated remarkable performance over the past year, achieving a 39.67% return, which surpasses its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return. This impressive performance is attributed to the fund’s strategic allocation in high-growth sectors, particularly technology, which constitutes 31.11% of its portfolio. The fund’s ability to outperform its benchmark is further highlighted by its alpha of 2.00%, indicating superior risk-adjusted returns. Investors looking for a fund that has recently outperformed the market may find LBGAX’s performance appealing.
Sector Allocation and Growth Potential
The sector allocation of LBGAX is heavily weighted towards technology, which makes up 31.11% of its portfolio. This significant exposure to technology reflects the fund’s strategy to leverage the growth potential of innovative and rapidly expanding companies. Other notable sectors include industrials at 17.40% and healthcare at 15.24%, which provide diversification and stability. The fund’s focus on sectors with strong growth prospects aligns with its objective of long-term capital appreciation, making it a suitable choice for investors seeking to benefit from sector-specific growth trends.
Risk and Volatility Considerations
Investors should be aware of the risk and volatility associated with LBGAX. The fund has a beta of 1.14, indicating that it is more volatile than the market. This higher volatility is a common characteristic of growth funds, which tend to experience larger price swings. The fund’s standard deviation of 4.83% and a max drawdown of -11.1% further highlight the potential for fluctuations in value. However, the fund’s Treynor Ratio of 1.76 suggests that it has been able to generate returns that justify its risk level, making it a viable option for investors with a higher risk tolerance.
Competitive Expense Ratio Analysis
While LBGAX offers strong performance, its expense ratio of 1.21% is higher compared to some of its peers. For instance, similar funds like Columbia MidCap Growth-A (CBSAX) have a lower expense ratio of 0.011200. This higher expense ratio may impact net returns over the long term, and investors should weigh this cost against the fund’s performance benefits. Despite the higher fees, LBGAX’s ability to deliver superior returns may justify the expense for investors prioritizing growth over cost efficiency.
Top Holdings and Investment Strategy
LBGAX’s top holdings include Monolithic Power Systems Inc (3.13%), Chipotle Mexican Grill Inc (3.05%), and AppLovin Corp (2.90%). These companies are leaders in their respective industries, contributing to the fund’s growth potential. The fund’s strategy of investing in high-quality mid-cap stocks with strong growth prospects is evident in its portfolio composition. By focusing on companies with robust fundamentals and innovative business models, LBGAX aims to capture the upside potential of mid-cap equities, aligning with its growth-oriented investment objective.
Comparison with Similar Funds
When compared to similar funds, LBGAX holds its ground with a strong 1-year return of 39.67%. However, funds like Columbia MidCap Growth-A (CBSAX) have outperformed with a 44.15% return. Despite this, LBGAX’s alpha of 2.00% indicates effective management and risk-adjusted performance. Investors should consider these comparisons when evaluating LBGAX, especially in terms of expense ratios and sector allocations. The fund’s focus on technology and mid-cap growth differentiates it from peers, offering a unique investment proposition for those seeking exposure to these areas.
Conclusion: Suitability for Growth-Oriented Investors
LBGAX stands out as a compelling option for growth-oriented investors seeking exposure to mid-cap equities. Its strong recent performance, strategic sector allocation, and focus on high-growth companies make it an attractive choice for those willing to accept higher volatility for the potential of superior returns. However, the higher expense ratio and associated risks should be carefully considered. Overall, LBGAX is well-suited for investors with a higher risk tolerance who are looking to capitalize on the growth potential of mid-cap stocks, particularly in the technology sector.
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Futher Reading
https://finance.yahoo.com/quote/LBGAX/”>Yahoo: ClearBridge MidCap Growth-A
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