Here's Why Clearbridge Small Cap Strategy Chose UMB Financial (UMBF)

ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The small-cap stocks experienced volatility in the second quarter. The Russell 2000 Index rebounded 10% of its November 2024 record highs just 55 days after the “Liberation Day” decline. It was driven by growth, momentum, high-beta, and low-quality stocks. Even though small-cap stocks rose, they failed to outpace the larger-cap peers due to perceived sensitivity to macroeconomic shocks. The Russell 2000 returned 8.5% for the quarter compared to the 11.1% of the Russell 1000 Index. The strategy underperformed the benchmark in this backdrop. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, ClearBridge Small Cap Strategy highlighted stocks such as UMB Financial Corporation (NASDAQ:UMBF). UMB Financial Corporation (NASDAQ:UMBF) is a bank holding company that provides banking services and asset servicing. The one-month return of UMB Financial Corporation (NASDAQ:UMBF) was 3.85%, and its shares gained 14.75% of their value over the last 52 weeks. On September 15, 2025, UMB Financial Corporation (NASDAQ:UMBF) stock closed at $120.39 per share, with a market capitalization of $9.141 billion.

ClearBridge Small Cap Strategy stated the following regarding UMB Financial Corporation (NASDAQ:UMBF) in its second quarter 2025 investor letter:

"We continued to be very active in adapting our positioning within the financials sector. We elected to exit Home BancShares, which operates as the holding company for Centennial Bank, for a new position in UMB Financial Corporation (NASDAQ:UMBF), which also offers banking services and asset servicing. Although we think that Home BancShares remains a solid business, UMB Financial increases the quality of our exposure to regional banks due to its differentiated fee business and superior return potential with its greater geographic and business diversification."

UMB Financial Corporation (NASDAQ:UMBF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 28 hedge fund portfolios held UMB Financial Corporation (NASDAQ:UMBF) at the end of the second quarter, compared to 25 in the previous quarter. While we acknowledge the potential of UMB Financial Corporation (NASDAQ:UMBF) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.