A Fund to Consider for Bull and Bear Markets

Legg Mason Partners Capital and Income Fund

Many investors today are looking for equity market growth potential. But given the possibility of a recession, they're also seeking investments that can help cushion their portfolios against unexpected market volatility. Legg Mason can provide you with both of these important potential benefits through Legg Mason Partners Capital and Income Fund.

LMP Capital and Income Fund utilizes dynamic tactical asset allocation to invest in a flexible portfolio of equity and fixed-income securities that the managers believe have the most attractive risk-adjusted return potential. The Fund's lead portfolio manager is Robert Gendelman of ClearBridge Advisors, one of Legg Mason's independent investment management firms.

Talk to your financial advisor to see if an allocation to LMP Capital and Income Fund makes sense for you as part of a diversified portfolio. For more on the Fund, read Robert's latest Fund commentary (PDF) or visit the Fund's product overview page.

Potential for Strong Performance and Less Volatility – A Solid Combination
As the chart below shows, LMP Capital and Income Fund outperformed the S&P 500 Index during the last bull and bear markets – with less volatility. Volatility is measured by standard deviation.

Source: Zephyr. Performance and standard deviation data shown above are as of March 31, 2008. October 31, 2007 represents the last peak of the S&P 500 Index.

Fund Performance and Expense Ratios - As of 3/31/08
Average Annual Total Returns and Expense Ratio (%)

The performance shown above represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. For performance data current to the most recent month end, please see our Web site at www.leggmason.com/individualinvestors. Average annual total return assumes the reinvestment of all distributions at net asset value, the deduction of all fund expenses, and the effects of the Fund's maximum front-end sales charge of 5.75% for Class A shares. Other share classes that have different sales charges, fees and expenses are available for which performance results will vary.

*Expenses are the Fund's total annual operating expenses for the share class indicated as of the date of the Fund's most current prospectus. These expenses include management fees, 12b-1 distribution and service fees, and other expenses.

Keep in mind, diversification does not assure against market loss. The Fund is subject to certain risks. As interest rates rise, bond prices fall, reducing the value of the Fund's share price. High-yield bonds are rated below investment grade and involve greater credit and liquidity risk than higher-rated securities. The Fund may use derivatives, such as options or futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on the Fund's performance. The Fund is subject to certain risks of overseas investing not associated with domestic investing, including currency fluctuations and changes in political and economic conditions.

Interested in learning more about how Legg Mason can help you build a solid financial plan?

Learn about Legg Mason's mutual fund families

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Read more of Legg Mason's investment insights

Meet the New Legg Mason (PDF)

A look at rising market volatility (PDF)