The Legg Mason Multi-Manager HNW Portfolios comprise a suite of five multi-asset portfolios seeking to deliver long-term capital growth consistent with a target investment risk profile. Developed utilizing the portfolio construction expertise of QS Investors, the Portfolios incorporate active management to enhance return potential and alternative assets to mitigate risk. A portion of each Portfolio is implemented using separately managed accounts (SMAs), which are made up of individual securities to allow for customization. The Legg Mason Multi-Manager HNW Portfolio - 70/20/10 generally targets 70% equity exposure.
- No single market environment or investment view persistently drives results; we seek to diversify across multiple dimensions and complementary investment perspectives.
- Managing risk is essential to compounding returns over time; we incorporate alternative strategies with low correlations to traditional indices that seeks to deliver more consistent risk-adjusted returns.
Flexibility to Customize
- Preferences and personal circumstances differ across investors; the Portfolios are implemented with an allocation to SMAs, allowing for the ability to customize for personal preferences, including tax considerations.
- Offers diversified exposure to both traditional and nontraditional assets
- Leverages the asset allocation expertise of QS Investors, a multi-asset solutions manager
- Provides access to Legg Mason’s deep bench of specialized active managers
- Implemented with an allocation to separately managed accounts (SMAs), which allows for the Portfolio to be tailored to a client’s personal preferences, including tax considerations
- Single solution, tailored to multiple risk levels and objectives
- Incorporates risk-mitigating strategies such as alternatives and defensive equities, which seeks to improve the return/risk profile of a portfolio
- Removes the operational burden of manager selection and asset allocation
Diversification does not guarantee a profit or protect against a loss.
There is no guarantee that the Portfolio's objectives will be met.
QS Investors employs a systematic process to portfolio construction to eliminate human bias. Its multi-strategy process incorporates sophisticated statistical techniques to build a portfolio that balances risk and potential reward based on the target risk level. QS Investors draws upon the available universe of actively managed Legg Mason strategies to invest in a globally diversified mix of underlying assets designed to deliver on the portfolio objective.
Develop Strategic Asset Allocation
- Asset allocation is based on QS Investors’ long-term global perspective on capital markets and expertise examining complex market dynamics.
- The strategic asset mix is constructed to provide return potential while managing downside risk.
- The strategic asset allocation is reviewed annually.
- Identify the universe of actively managed Legg Mason strategies across mutual funds and separately managed accounts (SMAs).
- Evaluate and validate manager’s style and optimally combine to deliver on the stated objective.
- Ensure managers are delivering the risk that is expected.
- Determine target risk level to align with the risk profile and objective.
- Optimize allocations to balance exposure across managers, styles and regions.
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.
meet your managers
QS Investors is a quantitative asset manager that provides multi-asset class and global equity solutions. Their approach unites intellectual and academic precision with the power of data and technology in their quest to elevate the certainty of outcomes they deliver.
QS Investors team-managed approach
Diverse team of scientists, mathematicians, engineers, finance and investment experts work together to build and manage portfolios.
As of 12/5/19, Legg Mason Multi-Manager Diversified Risk Portfolio - Moderate Growth changed its name to the Legg Mason Multi-Manager HNW Portfolio - 70/20/10.
What I Should Know
All investments involve risk, including loss of principal and there is no guarantee that investment objectives will be met. 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. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. 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. 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. Equity securities are subject to price fluctuation and possible loss of principal. 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. Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses, and have a potentially large impact on Portfolio performance. Certain underlying strategies may use derivatives to a significant extent, which could result in substantial losses and greater volatility in the Portfolio’s net assets. 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. Active and frequent trading may increase a shareholder’s tax liability and transaction costs, which could detract from Portfolio performance. Some underlying strategies may be classified as non-diversified, which means they may be permitted to invest a higher percentage of its assets in any one issuer than a diversified Portfolio, which may magnify the strategy’s losses from events affecting a particular issuer. The managers’ investment style may become out of favor and/or the manager’s selection process may prove incorrect, which may have a negative impact on strategy performance. Diversification and asset allocation does not guarantee a profit or protect against a loss.
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.
Please see GIPS® endnotes for important additional information regarding the portfolio performance shown and for effects of fees.
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 advisor. Client portfolios are managed based on investment instructions or advice provided by one or more of the following Legg Mason-affiliated subadvisors: QS Investors. Management is implemented by LMPPG, the designated subadvisor 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.
|Net Composite Returns (%)||Pure Gross Returns (%)||Benchmark
Composite 3 -
Year Standard Deviation (c)
3 - Year Standard Deviation (c)
Bundled Fee Portfolios in the Composite
a) If applicable, partial reporting periods are a result of the inception or termination of the composite as further described below. Partial period returns of less than a year are not annualized.
b) Due to differences in sources for benchmark performance, there may be slight variances between benchmark returns noted above and those from other published sources.
c) 3-year annualized ex-post standard deviation; 3-year annualized ex-post standard deviation is not applicable because it does not have a 3-year history.
d) Asset-weighted standard deviation; calculated for net returns for composites with more than five portfolios active over the full year.
See Accompanying Notes below.
