Legg Mason Partners Investment Trust
Prospectus January 28, 2022
Share class
(Symbol): A (SBVAX), C
(SBVLX), R (—), I (SMCYX), IS (LCBIX)
CLEARBRIDGE
SMALL CAP VALUE FUND
The
Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this Prospectus is accurate or complete. Any
statement to the contrary is a crime.
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INVESTMENT
PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE
VALUE |
Investment objective
The
fund seeks long-term capital growth.
Fees and expenses of the
fund
The
accompanying table describes the fees and expenses that you may pay if you buy,
hold and sell shares of the fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, which are not reflected
in the tables and examples below.
You may qualify for sales charge discounts
if you and your family invest, or agree to invest in the future, at least
$25,000 in Legg Mason funds or other eligible
investments as described below. More information about
these and other discounts is available from your Service Agent, in the fund’s
Prospectus on page 19 under the heading “Additional information about each share
class,” in the appendix titled “Appendix: Waivers and Discounts Available from
Certain Service Agents” on page A-1 of the fund’s Prospectus and in the fund’s
Statement of Additional Information (“SAI”) on page 84 under the heading “Sales
Charge Waivers and Reductions for Class A Shares.” “Service Agents” include
banks, brokers, dealers, insurance companies, investment advisers, financial
consultants or advisers, mutual fund supermarkets and other financial
intermediaries that have entered into an agreement with Franklin Distributors,
LLC (“Franklin Distributors” or the “Distributor”), the fund’s distributor, to
sell shares of the fund.
If
you purchase Class I shares or Class IS shares through a Service Agent acting
solely as an agent on behalf of its customers, that Service Agent may charge you
a commission. Such commissions, if any, are not charged by the fund and are not
reflected in the fee table or expense example
below.
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Shareholder
fees |
(fees paid directly from
your investment) |
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Class A |
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Class C |
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Class R |
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Class I |
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Class IS |
Maximum
sales charge (load) imposed on purchases (as a % of offering price) |
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5.751,2 |
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None |
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None |
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None |
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None |
Maximum
deferred sales charge (load) (as a % of the lower of net asset value at
purchase or redemption)3 |
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None4 |
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1.00 |
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None |
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None |
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None |
Small
account fee5 |
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$15 |
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$15 |
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None |
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None |
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None |
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Annual fund operating expenses
(%) |
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(expenses that you pay each
year as a percentage of the value of your
investment) |
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Class A |
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Class C |
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Class R |
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Class I |
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Class IS |
Management
fees |
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0.75 |
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0.75 |
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0.75 |
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0.75 |
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0.75 |
Distribution
and/or service (12b-1) fees |
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0.25 |
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1.00 |
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0.50 |
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None |
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None |
Other
expenses |
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0.38 |
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0.39 |
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0.396 |
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0.29 |
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0.22 |
Total
annual fund operating expenses |
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1.38 |
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2.14 |
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1.64 |
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1.04 |
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0.97 |
Fees
waived and/or expenses reimbursed7 |
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(0.03) |
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(0.04) |
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(0.04) |
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(0.04) |
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(0.07) |
Total
annual fund operating expenses after waiving fees and/or reimbursing
expenses |
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1.35 |
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2.10 |
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1.60 |
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1.00 |
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0.90 |
1 |
The
sales charge is waived for shareholders purchasing Class A shares
through accounts where Franklin Distributors is the broker-dealer of
record (“Distributor
Accounts”). |
2 |
Shareholders
purchasing Class A shares through certain Service Agents or in
certain types of accounts may be eligible for a waiver of the sales
charge. For additional information, see “Additional information about each
share class — Sales charges” in the
Prospectus. |
3 |
Maximum
deferred sales charge (load) may be reduced over
time. |
4 |
You may buy Class A shares in amounts of $1,000,000 or
more at net asset value (without an initial sales charge), but if you
redeem those shares within 18 months of their purchase, you will pay a
contingent deferred sales charge of
1.00%. |
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2 |
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ClearBridge Small Cap Value
Fund |
5 |
If
the value of your account is below $1,000 ($250 for retirement plans that
are not employer-sponsored), the fund may charge you a fee of $3.75 per
account that is determined and assessed quarterly by the fund or your
Service Agent (with an annual maximum of $15.00 per account). Please
contact your Service Agent or the fund for more
information. |
6 |
Other expenses for Class R
shares are estimated for the current fiscal year. Actual expenses may
differ from
estimates. |
7 |
The
manager has agreed to waive fees and/or reimburse operating expenses
(other than interest, brokerage commissions, taxes, extraordinary expenses
and acquired fund fees and expenses) so that the ratio of total annual
fund operating expenses will not exceed 1.35% for Class A shares,
2.10% for Class C shares, 1.60% for Class R shares, 1.00% for Class I
shares and 0.90% for Class IS shares, subject to recapture as described
below. In addition, the ratio of total annual fund operating expenses for
Class IS shares will not exceed the ratio of total annual fund operating
expenses for Class I shares, subject to recapture as described below.
