ClearBridge All Cap Growth Strategy Q2 2025 Commentary

Market Overview - U.S. equities showed resilience, with the S&P 500 Index returning 10.9% and the NASDAQ Composite rising 17.7% in Q2, marking a shift from bear markets to all-time highs [3] - The Russell 3000 Growth Index outperformed the Russell 3000 Value Index by over 1,300 basis points, reflecting a strong risk-on sentiment [3] Economic Factors - Initial stock declines occurred after President Trump announced tariffs on April 2, but a 90-day delay in implementation and improved trade relations led to a market recovery [4] - May recorded the best monthly performance for the S&P 500 since November 2023, driven by a positive trade outlook [4] Sector Performance - Information technology (+25.4%), communication services (+24.2%), and consumer discretionary (+14.0%) sectors led performance, with significant contributions from Broadcom and Netflix [7] - The health care sector underperformed (-1.3%) due to tariff concerns on pharmaceutical imports and reimbursement rate pressures affecting UnitedHealth Group and Vertex Pharmaceuticals [9] Portfolio Positioning - The ClearBridge All Cap Growth Strategy added four positions and exited four others in Q2, focusing on companies with strong market positions and growth potential [10] - In health care, Novo Nordisk was added as a competitor to Eli Lilly, while Alnylam Pharmaceuticals was included for its RNA interference technology [11] - In IT, Synopsys and Palantir Technologies were added for their strong growth prospects and high margins [12] Performance Highlights - The ClearBridge All Cap Growth Strategy underperformed the Russell 3000 Growth Index in Q2, with IT being the primary contributor and health care the main detractor [18] - Stock selection positively contributed to performance, particularly in IT and communication services, while sector allocation negatively impacted results due to an overweight in health care [19] - Key contributors included Apple, Broadcom, and Netflix, while detractors were UnitedHealth Group, Microsoft, and Thermo Fisher Scientific [20]