Legg Mason Western Asset California Municipals Fund

Our goal¹

Provide California investors with a high level of current income exempt from regular federal income taxes and California state personal income taxes; and preservation of capital

What we invest in

The managers focus on finding value and competitive tax-free yields for California residents by focusing primarily on intermediate- and long-term municipal securities. Investments are mainly of high credit quality but the investment universe can be expanded into higher-yielding, lower-rated securities -- limited to 20% of assets -- enabling the managers to seek opportunities and selectively invest in securities that may enhance income.

Our approach

Western Asset's approach emphasizes team management and intensive proprietary research to identify undervalued securities with the potential to outperform over the long term. The teams employ multiple investment strategies in an effort to manage risk and create diversified portfolios, including sector rotation, issue selection and duration management.

What should I know before investing?

Fixed-income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed-income securities falls. The Fund is more vulnerable to unfavorable developments in California and its municipalities than are funds that invest in securities of many states. The California economy continues to be impacted by the slowdown in the national economy and particularly a decline in its housing market. The real estate downturn could affect the revenues and credit quality of municipal issuers in those markets. Only a more detailed examination of the finances of each issuer can determine the quality of its obligations held by the Fund. More detailed information about the economy of California may be found in the Fund's Statement of Additional Information. High-yield bonds possess greater price volatility, illiquidity, and possibility of default. As a nondiversified Fund, it is permitted to invest a higher percentage of its assets in any one issuer than a diversified fund, which may magnify the Fund's losses from events affecting a particular issuer. Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. An investor may be subject to the federal Alternative Minimum Tax, and state and local taxes may apply. Capital gains, if any, are fully taxable.

Meet your Western Asset managers

Western Asset uses a team-based approach to managing your Fund, with team members averaging over 20 years of investment industry experience.

One of the world's largest and leading fixed-income managers, Western Asset has focused exclusively on fixed income since its founding in 1971. They offer investors a broad range of core and specialized bond portfolios from across the fixed-income universe, all managed using a long-term, value-oriented investment process.

Legg Mason's unique structure provides you with access to this specialized expertise. We offer a powerful portfolio of solutions through our independent investment management firms.