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|
|
II
|
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ClearBridge Small Cap Growth Fund
|
Fund objective
The Fund seeks long-term growth of capital.
Fund and subadviser name changes
Prior to January 1, 2013, the Fund was known as Legg Mason ClearBridge Small Cap Growth Fund. On December 5, 2012, the name of the
Funds subadviser changed from ClearBridge Advisors, LLC to ClearBridge Investments, LLC. There was no change in the Funds investment objective or strategy as a result of these name changes.
Letter from the chairman
Dear Shareholder,
We are pleased to provide the annual report of ClearBridge Small Cap Growth Fund for the twelve-month reporting period ended
October 31, 2012. Please read on for a detailed look at prevailing economic and market conditions during the Funds reporting period and to learn how those conditions have affected Fund performance.
As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to
supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.leggmason.com/individualinvestors. Here you can gain immediate access to market and investment information, including:
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Fund prices and performance,
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Market insights and commentaries from our portfolio managers, and
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A host of educational resources.
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We look forward to helping you meet your financial goals.
Sincerely,
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
November 30, 2012
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ClearBridge Small Cap Growth Fund
|
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|
III
|
|
Investment commentary
Economic review
The U.S. economy continued to grow over the twelve months ended October 31, 2012, albeit at an uneven pace. U.S. gross
domestic product (GDP)
i
growth, as
reported by the U.S. Department of Commerce, was 4.1% in the fourth quarter of 2011. Economic growth in the U.S. then decelerated, as first quarter 2012 GDP growth was 2.0%. This was primarily due to less robust private inventory and non-residential
fixed investments. The economy slowed further in the second quarter, as GDP growth was a tepid 1.3%. According to the Commerce Departments second estimate, GDP growth then moved to 2.7% in the third quarter. The increase was partially due to
increased private inventory and investment, higher federal government spending and a deceleration in imports.
The U.S. job market
remained weak. While there was some improvement during the reporting period, unemployment remained elevated. When the reporting period began, unemployment, as reported by the U.S. Department of Labor, was 8.9%. Unemployment then generally declined
and was 8.1% in April 2012, the lowest rate since January 2009, but still high by historical standards. The unemployment rate then moved higher, reaching 8.3% in July, before falling to 7.8% in September and ending the reporting period at 7.9% in
October. However, the recent moderation in unemployment was partially due to people leaving the workforce and an increase in part-time workers.
Meanwhile, the housing market brightened, as sales have started to improve of late and home prices continued to rebound. According to the National Association of Realtors (NAR),
existing-home sales rose 2.1% on a seasonally adjusted basis in October 2012 versus the previous month and they were 10.9% higher than in October 2011. In addition, the NAR reported that the median existing-home price for all housing types was
$178,600 in October 2012, up 11.1% from October 2011. This marked the eighth consecutive month that home prices rose compared to the same period a year earlier. Furthermore, the inventory of homes available for sale fell 1.4% in October, which
represents a 5.4 month supply at the current sales pace. This represents the lowest inventory since February 2006.
The manufacturing sector overcame a soft patch that occurred in the summer of 2012 and improved toward the end of the reporting
period. Based on the Institute for Supply Managements PMI (PMI)
ii
, after expanding 34 consecutive months, the PMI fell to 49.7 in June 2012, which represented the first contraction in the manufacturing sector since July 2009 (a reading below 50 indicates a
contraction, whereas a reading above 50 indicates an expansion). Manufacturing continued to contract in July and August before ticking up to 51.5 in September and 51.7 in October.
The Federal Reserve Board (Fed)
iii
took a number of actions as it sought to meet its dual mandate of fostering maximum employment and price
stability. As has been the case since December 2008, the Fed kept the federal funds rate
iv
at a historically low range between zero and 0.25%. In September 2011, prior to the beginning of the reporting period, the Fed announced its intention to purchase $400 billion of longer-term
Treasury securities and to sell an equal amount of shorter-term Treasury securities by June 2012 (often referred to as Operation Twist). In January 2012, the Fed extended the period it expects to keep rates on hold, saying economic
conditions including low rates of resource utilization and a subdued outlook for inflation over the medium run are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. In June, the Fed
announced that it would
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IV
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|
ClearBridge Small Cap Growth Fund
|
Investment commentary (contd)
extend Operation Twist until the end of 2012. Finally, in September the Fed announced a third round of quantitative easing, which involves purchasing $40 billion each month of agency
mortgage-backed securities on an open-end basis. In addition, the Fed said that Operation Twist would continue and that it will keep the federal funds rate on hold until at least mid-2015.
As always, thank you for your confidence in our stewardship of your assets.
Sincerely,
R. Jay Gerken, CFA
Chairman, President and
Chief Executive Officer
November 30, 2012
All
investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results.
i
|
Gross domestic product (GDP) is the market value of all final goods and services produced within a country in a given period of time.
|
ii
|
The Institute for Supply Management's PMI is based on a survey of purchasing executives who buy the raw materials for manufacturing at more than
350 companies. It offers an early reading on the health of the manufacturing sector.
|
iii
|
The Federal Reserve Board ("Fed") is responsible for the formulation of policies designed to promote economic growth, full employment, stable
prices and a sustainable pattern of international trade and payments.
|
iv
|
The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the
Federal Reserve) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
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1
|
|
Fund overview
Q. What is the Funds investment strategy?
A.
The Fund seeks long-term growth of capital. The portfolios investment style emphasizes small-capitalization U.S. companies with what we believe to be strong growth potential. In
conjunction with research resources at ClearBridge Investments, LLC (known as ClearBridge Advisers, LLC prior to December 5, 2012), the Funds subadviser, we take a flexible approach designed to identify attractively valued securities.
Some of the sought characteristics include:
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Superior management teams,
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Good prospects for growth
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Dominant positions in a niche market
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Strong or improving financial conditions
|
We generally use a concentrated bottom-up approach for the Fund. We focus on individual security selection rather than allow macroeconomic considerations to strongly influence sector
weights or individual security selection. We also use portfolio risk controls, limiting individual stock exposure and imposing explicit sector limits.
Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities of companies with small market capitalizations and related investments. We use a growth-oriented
investment style, that emphasizes small U.S. companies. The Fund may invest up to 20% of its net assets in equity securities of companies that are not considered small-capitalization companies. The Fund may invest up to 20% of its assets in
non-convertible bonds, notes and debt, when we believe that their total return potential equals or exceeds the potential return of equity securities.
Q. What were the overall market conditions during the Funds reporting period?
A.
The reporting period began amid significant market volatility and weakness, stemming largely from uncertainty over the state of the European debt crisis and the failure of the U.S.
Congressional super committee to produce a deficit reduction plan. However, the start of the new calendar year saw stocks rise significantly, with both the Dow Jones Industrial Average (DJIA)
i
and the S&P 500 Index
ii
making record advances in the first quarter of 2012. The
key catalysts for the rise were the European Central Bank (ECB) introduction of the Long-Term Refinancing Operations (LTRO) in December 2011, which alleviated much of the concern about a potential European bank liquidity
crisis and financial contagion, and modest improvement seen in U.S. economic data.
As the period progressed, both
the domestic economic recovery and the bull market for equities managed to continue despite weaker corporate earnings guidance and slowing economic growth in both the U.S. and China. Increasingly, stock market performance was correlated with central
bank activity, as additional policy easing actions taken by the ECB and the Federal Reserve Board
(Fed)
iii
sparked impressive stock
market gains. Over the summer and fall, uncertainty over the outcome of the U.S. Presidential election and fears of the fiscal cliff remained in the forefront, but were not enough to stop the markets rise to multi-year highs
through the end of the reporting period.
For the reporting period, domestic small-cap stocks in general produced
solid gains, trailing the performance of large-cap stocks but in-line with performance of mid-cap stocks. As measured by the Russell 2000 Index
iv
, small-cap stocks returned 12.08% for the period while large- and mid-caps, as measured by the Russell 1000
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2
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Fund overview (contd)
Index
v
and the Russell Midcap Index
vi
, returned 14.97% and 12.15%, respectively, for the same period.
Q. How did we
respond to these changing market conditions?
A.
We selectively took advantage of the markets volatility, while maintaining
our strict fundamental-focused and research-driven bottom-up stock selection discipline. We looked to add to our existing positions where price weakness was, in our view, unrelated to company fundamentals, while simultaneously establishing new
positions in stocks we believed were attractively valued. We trimmed a number of existing positions, for risk management purposes, which had grown beyond our designated allocation, while we closed several positions entirely where the risk-reward
relationship had changed and we felt we could better utilize the capital in other investment opportunities.
We also used equity options
to control position sizes and generate incremental income for the Fund. Use of these options (primarily covered call writing) marginally contributed to total portfolio return for the period.
Performance review
For the twelve months ended October 31,
2012, Class A shares of ClearBridge Small Cap Growth Fund, excluding sales charges, returned 18.88%. The Funds unmanaged benchmark, the Russell 2000 Growth Index
vii
, returned 9.70% for the same period. The Lipper Small-Cap Growth Funds Category Average
1
returned 9.08% over the same time frame.
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Performance Snapshot
as of October 31, 2012
(unaudited)
|
|
(excluding sales charges)
|
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6 months
|
|
|
12 months
|
|
ClearBridge Small Cap
Growth Fund:
|
|
Class 1
2
|
|
|
-1.41
|
%
|
|
|
19.22
|
%
|
Class A
|
|
|
-1.57
|
%
|
|
|
18.88
|
%
|
Class B
3
|
|
|
-2.06
|
%
|
|
|
17.65
|
%
|
Class C
|
|
|
-1.92
|
%
|
|
|
17.92
|
%
|
Class FI
|
|
|
-1.57
|
%
|
|
|
18.92
|
%
|
Class R
|
|
|
-1.68
|
%
|
|
|
18.65
|
%
|
Class I
|
|
|
-1.38
|
%
|
|
|
19.43
|
%
|
Class IS
|
|
|
-1.28
|
%
|
|
|
19.51
|
%
|
Russell 2000 Growth Index
|
|
|
-0.80
|
%
|
|
|
9.70
|
%
|
Lipper Small-Cap Growth Funds Category Average
1
|
|
|
-2.20
|
%
|
|
|
9.08
|
%
|
The
performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and
investors shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/individualinvestors.
All share class returns assume the
reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply or the deduction of taxes that a shareholder would pay on Fund distributions. If
sales charges were reflected, the performance quoted would be lower. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.
1
|
Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the
period ended October 31, 2012, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 546 funds for the six-month period and among the 528 funds for the twelve-month period in the Funds
Lipper category, and excluding sales charges.
|
2
|
Effective July 27, 2007, Class 1 shares were closed to all new purchases and incoming exchanges. Investors owning Class 1 shares on that
date are permitted to continue to maintain their then-current Class 1 shares, but are no longer permitted to add to their Class 1 share positions (excluding reinvestment of dividends and distributions).
|
3
|
Effective July 1, 2011, the Fund no longer offers Class B shares for purchase by new and existing investors. Individual investors who owned
Class B shares on June 30, 2011 may continue to hold those shares but may not add to their Class B share positions except through dividend reinvestment. Class B shares are also available for incoming exchanges.
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
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3
|
|
Fund performance figures reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
|
Total Annual Operating Expenses
(unaudited)
|
As of the Funds current prospectus dated February 29, 2012, as supplemented,
the gross total annual operating expense ratios for Class 1, Class A, Class B, Class C, Class FI, Class R, Class I and Class IS shares were 1.40%, 1.36%, 2.34%, 2.25%, 1.50%, 1.56%, 0.85% and 0.81%, respectively.
Actual expenses may be higher. For
example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.
As a result of expense limitation
arrangements, the ratio of expenses, other than brokerage, interest, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets is not expected to exceed 1.35% for Class FI shares, 1.60% for Class R shares and 1.05% for
Class I shares. In addition, the total annual operating expenses for Class IS shares will not exceed those for Class I shares, and the total annual operating expenses for Class 1 shares are expected to be at least 0.25% lower than those for
Class A shares through December 31, 2012. Effective January 1, 2013, the total annual operating expenses for Class 1 shares are not expected to exceed those for Class A shares. These expense limitation arrangements cannot be
terminated prior to December 31, 2014 without the Board of Trustees consent.
The manager is permitted to recapture amounts waived or reimbursed to a class during the same fiscal year if the class total annual operating
expenses have fallen to a level below the expense limitation (expense cap) in effect at the time the fees were earned or the expenses incurred. In no case will the manager recapture any amount that would result, on any particular
business day of the Fund, in the class total annual operating expenses exceeding the expense cap or any other lower limit then in effect.
Q. What were the leading contributors to performance?
A.
On an absolute basis,
the Fund produced positive returns in nine out of the ten sectors in which it was invested over the period, with the greatest contributions to returns coming from the information technology (IT), Consumer Discretionary and Industrials
sectors. Relative to the benchmark, overall stock selection contributed to performance for the period and the impact of sector allocation was marginally positive. In particular, stock selection in the IT, Consumer Discretionary, Industrials,
Telecommunication Services (Telecom), Financials, Energy and Utilities sectors helped performance for the period, as did an underweight to the Energy sector.
