The Funds are not sold or distributed by Legg Mason Investor Services, LLC ("LMIS") or any affiliate of Legg Mason, Inc. Shares of the funds are bought and sold through non-affiliated broker/dealers and trade on the NYSE/NYSE Alternext. The Fund may employ leverage in the form of loans, preferred stock, reverse repurchase agreements and/or other instruments. If the Fund establishes a segregated account in which it maintains cash and/or liquid securities equal in value to its obligation in respect of the reverse repurchase agreements (or other instruments), these investments are not considered to be a borrowing or a "senior security" for purposes of the asset coverage requirements under the 1940 Act, although they may have the same economic effect as other types of leverage.
Weighted Average Life (WAL) -- The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, WAL tells how many years it will take to pay half of the outstanding principal.
Effective duration is a duration calculation for bonds with embedded options. Effective duration takes into account that expected cash flows will fluctuate as interest rates change. Please note; duration measures the sensitivity of price (the value of principal) of a fixed-income investment to a change in interest rates.
Distribution Rate is calculated by annualizing the amount of the most recent distribution paid, excluding special distributions, divided by the previous trading day's closing market price. Distributions may include investment income, realized capital gains, and/or return of capital. The Distribution Rate will change based on changes in market price and distribution amounts, may not include all amounts distributed by the fund, and is not a quotation of Fund performance. For more information about a distribution's composition refer to the distribution press release or Section 19 notice located in the press release section of our website.
Investing in a non-diversified fund may entail greater risks than is normally associated with more widely diversified funds.
The fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on fund performance.
Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. There is the risk that the value of the Fund's inflation-protected securities could decrease if nominal interest rates increase at a faster rate than inflation and real interest rates. Conversely, if inflation rises at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in the value of inflation-protected securities. If inflation is lower than expected during the period in which the Fund holds inflation-protected securities, the Fund may earn less on the securities than on conventional bonds. In a deflationary market, the value of the fund's inflation-protected securities would decrease. The market for inflation-protected securities may be less developed or less liquid, and more volatile than certain other securities markets.
High yield bonds involve greater credit and liquidity risks than investment grade bonds.
Foreign securities are subject to certain risks not associated with domestic investing, such as currency fluctuations and changes in political and economic conditions which could result in significant fluctuations. The risks are magnified in emerging markets.
To the extent that the Fund invests in asset-backed, mortgage-backed or mortgage-related securities, its exposure to prepayment and extension risks may be greater than other investments in fixed income securities.
‡Net Asset Value (NAV) is a price that reflects the value of the fund's underlying portfolio plus other assets, less the fund's liabilities divided by the number of shares outstanding. However, the price at which an investor may buy or sell common shares of the fund is at the fund's market price as determined by supply of and demand for the fund's common shares, which may be more or less than the fund's NAV.
Unless otherwise specified, all investment managers and Legg Mason Investors Services, LLC, are subsidiaries of Legg Mason Inc.
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