These arrangements cannot be terminated prior to December 31,
2023 without the Board of Trustees’ consent. The manager
is permitted to recapture amounts waived and/or reimbursed to a class
during the same fiscal year in which the manager earned the fee or
incurred the expense if the class’ total annual fund operating expenses
have fallen to a level below the limits described above. 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 fund operating
expenses exceeding the applicable limits described above or any other
lower limit then in effect. In addition, the manager has agreed to waive
the fund’s management fee to an extent sufficient to offset the net
management fee payable in connection with any investment in an affiliated
money market fund. This management fee waiver is not subject to the
recapture provision discussed
above. |
Example
This
example is intended to help you compare the cost of investing in the fund with
the cost of investing in other mutual funds. The example assumes:
• |
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You
invest $10,000 in the fund for the time periods
indicated |
• |
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Your
investment has a 5% return each year and the fund’s operating expenses
remain the same (except that any applicable fee waiver or expense
reimbursement is reflected only through its expiration
date) |
• |
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You
reinvest all distributions and dividends without a sales
charge |
Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
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Number of years you own
your shares ($) |
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1 year |
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3 years |
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5 years |
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10 years |
Class A
(with or without redemption at end of period) |
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705 |
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984 |
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1,284 |
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2,134 |
Class
C (with redemption at end of period) |
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313 |
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666 |
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1,145 |
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2,275 |
Class
C (without redemption at end of period) |
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213 |
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666 |
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1,145 |
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2,275 |
Class R
(with or without redemption at end of period) |
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163 |
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513 |
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887 |
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1,939 |
Class I
(with or without redemption at end of period) |
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102 |
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327 |
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570 |
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1,267 |
Class IS
(with or without redemption at end of period) |
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92 |
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302 |
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529 |
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1,184 |
Portfolio
turnover. The fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when shares are held in a taxable account.
These costs, which are not reflected in annual fund operating expenses or in the
example, affect the fund’s performance. During the most recent fiscal year,
the fund’s portfolio turnover rate was 53% of the average value of its
portfolio.
Principal investment
strategies
Under
normal circumstances, the fund invests at least 80% of its net assets, plus
borrowings for investment purposes, if any, in common stocks and other equity
securities of small capitalization U.S. companies or in other investments with
similar economic characteristics. Small capitalization companies are those
companies whose market capitalizations at the time of investment do not exceed
(i) $3 billion or (ii) the highest month-end market capitalization
value of any stock in the Russell 2000 Index (the “Index”) for the previous 12
months, whichever is greater. Securities of companies whose market
capitalizations no longer meet this definition after purchase by the fund still
will be considered to be securities of small capitalization companies for
purposes of the fund’s 80% investment policy. The size of companies in the Index
changes with the market conditions and the composition of the Index. Equity
securities in which the fund may invest include common stocks, preferred
securities, convertible securities, securities of other investment companies and
of real estate investment trusts (“REITs”), warrants and rights. The fund may
invest up to 20% of its net assets in shares of companies with larger market
capitalizations. The fund may invest up to 20% of its net assets (at the time of
investment) in foreign securities.
Principal risks
Risk
is inherent in all investing. The value of your investment in the fund, as well
as the amount of return you receive on your investment, may fluctuate
significantly. You may lose part or all
of your investment in the fund or your investment may not perform as well as
other similar investments. An investment in the fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or by any
bank or government agency. The following is a summary
description of certain risks of investing in the
fund.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of the fund’s equity securities may
decline generally. Equity securities may include warrants, rights,
exchange-traded and over-the-counter common stocks, preferred stock, depositary
receipts, trust certificates, limited partnership interests and shares of other
investment companies, including exchange-traded funds and real estate
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ClearBridge Small Cap Value
Fund |
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3 |
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investment
trusts. Equity securities may have greater price volatility than other asset
classes, such as fixed income securities, and may fluctuate in price based on
actual or perceived changes in a company’s financial condition and overall
market and economic conditions and perceptions. If the market prices of the
equity securities owned by the fund fall, the value of your investment in the
fund will decline.