Leading stock contributors included positions in Lumber Liquidators Holdings Inc. and Lions Gate Entertainment Corp. both in the Consumer Discretionary sector, SBA Communications Corp. in the
Telecom sector, as well as Sourcefire Inc. and SolarWinds Inc. both in the IT sector.
Q. What were the leading detractors from
performance?
A.
In absolute terms, the Funds Energy sector holdings negatively impacted performance for the period.
Relative to the benchmark, the Funds stock selection in the Health Care sector detracted from relative performance, as did overweights in the IT and Utilities sectors and an underweight in the Health Care sector.
On an individual stock basis, the leading detractors from performance for the period included our holdings in Accretive Health Inc. in the Health
Care sector, Monster Worldwide Inc., CEVA Inc., ServiceSource International Inc. and comScore Inc., all in the IT sector.
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4
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Fund overview (contd)
Q. Were there any significant changes to the Fund during the reporting
period?
A.
There were a number of Fund positions sold and bought over the course of the period. The largest additions to the
Funds portfolio were Maximus Inc. and Responsys Inc. both in the IT sector, Newpark Resources Inc. in the Energy sector, H&E Equipment Services Inc. in the Industrials sector and Susser Holdings Corp. in the Consumer Staples sector. The
largest positions closed during the period were Regeneron Pharmaceuticals Inc. in the Health Care sector, Solutia Inc. in the Materials sector, Elster Group SE ADS and Digital River Inc. both in the IT sector, and Urban Outfitters Inc. in the
Consumer Discretionary sector.
Thank you for your investment in ClearBridge Small Cap Growth Fund. As always, we appreciate that you
have chosen us to manage your assets and we remain focused on achieving the Funds investment goals.
Sincerely,
Jeffrey J. Russell, CFA
Portfolio Manager
ClearBridge Investments, LLC
Aram E. Green
Portfolio Manager
ClearBridge Investments, LLC
November 21, 2012
RISKS:
Investments in
small- and medium-capitalization companies may involve a higher degree of risk and volatility than investments in larger, more established companies. Investments in foreign securities are subject to certain risks of overseas investing, including
currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses,
and have a potentially large impact on Fund performance. Please see the Funds prospectus for a more complete discussion of these and other risks, and the Funds investment strategies.
Portfolio holdings and breakdowns are as of October 31, 2012 and are subject to change and may not be representative of the portfolio
managers current or future investments. The Funds top ten holdings (as a percentage of net assets) as of October 31, 2012 were: Solarwinds Inc. (2.6%), SBA Communications Corp., Class A Shares (2.6%), IDEX Corp. (2.5%), Bally
Technologies Inc. (2.4%), Sourcefire Inc. (2.3%), Lions Gate Entertainment Corp. (2.2%), MSC Industrial Direct Co. Inc., Class A Shares (2.1%), ITC Holdings Corp. (2.0%), Mercadolibre Inc. (2.0%) and Aspen Technology Inc. (2.0%).
Please refer to pages 10 through 14 for a list and percentage breakdown of the Funds holdings.
The mention of sector breakdowns is
for informational purposes only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors
seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional. The Funds top five sector holdings (as a percentage of net assets) as of
October 31, 2012 were: Information Technology (29.0%), Consumer Discretionary (14.2%), Health Care (14.0%), Industrials (13.5%) and Financials (8.4%). The Funds portfolio composition is subject to change at any time.
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
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5
|
|
All investments are subject to risk including the possible loss of principal. Past performance is no
guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.
The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.
i
|
The Dow Jones Industrial Average (DJIA) is a widely followed measurement of the stock market. The average is comprised of thirty
stocks that represent leading companies in major industries. These stocks, widely held by both individual and institutional investors, are considered to be all blue-chip companies.
|
ii
|
The S&P 500 Index is an unmanaged index of 500 stocks and is generally representative of the performance of larger companies in the U.S.
|
iii
|
The Federal Reserve Board (Fed) is responsible for the formulation of policies designed to promote economic growth, full employment,
stable prices and a sustainable pattern of international trade and payments.
|
iv
|
The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of
the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the U.S. equity market.
|
v
|
The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of
the total market capitalization of the Russell 3000 Index.
|
vi
|
The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represents approximately 25% of
the total market capitalization of the Russell 1000 Index.
|
vii
|
The Russell 2000 Growth Index measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher
forecasted growth values. (A price-to-book ratio is the price of a stock compared to the difference between a companys assets and liabilities.)
|
|
|
|
6
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Fund at a glance
(unaudited)
Investment breakdown
(%) as a percent of total investments
|
The bar graph above represents the composition of the Funds investments as of October 31, 2012 and October 31, 2011 and does not include derivatives such as
written options. The Fund is actively managed. As a result the composition of the Funds investments is subject to change at any time.
|
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|
|
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
7
|
|
Fund expenses
(unaudited)
Example
As a shareholder of the
Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees, service and/or distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested on May 1, 2012 and held for the six months ended October 31, 2012.
Actual expenses
The table below
titled Based on Actual Total Return provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid
over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled
Expenses Paid During the Period.
Hypothetical example for comparison purposes
The table below titled Based on Hypothetical Total Return provides information about hypothetical account values and hypothetical
expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Funds actual return. The hypothetical account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with
the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses
shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
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|
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|
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|
|
|
|
|
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|
|
Based on actual total return
1
|
|
|
|
|
Based on hypothetical total return
1
|
|
|
|
Actual
Total Return
Without
Sales
Charge
2
|
|
|
Beginning
Account
Value
|
|
|
Ending
Account
Value
|
|
|
Annualized
Expense
Ratio
|
|
|
Expenses
Paid
During
the
Period
3
|
|
|
|
|
|
|
Hypothetical
Annualized
Total Return
|
|
|
Beginning
Account
Value
|
|
|
Ending
Account
Value
|
|
|
Annualized
Expense
Ratio
|
|
|
Expenses
Paid
During
the
Period
3
|
|
Class 1
|
|
|
-1.41
|
%
|
|
$
|
1,000.00
|
|
|
|
985.90
|
|
|
|
1.06
|
%
|
|
$
|
5.29
|
|
|
|
|
Class 1
|
|
|
5.00
|
%
|
|
$
|
1,000.00
|
|
|
$
|
1,019.81
|
|
|
|
1.06
|
%
|
|
$
|
5.38
|
|
Class A
|
|
|
-1.57
|
|
|
|
1,000.00
|
|
|
|
984.30
|
|
|
|
1.31
|
|
|
|
6.53
|
|
|
|
|
Class A
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,018.55
|
|
|
|
1.31
|
|
|
|
6.65
|
|
Class B
|
|
|
-2.06
|
|
|
|
1,000.00
|
|
|
|
979.40
|
|
|
|
2.30
|
|
|
|
11.44
|
|
|
|
|
Class B
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,013.57
|
|
|
|
2.30
|
|
|
|
11.64
|
|
Class C
|
|
|
-1.92
|
|
|
|
1,000.00
|
|
|
|
980.80
|
|
|
|
2.08
|
|
|
|
10.36
|
|
|
|
|
Class C
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,014.68
|
|
|
|
2.08
|
|
|
|
10.53
|
|
Class FI
|
|
|
-1.57
|
|
|
|
1,000.00
|
|
|
|
984.30
|
|
|
|
1.34
|
|
|
|
6.68
|
|
|
|
|
Class FI
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,018.40
|
|
|
|
1.34
|
|
|
|
6.80
|
|
Class R
|
|
|
-1.68
|
|
|
|
1,000.00
|
|
|
|
983.20
|
|
|
|
1.55
|
|
|
|
7.73
|
|
|
|
|
Class R
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,017.34
|
|
|
|
1.55
|
|
|
|
7.86
|
|
Class I
|
|
|
-1.38
|
|
|
|
1,000.00
|
|
|
|
986.20
|
|
|
|
0.93
|
|
|
|
4.64
|
|
|
|
|
Class I
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,020.46
|
|
|
|
0.93
|
|
|
|
4.72
|
|
Class IS
|
|
|
-1.28
|
|
|
|
1,000.00
|
|
|
|
987.20
|
|
|
|
0.80
|
|
|
|
4.00
|
|
|
|
|
Class IS
|
|
|
5.00
|
|
|
|
1,000.00
|
|
|
|
1,021.11
|
|
|
|
0.80
|
|
|
|
4.06
|
|
1
|
For the six months ended October 31, 2012.
|
2
|
Assumes the reinvestment of all distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charge with
respect to Class A shares or the applicable contingent deferred sales charges (CDSC) with respect to Class B and Class C shares. Total return is not annualized, as it may not be representative of the total return for the year.
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.
Past performance is no guarantee of future results.
|
3
|
Expenses (net of compensating balance arrangements, fee waivers and/or expense reimbursements) are equal to each class respective
annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), then divided by 366.
|
|
|
|
8
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Fund performance
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average annual total returns
|
|
Without sales charges
1
|
|
Class 1
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
|
Class FI
|
|
|
Class R
|
|
|
Class I
|
|
|
Class IS
|
|
Twelve Months Ended 10/31/12
|
|
|
19.22
|
%
|
|
|
18.88
|
%
|
|
|
17.65
|
%
|
|
|
17.92
|
%
|
|
|
18.92
|
%
|
|
|
18.65
|
%
|
|
|
19.43
|
%
|
|
|
19.51
|
%
|
Five Years Ended 10/31/12
|
|
|
3.23
|
|
|
|
2.96
|
|
|
|
2.01
|
|
|
|
2.01
|
|
|
|
N/A
|
|
|
|
2.82
|
|
|
|
3.47
|
|
|
|
N/A
|
|
Ten Years Ended 10/31/2012
|
|
|
N/A
|
|
|
|
11.10
|
|
|
|
10.30
|
|
|
|
10.13
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Inception*through 10/31/2012
|
|
|
5.83
|
|
|
|
9.35
|
|
|
|
8.82
|
|
|
|
8.46
|
|
|
|
4.61
|
|
|
|
5.01
|
|
|
|
7.79
|
|
|
|
7.34
|
|
|
|
|
|
|
|
|
|
|
With sales charges
2
|
|
Class 1
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
|
Class FI
|
|
|
Class R
|
|
|
Class I
|
|
|
Class IS
|
|
Twelve Months Ended 10/31/12
|
|
|
19.22
|
%
|
|
|
12.03
|
%
|
|
|
12.65
|
%
|
|
|
16.92
|
%
|
|
|
18.92
|
%
|
|
|
18.65
|
%
|
|
|
19.43
|
%
|
|
|
19.51
|
%
|
Five Years Ended 10/31/12
|
|
|
3.23
|
|
|
|
1.75
|
|
|
|
1.82
|
|
|
|
2.01
|
|
|
|
N/A
|
|
|
|
2.82
|
|
|
|
3.47
|
|
|
|
N/A
|
|
Ten Years Ended 10/31/12
|
|
|
N/A
|
|
|
|
10.44
|
|
|
|
10.30
|
|
|
|
10.13
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Inception*through 10/31/12
|
|
|
4.19
|
|
|
|
8.90
|
|
|
|
8.82
|
|
|
|
8.46
|
|
|
|
4.61
|
|
|
|
5.01
|
|
|
|
7.79
|
|
|
|
7.34
|
|
|
|
|
|
|
Cumulative total returns
|
|
|
|
Without sales charges
1
|
|
|
|
Class 1 (Inception date of 3/2/07 through 10/31/12)
|
|
|
37.90
|
%
|
Class A (10/31/02 through 10/31/12)
|
|
|
186.39
|
|
Class B (10/31/02 through 10/31/12)
|
|
|
166.50
|
|
Class C (10/31/02 through 10/31/12)
|
|
|
162.56
|
|
Class FI (Inception date of 12/20/07 through 10/31/12)
|
|
|
24.54
|
|
Class R (Inception date of 12/28/06 through 10/31/12)
|
|
|
33.08
|
|
Class I (Inception date of 11/1/04 through 10/31/12)
|
|
|
82.22
|
|
Class IS (Inception date of 8/4/08 through 10/31/12)
|
|
|
35.08
|
|
All
figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost.
The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense
reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.
1
|
Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the
applicable sales charge with respect to Class A shares or the applicable CDSC with respect to Class B and C shares.
|
2
|
Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value. Includes the effect of the 8.50% initial
sales charge for periods prior to July 27, 2007 for Class 1 shares. Effective July 27, 2007, Class 1 shares were closed to all purchases and incoming exchanges. In addition, Class A shares reflect the deduction of the maximum initial
sales charge of 5.75%; Class B shares reflect the deduction of a 5.00% CDSC, which applies if shares are redeemed within one year from purchase payment and declines thereafter by 1.00% per year until no CDSC is incurred. Class C shares also
reflect the deduction of a 1.00% CDSC, which applies if shares are redeemed within one year from purchase payment.
|
*
|
Inception dates for Class 1, A, B, C, FI, R, I and IS shares are March 2, 2007, July 1, 1998, July 1, 1998, July 1, 1998,
December 20, 2007, December 28, 2006, November 1, 2004 and August 4, 2008, respectively.
|
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
9
|
|
Historical performance
Value of $10,000 invested in
Class A, B and C Shares of ClearBridge Small Cap
Growth Fund vs. Russell 2000 Growth Index October 2002 - October 2012
All
figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost.
