The ClearBridge SMID Cap Growth Strategy underperformed its Russell 2500 Growth Index benchmark during the third quarter, with the index gaining 10.7%. As such, the performance of SMID growth equities was broadly in line with large cap peers, as the Russell 1000 Growth Index rose 10.5%, and only modestly trailed the 12.2% return of the Russell 2000 Growth Index.
The fund initiated positions in Avidity Biosciences (NASDAQ:RNA) and CG Oncology (NASDAQ:CGON) in the healthcare sector, as well as in Kratos Defense & Security Solutions (NASDAQ:KTOS), Karman (NYSE:KRMN), and Rocket Lab (NASDAQ:RKLB) in the industrials sector, and Credo Technology (NASDAQ:CRDO) in the IT sector.
On the sell side, the fund exited Globant (NYSE:GLOB) and Bentley Systems (NASDAQ:BSY) in the IT sector, Oscar Health (NYSE:OSCR) in the financials sector, Blueprint Medicines, Ultragenyx Pharmaceutical (NASDAQ:RARE) and Vaxcyte (NASDAQ:PCVX) in the health care sector, and IDEX in the industrials sector.
Looking ahead, the fund expects volatility to remain elevated but sees improving opportunities as IPO activity picks up and believes focusing on innovative, high-quality businesses positions the Strategy well for long-term growth.