WINC actively pursues current income by combining low interest rate risk, high investment grade exposure, and industry expertise from a fixed income market leader – Western Asset Management.

 


Western Asset Short Duration Income ETF Highlights

 

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Active Income

A focus on current income through active management by Western Asset Management, an affiliate of Legg Mason and a market leader in active fixed income investing with more than 45 years of experience and 128 investment professionals.1  
 

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Low Duration

A diversified income strategy with a low duration target of just 0-3 years – offering investor’s the potential of reducing interest rate risk while maintaining attractive income levels.  
 

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Quality Focus 

At least 80% investment-grade credit quality, 100% U.S.-dollar, and exposure flexibility beyond investment-grade corporate bonds, including high yield, structured securities and emerging market debt.


The Manager: Western Asset

Western Asset, one of the world's leading fixed income managers, was founded in 1971. The firm has nine offices around the globe and deep experience across the range of fixed income sectors. Western Asset has been recognized for its emphasis on team management and intensive proprietary research, supported by robust risk management.

 

The Need for Active Management

The composition of the fixed income market has evolved: Changes to the yield curve and an erosion in the overall credit quality of the Bloomberg Barclays Investment Grade Corporate Bond Index help to make the case for an active approach to higher-quality, lower-duration credit.

 

Shorter-duration bonds now offer a relatively attractive yield and risk/reward trade-off – capturing the majority of the yield with less than half of the duration of the broader market.

 

The Bloomberg Barclays U.S. Aggregate Index Missing 65% of the Global Debt Market

Sources: Bloomberg, Legg Mason, Western Asset. As of 12/31/18.
Markets are represented by: Bloomberg Barclays 1-5 Year US Corporate Bond Index,  Bloomberg Barclays US Corporate Bond Index, Bloomberg Barclays U.S. Aggregate Index. Yield = Yield to Worst.

Past performance is not a guarantee of future results. For illustrative purposes only, does not represent the performance of an actual investment. Index returns do not reflect any fees, expenses or sales charges. Indexes are unmanaged and investors cannot invest directly in an index. See the Glossary of Terms for index definitions. Duration measures the sensitivity of a bond’s value to a change in interest rates. The higher the duration number, the more sensitive a bond’s value will be to interest rate changes.

 

Baa-rated bonds now represent more than half of the Bloomberg Barclays Investment Grade Corporate Bond Index – forcing many passive strategies to mimic this exposure and become forced sellers should downgrades occur.

 

Source: Bloomberg, Legg Mason. As of 12/31/8. Credit Quality is a measurement of a bond issuer's ability to pay interest on the bond in a timely manner; it informs investors of an investment’s creditworthiness, or risk of default. The credit quality ratings provided by ratings agencies such as Standard and Poor’s (S&P), Moody’s Investors Service and/or Fitch Ratings, Ltd. typically range from Aaa (highest) to D (lowest).


Western Asset's active fixed income expertise may help investors take advantage of market opportunities, generate current income and manage risk.

 

Why an Exchange-Traded Fund (ETF)

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Cost

With a net expense ratio of just 0.29%, WINC is a cost-effective solution to gaining access to actively managed, low-duration, higher-credit-quality fixed income exposure with a focus on current income.

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Intraday Liquidity

The ETF vehicle offers an extra layer of liquidity and can be traded throughout the day.

 

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Transparency

The availability of daily holdings may allow investors to make more informed investment decisions.

1Source: Western Asset Management. As of December 31, 2018.

*Gross expenses are the Fund's total annual operating expenses. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund's gross expenses, which cannot be terminated prior to December 31, 2019 without Board consent.


 


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 securities include greater price volatility, illiquidity and possibility of default. 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. Asset-backed, mortgage-backed or mortgage related securities are subject to prepayment and extension risks. Active management and diversification do not ensure gains or protect against market declines.

 


Western Asset Short Duration Income ETF (WINC) may benefit investors who are seeking current income via an actively managed, low-duration, higher-quality fixed income strategy that includes opportunistic, out-of-benchmark debt sectors combined with the potential liquidity, transparency and cost benefits of an ETF.

Featured Resource


Western Asset 2019 Outlook: Focus on Growth

Western Asset believes there could be room for greater optimism in the bond market if U.S. growth moderates and Europe and emerging markets regain their footing.


IMPORTANT INFORMATION: All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Please see each product’s webpage for specific details regarding investment objective, risks, performance and other important information. Review this information carefully before you make any investment decision. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges.

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. 

Authorized participants ("APs") may acquire shares in the primary market directly from the ETFs and may tender their shares for redemption directly to the ETFs, at net asset value per share only in Creation Units or Creation Unit Aggregations. Once created, shares of the funds generally trade in the secondary market in amounts less than a Creation Unit.

Retail investors buy and sell shares of ETFs at market price (not NAV) in the secondary market throughout the trading day. These shares are not individually available for purchase or redemption directly from the ETF. 

Legg Mason Investor Services, LLC (LMIS) serves as the distributor of Creation Units for the ETFs on an agency basis. LMIS does not maintain a secondary market in the funds' shares. 

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 fund’s prospectus.

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.  Please see each fund’s statement of additional information (SAI) for more information.  

FINANCIAL ADVISORS: Please note that not all products may be available for sale at your firm. Please call the Legg Mason Sales Desk 1-800-822-5544 or your Legg Mason Sales contact for more information.

Exchange Traded Funds (ETFs) — A type of investment company which is bought and sold on a securities exchange. ETFs generally represent a portfolio of securities, derivative instruments, currencies or commodities. The risks of owning an ETF generally reflect the risks of owning the underlying securities or commodities the ETF is designed to track. ETFs also have management fees and operating expenses that increase their costs.

Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.