The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense
reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.
|
Hypothetical illustration of $10,000 invested in Class A, B and C shares on October 31, 2002, assuming the deduction of the maximum initial sales charge of 5.75%
at the time of investment for Class A shares and the reinvestment of all distributions, including returns of capital, if any, at net asset value through October 31, 2012. The hypothetical illustration also assumes a $10,000 investment in the Russell
2000 Growth Index. The Russell 2000 Growth Index measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Index is unmanaged and is not subject to the same management
and trading expenses as a mutual fund. Please note that an investor cannot invest directly in an index. The performance of the Funds other classes may be greater or less than the Class A, B and C shares performance indicated on this
chart depending on whether greater or lesser sales charges and fees were incurred by shareholders investing in the other classes.
|
|
|
|
10
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Schedule of investments
October 31, 2012
ClearBridge Small Cap Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
Common Stocks
94.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary
14.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure 4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Bally Technologies Inc.
|
|
|
|
|
|
|
465,510
|
|
|
$
|
23,238,259
|
*
|
Penn National Gaming Inc.
|
|
|
|
|
|
|
377,380
|
|
|
|
15,257,474
|
*
|
Total Hotels, Restaurants & Leisure
|
|
|
|
|
|
|
|
|
|
|
38,495,733
|
|
Media 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Lions Gate Entertainment Corp.
|
|
|
|
|
|
|
1,237,580
|
|
|
|
20,642,834
|
*
|
Millennial Media Inc.
|
|
|
|
|
|
|
169,400
|
|
|
|
2,715,482
|
*
|
Total Media
|
|
|
|
|
|
|
|
|
|
|
23,358,316
|
|
Specialty Retail 7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance Auto Parts Inc.
|
|
|
|
|
|
|
174,370
|
|
|
|
12,369,808
|
|
Hibbett Sports Inc.
|
|
|
|
|
|
|
353,630
|
|
|
|
19,092,483
|
*
|
Jos. A. Bank Clothiers Inc.
|
|
|
|
|
|
|
319,242
|
|
|
|
14,937,333
|
*
|
Lumber Liquidators Holdings Inc.
|
|
|
|
|
|
|
330,662
|
|
|
|
18,457,553
|
*
|
Stage Stores Inc.
|
|
|
|
|
|
|
354,920
|
|
|
|
8,695,540
|
|
Total Specialty Retail
|
|
|
|
|
|
|
|
|
|
|
73,552,717
|
|
Total Consumer Discretionary
|
|
|
|
|
|
|
|
|
|
|
135,406,766
|
|
Consumer Staples
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Food & Staples Retailing 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Caseys General Stores Inc.
|
|
|
|
|
|
|
259,049
|
|
|
|
13,353,976
|
|
Susser Holdings Corp.
|
|
|
|
|
|
|
180,757
|
|
|
|
6,496,407
|
*
|
Total Consumer Staples
|
|
|
|
|
|
|
|
|
|
|
19,850,383
|
|
Energy
4.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Equipment & Services 4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Lufkin Industries Inc.
|
|
|
|
|
|
|
222,820
|
|
|
|
11,143,228
|
|
Newpark Resources Inc.
|
|
|
|
|
|
|
874,920
|
|
|
|
5,940,707
|
*
|
Oceaneering International Inc.
|
|
|
|
|
|
|
337,440
|
|
|
|
17,658,235
|
|
TETRA Technologies Inc.
|
|
|
|
|
|
|
796,370
|
|
|
|
4,260,580
|
*
|
Total Energy Equipment & Services
|
|
|
|
|
|
|
|
|
|
|
39,002,750
|
|
Oil, Gas & Consumable Fuels 0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Comstock Resources Inc.
|
|
|
|
|
|
|
354,710
|
|
|
|
6,072,635
|
*
|
Total Energy
|
|
|
|
|
|
|
|
|
|
|
45,075,385
|
|
Financials
8.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Markets 4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated Managers Group Inc.
|
|
|
|
|
|
|
124,055
|
|
|
|
15,692,957
|
*
|
Duff & Phelps Corp., Class A Shares
|
|
|
|
|
|
|
546,580
|
|
|
|
6,793,989
|
|
Financial Engines Inc.
|
|
|
|
|
|
|
517,260
|
|
|
|
12,419,413
|
*
|
WisdomTree Investments Inc.
|
|
|
|
|
|
|
539,510
|
|
|
|
3,458,259
|
*
|
Total Capital Markets
|
|
|
|
|
|
|
|
|
|
|
38,364,618
|
|
See Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
11
|
|
ClearBridge Small Cap Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
Commercial Banks 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Old National Bancorp
|
|
|
|
|
|
|
770,910
|
|
|
$
|
9,459,065
|
|
SVB Financial Group
|
|
|
|
|
|
|
186,710
|
|
|
|
10,565,919
|
*
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
20,024,984
|
|
Diversified Financial Services 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Primus Guaranty Ltd.
|
|
|
|
|
|
|
1,371,876
|
|
|
|
11,455,165
|
*
|
Real Estate Management & Development
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Jones Lang LaSalle Inc.
|
|
|
|
|
|
|
133,890
|
|
|
|
10,408,609
|
|
Total Financials
|
|
|
|
|
|
|
|
|
|
|
80,253,376
|
|
Health Care
14.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Biotechnology 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Acorda Therapeutics Inc.
|
|
|
|
|
|
|
393,464
|
|
|
|
9,423,463
|
*
|
ARIAD Pharmaceuticals Inc.
|
|
|
|
|
|
|
305,590
|
|
|
|
6,585,464
|
*
|
Total Biotechnology
|
|
|
|
|
|
|
|
|
|
|
16,008,927
|
|
Health Care Equipment & Supplies 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Insulet Corp.
|
|
|
|
|
|
|
249,620
|
|
|
|
5,294,440
|
*
|
Integra LifeSciences Holdings Corp.
|
|
|
|
|
|
|
270,396
|
|
|
|
10,342,647
|
*
|
Volcano Corp.
|
|
|
|
|
|
|
243,830
|
|
|
|
6,978,415
|
*
|
Total Health Care Equipment & Supplies
|
|
|
|
|
|
|
|
|
|
|
22,615,502
|
|
Health Care Providers & Services 5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretive Health Inc.
|
|
|
|
|
|
|
646,610
|
|
|
|
7,623,532
|
*
|
Hanger Orthopedic Group Inc.
|
|
|
|
|
|
|
457,793
|
|
|
|
11,605,053
|
*
|
Mednax Inc.
|
|
|
|
|
|
|
265,932
|
|
|
|
18,343,989
|
*
|
Owens & Minor Inc.
|
|
|
|
|
|
|
351,210
|
|
|
|
9,998,949
|
|
Total Health Care Providers & Services
|
|
|
|
|
|
|
|
|
|
|
47,571,523
|
|
Health Care Technology 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
athenahealth Inc.
|
|
|
|
|
|
|
178,310
|
|
|
|
11,463,550
|
*
|
Life Sciences Tools & Services 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Luminex Corp.
|
|
|
|
|
|
|
440,880
|
|
|
|
7,089,350
|
*
|
Mettler-Toledo International Inc.
|
|
|
|
|
|
|
99,010
|
|
|
|
16,769,324
|
*
|
Total Life Sciences Tools & Services
|
|
|
|
|
|
|
|
|
|
|
23,858,674
|
|
Pharmaceuticals 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Auxilium Pharmaceuticals Inc.
|
|
|
|
|
|
|
515,730
|
|
|
|
10,562,150
|
*
|
Endocyte Inc.
|
|
|
|
|
|
|
160,670
|
|
|
|
1,537,612
|
*
|
Total Pharmaceuticals
|
|
|
|
|
|
|
|
|
|
|
12,099,762
|
|
Total Health Care
|
|
|
|
|
|
|
|
|
|
|
133,617,938
|
|
Industrials
13.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Orbital Sciences Corp.
|
|
|
|
|
|
|
670,883
|
|
|
|
8,989,832
|
*
|
See Notes to Financial Statements.
|
|
|
12
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Schedule of investments (contd)
October 31, 2012
ClearBridge Small Cap Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
Commercial Services & Supplies 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Copart Inc.
|
|
|
|
|
|
|
343,300
|
|
|
$
|
9,883,607
|
*
|
Corrections Corporation of America
|
|
|
|
|
|
|
146,030
|
|
|
|
4,913,910
|
|
Total Commercial Services & Supplies
|
|
|
|
|
|
|
|
|
|
|
14,797,517
|
|
Construction & Engineering 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Quanta Services Inc.
|
|
|
|
|
|
|
625,440
|
|
|
|
16,217,659
|
*
|
Electrical Equipment 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Thermon Group Holdings Inc.
|
|
|
|
|
|
|
115,200
|
|
|
|
2,861,568
|
*
|
Machinery 4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Chart Industries Inc.
|
|
|
|
|
|
|
174,000
|
|
|
|
12,317,460
|
*
|
IDEX Corp.
|
|
|
|
|
|
|
553,330
|
|
|
|
23,533,125
|
|
Tennant Co.
|
|
|
|
|
|
|
219,430
|
|
|
|
8,211,070
|
|
Total Machinery
|
|
|
|
|
|
|
|
|
|
|
44,061,655
|
|
Trading Companies & Distributors 4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
H&E Equipment Services Inc.
|
|
|
|
|
|
|
387,470
|
|
|
|
5,897,293
|
|
MSC Industrial Direct Co. Inc., Class A Shares
|
|
|
|
|
|
|
264,830
|
|
|
|
19,756,318
|
|
United Rentals Inc.
|
|
|
|
|
|
|
394,490
|
|
|
|
16,039,964
|
*
|
Total Trading Companies & Distributors
|
|
|
|
|
|
|
|
|
|
|
41,693,575
|
|
Total Industrials
|
|
|
|
|
|
|
|
|
|
|
128,621,806
|
|
Information Technology
29.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications Equipment 0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Comverse Technology Inc.
|
|
|
|
|
|
|
934,871
|
|
|
|
6,160,800
|
*
|
Palo Alto Networks Inc.
|
|
|
|
|
|
|
34,000
|
|
|
|
1,869,320
|
*
|
Total Communications Equipment
|
|
|
|
|
|
|
|
|
|
|
8,030,120
|
|
Electronic Equipment, Instruments & Components
1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
FEI Co.
|
|
|
|
|
|
|
205,480
|
|
|
|
11,311,674
|
|
Internet Software & Services 7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Active Network Inc.
|
|
|
|
|
|
|
421,170
|
|
|
|
3,731,566
|
*
|
Bazaarvoice Inc.
|
|
|
|
|
|
|
162,310
|
|
|
|
2,071,076
|
*
|
comScore Inc.
|
|
|
|
|
|
|
484,698
|
|
|
|
6,868,171
|
*
|
Cornerstone OnDemand Inc.
|
|
|
|
|
|
|
341,270
|
|
|
|
9,552,147
|
*
|
Dice Holdings Inc.
|
|
|
|
|
|
|
545,010
|
|
|
|
4,812,438
|
*
|
Limelight Networks Inc.
|
|
|
|
|
|
|
450,770
|
|
|
|
951,125
|
*
|
LivePerson Inc.
|
|
|
|
|
|
|
754,860
|
|
|
|
11,843,753
|
*
|
Mercadolibre Inc.
|
|
|
|
|
|
|
227,577
|
|
|
|
19,109,641
|
|
Monster Worldwide Inc.
|
|
|
|
|
|
|
907,780
|
|
|
|
5,646,392
|
*
|
Responsys Inc.
|
|
|
|
|
|
|
608,260
|
|
|
|
5,437,844
|
*
|
Trulia Inc.
|
|
|
|
|
|
|
105,110
|
|
|
|
2,370,230
|
*
|
XO Group Inc.
|
|
|
|
|
|
|
328,420
|
|
|
|
2,643,781
|
*
|
Total Internet Software & Services
|
|
|
|
|
|
|
|
|
|
|
75,038,164
|
|
See Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
13
|
|
ClearBridge Small Cap Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
IT Services 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
MAXIMUS, Inc.
|
|
|
|
|
|
|
109,200
|
|
|
$
|
6,025,656
|
|
ServiceSource International Inc.
|
|
|
|
|
|
|
1,180,007
|
|
|
|
10,631,863
|
*
|
Total IT Services
|
|
|
|
|
|
|
|
|
|
|
16,657,519
|
|
Semiconductors & Semiconductor Equipment
4.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
CEVA Inc.
|
|
|
|
|
|
|
315,340
|
|
|
|
4,777,401
|
*
|
Cymer Inc.