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, investor sentiment, the global and domestic effects of a
pandemic, and other factors that may or may not be related to the issuer of the
security or other asset. Economies and financial markets throughout the world
are increasingly interconnected. Economic, financial or political events,
trading and tariff arrangements, public health events, terrorism, natural
disasters and other circumstances in one country or region could have profound
impacts on global economies or markets. As a result, whether or not the fund
invests in securities of issuers located in or with significant exposure to the
countries directly affected, the value and liquidity of the fund’s investments
may be negatively affected.
The
rapid and global spread of a highly contagious novel coronavirus respiratory
disease, designated COVID-19, has resulted in extreme volatility in the
financial markets; reduced liquidity of many instruments; restrictions on
international and, in some cases, local travel; significant disruptions to
business operations (including business closures); strained healthcare systems;
disruptions to supply chains, consumer demand and employee availability; and
widespread uncertainty regarding the duration and long-term effects of this
pandemic. Some sectors of the economy and individual issuers have experienced
particularly large losses. In addition, the COVID-19 pandemic may result in a
sustained domestic or even global economic downturn or recession, domestic and
foreign political and social instability, damage to diplomatic and international
trade relations and increased volatility and/or decreased liquidity in the
securities markets. Developing or emerging market countries may be more impacted
by the COVID-19 pandemic as they may have less established health care systems
and may be less able to control or mitigate the effects of the pandemic. The
ultimate economic fallout from the pandemic, and the long-term impact on
economies, markets, industries and individual issuers, are not known. The U.S.
government and the Federal Reserve, as well as certain foreign governments and
central banks, have taken extraordinary actions to support local and global
economies and the financial markets in response to the COVID-19 pandemic. This
and other government intervention into the economy and financial markets to
address the COVID-19 pandemic may not work as intended, particularly if the
efforts are perceived by investors as being unlikely to achieve the desired
results. Government actions to mitigate the economic impact of the pandemic have
resulted in a large expansion of government deficits and debt, the long term
consequences of which are not known. The COVID-19 pandemic could adversely
affect the value and liquidity of the fund’s investments, impair the fund’s
ability to satisfy redemption requests, and negatively impact the fund’s
performance. In addition, the outbreak of COVID-19, and measures taken to
mitigate its effects, could result in disruptions to the services provided to
the fund by its service
providers.
Small capitalization
company risk. The fund will be exposed
to additional risks as a result of its investments in the securities of small
capitalization companies. Small capitalization companies may fall out of favor
with investors; may have limited product lines, operating histories, markets or
financial resources; or may be dependent upon a limited management group. The
prices of securities of small capitalization companies generally are more
volatile than those of large capitalization companies and are more likely to be
adversely affected than large capitalization companies by changes in earnings
results and investor expectations or poor economic or market conditions,
including those experienced during a recession. Securities of small
capitalization companies may underperform large capitalization companies, may be
harder to sell at times or at prices the portfolio managers believe appropriate
and may have greater potential for losses.
REITs
risk. The value of real estate
investment trusts (“REITs”) may be affected by factors including the condition
of the economy as a whole, changes in the value of the underlying real estate,
the creditworthiness of the issuers of the investments, property taxes, interest
rates, liquidity of the credit markets, poor performance by the REIT’s manager,
and the real estate regulatory environment. REITs that concentrate their
holdings in specific businesses, such as apartments, offices or retail space,
will be affected by conditions affecting those businesses.
Industry or sector
focus risk. Although the fund does not
employ an industry or sector focus, the fund may be susceptible to an increased
risk of loss, including losses due to events that adversely affect the fund’s
investments more than the market as a whole, to the extent that the fund has
greater exposure to the securities of a particular issuer or issuers within the
same industry or sector.
Value investing
risk. The value approach to investing
involves the risk that stocks may remain undervalued for long periods,
undervaluation may become more severe, or perceived undervaluation may actually
represent intrinsic value. Value stocks may underperform the overall equity
market for an extended period while the market concentrates on growth stocks.
