- Provides a leveraged portfolio, consisting primarily of non-agency residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS) and mortgage whole loans
- Seeks current income, with a secondary investment objective of capital appreciation
- Emphasizes team management and extensive credit research expertise to identify attractively priced securities
meet your managers
One of the world’s leading global fixed income managers. Founded in 1971, the firm is known for team management and proprietary research, supported by robust risk management and a long-term fundamental value approach.
Meet Your Managers
Western Asset uses a team-based approach to managing your Fund.
One of the world's largest and leading fixed-income managers, Western Asset has focused exclusively on fixed income since its founding in 1971. They offer investors a broad range of core and specialized bond portfolios from across the fixed-income universe, all managed using a long-term, value-oriented investment process.
Effective January 2, 2020, the Fund converted to a perpetual fund by eliminating the Fund’s term. Prior to January 2, 2020, the Fund was known as Western Asset Mortgage Defined Opportunity Fund Inc. At that time, the investment strategy also changed.
What I Should Know
All investments are subject to risks, including the possible loss of principal. The Fund’s investments are subject to liquidity risk, credit risk, inflation risk and interest rate risk. As interest rates rise, bond prices fall, reducing the value of the Fund’s fixed-income holdings. The Fund may invest in lower-rated high-yield bonds which are subject to greater credit risk (risk of default) than higher-rated obligations. Mortgage-backed securities are subject to additional risks, including prepayment risk, which can limit the potential gains in a declining interest rate environment. The Fund may invest in securities backed by subprime or distressed mortgages which involve a higher degree of risk and chance of loss. Leverage may result in greater volatility of NAV and the market price of common shares and increases a shareholder’s risk of loss. The Fund may make significant investments in derivative instruments. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Because the Fund is non-diversified, it may be more susceptible to economic, political or regulatory events than a diversified fund. The Fund is not guaranteed by the U.S. government, the U.S. Treasury or any government agency.
Distributions are not guaranteed and are subject to change.
IMPORTANT PERFORMANCE INFORMATION: Performance shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate so shares, when sold, may be worth more or less than the original cost. Returns based on Market Price or NAV, and assume the reinvestment of all distributions at the Dividend Reinvestment Plan Price or NAV, respectively. Prior to January 1, 2012, returns based on NAV assume the reinvestment of all distributions at the Dividend Reinvestment Plan Price. All returns include the deduction of management fees, operating expenses and all other fund expenses, and do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares. Returns for periods of less than one year are not annualized.
Net Asset Value (NAV) is total assets less total liabilities divided by the number of shares outstanding.
Market Price, determined by supply and demand, is the price an investor purchases or sells the fund. The Market Price may differ from a fund’s NAV.
*Distribution rate is calculated by annualizing the most recent distribution amount paid, excluding special distributions, divided by the closing market price or NAV. As of 10/31/2020, the fund estimates that the distributions will be paid from: 77.30% investment income;0.00% realized capital gains; and, 22.70% return of capital. The Distribution Rate is subject to change and is not a quotation of Fund performance. The Board of Directors may terminate or suspend the managed distribution policy at any time. Any such termination or suspension could have an adverse effect on the market price of the Fund's shares. A return of capital is not taxable and results in a reduction in the tax basis of a shareholder's investment. For more information about a distribution's composition refer to the Fund's distribution press release or, if applicable, the Section 19 notice located in the Press Releases section below.
A NOTE ABOUT FEES & EXPENSES: Based on the Fund’s net assets of the common shares, as of the most recent Annual Report.
Management fees: Under the investment management agreement, the Fund pays an annual fee, paid monthly, as a portion of the Fund's average daily Managed Assets. “Managed Assets” are defined as net assets plus the amount of any borrowing, including loans from certain financial institutions and/or the issuance of debt securities (collectively, “Borrowings”), and assets attributable to any preferred stock (“Preferred Stock”) that may be outstanding. Please see the fund’s Annual Report for more information on expenses.
