| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
ClearBridge's International Growth ADR Strategy navigated a challenging environment where value significantly outperformed growth internationally, with the MSCI EAFE Value Index outperforming growth by over 2,100 basis points in 2025. The strategy underperformed its core benchmark but outperformed its growth benchmark, supported by strong stock selection in Asia Ex Japan, Japan, Europe and Canada. Key contributors included holdings supporting AI workload buildout such as Siemens Energy, Tokyo Electron, and Celestica, alongside pharmaceutical improvements led by AstraZeneca and new additions like Roche. The team selectively increased exposure to value characteristics through European and U.K. banks, where they see a step change in earnings from stable interest rates and increased lending for AI and energy transitions. Portfolio activity focused on health care with strategic additions and exits, while maintaining industrial exposure to data center beneficiaries. Looking forward, the managers see challenges for growth stocks in tariffs, technology and transition areas, but believe better earnings can drive outperformance. They emphasize the necessity of China exposure despite complexity, citing rapid innovation at attractive valuations and industrial policy driving consolidation at higher value chain positions.
International growth equities offer compelling value relative to U.S. markets, with selective opportunities in AI infrastructure, pharmaceuticals innovation, and European banks benefiting from stimulus measures, while maintaining exposure to Chinese innovation and defense spending trends.
Better earnings can drive growth stocks higher, with challenges falling into tariffs, technology and transition categories. Lower interest rates will help, but improved earnings will be key for technology leadership reassertion. China represents a necessary exposure opportunity despite complexity, with innovation happening at lower prices and companies consolidating at higher value chain positions. International markets continue offering growth franchises with best-in-class business models at more reasonable multiples than U.S. peers.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | 0700.HK, 8035.T, AZN.L, CLS.TO, EL.PA, ENR1.DE, GALD.SW, HEI.DE, III.L, ITX.MC, LIN, NVO, NWG.L, RACE, ROG.SW, RYA.L, SE, SIE.DE, SONY, TT, UCG.MI | AI, Asia, banks, Europe, growth, international, Pharmaceuticals, value |
AZN LN NWG LN ROG SW HEI GR |
The Strategy saw strength in holdings supporting the buildout of AI workloads during the quarter, led by Siemens Energy (electrical equipment for data centers), Tokyo Electron (semiconductor equipment), and Celestica (cloud platform technology solutions). Data centers remain supportive for earnings revisions in industrial holdings. Health care was a focus of activity with repurchases of EssilorLuxottica and Galderma Group and addition of Roche. Roche reported positive Phase III data for giredestrant and fenebrutinib with peak sales opportunities of $5 billion each. The sector has been improving after U.S. policy pressures moderated. Increased non-U.S. defense spending is here to stay as NATO evolves from U.S. leadership to more European participation. There has been rebuilding of inventories in the European Union and efforts to maintain steady defense infrastructure supply. Japan has also increased defense spending under its new prime minister. Despite investor avoidance since COVID, Chinese innovation is rapid and happens at lower prices. The next five years will see companies consolidate and dominate higher value chain positions across pharmaceuticals, battery materials, solar energy and technology. Lower valuations and higher profitability make exposure necessary. Banks can benefit from funding AI and energy transitions through new profitable loans. Heidelberg Materials could see upside from implementing decarbonization technologies in cement production. The transition creates lending opportunities and operational improvements for industrial companies. Value has worked internationally because inexpensive stocks are direct beneficiaries of enormous stimulus measures in Germany, Europe and Japan. The Strategy increased structural growth exposure through European and U.K. banks where there is a step change in earnings. Bank valuations remain inexpensive with excess capital. |
| Oct 9 2025 | 2025 Q3 | ARGX, CLS CN, DOL CN, HSBC, KBC BB, NZYMB SW, SAN | Artificial Intelligence, banks, emerging markets, Europe, healthcare |
UCB BB CLS CN |
ClearBridges international growth strategy navigated mixed global conditions, repositioning bank holdings and adding exposure to AI infrastructure names like Celestica. The team sees opportunity in Europe and Asia, particularly Japan and China, as weaker U.S. dollar trends and policy easing support equities. Biotech, industrial innovation, and digital infrastructure remain key focus areas. |
| Jul 9 2025 | 2025 Q2 | 700 HK, 7011 JP, AEM CN, BA/ LN, EOAN GR, MC FP, TSCO LN | Currency, fiscal stimulus, growth, international, reforms |
7011 JP TSCO LN EOAN GR AEM CN MC FP |
The commentary highlights improving prospects outside the U.S. driven by fiscal stimulus, monetary easing, and currency tailwinds. The strategy focuses on domestic champions in Europe, Japan, and select emerging markets benefiting from structural reforms. International growth is framed as increasingly competitive versus U.S. equities. |
