Legg Mason Global Asset Management has launched a socially responsible US equity fund to be run by its affiliate ClearBridge Investments who run almost $3bn in ESG strategies.
The Legg Mason ClearBridge US Equity Sustainability Leaders Fund takes a concentrated multi-cap approach that seeks financially attractive companies with demonstrated environmental, social and governance (ESG) leadership, as well as emerging opportunities.
Reflecting ClearBridge’s position on the forefront of ESG investing and commitment to long-term results through active management, the fund aims to provide a comprehensive view of sustainability, without relying on exclusionary screens.
The Fund is managed by ClearBridge Investments’ Head of ESG Investment Mary Jane McQuillen, who has 19 years of experience working on ESG mandates, and Derek Deutsch, who has 16 years of investment experience and runs a number of mid cap strategies for the firm.
Commenting on the launch, McQuillen said: “Companies with positive ESG attributes can offer some of the best opportunities to make attractive returns as they typically have a higher sustainable business focus than their peers over the long term.”
Highlighting the types of companies the fund will target, McQuillen said, “Utilising the ESG process and proprietary rating system that ClearBridge has developed over almost three decades our approach is not just about owning companies already exhibiting these characteristics, but also identifying companies striving to improve their ESG credentials. Working with them to develop their practices is an essential aspect of our role as investors, and will be ingrained in the fund’s process.”
Company engagement is a key component of ClearBridge’s ESG approach. Commenting on its importance, ClearBridge’s London based, senior portfolio specialist Ryan Virag added, “Our sector analysts and portfolio management team will actively engage the managements of portfolio companies and work with them for continuous improvement on ESG issues.”
The fund uses fundamental analysis to help identify best in class companies, focusing on valuations, financial strength, and how effectively businesses allocate capital. Its proprietary ESG research – developed by ClearBridge over the last three decades – is integrated into the fundamental research process to help identify companies that are on the front foot when it comes to their ESG responsibilities.
As well as identifying companies already incorporating ESG best practices, the fund will also consider those it believes are making substantial progress toward becoming leaders on ESG issues.
The fund invests in businesses across the market cap spectrum, with portfolio turnover expected to be kept to a minimum by the managers who favour long-term investment opportunities. The fund will typically hold 30 to 50 companies.
The Legg Mason ClearBridge US Equity Sustainability Leaders Fund has an Annual Management Charge (‘AMC’) of 0.7% payable on the retail share class.