ClearBridge Investments said Monday that Hersh Cohen will step down from portfolio management at the end of the year, though he’ll continue to serve as co-chief investment officer at the global equity manager.
Co-CIO Scott Glasser will replace him on the portfolio management team for the ClearBridge Dividend Strategy Fund, working alongside long-time co-managers Michael Clarfeld and Peter Vanderlee. “Hersh has been a consistently strong investment leader at ClearBridge and predecessor firms for nearly 50 years,” Terrence Murphy, CEO of ClearBridge, said in the announcement.
ClearBridge, which is owned by Legg Mason, identifies successors for all portfolio managers and senior executives as a regular part of its business planning to ensure “institutional knowledge is retained,” the firm said.
The ClearBridge Dividend Strategy Fund, which had $5.6 billion of assets at the end of 2016, invests for a combination of dividend income, dividend growth, and long-term appreciation, according to the fund’s fact sheet. The top holding as of Dec. 31 was Berkshire Hathaway Class B shares – which doesn’t pay dividends – followed by Microsoft and Comcast Class A shares.
The fund has underperformed the S&P 500 index over the past five years, posting an average annual return of 10.71 percent. The S&P 500 had an average annual gain of 14.66 percent over that time period.
In their fourth quarter 2016 commentary, Cohen and his co-managers wrote that they continue to advocate buying and holding “dividend growers,” though they believe dividend growth will slow to the mid-single digits. They added that while there are reasons the economy may benefit from taxes and stimulus, the fund has reservations buying into the market at current “hefty” valuation levels.
