Deep Dive: Small-cap fund produces big profits, even if some of its holdings don’t

The spectacular rise in small-cap shares since the election of Donald Trump shows that investors sometimes care more about sales and market-share growth than they do earnings.

Albert Grosman and Brian Lund, portfolio managers of the ClearBridge Small Cap Fund, shared with us three of their favorite stock holdings, and only one of them has been consistently profitable.

Still, the $716 million ClearBridge Small Cap Fund LMASX, +0.22% has performed well this year, up 27.2%, easily outpacing the small-cap Russell 2000 Index’s RUT, -0.16% 22% increase.

ClearBridge Investments is a subsidiary of Legg Mason Inc. LM, -2.96% which has about $110 billion in assets under management.

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