| Mar 31 2025 | 2025 Q1 | 1211 HK, 7011 JP, AIR FP, NVO, NWG LN, UCG IM | - | - | |
| Dec 31 2024 | 2024 Q4 | NVO, SPOT | - | - | |
| Sep 30 2024 | 2024 Q3 | 4543 JP, 7936 JP, 8766 JP, CPG, NESN SW | - | - | |
| Jul 18 2024 | 2024 Q2 | 4568 JP, ABBN SW, BBVA, LYG, NICE, TSM | - | - | |
| Apr 15 2024 | 2024 Q1 | MNDY, PUB FP, RACE, SU CN, SU FP | - | - | |
| Jan 13 2024 | 2023 Q4 | 4307 JP, 472 GR, CRH, NVO, SMCN MM | - | - | |
| Oct 25 2023 | 2023 Q3 | ARGX, AZN, SMCAY | - | - | |
| Jun 30 2023 | 2023 Q2 | AAGIY, XRO AU | - | - | |
| Mar 31 2023 | 2023 Q1 | AAGIY, AIA, ASML, BNP GR, CPU AU, CRH, CS, DTE GR, RCRT, SAP, TCEHY | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
ChinaChina's economic rebalancing appears to be moving forward. Market liquidity, anti-involution and a measured consumer policy are likely to drive a sustained market performance in 4Q. Fiscal support and ongoing reforms in China is supportive of a stronger currency. |
Growth Policy Currency | |
Defense SpendingThe entire world is rapidly rearming off an extremely low base of defense spending. This exposure focuses on companies that make armaments for nation state security and materially outperformed for the year. |
Defense Armaments Rheinmetall Palantir RTX | |
Energy TransitionThe portfolio maintains significant exposure to electrification themes through companies like Bloom Energy, which provides clean, reliable power solutions for AI data centers. The energy transition represents a structural opportunity as companies race to build power infrastructure to support growing electricity demands from AI workloads. |
Electrification Clean Energy Power Generation Fuel Cells Grid Infrastructure | |
PharmaceuticalsEli Lilly represents a high-quality growth franchise in global healthcare, with leadership in diabetes, obesity, and neuroscience providing durable competitive advantages. The company's GLP-1 treatments continue to see demand outpace supply with additional indications on the horizon. |
Pharmaceuticals GLP1 Diabetes Obesity Healthcare | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
BanksDBS Bank was added as a new core holding, recognized for converting scale and technology into structural competitive advantages. The bank achieved 18% ROE through growing fee-based businesses like wealth management, reduced cyclicality, and strong capital allocation with progressive dividends and share repurchases. |
Wealth Management Digital Banking Singapore Fee Income Capital Allocation | |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure | |
Growth |
||
HealthcareHealthcare was the strongest relative contributor in the quarter with holdings increasing nearly +16% compared to benchmark returns of roughly +12%. Exact Sciences was acquired for a significant premium by Abbott Laboratories resulting in an +86% return, while other strong performers included Tarsus Pharmaceuticals, Glaukos following approval of a new product, Penumbra, and Repligen driven by strong earnings results. |
M&A Product Approval Earnings Biotech | |
| 2025 Q2 |
InternationalHigh-quality international businesses trade at fractions of US multiples, with the manager positioning clients to take advantage of this divergence. Despite US equity market dominating investor mindshare, the rest of the world returned 32.6% in dollar terms in 2025 versus SPY's 17.7%. |
Discount Opportunity Outperformance Quality Positioning |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 9, 2025 | Fund Letters | Elisa Mazen | UCB BB | UCB SA | Financials | Biotechnology | Bull | Shanghai Stock Exchange | Biotech, growth, Immunology, Margins, Neurology, pipeline, valuation | Login |
| Oct 9, 2025 | Fund Letters | Elisa Mazen | CLS CN | Celestica Inc. | Information Technology | Electronic Manufacturing Services | Bull | NYSE | AI, buybacks, growth, infrastructure, manufacturing, Margins, valuation | Login |
| Jul 9, 2025 | Fund Letters | Elisa Mazen | 7011 JP | Mitsubishi Heavy Industries, Ltd. | Industrials | Industrial Conglomerates | Bull | NYSE | backlog, Defense, energy, infrastructure, Margins | Login |
| Jul 9, 2025 | Fund Letters | Elisa Mazen | TSCO LN | Tesco plc | Consumer Discretionary | Food Retail | Bull | NYSE | cashflow, grocery, inflation, Margins, scale | Login |
| Jul 9, 2025 | Fund Letters | Elisa Mazen | EOAN GR | E.On SE | Utilities | Multi-Utilities | Bull | - | CapEx, dividends, earnings, Regulation, utilities | Login |
| Jul 9, 2025 | Fund Letters | Elisa Mazen | AEM CN | Agnico Eagle Mines Ltd. | Materials | Gold | Bull | TSX | cashflow, Gold, Hedging, inflation, Production | Login |
| Jul 9, 2025 | Fund Letters | Elisa Mazen | MC FP | LVMH Moet Hennessy - Louis Vuitton SE | Financials | Apparel, Accessories & Luxury Goods | Bear | Euronext Stock Exchange | Demand, Luxury, Margins, restructuring, valuation | Login |
| Jan 15, 2026 | Fund Letters | Elisa Mazen | AZN LN | AstraZeneca plc | Health Care | Pharmaceuticals | Bull | New York Stock Exchange | Defensiveness, growth, pharmaceuticals, pipeline, Regulation | Login |
| Jan 15, 2026 | Fund Letters | Elisa Mazen | NWG LN | NatWest Group plc | Financials | Diversified Banks | Bull | New York Stock Exchange | banking, Capital, dividends, Loan_Growth, valuation | Login |
