Legg Mason Western Asset
Short Duration Blue Chip Bond Fund
A Blue-chip corporate bond fund with a high quality, low volatility focus.
Strict guidelines ensure the fund maintains a high credit quality and exposure to the more liquid areas of the fixed income universe.
Low exposure to interest rate volatility due to short duration nature and active management of interest rate risk.
Potential for stable performance with low levels of risk as high quality credit and duration provide balance.
Investment Strategy Overview
The Fund's goal is to achieve total return, through income and capital appreciation.
Low Volatility Focus
Invests in high quality Blue Chip corporate bonds. The Fund will only purchase securities that are rated A- or higher. The Fund’s volatility has historically been in a range of 2% to 4% annually since inception.
Interest Rate Risk
The strategy invests in shorter dated securities. The interest rate risk embedded in corporate bonds held in the portfolio is actively managed. Historically, the portfolio duration has been in a 2-4-year range since January 2012.
No EM, Subordinated and Securitised Debt
The strategy focuses on higher rated investment grade corporate and supranational bonds in developed markets.
Even in times of significant stress in credit markets, a large fall in government yields can provide balance to spread widening, helping to protect the overall total return.
Performance Stability and Diversification
Offers increased return potential compared to deposits and money market funds, but with less interest rate and credit quality risk compared to traditional government bond or broad credit strategies.
Strict investment restrictions combined with a positive fund duration range have historically helped it to achieve positive returns in many periods of risk on and risk off markets. Having positive fund duration is beneficial during times of stressed credit markets, when government bonds rally but riskier assets sell off.
Since the Global Financial crisis, we have seen many periods of market turbulence. Having a higher quality strategy as part of a broader portfolio should help to lower volatility and mitigate drawdowns over time.
Inflation: Is 2% the Right Target?
Main Street and Wall Street have divergent opinions about the Fed's longstanding 2% inflation target.
Fallen Angels Bring Opportunities
The recent wave of corporate bond downgrades has dropped many companies' debt into the high yield sector. But could some "fallen angels" rise again?
The value of investments and the income from them may go down as well as up and you may not get back the amount you originally invested
Fund Risks Legg Mason Western Asset Short Duration Blue Chip Bond Fund
Bonds: There is a risk that issuers of bonds held by the fund may not be able to repay the investment or pay the interest due on it, leading to losses for the fund. Bond values are affected by the market’s view of the above risk, and by changes in interest rates and inflation.
Liquidity: In certain circumstances it may be difficult to sell the fund’s investments because there may not be enough demand for them in the markets, in which case the fund may not be able to minimize a loss on such investments.
Fund currency: Changes in exchange rates between the currencies of investments held by the fund and the fund's base currency may negatively affect the value of an investment and any income received from it.
Interest rates: Changes in interest rates may negatively affect the value of the fund. Typically as Interest rates rise, bond values fall.
Derivatives: The use of derivatives can result in greater fluctuations of the fund’s value and may cause the fund to lose as much as or more than the amount invested.
Fund counterparties: The fund may suffer losses if the parties that it trades with cannot meet their financial obligations.
Fund operations: The fund is subject to the risk of loss resulting from inadequate or failed internal processes, people or systems or those of third parties such as those responsible for the custody of its assets.
This is a sub-fund of Legg Mason Global Funds plc (‘LMGF plc’). LMGF is an open-ended investment company with variable capital, organised as an undertaking for collective investment in transferable securities (‘UCITS’). LMGF is authorised in Ireland by the Central Bank of Ireland.
Information has been prepared from sources believed reliable. It is not guaranteed in any way by any Legg Mason, Inc. company or affiliate (together ‘Legg Mason’).
Before investing you should read the application form Prospectus and KIID. The fund documents may be obtained free of charge in English, French, German, Italian and Spanish from LMGF plc’s registered office at Riverside Two, Sir John Rogerson’s Quay, Grand Canal Dock, Dublin 2, Ireland, from LMGF plc’s administrator, BNY Mellon Fund Services (Ireland) Limited, or from www.leggmasonglobal.com.
Information provided herein is current to the date of this communication and subject to change.
Individual securities are examples only and are not recommendations to buy or sell an investment.
Opinions expressed are subject to change without notice and do not consider the needs of investors.
In Europe (excluding UK & Switzerland) this financial promotion is issued by Legg Mason Investments (Ireland) Limited, registered office 6th Floor, Building Three, Number One Ballsbridge, 126Pembroke Road, Ballsbridge, Dublin 4, D04 EP27, Ireland. Registered in Ireland, Company No. 271887. Authorised and regulated by the Central Bank of Ireland.
In the UK this financial promotion is issued by Legg Mason Investments (Europe) Limited, registered office 201 Bishopsgate, London, EC2M 3AB. Registered in England and Wales, Company No.1732037. Authorised and regulated by the UK Financial Conduct Authority.
In Switzerland, this financial promotion is issued by Legg Mason Investments (Switzerland) GmbH, authorised by the Swiss Financial Market Supervisory Authority FINMA.
Investors in Switzerland: The representative in Switzerland is FIRST INDEPENDENT FUND SERVICES LTD., Klausstrasse33, 8008 Zurich, Switzerland and the paying agent in Switzerland is NPB Neue Privat Bank AG, Limmatquai1, 8024 Zurich, Switzerland. Copies of the Articles of Association, the Prospectus, the Key Investor Information Documents and the annual and semi-annual reports of the Company may be obtained free of charge from the representative in Switzerland.
German investors: The prospectus, Key Investor Information Document, annual report and semi-annual report are available free of charge from the German Information agent [Legg Mason Investments (Europe) Limited, ZweigniederlassungFrankfurt am Main, MesseTurm, 21. Etage, Friedrich-Ebert-Anlage49, 60308 Frankfurt a.M., Germany] or from www.leggmasonglobal.com.
The representative paying agent in France, through which the KIIDs, Prospectus, semi-annual and annual reports can be obtained free of charge is CACEIS Bank, 1/3, Place Valhubert, 75013 Paris, France.
This information is only for use by professional clients. It is not aimed at retail clients. Not for onward distribution.