1. Basis of Presentation
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 affiliate 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 affiliates, into QS Investors.
QS Investors claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. QS Investors has been independently verified for the periods August 1, 2010 through 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.
This presentation of investment performance sets forth the time-weighted net rates of return for the QS Multi-Manager Diversified Risk – Moderate Growth Retail Composite (the "Composite") for the period shown. Past performance is no guarantee of future results and may differ in future time periods.
2. Composite Description
The Composite includes 100% non-fee-paying portfolios managed on a fully discretionary basis. The QS Multi-Manager Diversified Risk – Moderate Growth Retail Composite is an asset allocation strategy that seeks to produce portfolio returns in-line with the named risk and return objectives. Accounts in this composite invest in other SMA/Wrap portfolios and mutual funds. This risk-based model utilizes actively managed strategies with equity levels targeting 60-80% and fixed income levels targeting 10-30%. Underlying accounts in the composite also include an allocation to alternative investments targeting 0-20%. The strategy provides investors exposure to a diversified range of assets and factors including equity value, equity growth, low-volatility equity, equity dividends, international equity, emerging markets equity, credit, and interest rate duration.
Eligible new portfolios are added to the Composite at the start of the first performance measurement period following the date that the portfolio is fully invested as defined by the Composite strategy. Securities listed on any national exchange are valued at their last trade price. Securities that are not listed are valued at the most recent publicly quoted bid price. Securities transactions are recorded on a trade date basis. If applicable, dividend income is recorded as of the ex-dividend date. Returns reflect the reinvestment of dividends and other earnings. There has been no minimum account size for this composite. The Composite’s inception date is January 1, 2019, with a creation date of January 10, 2019.
3. Calculation of Rates of Return
Composite returns are expressed in US dollars. For each portfolio within the Composite, the total rate of return for the time period is equal to the change in the market value of the portfolio, including capital appreciation, depreciation and income, as a percentage of the beginning market value of the portfolio, adjusted for the net of all contributions and withdrawals (the "cash flows"). Rates of return are calculated on a daily “time-weighted" basis and are net of withholding taxes, where applicable, for all portfolios which comprise the Composite. Daily time-weighted rates of return minimize the effect of cash flows on the investment performance of the portfolio. There are no known material differences between the Firm’s source of foreign exchange rates and that of the benchmark.
Monthly Composite rates of return are computed by taking an asset weighted average of each portfolio's monthly rate of return within the Composite, utilizing their respective beginning market values for the period. Annual Composite rates of return are derived by geometrically linking monthly Composite rates of return. Pure gross of fee performance shown is gross of transaction and commission costs. 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%). The "bundled" fee includes transaction costs, investment management, custodial, and other administrative fees. Advisory fees are described in QS Investors, LLC’s Form ADV, Part 2A brochure. Actual management fees may vary depending upon, among other things, the account type, the applicable management fee schedule and the portfolio size.
The standard deviation of comparable performance over time is a measure of dispersion. This calculation measures the fluctuation of the rates of return of portfolios with the Composite in relation to the average return. Dispersion is not shown for composites with 5 or less portfolios for a full year as it is not meaningful.
4. Composite Benchmark
Composite returns are measured against a mixed static blend of 40% Bloomberg Barclays US Aggregate Bond Index; 38% Russell 1000 Index; 15% MSCI EAFE (Net) Index; and 7% MSCI Emerging Markets (Net) Index. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). Provided the necessary inclusion rules are met, US Aggregate eligible securities also contribute to the multi-currency Global Aggregate Index and the US Universal Index, which includes high yield and emerging markets debt. The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the U.S. market. The Russell 1000 Index is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected. The MSCI EAFE (Net) Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EAFE (Net) Index consists of 21 developed market country indices. The MSCI EM (Emerging Markets) (Net) Index is a free float‐adjusted market capitalization index that is designed to measure equity market performance of emerging markets. Net total return indexes reinvest dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.
The benchmark is used for comparative purposes only and generally reflects the risk or investment style of the investments reported on the schedule of investment performance. Investments made by the Firm for the portfolios it manages according to the Composite strategy may differ from those of the benchmark. Accordingly, investment results will differ from those of the benchmark.
The Firm’s portfolios are actively managed, while the index is unmanaged and may contain securities different from those included in the Firm’s portfolios. Bloomberg Barclays, FTSE Russell, MSCI Inc. are the source and owner of the Bloomberg Barclays, Russell, MSCI Inc. Indices data contained or reflected in this material and all trademarks and copyrights related thereto. The material may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is the Firm’s presentation of the data. Bloomberg Barclays, FTSE Russell, MSCI Inc. are not responsible for the formatting or configuration of this material or for any inaccuracy in presentation thereof. The index providers are the sources and owners of the index data contained or reflected in this material and all trademarks and copyrights related thereto.
5. Additional Information and Information Available upon Request
In addition to the Composite, the Firm provides investment management services utilizing different strategies. The following information is available upon request: policies for valuing portfolios, calculating performance, and preparing compliant presentations; a complete list and description of the Firm's composites; QS Investors, LLC’s Form ADV, Part 2A brochure; a list of other Legg Mason affiliates.
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.