|
|
|
|
|
|
|
188,060
|
|
|
|
14,986,502
|
*
|
Integrated Device Technology Inc.
|
|
|
|
|
|
|
1,004,100
|
|
|
|
5,462,304
|
*
|
LSI Corp.
|
|
|
|
|
|
|
1,733,512
|
|
|
|
11,874,557
|
*
|
Monolithic Power Systems
|
|
|
|
|
|
|
175,000
|
|
|
|
3,400,250
|
*
|
Total Semiconductors & Semiconductor
Equipment
|
|
|
|
|
|
|
|
|
|
|
40,501,014
|
|
Software 13.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Aspen Technology Inc.
|
|
|
|
|
|
|
770,590
|
|
|
|
19,095,220
|
*
|
Eloqua Inc.
|
|
|
|
|
|
|
212,610
|
|
|
|
4,960,191
|
*
|
Fortinet Inc.
|
|
|
|
|
|
|
703,770
|
|
|
|
13,632,025
|
*
|
Imperva Inc.
|
|
|
|
|
|
|
122,900
|
|
|
|
3,875,037
|
*
|
Jive Software Inc.
|
|
|
|
|
|
|
100,160
|
|
|
|
1,121,792
|
*
|
MICROS Systems Inc.
|
|
|
|
|
|
|
235,984
|
|
|
|
10,711,314
|
*
|
Monotype Imaging Holdings Inc.
|
|
|
|
|
|
|
408,850
|
|
|
|
6,259,493
|
|
Qualys Inc.
|
|
|
|
|
|
|
257,700
|
|
|
|
3,344,946
|
*
|
ServiceNow Inc.
|
|
|
|
|
|
|
129,200
|
|
|
|
3,959,980
|
*
|
Solarwinds Inc.
|
|
|
|
|
|
|
485,670
|
|
|
|
24,570,045
|
*
|
Sourcefire Inc.
|
|
|
|
|
|
|
509,968
|
|
|
|
21,821,531
|
*
|
Verint Systems Inc.
|
|
|
|
|
|
|
418,895
|
|
|
|
11,423,267
|
*
|
Total Software
|
|
|
|
|
|
|
|
|
|
|
124,774,841
|
|
Total Information Technology
|
|
|
|
|
|
|
|
|
|
|
276,313,332
|
|
Materials
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemicals 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Kraton Performance Polymers Inc.
|
|
|
|
|
|
|
175,720
|
|
|
|
3,834,210
|
*
|
Rockwood Holdings Inc.
|
|
|
|
|
|
|
389,314
|
|
|
|
17,869,513
|
|
Senomyx Inc.
|
|
|
|
|
|
|
621,950
|
|
|
|
1,082,193
|
*
|
Total Chemicals
|
|
|
|
|
|
|
|
|
|
|
22,785,916
|
|
Metals & Mining 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Compass Minerals International Inc.
|
|
|
|
|
|
|
144,516
|
|
|
|
11,395,087
|
|
Total Materials
|
|
|
|
|
|
|
|
|
|
|
34,181,003
|
|
Telecommunication Services
2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
SBA Communications Corp., Class A Shares
|
|
|
|
|
|
|
366,710
|
|
|
|
24,433,887
|
*
|
See Notes to Financial Statements.
|
|
|
14
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Schedule of investments (contd)
October 31, 2012
ClearBridge Small Cap Growth Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
Utilities
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Utilities 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITC Holdings Corp.
|
|
|
|
|
|
|
|
|
244,080
|
|
|
$
|
19,433,650
|
|
Total Investments before Short-term Investments (Cost
$653,611,837)
|
|
|
|
897,187,526
|
|
|
|
|
|
|
|
|
Rate
|
|
|
Maturity
Date
|
|
Face
Amount
|
|
|
|
|
Short-term Investments
6.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Agreements 6.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest in $552,780,000 joint tri-party repurchase agreement dated 10/31/12 with Deutsche Bank
Securities Inc.; Proceeds at maturity $57,539,511;
(Fully collateralized by various U.S. government agency obligations, 0.000% to 6.250% due 11/23/12 to 11/2/40; Market value
$58,689,804)
(Cost $57,539,000)
|
|
|
0.320
|
%
|
|
11/1/12
|
|
$
|
57,539,000
|
|
|
|
57,539,000
|
|
Total Investments 100.3% (Cost $711,150,837#)
|
|
|
|
|
|
|
|
|
|
954,726,526
|
|
Liabilities in Excess of Other Assets (0.3)%
|
|
|
|
|
|
|
|
|
|
(2,665,834
|
)
|
Total Net Assets 100.0%
|
|
|
|
|
|
|
|
|
$
|
952,060,692
|
|
*
|
Non-income producing security.
|
#
|
Aggregate cost for federal income tax purposes is $714,772,402.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule Of Written Options
|
|
|
|
|
Security
|
|
Expiration
Date
|
|
|
Strike
Price
|
|
|
Contracts
|
|
|
Value
|
|
Advance Auto Parts Inc., Call
(Premiums received $22,126)
|
|
|
11/17/12
|
|
|
$
|
75.00
|
|
|
|
299
|
|
|
$
|
13,455
|
|
See Notes to Financial
Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
15
|
|
Statement of assets and liabilities
October 31, 2012
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Investments, at value (Cost $711,150,837)
|
|
$
|
954,726,526
|
|
Cash
|
|
|
314,772
|
|
Receivable for Fund shares sold
|
|
|
3,382,197
|
|
Receivable for securities sold
|
|
|
75,551
|
|
Dividends and interest receivable
|
|
|
43,254
|
|
Prepaid expenses
|
|
|
78,752
|
|
Total Assets
|
|
|
958,621,052
|
|
|
|
Liabilities:
|
|
|
|
|
Payable for securities purchased
|
|
|
3,920,619
|
|
Payable for Fund shares repurchased
|
|
|
1,181,317
|
|
Investment management fee payable
|
|
|
599,698
|
|
Service and/or distribution fees payable
|
|
|
176,982
|
|
Written options, at value (premiums received $22,126)
|
|
|
13,455
|
|
Accrued expenses
|
|
|
668,289
|
|
Total Liabilities
|
|
|
6,560,360
|
|
Total Net Assets
|
|
$
|
952,060,692
|
|
|
|
Net
Assets:
|
|
|
|
|
Par value (Note 6)
|
|
$
|
475
|
|
Paid-in capital in excess of par value
|
|
|
695,479,960
|
|
Accumulated net investment loss
|
|
|
(6,334,698)
|
|
Accumulated net realized gain on investments and written options
|
|
|
19,330,595
|
|
Net unrealized appreciation on investments and written options
|
|
|
243,584,360
|
|
Total Net Assets
|
|
$
|
952,060,692
|
|
See Notes to Financial Statements.
|
|
|
16
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Statement of assets and liabilities (contd)
October 31, 2012
|
|
|
|
|
|
|
Shares
Outstanding:
|
|
|
|
|
Class 1
|
|
|
164,385
|
|
Class A
|
|
|
24,699,348
|
|
Class B
|
|
|
1,383,359
|
|
Class C
|
|
|
2,668,507
|
|
Class FI
|
|
|
282,281
|
|
Class R
|
|
|
1,187,061
|
|
Class I
|
|
|
9,354,801
|
|
Class IS
|
|
|
7,710,998
|
|
|
|
Net Asset
Value:
|
|
|
|
|
Class 1 (and redemption price)
|
|
|
$20.28
|
|
Class A (and redemption price)
|
|
|
$20.02
|
|
Class B*
|
|
|
$17.13
|
|
Class C*
|
|
|
$17.37
|
|
Class FI (and redemption price)
|
|
|
$20.11
|
|
Class R (and redemption price)
|
|
|
$19.85
|
|
Class I (and redemption price)
|
|
|
$20.78
|
|
Class IS (and redemption price)
|
|
|
$20.83
|
|
Maximum Public Offering
Price Per Share:
|
|
|
|
|
Class A (based on maximum initial sales charge of 5.75%)
|
|
|
$21.24
|
|
*
|
Redemption price per share is NAV of Class B and Class C shares by a 5.00% and 1.00% CDSC, respectively, if shares are redeemed within one year from purchase
payment (See Note 2).
|
See
Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
17
|
|
Statement of operations
For the Year Ended October 31, 2012
|
|
|
|
|
|
|
Investment
Income:
|
|
|
|
|
Dividends
|
|
$
|
5,812,291
|
|
Interest
|
|
|
96,040
|
|
Total Investment Income
|
|
|
5,908,331
|
|
|
|
Expenses:
|
|
|
|
|
Investment management fee (Note 2)
|
|
|
6,527,081
|
|
Service and/or distribution fees (Notes 2 and 5)
|
|
|
2,081,255
|
|
Transfer agent fees (Note 5)
|
|
|
1,847,066
|
|
Registration fees
|
|
|
117,812
|
|
Fund accounting fees
|
|
|
79,782
|
|
Trustees fees
|
|
|
66,200
|
|
Shareholder reports
|
|
|
47,343
|
|
Audit and tax
|
|
|
39,902
|
|
Legal fees
|
|
|
29,850
|
|
Insurance
|
|
|
18,885
|
|
Custody fees
|
|
|
5,770
|
|
Miscellaneous expenses
|
|
|
10,639
|
|
Total Expenses
|
|
|
10,871,585
|
|
Less: Fee waivers and/or expense reimbursements (Notes 2 and 5)
|
|
|
(14,625)
|
|
Net Expenses
|
|
|
10,856,960
|
|
Net Investment Loss
|
|
|
(4,948,629)
|
|
|
|
Realized and Unrealized
Gain (Loss) on Investments and Written Options (Notes 1, 3 and 4):
|
|
|
|
|
Net Realized Gain From:
|
|
|
|
|
Investment transactions
|
|
|
40,266,457
|
|
Written options
|
|
|
1,084,767
|
|
Net Realized Gain
|
|
|
41,351,224
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
|
|
|
Investments
|
|
|
107,816,577
|
|
Written options
|
|
|
(17,357)
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
|
107,799,220
|
|
Net Gain on Investments and Written Options
|
|
|
149,150,444
|
|
Increase in Net Assets from Operations
|
|
$
|
144,201,815
|
|
See Notes to Financial
Statements.
|
|
|
18
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Statements of changes in net assets
|
|
|
|
|
|
|
|
|
For the Years Ended October 31,
|
|
2012
|
|
|
2011
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(4,948,629)
|
|
|
$
|
(8,280,892)
|
|
Net realized gain
|
|
|
41,351,224
|
|
|
|
50,768,203
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
107,799,220
|
|
|
|
15,292,584
|
|
Increase in Net Assets From Operations
|
|
|
144,201,815
|
|
|
|
57,779,895
|
|
|
|
|
Fund Share Transactions
(Note 6):
|
|
|
|
|
|
|
|
|
Net proceeds from sale of shares
|
|
|
289,316,605
|
|
|
|
188,773,186
|
|
Cost of shares repurchased
|
|
|
(269,129,676)
|
|
|
|
(246,833,514)
|
|
Increase (Decrease) in Net Assets From Fund Share
Transactions
|
|
|
20,186,929
|
|
|
|
(58,060,328)
|
|
Increase (Decrease) in Net Assets
|
|
|
164,388,744
|
|
|
|
(280,433)
|
|
|
|
|
Net
Assets:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
787,671,948
|
|
|
|
787,952,381
|
|
End of year*
|
|
$
|
952,060,692
|
|
|
$
|
787,671,948
|
|
* Includes accumulated net investment loss of:
|
|
|
$(6,334,698)
|
|
|
|
$(1,386,069)
|
|
See Notes to Financial
Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
19
|
|
Financial highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class 1 Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
4
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$17.01
|
|
|
|
$15.89
|
|
|
|
$12.31
|
|
|
|
$9.66
|
|
|
|
$16.75
|
|
|
|
$15.79
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.08)
|
|
|
|
(0.14)
|
|
|
|
(0.11)
|
|
|
|
(0.03)
|
|
|
|
(0.06)
|
|
|
|
(0.05)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.35
|
|
|
|
1.26
|
|
|
|
3.68
|
|
|
|
2.68
|
|
|
|
(6.58)
|
|
|
|
1.75
|
|
Proceeds from settlement of a regulatory matter
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
3.27
|
|
|
|
1.12
|
|
|
|
3.58
|
|
|
|
2.65
|
|
|
|
(6.64)
|
|
|
|
1.70
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.74)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.74)
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$20.28
|
|
|
|
$17.01
|
|
|
|
$15.89
|
|
|
|
$12.31
|
|
|
|
$9.66
|
|
|
|
$16.75
|
|
Total return
5
|
|
|
19.22
|
%
|
|
|
7.05
|
%
|
|
|
29.08
|
%
6
|
|
|
27.43
|
%
|
|
|
(40.75)
|
%
|
|
|
10.85
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$3,333
|
|
|
|
$3,260
|
|
|
|
$3,466
|
|
|
|
$2,993
|
|
|
|
$2,713
|
|
|
|
$5,381
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.37
|
%
|
|
|
1.40
|
%
|
|
|
1.50
|
%
|
|
|
1.42
|
%
7
|
|
|
1.34
|
%
|
|
|
1.70
|
%
7
|
Net expenses
8,9,10
|
|
|
1.07
|
|
|
|
1.11
|
|
|
|
1.14
|
|
|
|
1.11
|
7
|
|
|
1.05
|
|
|
|
1.12
|
7
|
Net investment loss
|
|
|
(0.41)
|
|
|
|
(0.80)
|
|
|
|
(0.77)
|
|
|
|
(0.37)
|
7
|
|
|
(0.41)
|
|
|
|
(0.34)
|
7
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
For the period March 2, 2007 (inception date) to December 31, 2007.
