Legg Mason Western Asset 
Macro Opportunities Bond Fund 

An Unconstrained
Global Fixed Income Fund

Target attractive risk/adjusted returns during different market environments

Legg Mason Western Asset Macro Opportunities Bond Fund 

A macro-oriented, unconstrained, global fixed income fund that has the tools to fare well in changing rate and risk environments with a strong track record over the long-term. 

  • Distinctive approach - Western Asset seeks to offset long-term risk positions with macro strategies. 

  • Flexible diversification - Strategy may serve as an opportunistic diversifier to traditional exposures by investing across global fixed income, foreign exchange, and derivative markets. 

  • Diversified, low correlation - Potential for a low correlation and beta to equity and fixed income markets over the long-term.

Investment Strategy Overview

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Investment
objective

The Fund seeks to maximise total return, consisting of income and capital appreciation.

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Broad opportunity
set

Provides concentrated and opportunistic exposures to Western Asset’s key themes by investing across global fixed income markets (including emerging markets), currencies and derivatives.

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Active use of
macro strategies

Combines long-term fundamental value investing with active management of duration, yield curve and volatility. Macro strategies can be used to enhance returns as well as to hedge risks.

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Nimble duration
management

Active management of portfolio duration from negative 5 years to positive 10 years allows the fund to generate returns across different rate environments.

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Risk
Profile

Western Asset seeks to maximise total return, while managing overall portfolio risk (historically within an annualised volatility budget of 10%).

Distinct Roles Within a Portfolio 

  • Generate uncorrelated alternative source of return

    Performance is not dependent on the direction of interest rates or a particular fixed income sector.

  • Diversifier

    An alternative to higher volatility fixed income allocation, to smooth overall fixed income volatility and returns.

    A liquid diversifier that fits in a pure “alternatives’ sleeve given the greater volatility than traditional fixed income and lower volatility than equities.

The Team

An Unconstrained Global Fixed Income Fund

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Fund Insight

Global Credit Monitor Quarterly

Fund Information

Video Transcript

  • I am Amanda Stitt, Investment Director and Head of Fixed Income Product Specialist group at Legg Mason. I work closely with our affiliate company Western Asset Management who manage the Legg Mason Western Asset Macro Opportunities Bond Fund. Western Asset is one of the world’s leading global fixed income managers. Founded in 1971, the firm is known for team management, proprietary research and long-term fundamental valuation approach. The Legg Mason Western Asset Macro Opportunities Bond Fund is an unconstrained global macro fixed income fund that seeks to maximise total returns relative to a volatility budget. The fund is managed by Western Chief Investment Office Ken Leech and portfolio manager Prashant Chandran with the full support of a wider team of investment professionals. They have been managing the strategy since its inception, back in March 2012. We believe this fund could provide a solution for investors with the need for diversification; this is achieved by providing return that in the long term can move to independently traditional fixed income and equity markets. Alpha: through very active management of interest rate risk and volatility as well as credit risk, the manager has the ability to generate attractive returns across different markets and economic environments, including arising rate environment. Unbiased investing: the strategy is designed to be flexible and only invests in manager’s best ideas in global bond markets. It’s based on how attractive these investments are, rather than being driven by any benchmark allocation.

    In order to achieve these objectives, the fund blends short-term tactical macro strategies with longer term strategic investments. The portfolio is made up of a long and medium term holding in undervalued credits, whether it being investment grade corporate bonds, high yield corporate bonds, emerging markets, foreign currencies or structured credit. A couple of these investments with an interest rate management strategy designed to reduce volatility in times of stress but also generate alpha, when the manager’s fields markets are mispriced. These interest rate positions all macro strategies can generate returns through long duration positions as well as short positions. And therefore can generate attractive performance both when interest rates go up as well as down.

    The funds diversified source of return and flexibility to invest across global bond market has enabled the portfolio managers to achieve positive returns in various different market environments over the past five years. This is a fund that is aimed at those investors who are looking for exposure to all aspects of fixed income but may be concerned with lower fixed income returns and increased interest rate risk. It can be held within a global flexible bond or alternative allocations and can act as both diversifier and return enhancer within a broader portfolio.

    The strategy is a high conviction active strategy that has the flexibility to take on positions that can be volatile. So it’s only aimed at investors that have tolerance for short-term volatility in the pursue of longer term gains. 

FUND RISKS

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 minimise a loss on such investments. Low rated bonds: The fund may invest in lower rated or unrated bonds of similar quality, which carry a higher degree of risk than higher rated bonds. Emerging markets investment: The fund may invest in the markets of countries which are smaller, less developed and regulated, and more volatile than the markets of more developed countries. Asset-backed securities: The timing and size of the cash-flow from asset-backed securities is not fully assured and could result in loss for the fund. These types of investments may also be difficult for the fund to sell quickly. Hedging: The fund may use derivatives to reduce the risk of movements in exchange rates between the currency of the investments held by the fund and base currency of the fund itself (hedging). However, hedging transactions can also expose the fund to additional risks, such as the risk that the counterparty to the transaction may not be able to make its payments, which may result in loss to the fund. Interest rates: Changes in interest rates may negatively affect the value of the fund. Derivatives: Investment in derivatives may cause the fund to lose as much as or more than the amount invested. Use of derivatives may also result in greater fluctuations of the value of the fund. 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. Annual management charge from capital: The fund’s annual management charge is taken from its capital (rather than income). This may adversely affect the Fund’s overall growth.

