Amid a tech stock resurgence, this large-cap growth fund manager seeks opportunities elsewhere

Published Thu, Jun 17 202112:45 PM EDTUpdated Thu, Jun 17 20211:55 PM EDT

One growth stock fund manager is keeping a toe in reopening-themed stocks, even as her peers snap up the tech shares that are often the staples of growth strategies. Tech stocks have bounced in June, as investors begin to fret that the recovery has been priced into the market. Margaret Vitrano of ClearBridge Investments, which was managing $184 billion as of March, is looking for growth opportunities in less typical places. "We try to think long term and think about constructing a portfolio that does well in different kinds of markets," she said. "When [market] leadership changes, we want to have protection." Some of the best-performing stocks in ClearBridge's large-cap growth portfolio this year include UPS , Grainger , Ulta and Home Depot , Vitrano told CNBC. Those companies aren't typically thought of as falling in the "growth" category. Growth stocks — which had outperformed value in recent years — have lagged in 2021 as investors monitor rising prices and worry about the possibility of higher interest rates . But with bond yields retreating and some believing inflation will be temporary, growth stocks are coming back in vogue. The Russell 1000 Value Index is up about 14% for 2021, compared with its growth counterpart's gain of more than 8%. However, the Russell 1000 Growth Index is ahead for the month of June, registering a gain of about 2.6% versus the value index's loss of 2.6%. Selective on tech "We've been underweight tech for a while. That was a headwind for us in performance last year. But certainly in a reopening environment, that's going to help us," Vitrano said. She believes the market has moved from early in the economic cycle into a midcycle period "where the market's trying to figure out the next direction." "You certainly don't want to sell all your growth," Vitrano said. "If this inflation really is transitory, then I think growth stocks are going to be just fine over the next couple of years." ClearBridge's large-cap growth fund's top three holdings are classic Big Tech names Amazon , Facebook and Microsoft as of June, according to FactSet. The portfolio also includes growth-at-a-reasonable-price names, opportunistic growth stocks and high-beta stocks, Vitrano said. Vitrano recommends having some procyclical exposure — "a broader exposure in the portfolio than I probably would have said two years ago." The portfolio manager said she's also spending more time looking at health-care names, which tend to be more idiosyncratic and not as correlated with macroeconomic trends.

Margaret Vitrano, Managing Director, Portfolio Manager at ClearBridge Investments.

Adam Jeffery | CNBC

One growth stock fund manager is keeping a toe in reopening-themed stocks, even as her peers snap up the tech shares that are often the staples of growth strategies.

Tech stocks have bounced in June, as investors begin to fret that the recovery has been priced into the market. Margaret Vitrano of ClearBridge Investments, which was managing $184 billion as of March, is looking for growth opportunities in less typical places.

"We try to think long term and think about constructing a portfolio that does well in different kinds of markets," she said. "When [market] leadership changes, we want to have protection."