IMPORTANT CHARACTERISTICS INFORMATION: Portfolio characteristics and holdings are subject to change at any time. Percentages are based on total portfolio as of quarter-end and are subject to change at any time. For informational purposes only and not to be considered a recommendation to purchase or sell any security. Negative allocations and allocations in excess of 100% are primarily due to the Fund's unsettled trade activity.
The difference between total assets and net assets, if any, is due primarily to the Fund’s use of borrowings and other liabilities; net assets do not include borrowings. The Fund may employ leverage in the form of loans, preferred stock, reverse repurchase agreements and/or other instruments. When the Fund engages in transactions that have a leveraging effect on the Fund’s portfolio, the value of the Fund will be more volatile and all other risks will tend to be compounded.
Percentages are based on total portfolio as of quarter-end and are subject to change at any time. For informational purposes only and not to be considered a recommendation to purchase or sell any security. Negative allocations and allocations in excess of 100% are primarily due to the Fund's unsettled trade activity.
Weighted Average Life (WAL) is the average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, WAL tells how many years it will take to pay half of the outstanding principal.
Effective duration is a duration calculation for bonds with embedded options. Effective duration takes into account that expected cash flows will fluctuate as interest rates change. Duration measures the sensitivity of price (the value of principal) of a fixed-income investment to a change in interest rates. The higher the duration number, the more sensitive a fixed-income investment will be to interest rate changes.
Credit quality is a measure of a bond issuer's ability to repay interest and principal in a timely manner. The credit ratings shown are based on each portfolio security's rating as provided by Standard and Poor's, Moody's Investors Service and/or Fitch Ratings, Ltd. and typically range from AAA (highest) to D (lowest), or an equivalent and/or similar rating. For this purpose, when two or more of the agencies have assigned differing ratings to a security, the highest rating is used. Securities that are unrated by all three agencies are reflected as such. The credit quality of the investments in the Fund's portfolio does not apply to the stability or safety of the Fund. These ratings are updated monthly and may change over time. Please note, the Fund itself has not been rated by an independent rating agency.
IMPORTANT HOLDINGS INFORMATION: Portfolio holdings are based on total portfolio, and are subject to change at any time. Holdings are provided for informational purposes only and should not be construed as a recommendation to purchase or sell any security. Any negative allocations or allocations in excess of 100% are primarily due to unsettled trade activities.
Derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance.
IMPORTANT DISTRIBUTION INFORMATION: Distributions paid by the Fund may be comprised of income, capital gains, and/or return of capital. At year-end the Fund will issue a Form 1099 with the final composition of the distribution for tax purposes. A current estimate of the distribution's composition can be found in the performance section on this page or in the most recent distribution press release and/or Section 19 notice located in the press release section below. The Distribution Rate is not guaranteed, subject to change, and is not a quotation of Fund performance. A return of capital is not taxable and results in a reduction in the tax basis of a shareholder's investment.
Franklin Resources, Inc., its specialized investment managers 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 taxpayer for the purpose of avoiding tax penalties. 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 taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.
IMPORTANT INFORMATION: 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 associated with hedge funds, alternative investments and other risks, performance and other important information. Review this information carefully before you make any investment decision.
The Closed-End Funds are not sold or distributed by Legg Mason Investor Services, LLC ("LMIS") or any specialized investment manager of Franklin Resources, Inc. Unlike open-end funds, shares are not continually offered. Like other public companies, closed-end funds have a one-time initial public offering, and once their shares are first issued, are generally bought and sold through non-affiliated broker/dealers and trade on nationally recognized stock exchanges. Share prices will fluctuate with market conditions and, at the time of sale, may be worth more or less than your original investment. Shares of exchange-traded closed-end funds may trade at a discount or premium to their original offering price, and often trade at a discount to their net asset value. Net Asset Value (NAV) is total assets less total liabilities divided by the number of shares outstanding. Market Price, determined by supply and demand, is the price an investor purchases or sells the fund. Investment return, market price and net asset value will fluctuate with changes in market conditions. The Funds are subject to investment risks, including the possible loss of principal invested.