Legg Mason Balanced Income Portfolios pursue an objective of long-term growth and high current income through a combination of asset allocation and fundamental security analysis. Legg Mason’s ClearBridge Investments subsidiary determines the portfolios’ allocations among equities, fixed income securities and cash equivalents and also selects equity investments for the portfolios. Fixed income investments are managed on the basis of investment instructions furnished by Western Asset.
- Provide a high level of current income by investing in high-quality, undervalued companies and select fixed income instruments
- Achieve long-term capital growth.
- Outperform a 70/30 blend of the Russell 1000 Value Index and the Bloomberg Barclays U.S. Intermediate Treasury Bond Index.
We believe that:
- A combination of steady income and conservative capital growth may be achieved in a single portfolio.
- Blending top-down macroeconomic research with bottom-up fundamental analysis may enhance the portfolio’s overall return.
- Diversify across equity, fixed income and cash allocations.
There is no guarantee that the Portfolio's objectives will be met.
Define the investment universe
- Consider common stocks, convertible and non-convertible preferred stocks, convertible bonds, ADRs, real estate investment trusts (REITs), U.S. Treasuries, U.S. Government agency securities and, to a limited extent, ETFs.
Evaluate stocks using proprietary discipline
- Perform top-down macroeconomic research to drive sector weightings and emphasize industry themes and trends.
Base selection on fundamental security analysis and stress a current income and long-term value orientation
- Equity and equity-related investments may include common stocks, preferred stocks, convertible bonds, ETFs, ADRs and REITs. Focus on companies with healthy balance sheets selling at or near book value and at prices that do not accurately reflect cash flows, tangible assets, or management skills.
- Fixed income investments may include U.S. Treasuries and U.S. Government agency securities. Fixed-income investments have an average maturity of 10 years or less.
- Re-examine when technicals/ fundamentals deteriorate, full growth potential is reached, material insider buying/selling is apparent or to capitalize on temporary bond mispricing.
- Adeptly assesses market conditions and at times hold significant amounts of cash reserves as a portion of the portfolio while waiting for buying opportunities.
The investment process may change over time. The characteristics set forth above are intended as a general illustration of some of the criteria the strategy team considers in selecting securities for client portfolios. There is no guarantee investment objectives will be achieved.
Investments may include ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. securities markets and market sectors. In addition, a client will bear a proportionate share of the separate fees and expensed incurred by any ETF in which the clients’ account is invested.
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.
With a legacy dating back over 50 years, ClearBridge Investments is a leading global equity manager committed to delivering differentiated long-term results through authentic active management.
Peter Vanderlee, CFA
Managing Director, Portfolio Manager
Mark McAllister, CFA
Managing Director, Portfolio Manager
Active share is a measure of the percentage of stock holdings in a manager's portfolio that differs from the benchmark index.
What I Should Know
All investments involve risk, including loss of principal and there is no guarantee that investment objectives will be met. Investments may be made in small- and mid-cap companies, which involve a higher degree of risk and volatility than investments in large-cap companies. While most investments are in U.S. companies, investments may also be made in ADRs and other securities of non-U.S. companies in developed and emerging markets which involve risks in addition to those ordinarily associated with investing in domestic securities, including the potentially negative effects of currency fluctuation, political and economic developments, foreign taxation and differences in auditing and other financial standards. These risks are magnified in emerging markets. Fixed income securities are subject to illiquidity risk, which is the risk that securities may be difficult to sell at certain prices when no market participants are willing to purchase the securities at such prices. Fixed income securities are subject to interest rate and credit risk, which is a possibility that the issuer of a security will be unable to make interest payments and repay the principal on its debt. As interest rates rise, the price of fixed income securities falls. Investments may include ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. markets and sectors. In addition, a client will bear a proportionate share of the separate fees and expensed incurred by any ETF in which the clients’ account is invested. U.S. Treasuries are direct debt obligations issued and backed by the "full faith and credit" of the U.S. government. The U.S. government guarantees the principal and interest payments on U.S. Treasuries when the securities are held to maturity. Unlike U.S. Treasury securities, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the U.S. government. Even when the U.S. government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities.
IMPORTANT INFORMATION: Past performance is no guarantee of future results. Management and performance of individual accounts may vary for reasons that include the existence of different implementation practices and model requirements in different investment programs.
Pure Gross performance shown does not reflect the deduction of investment management fees and certain transaction costs, which will reduce portfolio performance. Net Performance includes the deduction of a 3% annual wrap fee for equity and balanced portfolios and a 1.5% annual wrap fee for fixed income portfolios. These deducted fees amounts are the maximum anticipated wrap fees. Actual fees may vary. For fee schedules, contact your financial professional or, if you enter into an agreement directly with Legg Mason Private Portfolio Group, LLC ("LMPPG"), refer to LMPPG's Form ADV disclosure document. Returns reflect the reinvestment of dividends and other earnings.
An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.
