ClearBridge Small Cap Growth Strategy Q1 2025 Commentary

2025-04-07 08:00:00 ET

Summary

• ClearBridge is a leading global asset manager committed to active management. Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.
• Despite volatile markets and an uncertain, macro-driven landscape, the Strategy handily outperformed its benchmark, gaining traction from new ideas and repositioning work and from tailwinds across several sectors.
• Stock selection in information technology and health care were the largest contributors to relative performance, partially offset by modest weakness in consumer discretionary and financials holdings.
• The impact of tariffs and policymaking has clouded visibility, and we anticipate continued volatility given the pace of headline policy changes.

By Jeffrey Bailin, CFA, & Aram Green

Repositioning Bears Fruit as Turbulence Abounds

Market Overview

Following the initial “animal spirits” post-election rally, stock market performance in the first quarter of 2025 was volatile. While January started relatively strongly for most corners of the stock market, the combination of dents in the major narrative market driver (i.e., AI, precipitated initially by concerns following reporting around the DEEPSEEK model) along with increasing concerns around the policy changes from the new administration led stocks to pull back meaningfully....

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