ClearBridge Value ESG Fund Trails Benchmark in Third Quarter
The ClearBridge Large Cap Value ESG Strategy lagged the Russell 1000 Value Index in the third quarter. Stock selection in industrials and financials helped relative performance, but weaker picks in information technology, health care, energy, and materials weighed on results. The commentary also highlighted how AI and data-center growth are increasing demand for sustainable infrastructure.
The strategy lagged the Russell 1000 Value Index, which gained 2.6% in the quarter. Energy led as oil prices rose, while technology and communication services gained from cloud-provider momentum; health care rebounded, and consumer and rate-sensitive sectors were flat to lower. The Fed raised rates in September, and the 10-year Treasury yield ended at 5.3%, up more than 80 basis points.
Stock picking helped in industrials and financials, and lighter exposure to real estate and consumer staples helped, but selections in IT, health care, energy and materials hurt. The fund also cited expanding artificial intelligence and data-center demand intensifying pressure on electricity, water and local communities, creating possible openings for sustainable-infrastructure providers.
Investors in value and ESG-oriented funds may see returns diverge from broad benchmarks when narrow AI-linked rallies dominate, which could affect retirement and savings outcomes. Companies tied to data centers, power