|
5
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
6
|
The total return reflects a payment received due to the settlement of a regulatory matter. Absent this payment, the total return would have been
29.00%. Class 1 received $2,285 related to this distribution.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
9
|
As a result of an expense limitation arrangement, the ratio of expenses, other than brokerage, interest, taxes, extraordinary expenses and
acquired fund fees and expenses, to average net assets of Class 1 shares did not and are not expected to exceed the total annual operating expenses of Class A shares less the 12b-1 differential of 0.25% through December 31, 2012. Effective
January 1, 2013, the total annual operating expenses for Class 1 Shares are not expected to exceed those for Class A shares. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees
consent.
|
10
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
See Notes to Financial Statements.
|
|
|
20
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class A Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
3
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$16.84
|
|
|
|
$15.77
|
|
|
|
$12.25
|
|
|
|
$9.64
|
|
|
|
$16.75
|
|
|
|
$16.11
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.12)
|
|
|
|
(0.18)
|
|
|
|
(0.14)
|
|
|
|
(0.06)
|
|
|
|
(0.09)
|
|
|
|
(0.06)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.30
|
|
|
|
1.25
|
|
|
|
3.66
|
|
|
|
2.67
|
|
|
|
(6.57)
|
|
|
|
1.59
|
|
Total income (loss) from operations
|
|
|
3.18
|
|
|
|
1.07
|
|
|
|
3.52
|
|
|
|
2.61
|
|
|
|
(6.66)
|
|
|
|
1.53
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$20.02
|
|
|
|
$16.84
|
|
|
|
$15.77
|
|
|
|
$12.25
|
|
|
|
$9.64
|
|
|
|
$16.75
|
|
Total return
4
|
|
|
18.88
|
%
|
|
|
6.79
|
%
|
|
|
28.73
|
%
|
|
|
27.07
|
%
|
|
|
(40.87)
|
%
|
|
|
9.68
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$494,454
|
|
|
|
$447,192
|
|
|
|
$477,667
|
|
|
|
$405,700
|
|
|
|
$322,359
|
|
|
|
$582,025
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.32
|
%
|
|
|
1.36
|
%
|
|
|
1.39
|
%
|
|
|
1.39
|
%
5
|
|
|
1.37
|
%
|
|
|
1.29
|
%
|
Net expenses
6
|
|
|
1.32
|
|
|
|
1.36
|
|
|
|
1.39
|
|
|
|
1.39
|
5
|
|
|
1.31
|
7,8
|
|
|
1.13
|
7,8
|
Net investment loss
|
|
|
(0.65)
|
|
|
|
(1.04)
|
|
|
|
(1.02)
|
|
|
|
(0.65)
|
5
|
|
|
(0.66)
|
|
|
|
(0.35)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
Performance figures, exclusive of sales charges, may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the
absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
6
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
7
|
Reflects fee waivers and/or expense reimbursements.
|
8
|
Effective as of the close of business on March 2, 2007, as a result of a contractual expense limitation, the ratio of expenses, other than
brokerage, taxes and extraordinary expenses, to average net assets of Class A shares would not exceed 1.12% until May 1, 2008.
|
See Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class B Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
3
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$14.56
|
|
|
|
$13.77
|
|
|
|
$10.76
|
|
|
|
$8.55
|
|
|
|
$15.04
|
|
|
|
$14.68
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.28)
|
|
|
|
(0.31)
|
|
|
|
(0.25)
|
|
|
|
(0.14)
|
|
|
|
(0.20)
|
|
|
|
(0.19)
|
|
Net realized and unrealized gain (loss)
|
|
|
2.85
|
|
|
|
1.10
|
|
|
|
3.20
|
|
|
|
2.35
|
|
|
|
(5.84)
|
|
|
|
1.44
|
|
Proceeds from settlement of a regulatory matter
|
|
|
|
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
2.57
|
|
|
|
0.79
|
|
|
|
3.01
|
|
|
|
2.21
|
|
|
|
(6.04)
|
|
|
|
1.25
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$17.13
|
|
|
|
$14.56
|
|
|
|
$13.77
|
|
|
|
$10.76
|
|
|
|
$8.55
|
|
|
|
$15.04
|
|
Total return
4
|
|
|
17.65
|
%
|
|
|
5.74
|
%
|
|
|
27.97
|
%
5
|
|
|
25.85
|
%
|
|
|
(41.40)
|
%
|
|
|
8.71
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$23,693
|
|
|
|
$27,660
|
|
|
|
$34,619
|
|
|
|
$34,822
|
|
|
|
$35,252
|
|
|
|
$81,191
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
2.34
|
%
|
|
|
2.34
|
%
|
|
|
2.41
|
%
|
|
|
2.53
|
%
6
|
|
|
2.35
|
%
|
|
|
2.32
|
%
|
Net expenses
7
|
|
|
2.34
|
|
|
|
2.34
|
|
|
|
2.41
|
|
|
|
2.53
|
6
|
|
|
2.25
|
8,9
|
|
|
2.05
|
8,9
|
Net investment loss
|
|
|
(1.70)
|
|
|
|
(2.03)
|
|
|
|
(2.04)
|
|
|
|
(1.77)
|
6
|
|
|
(1.61)
|
|
|
|
(1.27)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
Performance figures, exclusive of CDSC, may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence
of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
5
|
The total return reflects a payment received due to the settlement of a regulatory matter. Absent this payment, the total return would have been
27.42%. Class B received $160,429 related to this distribution.
|
7
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
9
|
Effective as of the close of business on March 2, 2007, as a result of a contractual expense limitation, the ratio of expenses, other than
brokerage, taxes and extraordinary expenses, to average net assets of Class B shares would not exceed 2.26% until May 1, 2008.
|
See Notes to Financial Statements.
|
|
|
22
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class C Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
3
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$14.73
|
|
|
|
$13.92
|
|
|
|
$10.90
|
|
|
|
$8.64
|
|
|
|
$15.24
|
|
|
|
$14.84
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.25)
|
|
|
|
(0.30)
|
|
|
|
(0.24)
|
|
|
|
(0.12)
|
|
|
|
(0.22)
|
|
|
|
(0.18)
|
|
Net realized and unrealized gain (loss)
|
|
|
2.89
|
|
|
|
1.11
|
|
|
|
3.25
|
|
|
|
2.38
|
|
|
|
(5.93)
|
|
|
|
1.47
|
|
Proceeds from settlement of a regulatory matter
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
2.64
|
|
|
|
0.81
|
|
|
|
3.02
|
|
|
|
2.26
|
|
|
|
(6.15)
|
|
|
|
1.29
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$17.37
|
|
|
|
$14.73
|
|
|
|
$13.92
|
|
|
|
$10.90
|
|
|
|
$8.64
|
|
|
|
$15.24
|
|
Total return
4
|
|
|
17.92
|
%
|
|
|
5.82
|
%
|
|
|
27.71
|
%
5
|
|
|
26.16
|
%
|
|
|
(41.58)
|
%
|
|
|
8.89
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$46,347
|
|
|
|
$50,760
|
|
|
|
$56,585
|
|
|
|
$54,152
|
|
|
|
$48,591
|
|
|
|
$96,387
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
2.17
|
%
|
|
|
2.25
|
%
|
|
|
2.30
|
%
|
|
|
2.30
|
%
6
|
|
|
2.37
|
%
|
|
|
2.02
|
%
|
Net expenses
7
|
|
|
2.17
|
|
|
|
2.25
|
|
|
|
2.30
|
|
|
|
2.30
|
6
|
|
|
2.33
|
8,9
|
|
|
1.92
|
8,9
|
Net investment loss
|
|
|
(1.53)
|
|
|
|
(1.94)
|
|
|
|
(1.92)
|
|
|
|
(1.55)
|
6
|
|
|
(1.69)
|
|
|
|
(1.13)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
Performance figures, exclusive of CDSC, may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence
of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
5
|
The total return reflects a payment received due to the settlement of a regulatory matter. Absent this payment, the total return would have been
27.61%. Class C received $66,966 related to this distribution.
|
7
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
9
|
Effective as of the close of business on March 2, 2007, as a result of a contractual expense limitation, the ratio of expenses, other than
brokerage, taxes and extraordinary expenses, to average net assets of Class C shares would not exceed 1.95% until May 1, 2008.
|
See Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class FI Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
4
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$16.91
|
|
|
|
$15.84
|
|
|
|
$12.30
|
|
|
|
$9.66
|
|
|
|
$16.75
|
|
|
|
$16.59
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
(0.12)
|
|
|
|
(0.18)
|
|
|
|
(0.13)
|
|
|
|
(0.05)
|
|
|
|
(0.07)
|
|
|
|
0.00
|
5
|
Net realized and unrealized gain (loss)
|
|
|
3.32
|
|
|
|
1.25
|
|
|
|
3.67
|
|
|
|
2.69
|
|
|
|
(6.57)
|
|
|
|
0.16
|
|
Total income (loss) from operations
|
|
|
3.20
|
|
|
|
1.07
|
|
|
|
3.54
|
|
|
|
2.64
|
|
|
|
(6.64)
|
|
|
|
0.16
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$20.11
|
|
|
|
$16.91
|
|
|
|
$15.84
|
|
|
|
$12.30
|
|
|
|
$9.66
|
|
|
|
$16.75
|
|
Total return
6
|
|
|
18.92
|
%
|
|
|
6.76
|
%
|
|
|
28.78
|
%
|
|
|
27.33
|
%
|
|
|
(40.75)
|
%
|
|
|
0.96
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$5,675
|
|
|
|
$2,933
|
|
|
|
$1,785
|
|
|
|
$868
|
|
|
|
$376
|
|
|
|
$122
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.40
|
%
|
|
|
1.50
|
%
|
|
|
1.44
|
%
|
|
|
1.35
|
%
7
|
|
|
1.20
|
%
|
|
|
1.07
|
%
7
|
Net expenses
8
|
|
|
1.34
|
9,10
|
|
|
1.34
|
9,10
|
|
|
1.34
|
9,10
|
|
|
1.22
|
7,9,10
|
|
|
1.20
|
|
|
|
1.07
|
7
|
Net investment income (loss)
|
|
|
(0.64)
|
|
|
|
(1.02)
|
|
|
|
(0.95)
|
|
|
|
(0.54)
|
7
|
|
|
(0.55)
|
|
|
|
1.63
|
7
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
For the period December 20, 2007 (inception date) to December 31, 2007.
|
5
|
Amount represents less than $0.01 per share.
|
6
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
8
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
9
|
As a result of an expense limitation arrangement, effective September 18, 2009, the ratio of expenses, other than brokerage, interest,
taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class FI shares did not exceed 1.35%. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of
Trustees consent.