Issuer
risk. The market price of a security can
go up or down more than the market as a whole and can perform differently from
the value of the market as a whole, due to factors specifically relating to the
security’s issuer, such as disappointing earnings reports by the issuer,
unsuccessful products or services, loss of major customers, changes in
management, corporate actions, negative perception in the marketplace, or major
litigation or changes in government regulations affecting the issuer or the
competitive environment. An individual security may also be affected by factors
relating to the industry or sector of the issuer. The fund may experience a
substantial or complete loss on an individual security. A change in financial
condition or other event affecting a single issuer may adversely impact the
industry or sector of the issuer or securities markets as a whole.
Valuation
risk. The sales price the fund could
receive for any particular portfolio investment may differ from the fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets or that are valued using a fair value methodology. These
differences may increase significantly and affect fund investments more broadly
during periods of market volatility. Investors who purchase or redeem fund
shares on days
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4 |
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ClearBridge Small Cap Value
Fund |
when
the fund is holding fair-valued securities may receive fewer or more shares or
lower or higher redemption proceeds than they would have received if the fund
had not fair-valued securities or had used a different valuation methodology.
The fund’s ability to value its investments may be impacted by technological
issues and/or errors by pricing services or other third party service providers.
The valuation of the fund’s investments involves subjective
judgment.
Foreign investments
risk. The fund’s investments in
securities of foreign issuers or issuers with significant exposure to foreign
markets involve additional risk as compared to investments in U.S. securities or
issuers with predominantly domestic exposure, such as less liquid, less
transparent, less regulated and more volatile markets. The value of the fund’s
investments may decline because of factors affecting the particular issuer as
well as foreign markets and issuers generally, such as unfavorable or
unsuccessful government actions, reduction of government or central bank
support, inadequate accounting standards and auditing and financial
recordkeeping requirements, lack of information and political, economic,
financial or social instability. In addition, there may be significant obstacles
to obtaining information necessary for investigations into or litigation against
issuers located in or operating in certain foreign markets, particularly
emerging market countries, and shareholders may have limited legal remedies.
The
value of investments in securities denominated in foreign currencies increases
or decreases as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could erase
investment gains or add to investment losses. Currency exchange rates can be
volatile, and are affected by factors such as general economic and political
conditions, the actions of the U.S. and foreign governments or central banks,
the imposition of currency controls and speculation. The fund may be unable or
may choose not to hedge its foreign currency
exposure.
Financial services
sector risk. The fund is more
susceptible to any economic, business, political, regulatory or other
developments that adversely affect issuers in the financial services sector,
including the commercial banking and insurance industries, than a fund that does
not focus its investments in the financial services sector. Economic downturns,
credit losses, data breaches and severe price competition, among other things,
can negatively affect this sector. The profitability of financial services
companies is dependent on the availability and cost of capital and can be
significantly affected by changes in interest rates and monetary policy.
Financial services companies are also subject to extensive government
regulation, and policy and legislative changes in the United States and other
countries are changing many aspects of financial regulation. Financial services
companies will be particularly affected by these changes in regulation, and the
impact of these changes on any individual company or on the sector as a whole
may not be fully known for some time. Interconnectedness or interdependence
among financial services companies increases the risk that the financial
distress or failure of one financial services company may materially and
adversely affect a number of other financial services companies. In recent
years, cyber attacks and technology malfunctions have become increasingly
frequent in this sector and have caused significant losses to companies in this
sector, which may negatively impact the fund.
Portfolio management
risk. The value of your investment may
decrease if the subadviser’s judgment about the attractiveness or value of, or
market trends affecting, a particular security, industry, sector or region, or
about market movements, is incorrect or does not produce the desired results, or
if there are imperfections, errors or limitations in the models, tools and data
used by the subadviser. In addition, the fund’s investment strategies or
policies may change from time to time. Those changes may not lead to the results
intended by the subadviser and could have an adverse effect on the value or
performance of the fund.
Illiquidity
risk. Some assets held by the fund may
be or become impossible or difficult to sell, particularly during times of
market turmoil. These illiquid assets may also be difficult to value. Markets
may become illiquid when, for instance, there are few, if any, interested buyers
or sellers or when dealers are unwilling or unable to make a market for certain
securities. As a general matter, dealers recently have been less willing to make
markets for fixed income securities. If the fund is forced to sell an illiquid
asset to meet redemption requests or other cash needs, or to try to limit
losses, the fund may be forced to sell at a substantial loss or may not be able
to sell at all.