| Jan 15, 2026 | Fund Letters | Elisa Mazen | ROG SW | Roche Holding AG | Health Care | Pharmaceuticals | Bull | Swiss Exchange | growth, innovation, Oncology, pharma, pipeline | Login |
| Jan 15, 2026 | Fund Letters | Elisa Mazen | HEI GR | Heidelberg Materials AG | Materials | Construction Materials | Bull | Xetra | Cement, Decarbonization, Margins, materials, Stimulus | Login |
| TICKER | COMMENTARY |
|---|---|
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 8035.T | Tokyo Electron did well in the quarter as related semiconductor production equipment companies also did well. |
| AZN.L | AstraZeneca was one of the top performing holdings this quarter. |
| CLS.TO | Non dividend paying technology names Shopify and Celestica had also meaningful contribution to the index returns for the year, detracting our relative outcome. |
| EL.PA | We see opportunity for EssilorLuxottica, an Italian-French maker of sunglasses and corrective lenses, and expect its digital glasses partnership with Meta Platforms to be bigger than the market is discounting. |
| ENR1.DE | Germany's Siemens Energy, a supplier of electrical equipment to power data centers |
| GALD.SW | Swiss dermatology products provider Galderma is expected to grow revenue in injectables, a market benefiting from secular tailwinds from an aging population and new product launches. |
| HEI.DE | I followed this global cement company for many years, but only first bought the stock around the time Greenfield started managing money in September 2021. The stock had been falling when we purchased it around €65, representing about 8 times earnings. It continued to fall and in April 2022 I wrote a blog about the industry. The stock continued falling all the way to about €40 in September 2022, equating to just 5 times earnings. Since then, the stock has been on a steady climb to €222 or about 17 times earnings, making it our highest contributing investment. We trimmed the stock a few times, but it remains a large investment. I believe the company will benefit from investment in and upgrading of infrastructure around the world. New bridges, highways, dams, tunnels, airports, ports, pipes, and railways require a lot of cement. |
| ITX.MC | Inditex, the global fast fashion leader, performed well in Q4 as its products within Zara are resonating with consumers. |
| LIN | While the company remains a high-quality global leader in industrial gases, shares of Linde plc declined nearly 10% in Q4 due to a persistent industrial gas volume recession, softer guidance and global macroeconomic concerns. From a macro standpoint, the company continues to struggle with negative base volumes in its core industrial segments. |
| NVO | added a new holding in Novo Nordisk, which had seen its share price decline by two thirds since mid-2024 |
| NWG.L | Retail and commercial bank NatWest maintains a strong domestic market share offering wealth management and corporate banking services as well as a growing digital franchise. Results ahead of consensus on the back of upgraded guidance going in to the new year saw the share price surge throughout the final quarter. |
| RACE | Our largest common stock holding is Ferrari. Over the last three years we have purchased 543,800 shares. At year-end, our investment in Ferrari was valued at $202.3 million. When we started purchasing shares in 2022, we were thinking about what the company would look like in two decades. Ferrari's vehicles will, of course, continue to change over the coming years, but we think the reasons people will choose the brand in the 2040s will be nearly the same as they are today. We believe Ferrari is one such company that has sustained its competitive edge. |
| ROG.SW | Top gainers among the Fund's holdings included Roche (+27%) |
| RYA.L | After posting an in-line September quarter and providing a better-than-expected outlook for the holiday travel season based on forward bookings, Ryanair outlined a bullish long-term outlook. Based on continued industry capacity constraints and the company's widening unit cost advantage, Ryanair believes it can raise fares while maintaining its significant value gap to competitors and increase net profit per passenger from €10 today to €12 to €14 over the next decade. |
| SE | During the quarter, we initiated a new position in Sea Limited, a Southeast Asian consumer internet company with an integrated ecosystem combining e-commerce, digital payments, and entertainment. Sea has a diversified business model, with its Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services. |
| SIE.DE | We exited Siemens, where the forward earnings multiple has re-rated to 20x versus an average of 15x over the last 10 years. |
| SONY | Japan's Sony, whose diversified media, entertainment and technology businesses are headlined by its PlayStation franchise, traded lower after the spinout of its Sony Financial Group. Additionally, the sharp rise in DRAM prices created uncertainty around margin pressure in the company's gaming division, further weighing on the share price. |
| TT | TT continued to be a juggernaut, in our view, as earnings and backlog remained strong. AI data center cooling was a strong contributor while its residential HVAC business is experiencing weakness as the industry changes over to a new refrigerant. |
| UCG.MI | For the 2025 full year the best-performing stocks were BAWAG Group (BG AV), UniCredit (UCG IM), and Bankinter (BKT SM). |
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