|
10
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
24
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class R Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
3
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$16.73
|
|
|
|
$15.69
|
|
|
|
$12.21
|
|
|
|
$9.61
|
|
|
|
$16.72
|
|
|
|
$16.11
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.15)
|
|
|
|
(0.21)
|
|
|
|
(0.15)
|
|
|
|
(0.07)
|
|
|
|
(0.11)
|
|
|
|
(0.05)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.27
|
|
|
|
1.25
|
|
|
|
3.63
|
|
|
|
2.67
|
|
|
|
(6.55)
|
|
|
|
1.55
|
|
Total income (loss) from operations
|
|
|
3.12
|
|
|
|
1.04
|
|
|
|
3.48
|
|
|
|
2.60
|
|
|
|
(6.66)
|
|
|
|
1.50
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$19.85
|
|
|
|
$16.73
|
|
|
|
$15.69
|
|
|
|
$12.21
|
|
|
|
$9.61
|
|
|
|
$16.72
|
|
Total return
4
|
|
|
18.65
|
%
|
|
|
6.63
|
%
|
|
|
28.50
|
%
|
|
|
27.06
|
%
|
|
|
(40.94)
|
%
|
|
|
9.50
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$23,562
|
|
|
|
$12,921
|
|
|
|
$10,759
|
|
|
|
$6,061
|
|
|
|
$2,112
|
|
|
|
$827
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.54
|
%
|
|
|
1.56
|
%
|
|
|
1.50
|
%
|
|
|
1.54
|
%
5
|
|
|
1.47
|
%
|
|
|
1.34
|
%
|
Net expenses
6
|
|
|
1.53
|
7,8
|
|
|
1.52
|
7,8
|
|
|
1.50
|
7
|
|
|
1.49
|
5,7,8
|
|
|
1.47
|
|
|
|
1.34
|
|
Net investment loss
|
|
|
(0.80)
|
|
|
|
(1.21)
|
|
|
|
(1.11)
|
|
|
|
(0.82)
|
5
|
|
|
(0.82)
|
|
|
|
(0.30)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
6
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
7
|
As a result of an expense limitation arrangement, effective September 18, 2009, the ratio of expenses, other than brokerage, interest,
taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class R shares did not exceed 1.60%. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of
Trustees consent.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class I Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
2007
3,4
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$17.40
|
|
|
|
$16.21
|
|
|
|
$12.53
|
|
|
|
$9.82
|
|
|
|
$16.96
|
|
|
|
$16.25
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
(0.03)
|
|
|
|
(0.10)
|
|
|
|
(0.07)
|
|
|
|
(0.02)
|
|
|
|
(0.02)
|
|
|
|
0.00
|
5
|
Net realized and unrealized gain (loss)
|
|
|
3.41
|
|
|
|
1.29
|
|
|
|
3.75
|
|
|
|
2.73
|
|
|
|
(6.67)
|
|
|
|
1.60
|
|
Total income (loss) from operations
|
|
|
3.38
|
|
|
|
1.19
|
|
|
|
3.68
|
|
|
|
2.71
|
|
|
|
(6.69)
|
|
|
|
1.60
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
Total distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.45)
|
|
|
|
(0.89)
|
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$20.78
|
|
|
|
$17.40
|
|
|
|
$16.21
|
|
|
|
$12.53
|
|
|
|
$9.82
|
|
|
|
$16.96
|
|
Total return
6
|
|
|
19.43
|
%
|
|
|
7.34
|
%
|
|
|
29.37
|
%
|
|
|
27.60
|
%
|
|
|
(40.53)
|
%
|
|
|
10.03
|
%
|
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$194,392
|
|
|
|
$78,316
|
|
|
|
$35,391
|
|
|
|
$21,945
|
|
|
|
$12,252
|
|
|
|
$270,164
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
0.90
|
%
|
|
|
0.85
|
%
|
|
|
0.88
|
%
|
|
|
0.89
|
%
7
|
|
|
0.80
|
%
|
|
|
0.79
|
%
|
Net expenses
8
|
|
|
0.90
|
9
|
|
|
0.85
|
9
|
|
|
0.88
|
9
|
|
|
0.85
|
7,9,10
|
|
|
0.80
|
|
|
|
0.79
|
|
Net investment income (loss)
|
|
|
(0.14)
|
|
|
|
(0.54)
|
|
|
|
(0.49)
|
|
|
|
(0.16)
|
7
|
|
|
(0.15)
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
|
|
78
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the year ended December 31.
|
4
|
As of March 2, 2007, Class O shares were converted to Class I shares.
|
5
|
Amount represents less than $0.01 per share.
|
6
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
8
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
9
|
As a result of an expense limitation arrangement, effective September 18, 2009, the ratio of expenses, other than brokerage, interest,
taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class I shares did not exceed 1.05%. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of
Trustees consent.
|
10
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
26
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless
otherwise noted:
|
|
Class IS Shares
1
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2
|
|
|
2008
3
|
|
|
|
|
|
|
|
Net asset value, beginning
of year
|
|
|
$17.43
|
|
|
|
$16.23
|
|
|
|
$12.54
|
|
|
|
$9.82
|
|
|
|
$15.42
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.03)
|
|
|
|
(0.09)
|
|
|
|
(0.06)
|
|
|
|
(0.01)
|
|
|
|
(0.01)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.43
|
|
|
|
1.29
|
|
|
|
3.75
|
|
|
|
2.73
|
|
|
|
(5.59)
|
|
Total income (loss) from operations
|
|
|
3.40
|
|
|
|
1.20
|
|
|
|
3.69
|
|
|
|
2.72
|
|
|
|
(5.60)
|
|
|
|
|
|
|
|
Net asset value, end of
year
|
|
|
$20.83
|
|
|
|
$17.43
|
|
|
|
$16.23
|
|
|
|
$12.54
|
|
|
|
$9.82
|
|
Total return
4
|
|
|
19.51
|
%
|
|
|
7.39
|
%
|
|
|
29.43
|
%
|
|
|
27.70
|
%
|
|
|
(36.32)
|
%
|
|
|
|
|
|
|
Net assets, end of year
(000s)
|
|
|
$160,605
|
|
|
|
$164,630
|
|
|
|
$167,680
|
|
|
|
$154,843
|
|
|
|
$128,933
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
0.80
|
%
|
|
|
0.81
|
%
|
|
|
0.81
|
%
|
|
|
0.81
|
%
5
|
|
|
0.81
|
%
5
|
Net expenses
6
|
|
|
0.80
|
7
|
|
|
0.81
|
7
|
|
|
0.81
|
7
|
|
|
0.81
|
5,7
|
|
|
0.81
|
5
|
Net investment loss
|
|
|
(0.14)
|
|
|
|
(0.50)
|
|
|
|
(0.44)
|
|
|
|
(0.06)
|
5
|
|
|
(0.18)
|
5
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
14
|
%
|
|
|
24
|
%
|
|
|
33
|
%
|
|
|
25
|
%
|
|
|
41
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period January 1, 2009 through October 31, 2009.
|
3
|
For the period August 4, 2008 (inception date) to December 31, 2008.
|
4
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating
balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
6
|
The impact of compensasting balance arrangements, if any, was less than 0.01%.
|
7
|
As a result of an expense limitation arrangement, effective September 18, 2009, the total annual operating expenses for Class IS shares did
not exceed those of Class I shares. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
|
See Notes to Financial Statements.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
27
|
|
Notes to financial statements
1. Organization and significant accounting policies
Legg Mason ClearBridge Small Cap Growth Fund (effective January 1, 2013, the Fund will be known as ClearBridge Small Cap Growth Fund) (the
Fund) is a separate diversified investment series of Legg Mason Partners Equity Trust (the Trust). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the 1940
Act), as an open-end management investment company.
The following are significant accounting policies consistently followed by the
Fund and are in conformity with U.S. generally accepted accounting principles (GAAP). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial
statements were issued.
(a) Investment valuation.
Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. The
valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically
the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are
observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at
amortized cost, unless it is determined that using this method would not reflect an investments fair value. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are
deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained
from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally
traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Funds Board of Trustees.
The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North American Fund Valuation Committee (the
Valuation Committee). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Funds pricing policies, and
reporting to the Board of Trustees. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the
daily change in prices and reviews transactions among market participants.
|
|
|
28
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Notes to financial statements (contd)
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value
determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield
analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not
limited to, the type of security; the issuers financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts research and
observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar
securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.
For each
portfolio security that has been fair valued pursuant to the policies adopted by the Board of Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of
such back testing monthly and fair valuation occurrences are reported to the Board of Trustees quarterly.
The Fund uses valuation
techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by
market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.
GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad
levels listed below:
|
|
Level 1 quoted prices in active markets for identical investments
|
|
|
Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit
risk, etc.)
|
|
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments)
|
The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with
investing in those securities.
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
29
|
|
The following is a summary of the inputs used in valuing the Funds assets and liabilities
carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Common stocks:
|
|
$
|
897,187,526
|
|
|
|
|
|
|
|
|
|
|
$
|
897,187,526
|
|
Short-term investments
|
|
|
|
|
|
$
|
57,539,000
|
|
|
|
|
|
|
|
57,539,000
|
|
Total
|
|
$
|
897,187,526
|
|
|
$
|
57,539,000
|
|
|
|
|
|
|
$
|
954,726,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Written options
|
|
$
|
13,455
|
|
|
|
|
|
|
|
|
|
|
$
|
13,455
|
|
|
See Schedule of Investments for additional detailed categorizations.
|
(b) Repurchase agreements.
The Fund may enter into repurchase
agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of
the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Funds holding period. When entering into repurchase agreements, it is the Funds policy that its
custodian or a third party custodian, acting on the Funds behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including
accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral.
If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its
rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.
(c) Written option.
When the Fund writes an option, an amount
equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the premium received is recorded as a realized gain.
When a written call option is exercised, the difference between the premium received plus the option exercise price and the Funds basis in the underlying security (in the case of a covered written call option), or the cost to purchase the
underlying security (in the case of an uncovered written call option), including brokerage commission, is recognized as a realized gain or loss. When a written put option is exercised, the amount of the
|
|
|
30
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Notes to financial statements (contd)
premium received is subtracted from the cost of the security purchased by the Fund from the exercise of the written put option to form the Funds basis in the underlying security purchased.
The writer or buyer of an option traded on an exchange can liquidate the position before the exercise of the option by entering into a closing transaction. The cost of a closing transaction is deducted from the original premium received resulting in
a realized gain or loss to the Fund.
The risk in writing a covered call option is that the Fund may forego the opportunity of profit if
the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. The risk in
writing an uncovered call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
(d) Security transactions and investment
income.
Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may
halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default or credit event.
(e) Counterparty risk and credit-risk-related contingent features of derivative
instruments.
The Fund may invest in certain securities or engage in other transactions, where the Fund is exposed to counterparty credit risk in addition to broader market risks.
The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty
otherwise fails to meet its contractual obligations. The Funds investment manager attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the
amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment
of such counterparty risk by the investment manager. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.
The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events of default or
termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Funds net assets or NAV over a specified period of time. If these credit related
contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.
|
|
|
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
31
|
|
As of October 31, 2012, the Fund held written options with credit related contingent features
which had a liability position of $13,455. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties
(f) REIT distributions.
The character of distributions received from Real Estate Investment Trusts (REITs) held by the Fund is generally comprised of net investment income, capital gains, and return of
capital. It is the policy of the Fund to estimate the character of distributions received from underlying REITs based on historical data provided by the REITs. After each calendar year end, REITs report the actual tax character of these
distributions. Differences between the estimated and actual amounts reported by the REITs are reflected in the Funds records in the year in which they are reported by the REITs by adjusting related investment cost basis, capital gains and
income, as necessary.
(g) Distributions to shareholders.
Distributions from net investment income and distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend
date and are determined in accordance with income tax regulations, which may differ from GAAP.
(h) Share class accounting.
Investment income, common expenses and realized/unrealized gains (losses) on investments are
allocated to the various classes of the Fund on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that share class.
(i) Compensating balance arrangements.
The Fund has an
arrangement with its custodian bank whereby a portion of the custodians fees is paid indirectly by credits earned on the Funds cash on deposit with the bank.
(j) Federal and other taxes.
It is the Funds policy to
comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the Code), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net
realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Funds financial statements.
Management has analyzed the Funds tax positions taken on income tax returns for all open tax years and has concluded that as of
October 31, 2012, no provision for income tax is required in the Funds financial statements. The Funds federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not
expired are subject to examination by Internal Revenue Service and state departments of revenue.
(k) Reclassification.
GAAP requires that certain components of net assets be reclassified to reflect permanent differences
between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. During the current year, the Fund had no reclassifications.
2. Investment management agreement and other transactions with affiliates
Legg Mason
Partners Fund Advisor, LLC (LMPFA) is the Funds investment manager and ClearBridge Investments, LLC (formerly ClearBridge Advisors, LLC)
|
|
|
32
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ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Notes to financial statements (contd)
(ClearBridge) is the Funds subadviser. Western Asset Management Company (Western Asset) manages the Funds cash and short-term instruments. LMPFA, ClearBridge
and Western Asset are wholly-owned subsidiaries of Legg Mason, Inc. (Legg Mason).
Under the investment management agreement,
the Fund pays an investment management fee, calculated daily and paid monthly, at an annual rate of 0.75% of the Funds average daily net assets.
LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the day-to-day portfolio management of the Fund, except for the management of cash and
short-term instruments, which is provided by Western Asset. For its services, LMPFA pays ClearBridge and Western Asset an aggregate fee equal to 70% of the net management fee it receives from the Fund.
As a result of expense limitation arrangements between the Fund and LMPFA, the ratio of expenses, other than brokerage, interest, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net assets of Class 1 shares did not and are not expected to exceed the total net annual operating expense of Class A shares less the 12b-1 differential of 0.25% through
December 31, 2012. Effective January 31, 2013, the total annual operating expenses for Class 1 shares are not expected to exceed those of Class A shares. In addition, the ratio of expenses, other than brokerage, interest, taxes, extraordinary
expenses and acquired fund fees and expenses, to average net assets of Class FI, Class R and Class I shares did not exceed 1.35%, 1.60% and 1.05%, respectively. In addition, total annual operating expenses for Class IS shares did not exceed
those of Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
During the year ended October 31, 2012, fees waived and/or expenses reimbursed amounted to $14,625.
The investment manager is permitted to recapture amounts waived or reimbursed to a class during the same fiscal year if the class total annual operating expenses have fallen to a level below
the expense limitation (expense cap) in effect at the time the fees were earned or the expenses incurred. In no case will the investment manager recapture any amount that would result, on any particular business day of the Fund, in the
class total annual operating expenses exceeding the expense cap or any other lower limit then in effect.