Performance Source: Legg Mason
Hypothetical growth of dollars: For illustrative purposes only. Assumes no withdrawals or contributions. The performance results shown were calculated assuming reinvestment of dividends and income and take into account both realized and unrealized capital gains and losses.
IMPORTANT INFORMATION: Separately Managed Accounts (SMAs) are investment services provided by Legg Mason Private Portfolio Group, LLC (LMPPG), a federally registered investment adviser. Client portfolios are managed based on investment instructions or advice provided by one or more of the following Legg Mason-affiliated sub-advisers: ClearBridge Investments, and Western Asset Management Company. Management is implemented by LMPPG, the designated sub-adviser or, in the case of certain programs, the program sponsor or its designee.
Professional money management may not be suitable for all investors. Factual information relating to the securities discussed was obtained from sources believed to be reliable, but there can be no guarantee as to its accuracy. It should not be assumed that investments made in the future will be profitable or will equal the performance of the securities discussed in the material.
Holdings, sector weightings, market capitalization and portfolio characteristics are subject to change at any time and are based on a representative portfolio. Holdings, sector weightings, market capitalization and portfolio characteristics of individual client portfolios in the program may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed.
Portfolio characteristics (Source: FactSet)
|Period||Total Return (Net, %)
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||Benchmark Return (%)
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||% of Bundled Fee Portfolios in the Composite
||Composite Dispersion (%)
||Composite 3 Yr. St. Dev. (%)
||Benchmark 3 Yr. St. Dev. (%)
||Total Composite Assets at End of Period (USD million)
||Percentage of Firm Assets
||Total Firm Assets at End of Period (USD million)
*Pure gross of fee returns do not reflect the deduction of any expenses, including transaction costs, and are presented as supplemental to the net of fee returns.
Legg Mason Private Portfolio Group, LLC ("LMPPG") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Legg Mason Private Portfolio Group, LLC has been independently verified for the periods January 1, 2013 - December 31, 2018. The verification reports are available upon request.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.
Legg Mason Private Portfolio Group, LLC is a wholly-owned subsidiary of Legg Mason, Inc. LMPPG, together with its Subadvisers, ClearBridge Investments, LLC ("ClearBridge"), Martin Currie Inc. ("Martin Currie"), QS Investors, LLC ("QS"), RARE Infrastructure (North America) Pty Ltd ("RARE"), Royce & Associates, LP ("Royce") and Western Asset Management Company (“Western Asset”), provides investment advisory services primarily in investment programs sponsored by Sponsor Firms. The investment advisory services LMPPG and the Subadvisers provide differ depending on the type of Sponsor Firm investment program in which a client participates. ClearBridge claims compliance with the Global Investment Performance Standards (GIPS®). ClearBridge has been independently verified for the periods January 1, 1997 - December 31, 2018. ClearBridge Investments, LLC ("ClearBridge") is a wholly owned subsidiary of Legg Mason, Inc. ("Legg Mason"). The investment advisory business now known as ClearBridge was registered in September 2005 to facilitate Legg Mason's acquisition of substantially all the equity asset management businesses known as Citigroup Asset Management. These former businesses serve as the foundation of ClearBridge and its claim of GIPS compliance for institutional accounts through predecessor firms, effective as of January 1997. In June 2008, ClearBridge combined this business with its retail business to form a single GIPS firm. As of April 1, 2013 and January 1, 2016, ClearBridge's affiliates, Global Currents Investment Management, LLC, and ClearBridge, LLC, respectively, have become part of the ClearBridge GIPS firm. To obtain a compliant presentation and/or the firm’s list of composite descriptions, please contact firstname.lastname@example.org. Martin Currie claims compliance with the Global Investment Performance Standards (GIPS®). Martin Currie has been independently verified though December 31, 2017. Martin Currie, which encompasses Martin Currie Investment Management Ltd and Martin Currie Inc. Martin Currie is a wholly owned subsidiary of Legg Mason, Inc. (“Legg Mason”) but operates autonomously, and Martin Currie, as a firm, is held out to the public as a separate entity. To obtain a compliant presentation and/or the firm’s list of composite descriptions, please contact email@example.com. QS Investors claims compliance with the Global Investment Performance Standards (GIPS®). QS has been independently verified for the periods August 1, 2010 through December 31, 2018. QS Investors, LLC (“QS Investors” or “the Firm”), is a registered investment adviser with the Securities and Exchange Commission, providing investment and advisory services to a diverse array of institutional, retail and sub-advisory clients worldwide. Registration as an investment adviser does not imply any level of skill or training. The Firm is headquartered in New York City with an additional office in Boston, Massachusetts. The Firm provides discretionary and non-discretionary advice and investment management to domestic and international clients based on their investment objectives, guidelines, and risk tolerance, each of which may be customized to address