ClearBridge Select Fund trailed in Q1 as rotation out of growth stocks and Iran conflict sparked volatility. Shopify, insulated from AI fears, still struggled.
Alpha Score of 46 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
ClearBridge Select Fund lagged its benchmark in the first quarter of 2026, fund managers at Franklin Templeton said. The underperformance traced to a rotation out of growth and momentum stocks that accelerated after the Iran conflict erupted, they said. Surging volatility and a shift away from AI-related names also hit the fund.
Shopify, an e-commerce platform held by the fund, felt additional pressure. The company had been insulated from fears about AI disruption through its partnership with OpenAI. The broader selloff in U.S. equities still weighed on the stock.
The broader market selloff to start 2026 reflected rapidly changing macro conditions, fund managers said. The outbreak of military conflict in the Middle East added a layer of geopolitical uncertainty. Sentiment around AI cooled after driving much of the prior rally.
The ClearBridge Select Fund focuses on growth and momentum names, leaving it exposed to the themes most sensitive to those shifts. The rotation away from those names forced the fund to trail its benchmark.
The commentary covered the three months through March 31, 2026.
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