Legg Mason IF ClearBridge US Equity A

A concentrated large cap US equity portfolio with a contrarian investment approach.

  • 235.50p Price (Inc)
  • - Price (Acc)
  • 4.25% 0.00% Initial charge
  • 1.50% Annual management charge
  • 1.79% Ongoing charges
  • 0.20% Yield

Prices as at 10 December 2019, fund data last updated 13 February 2012

This fund targets long term capital growth by investing in predominantly large cap US equities which the manager believes are trading at a significant discount to their intrinsic value. The investment approach is benchmark unconstrained with an emphasis on in depth industry and company research. The manager takes a longer term view to investing so portfolio turnover is low, however, given the more contrarian approach expect periods of significant underperformance.

Fund summary

Sector North America
Structure OEIC
Launched January, 2003
Size £29m
Yield 0.20%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 4.25%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.79%

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Investment process

The fund’s objective is capital growth, principally from investment in large cap US equities. The manager believes this is most consistently achieved through long term ownership of companies purchased at large discounts to their intrinsic value. Ideas are sourced by looking for signs of “expectation gaps” – areas of the market where the pricing mechanism has broken down. These are often found in companies undergoing management or business upheaval or with emerging business models with high uncertainty. The key areas considered in stock analysis are competitive strategy, financial and managerial acumen, and valuation. The manager looks to understand an industry or company to a much greater level than his peers. This often means applying a pragmatic and contrarian approach,that is, buying into emerging stories or buying an unloved stock when others have given up on it. Since 2005 the sole manager approach has evolved into a more collegiate, team-based approach to investing.

In April 2012 Bill Miller, longstanding manager of this fund, stepped down. Miller had run the fund’s US equivalent, Legg Mason US Value Trust, for 30 years and previously had an outstanding track record, uniquely beating the S&P 500 index for 15 consecutive years from 1991 to 2005. Since then, however, he has spectacularly underperformed and the fund has struggled to develop a team-based investment process. The incoming manager and new CIO is Sam Peters. Peters has no identifiable track record as sole manager of an equivalent mandate, so this fund no longer qualifies for a Bestinvest rating.

Manager research

Average monthly relative returns

  • 14/15 -1.03%
  • 15/16 0.09%
  • 16/17 -0.16%
  • 17/18 -0.80%
  • 18/19 -0.45%

Bestinvest MRI

  • 3 years -0.47%
  • 5 years -0.47%
  • Career -0.30%
  • 3 years 7.90%
  • 5 years 7.60%
  • Career 16.10%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Sam Peters

Peters joined Legg Mason Capital Management (LMCM) in 2005. Prior to joining LMCM, Peters worked for Fidelity Management & Research, serving as portfolio manager of the Fidelity Select Health Care Fund and the Fidelity Select Medical Equipment Fund, as well as Team Leader for the Health Care sector. From 2002 to 2004, he was portfolio manager for the Fidelity Select Electronics Fund, and from 2000 to 2001, he was portfolio manager for the Fidelity Select Banking Fund. Peters joined Fidelity in 1999 as a Bank Analyst. In 1996, he founded Samuel M. Peters Investment Advisors, an independent advisory firm. From 1992 to 1995, Peters was a Financial Consultant for Eppler, Guerin & Turner. He has a BA in economics from the College of William & Mary, an MBA from the University of Chicago and received his CFA designation in 1997.

Track record

Sam Peters has 7.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.3%. During the worst period of relative performance (from July 2014 - August 2019) there was a decline of 27% relative to the index. The worst absolute loss has been 18%.

Periods of worst performance

Absolute -18.00% (March 2015 - September 2015)
Relative -27.00% (July 2014 - August 2019)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 31 July 2019

5.9901% Microsoft Corp
5.8981% Alphabet Inc
4.4739% American International Group Inc
4.2387% Allergan Plc
3.8987% Royal Gold Inc
3.6397% Oracle Corp
3.3805% Wells Fargo & Co
3.362% Synchrony Financial
2.7449% Mondelez Intl Inc
2.637% Citigroup Inc
Source: Trustnet

Sector breakdown

Financials 21.00%
Information Technology 17.00%
Health Care 12.00%
Consumer Staples 8.00%
Communications 7.00%
Cash & Cash Equivalents 7.00%
Industrials 6.00%
Consumer Discretionary 6.00%
Energy 5.00%
Materials 5.00%

Portfolio

30-60 stocks, weighted according to risk-adjusted expected returns.

Constraints

Primarily invests in stocks with a market cap of more than US$5bn at the time of purchase.

Key Investor Information

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