specific client needs. QS Investors, LLC launched in August 2010 and became a wholly-owned, independently managed subsidiary of Legg Mason, Inc. on May 31, 2014. As part of this transaction, Legg Mason merged QS Batterymarch Financial Management, Inc. (“QS Batterymarch”) and QS Legg Mason Global Asset Allocation, LLC (“QS LMGAA”), two other subsidiaries, into QS Investors. To obtain a compliant presentation and/or the firm’s list of composite descriptions, please contact Keri Mclaughlin at Keri.Mclaughlin@qsinvestors.com. RARE claims compliance with the Global Investment Performance Standards (GIPS®). RARE has been independently verified for the periods August 31 2006 through December 31, 2017. For purposes of compliance with the GIPS® the Firm is defined as RARE Infrastructure Limited ("RIL") and its relevant subsidiaries, being RARE Infrastructure (North America) Pty Ltd, RARE Infrastructure International Pty Ltd and RARE Infrastructure USA Inc. (together "RARE"). RIL performs the role of investment manager and subadvisor for RARE in the delivery of services to both domestic and global institutional clients, funds and retail end users. RIL has global developed and developing listed equity infrastructure investment objectives based on its proprietary investment and research model. RIL is a majority owned, independently operated subsidiary of Legg Mason, Inc. To obtain a compliant presentation and/or the firm’s list of composite descriptions, please contact firstname.lastname@example.org. Royce claims compliance with the Global Investment Performance Standards (GIPS®). Royce has been independently verified for the periods January 1, 2008 through December 31, 2018. For the purpose of complying with the GIPS standards, the Firm is defined as Royce & Associates, LP (“Royce”). Royce is registered with the U.S. Securities and Exchange Commission (the “SEC”) as an investment adviser (SEC File No. 801-8268). To obtain a compliant presentation and/or the firm’s list of composite descriptions, please contact Tara Francoeur at email@example.com. Western Asset claims compliance with the Global Investment Performance Standards (GIPS®). Western has been independently verified for the periods January 1, 1993 to December 31, 2018. For GIPS® purposes, the Firm is defined as Western Asset, a primarily fixed-income investment manager comprised of Western Asset Management Company, LLC; Western Asset Management Company Limited, authorised and regulated by the Financial Conduct Authority ("FCA"); Western Asset Management Company Pte. Ltd. Co. Reg. No. 200007692R, holder of the Capital Markets Services Licence for fund management and regulated by the Monetary Authority of Singapore; Western Asset Management Company Ltd, a registered Financial Instruments Business operator and regulated by the Financial Services Agency of Japan; Western Asset Management Company Pty Ltd ABN 41 117 767 923, holder of the Australian Financial Services Licence 303160; and Western Asset Management Company Distribuidora de Títulos e Valores Mobiliários (DTVM) Limitada, authorised and regulated by Comissão de Valores Mobiliários and Banco Central do Brazil, with offices in Pasadena, New York, London, Singapore, Tokyo, Melbourne, São Paulo, Hong Kong, and Zürich. Each Western Asset company is a wholly owned subsidiary of Legg Mason, Inc. ("Legg Mason") but operates autonomously, and Western Asset, as a Firm, is held out to the public as a separate entity. Western Asset Management Company was founded in 1971. To obtain a compliant presentation and/or the firm’s list of composite descriptions, please contact Michael Van Raaphorst at 212-601-6211 or Michael.VanRaaphorst@westernasset.com. LMPPG has used Subadvisers for all periods presented.
The Legg Mason Balanced Income 70/30 composite consists of discretionary wrap accounts with an account minimum of US $25,000. The strategy seeks an objective of long-term growth and high current income through a combination of asset allocation and fundamental security analysis. The main risks of this strategy are General Investment Risk, Small Cap Risk, Mid Cap Risk, Illiquidity Risk, Credit Risk, Interest Rate Risk and Asset Allocation Risk.
Input and Calculation Data:
The fee schedule currently in effect is 3.00% on all assets. Net of fee composite returns are calculated by reducing each monthly composite pure gross rate of return by the highest "bundled" fee charged (3.00%) annually, prorated to a monthly ratio. The "bundled" fee includes transaction costs, investment management, custodial, and other administrative fees. As of January 2014, the internal dispersion of annual returns is measured by the asset-weighted standard deviation of portfolio returns included in the composite for the entire year. For prior years, the equal-weighted standard deviation was used. Data prior to January 2013 is not displayed because that data is non GIPS compliant. The three-year annualized ex-post standard deviation is not available prior to 2015 because the composite did not have 36 months of GIPS compliant data. A list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Past performance is not necessarily indicative of future results.
The composite uses the following blended benchmark 70% Russell 1000® Value / 30% Bloomberg Barclays US Intermediate Treasury which is rebalanced monthly. Benchmark returns are not covered by the report of independent verifiers.
The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe.
The Bloomberg Barclays U.S Intermediate Treasury Bond Index is comprised of all public obligations of the U.S. Treasury.
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.
Certain SMA products may not be available at all firms.