IMPORTANT INFORMATION

The Legg Mason IF Brandywine Global Income Optimiser Fund is a sub-fund (“fund”) of Legg Mason Funds ICVC (“the Company”), an umbrella investment company with variable capital, authorised in the UK by the Financial Conduct Authority as an undertaking for collective investment in transferable securities (“UCITS”). It should be noted that the value of investments and the income from them may go down as well as up. Investing in a subfund involves investment risks, including the possible loss of the amount invested. Past performance is not a reliable indicator of future results. An investment in a sub-fund should not constitute a substantial proportion of an investor’s investment portfolio and may not be appropriate for all investors. Investors’ attention is drawn to the specific risk factors set out in a fund’s share class key investor information document (“KIID”) and the Company’s prospectus. This material is not intended as a complete summary or analysis. The information and data in this material has been prepared from sources believed reliable but is not guaranteed in any way by Legg Mason Investments (Europe) Limited nor any Legg Mason, Inc. company or affiliate (together “Legg Mason”). No representation is made that the information is correct as of any time subsequent to its date. There is no guarantee or assurance that funds will achieve their investment objectives. Individual securities mentioned are intended as examples only and are not to be taken as advice nor are they intended as a recommendation to buy or sell any investment or interest. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situations or needs of investors. Before investing investors should read in their entirety the Company’s application form and a sub-fund’s share class KIID and the Prospectus (which describe the investment objective and risk factors in full). These and other relevant documents may be obtained free of charge in English from Legg Mason Investment Funds Limited, 201 Bishopsgate, London EC2M 3AB or from www.leggmason.co.uk. This material is not intended for any person or use that would be contrary to local law or regulation.

Legg Mason is not responsible and takes no liability for the onward transmission of this material. This material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. 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. This information is only for use by professional clients, eligible counterparties or qualified investors. It is not aimed at, or for use by, retail clients.

FUND RISKS 

The aim of the fund is not guaranteed, and may not be achieved, the fund may suffer losses and you may not get back the amount originally invested. Owing to its investment philosophy, this Fund should be viewed as a high-risk investment. The fund is subject to the following risks which are materially relevant but may not be adequately captured by the indicator: 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 minimise a loss on such investments. Low rated bonds: The fund may invest in lower rated or unrated bonds of similar quality, which carry a higher degree of risk than higher rated bonds. Emerging markets investment: The fund may invest in the markets of countries which are smaller, less developed and regulated, and more volatile than the markets of more developed countries. Asset-backed securities: The timing and size of the cash-flow from asset-backed securities is not fully assured and could result in loss for the fund. These types of investments may also be difficult for the fund to sell quickly. 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. Hedging: The fund may use derivatives to reduce the risk of movements in exchange rates between the currency of the investments held by the fund and base currency of the fund itself (hedging). However, hedging transactions can also expose the fund to additional risks, such as the risk that the counterparty to the transaction may not be able to make its payments, which may result in loss to the fund. Interest rates: Changes in interest rates may negatively affect the value of the fund. Typically, as interest rates rise, bond values fall. Interbank offered rates: The use of IBORs (the rates at which banks are prepared to lend to one another) is changing and may affect the value of the fund, or investments held by the fund. The transition away from IBORs may impact markets that rely on IBORs to determine interest rates and may reduce the value of IBOR-based investments. 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, especially to the extent that it invests in developing countries. Fund counterparties: The fund may suffer losses if the parties that it trades with cannot meet their financial obligations. Please refer to the Key Investor Information and Prospectus documentation, which describe the full objective and risk factors associated with this Fund.

IMPORTANT INFORMATION 

The Legg Mason Brandywine Global Income Optimiser Fund is a sub-fund of Legg Mason Global Funds plc (“LMGF plc”), an umbrella fund with segregated liability between sub-funds, established as an open-ended investment company with variable capital, organised as an undertaking for collective investment in transferable securities (“UCITS”) under the laws of Ireland as a public limited company pursuant to the Irish Companies Acts and UCITS regulations. LMGF plc is authorised in Ireland by the Central Bank of Ireland. It should be noted that the value of investments and the income from them may go down as well as up. Investing in a sub-fund involves investment risks, including the possible loss of the amount invested. Past performance is not a reliable indicator of future results. An investment in a sub-fund should not constitute a substantial proportion of an investor’s investment portfolio and may not be appropriate for all investors. Investors’ attention is drawn to the specific risk factors set out in a fund’s share class key investor information document (“KIID”) and LMGF plc’s prospectus. There is no guarantee or assurance that funds will achieve their investment objectives. This material is not intended as a complete summary or analysis. The information and data in this material has been prepared from sources believed reliable but is not guaranteed in any way by any Legg Mason, Inc. company or affiliate (together “Legg Mason”). No representation is made that the information is correct as of any time subsequent to its date. This material is not intended for any person or use that would be contrary to local law or regulation. Legg Mason is not responsible and takes no liability for the onward transmission of this material. This material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. Individual securities mentioned are intended as examples only and are not to be taken as advice nor are they intended as a recommendation to buy or sell any investment or interest. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situations or needs of investors. Before investing investors should read in their entirety LMGF plc’s application form and a sub-fund’s share class KIID and the Prospectus (which describe the investment objective and risk factors in full). These and other relevant documents may be obtained free of charge in English, French, German, Greek, Italian, Norwegian 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, at the same address or from www.leggmasonglobal.com. 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, 126 Pembroke 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., Klausstrasse 33, 8008 Zurich, Switzerland and the paying agent in Switzerland is NPB Neue Privat Bank AG, Limmatquai 1, 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: Shares of the Fund may in particular not be distributed or marketed in any way to German retail investors if the Fund is not admitted for distribution to this investor category by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). This information is only for use by professional clients, eligible counterparties or qualified investors. It is not aimed at, or for use by, retail clients.