Legg Mason Investor
Services, LLC (LMIS), a wholly-owned broker-dealer subsidiary of Legg Mason, serves as the Funds sole and exclusive distributor.
There is a maximum initial sales charge of 5.75% for Class A shares. There is a contingent deferred sales charge (CDSC) of 5.00% on Class B shares, which applies if redemption
occurs within 12 months from purchase payment. This CDSC declines by 1.00% per year until no CDSC is incurred. Class C shares have a 1.00% CDSC, which applies if redemption occurs within 12 months from purchase payment. In certain cases,
Class A shares have a 1.00% CDSC, which applies if redemption occurs within 18 months from purchase payment (or within 12 months for shares
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|
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ClearBridge Small Cap Growth Fund 2012 Annual Report
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|
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33
|
|
purchased prior to August 1, 2012). This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of other shares of funds sold by LMIS, equal
or exceed $1,000,000 in the aggregate. These purchases do not incur an initial sales charge.
For the year ended October 31, 2012,
LMIS and its affiliates received sales charges of $97,588 on sales of the Funds Class A shares. In addition, for the year ended October 31, 2012, CDSCs paid to LMIS and its affiliates were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
CDSCs
|
|
$
|
227
|
|
|
$
|
28,430
|
|
|
$
|
513
|
|
All officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive
compensation from the Trust.
3. Investments
During the year ended October 31, 2012, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:
|
|
|
|
|
Purchases
|
|
$
|
123,357,691
|
|
Sales
|
|
|
148,318,110
|
|
At October 31, 2012, the aggregate gross unrealized appreciation and depreciation of investments for federal
income tax purposes were as follows:
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
305,828,200
|
|
Gross unrealized depreciation
|
|
|
(65,874,076)
|
|
Net unrealized appreciation
|
|
$
|
239,954,124
|
|
During the year ended October 31, 2012, written option transactions for the Fund were as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of Contracts
|
|
|
Premiums
|
|
Written options, outstanding as of October 31, 2011
|
|
|
470
|
|
|
$
|
37,778
|
|
Options written
|
|
|
10,763
|
|
|
|
1,069,114
|
|
Options closed
|
|
|
|
|
|
|
|
|
Options exercised
|
|
|
(1,253)
|
|
|
|
(143,345)
|
|
Options expired
|
|
|
(9,681)
|
|
|
|
(941,421)
|
|
Written options, outstanding as of October 31, 2012
|
|
|
299
|
|
|
$
|
22,126
|
|
4. Derivative instruments and hedging activities
Financial Accounting Standards Board Codification Topic 815 requires enhanced disclosure about an entitys derivative and hedging activities.
Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives within the Statement of
Assets and Liabilities at October 31, 2012.
|
|
|
|
|
LIABILITY DERIVATIVES
1
|
|
|
|
Equity Risk
|
|
Written options
|
|
$
|
13,455
|
|
1
|
Generally, the balance sheet location for liability derivatives is payables/net unrealized appreciation (depreciation).
|
|
|
|
34
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Notes to financial statements (contd)
The following tables provide information about the effect of derivatives and hedging activities on the Funds
Statement of Operations for the year ended October 31, 2012. The first table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second table provides additional information
about the change in unrealized appreciation (depreciation) resulting from the Funds derivatives and hedging activities during the period.
|
|
|
|
|
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
|
|
|
|
Equity Risk
|
|
Written options
|
|
$
|
1,084,767
|
|
|
|
|
|
|
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
|
|
|
|
Equity Risk
|
|
Written options
|
|
$
|
(17,357)
|
|
During the year ended October 31, 2012, the volume of derivative activity for the Fund was as follows:
|
|
|
|
|
|
|
Average Market
Value
|
|
Written options
|
|
$
|
46,513
|
|
5. Class specific expenses, waivers and/or expense reimbursements
The Fund has adopted a Rule 12b-1 distribution plan and under that plan the Fund pays a service fee with respect to its Class A, Class B, Class
C, Class R and Class FI shares calculated at the annual rate of 0.25% of the average daily net assets of each respective class. The Fund also pays a service fee with respect to its Class B, Class C and Class R shares calculated at the annual rate of
0.75%, 0.75% and 0.25% of the average daily net assets of each class, respectively. Service and distribution fees are accrued daily and paid monthly.
For the year ended October 31, 2012, class specific expenses were as follows:
|
|
|
|
|
|
|
|
|
|
|
Service and/or
Distribution Fees
|
|
|
Transfer Agent
Fees
|
|
Class 1
|
|
|
|
|
|
$
|
19,424
|
|
Class A
|
|
$
|
1,213,203
|
|
|
|
1,310,826
|
|
Class B
|
|
|
265,319
|
|
|
|
144,940
|
|
Class C
|
|
|
509,199
|
|
|
|
189,286
|
|
Class FI
|
|
|
10,579
|
|
|
|
14,767
|
|
Class R
|
|
|
82,955
|
|
|
|
40,763
|
|
Class I
|
|
|
|
|
|
|
119,790
|
|
Class IS
|
|
|
|
|
|
|
7,270
|
|
Total
|
|
$
|
2,081,255
|
|
|
$
|
1,847,066
|
|
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
35
|
|
For the year ended October 31, 2012, waivers and/or expense reimbursements by class were as
follows:
|
|
|
|
|
|
|
Waivers/Expense
Reimbursements
|
|
Class 1
|
|
$
|
10,162
|
|
Class A
|
|
|
|
|
Class B
|
|
|
|
|
Class C
|
|
|
|
|
Class FI
|
|
|
2,244
|
|
Class R
|
|
|
2,219
|
|
Class I
|
|
|
|
|
Class IS
|
|
|
|
|
Total
|
|
$
|
14,625
|
|
6. Shares of beneficial interest
At October 31, 2012, the Trust had an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per share. The Fund has the ability to issue multiple classes of
shares. Each class of shares represents an identical interest and has the same rights, except that each class bears certain direct expenses, including those specifically related to the distribution of its shares.
Transactions in shares of each class were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
October 31, 2012
|
|
|
Year Ended
October 31, 2011
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
Class
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares repurchased
|
|
|
(27,222)
|
|
|
$
|
(533,932)
|
|
|
|
(26,453)
|
|
|
$
|
(466,818)
|
|
Net decrease
|
|
|
(27,222)
|
|
|
$
|
(533,932)
|
|
|
|
(26,453)
|
|
|
$
|
(466,818)
|
|
|
|
|
|
|
Class
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
6,161,109
|
|
|
$
|
119,295,677
|
|
|
|
5,179,076
|
|
|
$
|
88,334,258
|
|
Shares repurchased
|
|
|
(8,018,825)
|
|
|
|
(152,362,752)
|
|
|
|
(8,910,238)
|
|
|
|
(153,513,212)
|
|
Net decrease
|
|
|
(1,857,716)
|
|
|
$
|
(33,067,075)
|
|
|
|
(3,731,162)
|
|
|
$
|
(65,178,954)
|
|
|
|
|
|
|
Class
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
16,842
|
|
|
$
|
283,137
|
|
|
|
170,649
|
|
|
$
|
2,618,215
|
|
Shares repurchased
|
|
|
(533,811)
|
|
|
|
(8,727,737)
|
|
|
|
(785,149)
|
|
|
|
(11,872,889)
|
|
Net decrease
|
|
|
(516,969)
|
|
|
$
|
(8,444,600)
|
|
|
|
(614,500)
|
|
|
$
|
(9,254,674)
|
|
|
|
|
|
|
Class
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
588,089
|
|
|
$
|
9,823,596
|
|
|
|
878,084
|
|
|
$
|
13,424,350
|
|
Shares repurchased
|
|
|
(1,364,827)
|
|
|
|
(22,792,249)
|
|
|
|
(1,497,130)
|
|
|
|
(22,777,110)
|
|
Net decrease
|
|
|
(776,738)
|
|
|
$
|
(12,968,653)
|
|
|
|
(619,046)
|
|
|
$
|
(9,352,760)
|
|
|
|
|
|
|
Class
FI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
187,671
|
|
|
$
|
3,612,808
|
|
|
|
123,319
|
|
|
$
|
2,195,837
|
|
Shares repurchased
|
|
|
(78,810)
|
|
|
|
(1,479,051)
|
|
|
|
(62,632)
|
|
|
|
(1,087,722)
|
|
Net increase
|
|
|
108,861
|
|
|
$
|
2,133,757
|
|
|
|
60,687
|
|
|
$
|
1,108,115
|
|
|
|
|
36
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
Notes to financial statements (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
October 31, 2012
|
|
|
Year Ended
October 31, 2011
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
Class
R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
768,640
|
|
|
$
|
14,932,165
|
|
|
|
388,059
|
|
|
$
|
6,675,824
|
|
Shares repurchased
|
|
|
(353,934)
|
|
|
|
(6,558,081)
|
|
|
|
(301,328)
|
|
|
|
(5,159,622)
|
|
Net increase
|
|
|
414,706
|
|
|
$
|
8,374,084
|
|
|
|
86,731
|
|
|
$
|
1,516,202
|
|
|
|
|
|
|
Class
I
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
6,469,395
|
|
|
$
|
130,725,686
|
|
|
|
3,260,960
|
|
|
$
|
57,375,706
|
|
Shares repurchased
|
|
|
(1,614,928)
|
|
|
|
(32,304,449)
|
|
|
|
(943,402)
|
|
|
|
(16,977,384)
|
|
Net increase
|
|
|
4,854,467
|
|
|
$
|
98,421,237
|
|
|
|
2,317,558
|
|
|
$
|
40,398,322
|
|
|
|
|
|
|
Class
IS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
534,047
|
|
|
$
|
10,643,536
|
|
|
|
1,087,582
|
|
|
$
|
18,148,996
|
|
Shares repurchased
|
|
|
(2,268,845)
|
|
|
|
(44,371,425)
|
|
|
|
(1,970,941)
|
|
|
|
(34,978,757)
|
|
Net decrease
|
|
|
(1,734,798)
|
|
|
$
|
(33,727,889)
|
|
|
|
(883,359)
|
|
|
$
|
(16,829,761)
|
|
7. Income tax information and distributions to sharesholders
Subsequent to the fiscal year end, the Fund has made the following distribution per share:
|
|
|
|
|
|
|
Record Date
Payable Date
|
|
|
|
Long-Term
Capital Gains
|
|
12/12/2012
12/13/2012
|
|
|
|
$
|
0.41003
|
|
There were no distributions paid to shareholders for the years ended October 31, 2012 and October 31, 2011.
As of October 31, 2012, the components of accumulated earnings on a tax basis were as follows:
|
|
|
|
|
Undistributed long-term capital gains net
|
|
$
|
19,774,380
|
|
Other book/tax temporary differences
(a)
|
|
|
(3,156,918)
|
|
Unrealized appreciation (depreciation)
(b)
|
|
|
239,962,795
|
|
Total accumulated earnings (losses) net
|
|
$
|
256,580,257
|
|
During the taxable year ended October 31, 2012, the Fund utilized $ 22,020,630 of its capital loss carryforward
available from prior years.
(a)
|
Other book/tax temporary differences are attributable primarily to the deferral of qualified late year losses and book/tax differences in the
timing of the deductibility of various expenses.
|
(b)
|
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on
wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.
|
|
|
|
|
|
ClearBridge Small Cap Growth Fund 2012 Annual Report
|
|
|
37
|
|
Report of independent registered public accounting firm
The Board of Trustees and Shareholders
Legg Mason Partners Equity Trust:
We have audited the accompanying statement of assets and liabilities of Legg Mason ClearBridge Small Cap Growth Fund, a series of Legg Mason
Partners Equity Trust, including the schedule of investments, as of October 31, 2012, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the three-year period then ended, the period from January 1, 2009 to October 31, 2009 and for each of the years or periods in the two-year period ended December 31, 2008.
These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2012, by correspondence with the custodian and brokers or by other appropriate auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position
of Legg Mason ClearBridge Small Cap Growth Fund as of October 31, 2012, the results of its operations, the changes in its net assets, and the financial highlights for the periods described above, in conformity with U.S. generally accepted
accounting principles.
New York, New York
December 18, 2012
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|
|
38
|
|
ClearBridge Small Cap Growth Fund
|
Additional information
(unaudited)
Information about Trustees and Officers
The business and affairs of ClearBridge Small Cap Growth Fund (the Fund) are conducted by management under the
supervision and subject to the direction of its Board of Trustees. The business address of each Trustee is c/o R. Jay Gerken, 620 Eighth Avenue, 49
th
Floor, New York, New York 10018. Information pertaining to the Trustees and officers of the Fund is set forth
below.
