Explore an ultrashort bond solution seeking to provide high current income via primarily adjustable-rate securities, which may help manage volatility during periods of rising interest rates.

 


What Makes it Different?

 

High Quality

At least 80% in investment grade securities.

Low Duration1
 

Limited to 1 year or less to manage NAV fluctuation due to interest rate shifts.

 

Enhanced Income Possibilities  

May allocate up to 20% to below investment grade securities, and up to 10% in USD denominated securities of foreign issuers.

 


Unlike ultrashort solutions focused on bank loans, the Fund invests primarily in investment grade securities. However, it also has the flexibility to selectively access opportunities in below investment grade debt in order to seek higher income.
 


What Role Can it Play in a Portfolio?

 

High Quality Bias  

 

May help maintain low interest rate risk and exhibit higher credit quality than a bank loan solution.

 

Lower Duration Potential  


May complement core bond positions with a lower duration profile.

 

Higher Income Potential Than a Money Market2 or a CD3  

May offer higher income than a money market or CD for investors willing to take some additional risk.

 


Investors seeking a high credit quality product that also seeks high current income and is designed to be less sensitive to interest rate volatility may find this fund appropriate.
 


Less Interest Rate Sensitivity


Over 85% less duration than the broad U.S. fixed income market.
 

Chart: Duration Interest Rate Sensitivity vs U.S. Barclays Aggregate Bond Index


Source: Legg Mason and Bloomberg, as of September 30, 2018. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges.

The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that measures the performance of the investment grade universe of bonds issued in the United States. The index includes institutionally traded U.S. Treasury, government sponsored, mortgage and corporate securities.

 

 

Fund Focus


SBAYX- Western Asset Adjustable Rate Income Fund

Seeks to provide high current income via primarily adjustable-rate securities

Featured Resources


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Western Asset’s active approach combines long-term fundamental value with multiple diversified strategies.


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1Duration is a measurement that signals how much the price of a bond is likely to fluctuate when there is a change in interest rates. The higher the duration number, the more sensitive a bond will be to interest rate changes.

2Money Markets: Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Under normal conditions, the Fund’s investments may be more susceptible than a money market fund to interest rate risk, valuation risk, credit risk and other risks relevant to the Fund’s investments.

3Certificate of Deposit (“CD”): CDs are generally issued by commercial banks and are insured by the Federal Deposit Insurance Corporation up to $250,000 per individual.

 

All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Please see each product’s web page for specific details regarding investment objective, risks, performance and other important information. Review this information carefully before you make any investment decision.

Carefully consider a fund’s investment objectives, risks, charges and expenses before investing. Please view the prospectus or summary prospectus, for this and other information. Read it carefully.

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.

High yield bonds are subject to greater price volatility, illiquidity, and possibility of default.

International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility.

These risks are magnified in emerging markets.

Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks.

Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance.

Leverage increases the volatility of investment returns and subjects investments to magnified losses and decline in value.