Legg Mason Growth Trust

Investment Objective

Long-term growth of capital.

Investment Strategy

Concentrated growth portfolio

Uses the "theory of focus investing" to create a concentrated, low-turnover portfolio of primarily common stocks that appear to have strong growth potential and are deemed undervalued at the time of purchase.

Traditional and untraditional valuation measures

Our analytical approach is not based on traditional, accounting-based valuation measures. We are focused on cash earnings - namely, the present value of future cash flows of a company. Shareholder value is the result of cash, not accounting, earnings. In this way, we believe we differ from most value managers. Traditional valuation measures miss many mispriced stocks because those measures do not focus on the value of a business.

Investment Risks

Market risk

The risk that prices of securities will go down because of the interplay of market forces.

Value-style risk

The value approach to investing involves the risk that those stocks deemed to be undervalued by the portfolio manager may remain undervalued.

Non-diversification risk

As a "non-diversified" fund, an investment in the fund will entail greater price risk than an investment in a diversified fund because a higher percentage of investments among fewer issuers may result in greater fluctuation in the total market value of the fund's portfolio.

Foreign securities risk

International investments are subject to currency fluctuations, social, economic and political risks.

Concentration risk

Because this Fund expects to hold a concentrated portfolio of a limited number of securities, a decline in the value of these investments would cause the fund's overall value to decline to a greater degree than a less concentrated portfolio. The Fund may focus its investments in certain regions or industries, thereby increasing its potential vulnerability to market volatility.

Investment Management

Managed by Legg Mason Capital Management

• Since 1982, invests in companies that appear to be selling at significant discounts to their intrinsic value.
• The Fund is managed by Robert Hagstrom, CFA, who has over 24 years of investment industry experience.