The Statement of Additional Information includes additional information about Trustees and is available, without charge, upon
request by calling the Fund at 1-877-721-1926.
|
|
|
Independent Trustees:
|
Paul R. Ades
|
Year of birth
|
|
1940
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1983
|
Principal occupation(s) during past five years
|
|
Paul R. Ades, PLLC (law firm) (since 2000)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
Andrew L. Breech
|
Year of birth
|
|
1952
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1991
|
Principal occupation(s) during past five years
|
|
President, Dealer Operating Control Service, Inc. (automotive retail management) (since 1985)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
Dwight B. Crane
|
Year of birth
|
|
1937
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1981
|
Principal occupation(s) during past five years
|
|
Professor Emeritus, Harvard Business School (since 2007); formerly, Professor, Harvard Business School (1969 to 2007); Independent
Consultant (since 1969)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
|
|
|
|
|
ClearBridge Small Cap Growth Fund
|
|
|
39
|
|
|
|
|
Independent Trustees contd
|
Frank G. Hubbard
|
Year of birth
|
|
1937
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1993
|
Principal occupation(s) during past five years
|
|
President, Avatar International Inc. (business development) (since 1998)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
Howard J. Johnson
|
Year of birth
|
|
1938
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
From 1981 to 1998 and since 2000
|
Principal occupation(s) during past five years
|
|
Chief Executive Officer, Genesis Imaging LLC (technology company) (since 2003)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
Jerome H. Miller
|
Year of birth
|
|
1938
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1995
|
Principal occupation(s) during past five years
|
|
Retired
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
Ken Miller
|
Year of birth
|
|
1942
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1983
|
Principal occupation(s) during past five years
|
|
President, Young Stuff Apparel Group, Inc. (apparel manufacturer), division of Li & Fung (since 1963)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
|
|
|
40
|
|
ClearBridge Small Cap Growth Fund
|
Additional information
(unaudited)
(contd)
Information about Trustees and Officers
|
|
|
Independent Trustees contd
|
John J. Murphy
|
Year of birth
|
|
1944
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 2002
|
Principal occupation(s) during past five years
|
|
Founder and Senior Principal, Murphy Capital Management (investment management) (since 1983)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
Trustee, UBS Funds (52 funds) (since 2008); Trustee, Consulting Group Capital Markets Funds (11 funds) (since 2002); formerly, Director, Nicholas Applegate Institutional Funds
(12 funds) (2005 to 2010); formerly, Director, Atlantic Stewardship Bank (2004 to 2005); formerly, Director, Barclays International Funds Group Ltd. and affiliated companies (1983 to 2003)
|
Thomas F. Schlafly
|
Year of birth
|
|
1948
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1983
|
Principal occupation(s) during past five years
|
|
President, The Saint Louis Brewery, Inc. (brewery) (since 1989); Partner, Thompson Coburn LLP (law firm) (since 2009); formerly, Of
Counsel, Husch Blackwell Sanders LLP (law firm) and its predecessor firms (1984 to 2009)
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
Director, Citizens National Bank of Greater St. Louis (since 2006)
|
Jerry A. Viscione
|
Year of birth
|
|
1944
|
Position(s) with Trust
|
|
Trustee
|
Term of office
1
and length of time served
2
|
|
Since 1993
|
Principal occupation(s) during past five years
|
|
Retired
|
Number of funds in fund complex overseen by Trustee
|
|
49
|
Other board memberships held by Trustee during past five years
|
|
None
|
|
|
|
|
|
ClearBridge Small Cap Growth Fund
|
|
|
41
|
|
|
|
|
Interested Trustee and Officer:
|
|
|
R. Jay Gerken
3
|
|
|
Year of birth
|
|
1951
|
Position(s) with Trust
|
|
Trustee, President, Chairman and Chief Executive Officer
|
Term of office
1
and length of time served
2
|
|
Since 2002
|
Principal occupation(s) during past five years
|
|
Managing Director of Legg Mason & Co., LLC (Legg Mason & Co.) (since 2005); Officer and Trustee/Director of 157
funds associated with Legg Mason Partners Fund Advisor, LLC (LMPFA) or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006); President and Chief Executive Officer (CEO) of LMPFA (since 2006);
President and CEO of Smith Barney Fund Management LLC (SBFM) (formerly a registered investment adviser) (since 2002)
|
Number of funds in fund complex overseen by Trustee
|
|
157
|
Other board memberships held by Trustee during past five years
|
|
None
|
Additional Officers
|
|
|
Ted P. Becker
Legg
Mason
620 Eighth Avenue, New York, NY 10018
|
|
|
Year of birth
|
|
1951
|
Position(s) with Trust
|
|
Chief Compliance Officer
|
Term of office
1
and length of time served
2
|
|
Since 2007
|
Principal occupation(s) during past five years
|
|
Director of Global Compliance at Legg Mason (since 2006); Chief Compliance Officer of LMPFA (since 2006); Managing Director of Compliance of Legg Mason & Co. (since 2005);
Chief Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006)
|
Vanessa A. Williams
Legg Mason
100 First Stamford Place, Stamford, CT 06902
|
|
|
Year of birth
|
|
1979
|
Position(s) with Trust
|
|
Chief Anti-Money Laundering Compliance Officer and Identity Theft Prevention Officer
|
Term of office
1
and length of time served
2
|
|
Since 2011
|
Principal occupation(s) during past five years
|
|
Vice President of Legg Mason & Co. (since 2012); Identity Theft Prevention Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since
2011); Chief Anti-Money Laundering Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011); formerly, Senior Compliance Officer of Legg Mason & Co. (2008 to 2011); formerly, Compliance
Analyst of Legg Mason & Co. (2006 to 2008) and Legg Mason & Co. predecessors (prior to 2006)
|
|
|
|
42
|
|
ClearBridge Small Cap Growth Fund
|
Additional information
(unaudited)
(contd)
Information about Trustees and Officers
|
|
|
Additional Officers contd
|
|
|
Robert I. Frenkel
Legg Mason
100 First Stamford Place, Stamford, CT 06902
|
|
|
Year of birth
|
|
1954
|
Position(s) with Trust
|
|
Secretary and Chief Legal Officer
|
Term of office
1
and length of time served
2
|
|
Since 2007
|
Principal occupation(s) during past five years
|
|
Vice President and Deputy General Counsel of Legg Mason (since 2006); Managing Director and General Counsel of Global Mutual Funds for Legg Mason & Co. (since 2006) and
Legg Mason & Co. predecessors (since 1994); Secretary and Chief Legal Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006)
|
Thomas C. Mandia
Legg Mason
100 First Stamford Place, Stamford, CT 06902
|
|
|
Year of birth
|
|
1962
|
Position(s) with Trust
|
|
Assistant Secretary
|
Term of office
1
and length of time served
2
|
|
Since 2007
|
Principal occupation(s) during past five years
|
|
Managing Director and Deputy General Counsel of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); Secretary of LMPFA (since 2006);
Assistant Secretary of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006); Secretary to SBFM (since 2002)
|
Richard F. Sennett
Legg Mason
100 International Drive, Baltimore, MD 21202
|
|
|
Year of birth
|
|
1970
|
Position(s) with Trust
|
|
Principal Financial Officer
|
Term of office
1
and length of time served
2
|
|
Since 2011
|
Principal occupation(s) during past five years
|
|
Principal Financial Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011); Managing Director of Legg Mason & Co. and Senior
Manager of the Treasury Policy group for Legg Mason & Co.s Global Fiduciary Platform (since 2011); formerly, Chief Accountant within the SECs Division of Investment Management (2007 to 2011); formerly, Assistant Chief Accountant
within the SECs Division of Investment Management (2002 to 2007)
|
|
|
|
|
|
ClearBridge Small Cap Growth Fund
|
|
|
43
|
|
|
|
|
Additional Officers contd
|
|
|
Albert Laskaj
Legg
Mason
55 Water Street, New York, NY 10041
|
|
|
Year of birth
|
|
1977
|
Position(s) with Trust
|
|
Treasurer
|
Term of office
1
and length of time served
2
|
|
Since 2010
|
Principal occupation(s) during past five years
|
|
Vice President of Legg Mason & Co. (since 2008); Treasurer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2010); formerly,
Controller of certain mutual funds associated with Legg Mason & Co. or its affiliates (prior to 2010)
|
Jeanne M. Kelly
Legg Mason
620 Eighth Avenue, New York, NY 10018
|
|
|
Year of birth
|
|
1951
|
Position(s) with Trust
|
|
Senior Vice President
|
Term of office
1
and length of time served
2
|
|
Since 2007
|
Principal occupation(s) during past five years
|
|
Senior Vice President of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of LMPFA (since 2006); Managing
Director of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005)
|
|
Trustees who are not interested persons of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.
|
1
|
Each Trustee and officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death,
resignation, retirement or removal.
|
2
|
Indicates the earliest year in which the Trustee became a board member for a fund in the Legg Mason fund complex or the officer took such office.
|
3
|
Mr. Gerken is an interested person of the Fund, as defined in the 1940 Act, because of his position with LMPFA and/or certain of
its affiliates.
|
ClearBridge
Small Cap Growth Fund
Trustees
Paul R. Ades
Andrew L. Breech
Dwight B. Crane
R. Jay Gerken
Chairman
Frank
G. Hubbard
Howard J. Johnson
Jerome H. Miller
Ken Miller
John J. Murphy
Thomas F. Schlafly
Jerry A. Viscione
Investment
manager
Legg Mason Partners Fund Advisor, LLC
Subadviser
ClearBridge Investments, LLC
Distributor
Legg Mason Investor Services, LLC
Custodian
State Street Bank and Trust Company
Co-transfer agents
Boston Financial
Data Services, Inc.
2000 Crown Colony Drive
Quincy, MA 02169
BNY Mellon Asset Servicing
4400 Computer Drive
Westborough, MA
01581
Independent registered public accounting firm
KPMG LLP
345 Park Avenue
New York, NY 10154
ClearBridge Small Cap Growth Fund
The Fund is a separate investment series of Legg
Mason Partners Equity Trust, a Maryland statutory trust.
ClearBridge Small Cap Growth Fund
Legg Mason Funds
55 Water Street
New York, NY 10041
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third
quarters of each fiscal year on Form N-Q. The Funds Forms N-Q are available on the SECs website at www.sec.gov. The Funds Forms N-Q may be reviewed and copied at the SECs Public Reference Room in Washington, D.C., and
information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q, shareholders can call the Fund at 1-877-721-1926.
Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the
Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling the Fund at 1-877-721-1926. (2) on the Funds website at www.leggmason.com/individualinvestors and (3) on
the SECs website at www.sec.gov.
This report is
submitted for the general information of the shareholders of ClearBridge Small Cap Growth Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by a current prospectus.
Investors should consider the
Funds investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before investing.
www.leggmason.com/individualinvestors
©2012 Legg Mason Investor Services, LLC
Member FINRA, SIPC
Legg Mason Funds Privacy and Security Notice
Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds
This Privacy and Security Notice (the Privacy Notice) addresses the Legg Mason Funds privacy and data protection practices with
respect to nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds distributor, Legg Mason Investor Services, LLC, as well as Legg Mason-sponsored closed-end funds and certain closed-end funds
managed or sub-advised by Legg Mason or its affiliates. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.
The Type of Nonpublic Personal Information the Funds Collect About You
The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:
|
|
Personal information included on applications or other forms;
|
|
|
Account balances, transactions, and mutual fund holdings and positions;
|
|
|
Online account access user IDs, passwords, security challenge question responses; and
|
|
|
Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individuals
total debt, payment history, etc.).
|
How the Funds Use Nonpublic Personal Information About You
The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with
other financial institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or
services you have authorized or as permitted or required by law. The Funds may disclose information about you to:
|
|
Employees, agents, and affiliates on a need to know basis to enable the Funds to conduct ordinary business or comply with obligations
to government regulators;
|
|
|
Service providers, including the Funds affiliates, who assist the Funds as part of the ordinary course of business (such as printing,
mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds behalf, including companies that may perform marketing services solely for the Funds;
|
|
|
The Funds representatives such as legal counsel, accountants and auditors; and
|
|
|
Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.
|
|
NOT PART OF THE ANNUAL REPORT
|
Legg Mason Funds Privacy and Security Notice (contd)
Except as otherwise permitted by applicable law, companies acting on
the Funds behalf are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform.
The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or
required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to
disclose your nonpublic personal information to third parties. While it is the Funds practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain
unchanged.
Keeping You Informed of the Funds Privacy and Security Practices
The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at
any time they will notify you promptly if this privacy policy changes.
The Funds Security Practices
The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The
Funds internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.
Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide
or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary so you can take appropriate protective steps.
If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.
In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your
account information is incomplete, not accurate or not current, or if you have questions about the Funds privacy practices, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us
section of the Funds website at www.leggmason.com, or contact the Fund at 1-877-721-1926.
Revised April 2011
|
NOT PART OF THE ANNUAL REPORT
|
www.leggmason.com/individualinvestors
©2012 Legg Mason Investor Services, LLC Member FINRA, SIPC
FDXX010732 12/12 SR12-1809
The
registrant has adopted a code of ethics that applies to the registrants principal executive officer, principal financial officer, principal accounting officer or controller.