Even with the potential for higher rates in 2018, traditional fixed income investments alone may not offer the level of income investors need to meet their goals.

 


 

DIVERSIFY YOUR SOURCES OF INCOME

Fixed Income Active Management

Dividend Stocks

Dividend-paying equities can be an attractive complement to traditional fixed income. Many dividend yields rival yields available in traditional fixed income investments.

Dividend-paying stocks also offer the potential for dividend growth, unlike traditional fixed income.

Fixed Income Active Management

Emerging Markets Debt

Emerging market1 debt securities may offer coupons2 and yields that are much higher than those available in developed markets.

Synchronized global growth, continued low inflation and the relatively slow unwinding of monetary stimulus may provide a supportive backdrop for emerging markets

Fixed Income Active Management

Infrastructure

Infrastructure assets are offen associated with dividend income, due to their potential to provide a reliable revenue stream, whatever the economic conditions.

The sector's relatively low correlation3 to other income-generating assets may make it an effective diversifier in a broader portfolio as well.

 


 


 

ATTRACTIVE OPPORTUNITIES FOR INCOME INVESTORS MAY LIE OUTSIDE TRADITIONAL FIXED INCOME

 

Diversification does not guarantee a profit or protect against a loss.

IMPORTANT INFORMATION: Past performance is no guarantee of future results.  Performance shown excludes sales charges, if any. Had sale charges been included, performance would be lower. The "% Change" column(s), indicate a change in the Net Asset Value (NAV) or Market Price from the previous business day. All investments involve risk, including loss of principal. 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. Additional share classes and products may be available. 

 

HIGHER YIELDS WITH LOWER CORRELATIONS

 

Dividend equities, emerging markets debt and infrastructure stocks vs. global bonds

Dividend Equities, Emerging Markets Debt, Infrastructure Stocks, Global Bonds

Equity and equity-related securities are subject to price fluctuation and possible loss of principal.

Source: Bloomberg, as of 12/31/2017. The yield for the S&P Global Infrastructure Index and the S&P 500 Dividend Aristocrats is the trailing 12-month divided yield. The yield for the Bloomberg Barclays Global Aggregate Bond Index is yield to worst, which is the lowest potential yield that can be received on a bond without the issuer actually defaulting. This chart is for illustrative purposes only and does not represent an actual investment. Income and dividends can fluctuate and are not guaranteed. Past performance is no guarantee of future results. Unmanaged index returns do not reflect any fees, expenses or sales charges. Indexes are unmanaged and investors cannot invest directly in an index. Global bonds: Bloomberg Barclays Global Aggregate Bond Index, is an unmanaged index of global investment-grade fixed-income securities. Infrastructure stocks: S&P Global Infrastructure Index, designed to track 75 companies from around the world chosen to represent the listed infrastructure industry while maintaining liquidity and tradability. Dividend equities: S&P 500 Dividend Aristocrats is Standard & Poor’s Index comprising the S&P 500 Index components that have increased dividends for at least 25 consecutive years.  Emerging market debt: JPMorgan Emerging Markets Bond Index (EMBI) Global tracks total returns for U.S. dollar denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities.

IMPORTANT INFORMATION: Equity securities are subject to price fluctuation and possible loss of principal. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. 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. Infrastructure investments are susceptible to adverse economic, regulatory, political

 

 

Featured Resources

1 Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries. 

Coupon is the periodic interest payment made to the bondholders during the life of the bond.

Correlation is a statistical measure of the relationship between two sets of data. When asset prices move together, they are described as positively correlated; when they move opposite to each other, the correlation is described as negative or inverse. If price movements have no relationship to each other, they are described as uncorrelated.

Mergers and acquisitions (M&A) is a general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.


Developed markets refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.

Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.

The MSCI EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

The MSCI Emerging Markets (EM) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The MSCI Japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Japan.

The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Mergers and acquisitions (M&A) is a general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.


Developed markets refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.

Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.

The MSCI EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

The MSCI Emerging Markets (EM) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The MSCI Japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Japan.

The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Mergers and acquisitions (M&A) is a general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.


Developed markets refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.

Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.

The MSCI EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

The MSCI Emerging Markets (EM) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The MSCI Japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Japan.

The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Mergers and acquisitions (M&A) is a general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.


Developed markets refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.

Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.

The MSCI EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

The MSCI Emerging Markets (EM) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The MSCI Japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Japan.

The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

IMPORTANT INFORMATION: All investments involve risk, including loss of principal. Past performance is no guarantee of future results. An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.

Equity securities are subject to price fluctuation and possible loss of principal. 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. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.

The opinions and views expressed herein are not intended to be relied upon as a prediction or forecast of actual future events or performance, guarantee of future results, recommendations or advice.  Statements made in this material are not intended as buy or sell recommendations of any securities. Forward-looking statements are subject to uncertainties that could cause actual developments and results to differ materially from the expectations expressed. This information has been prepared from sources believed reliable but the accuracy and completeness of the information cannot be guaranteed. Information and opinions expressed by either Legg Mason or its affiliates are current as at the date indicated, are subject to change without notice, and do not  take into account the particular investment objectives, financial situation or needs of individual investors.

Active management does not ensure gains or protect against market declines. 

Diversification does not guarantee a profit or protect against a loss.

Investments in small-cap and mid-cap companies involve a higher degree of risk and volatility than investments in larger, more established companies.

Outperformance does not imply positive results.

Yields and dividends represent past performance and there is no guarantee they will continue to be paid.

If you are neither a resident nor a citizen of the United States or if you are a non-U.S. entity, the ETF's ordinary income dividends (which include distributions of net short-term capital gains) will generally be subject to a 30% U.S. federal withholding tax, unless a lower treaty rate applies. For further information, please see each the ETF’s prospectus which is available on www.leggmason.com

Redemption payments will be effected within the specified number of calendar days following the date on which a request for redemption in proper form is made. For further information, please see each ETF’s statement of additional information (SAI) which is available on www.leggmason.com