Cybersecurity
risk. Cybersecurity incidents, both
intentional and unintentional, may allow an unauthorized party to gain access to
fund assets, fund or customer data (including private shareholder information),
or proprietary information, cause the fund, the manager, the subadvisers and/or
their service providers (including, but not limited to, fund accountants,
custodians, sub-custodians, transfer agents and financial intermediaries) to
suffer data breaches, data corruption or loss of operational functionality or
prevent fund investors from purchasing, redeeming or exchanging shares or
receiving distributions. The fund, the manager, and the subadvisers have limited
ability to prevent or mitigate cybersecurity incidents affecting third party
service providers, and such third party service providers may have limited
indemnification obligations to the fund or the manager. Cybersecurity incidents
may result in financial losses to the fund and its shareholders, and substantial
costs may be incurred in order to prevent any future cybersecurity incidents.
Issuers of securities in which the fund invests are also subject to
cybersecurity risks, and the value of these securities could decline if the
issuers experience cybersecurity incidents.
These
and other risks are discussed in more detail in the Prospectus or in the
Statement of Additional Information.
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ClearBridge Small Cap Value
Fund |
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5 |
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Performance
The
accompanying bar chart and table provide some indication of the risks of
investing in the fund. The bar chart
shows changes in the fund’s performance from year to year for Class A
shares. The table shows the average annual total returns of each class of
the fund that has been in operation for at least one full calendar year and also
compares the fund’s performance with the average annual total returns of an
index or other benchmark. Performance for classes other
than those shown may vary from the performance shown to the extent the expenses
for those classes differ. The fund makes updated performance information,
including its current net asset value, available at www.franklintempleton.com/mutualfunds
(select fund and share class), or by calling the fund at
877-6LM-FUND/656-3863.
The fund’s past performance
(before and after taxes) is not necessarily an indication of how the fund will
perform in the
future.
Sales charges are not reflected in
the accompanying bar chart, and if those charges were included, returns would be
less than those shown.
Best Quarter
(12/31/2020): 29.74 Worst
Quarter (03/31/2020): (40.11)
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Average annual total returns
(%) |
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(for periods ended
December 31, 2021) |
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Class A |
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1 year |
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5 years |
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10 years |
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Since inception |
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Inception date |
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Return
before taxes |
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24.21 |
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5.55 |
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8.77 |
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Return
after taxes on distributions |
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22.63 |
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3.28 |
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6.75 |
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Return
after taxes on distributions and sale of fund shares |
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15.28 |
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3.72 |
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6.58 |
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Other Classes
(Return before taxes only) |
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Class
C |
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29.86 |
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6.09 |
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8.64 |
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Class
I |
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32.20 |
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7.17 |
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9.77 |
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Class
IS |
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32.32 |
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7.28 |
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N/A |
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7.91 |
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05/22/2013 |
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Russell
2000 Value Index (reflects no deduction for fees, expenses or taxes)1 |
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28.27 |
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9.07 |
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12.03 |
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1 |
For
Class IS shares, for the period from the class’ inception date to December
31, 2021, the average annual total return of the Russell 2000 Value Index
was 10.10%. |
The after-tax returns are shown
only for Class A shares, are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and the
after-tax returns shown are not relevant to investors who hold their fund shares
through tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts. After-tax returns for classes other than Class A
will vary from returns shown for Class
A.
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6 |
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ClearBridge Small Cap Value
Fund |
Management
Investment
manager: Legg Mason Partners Fund
Advisor, LLC (“LMPFA”)
Subadviser: ClearBridge Investments, LLC (“ClearBridge”)
Portfolio managers:
Primary responsibility for the
day-to-day management of the fund lies with the following portfolio managers.
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Portfolio manager |
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Title |
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Portfolio manager of the fund since |
Albert
Grosman |
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Managing
Director and a Portfolio
Manager
of ClearBridge |
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2019 |
Brian
Lund, CFA |
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Managing
Director and a Portfolio
Manager
of ClearBridge |
|
2019 |
Purchase and sale of fund
shares
You
may purchase, redeem or exchange shares of the fund each day the New York Stock
Exchange is open, at the fund’s net asset value determined after receipt of your
request in good order, subject to any applicable sales charge.
The
fund’s initial and subsequent investment minimums generally are set forth in the
accompanying table:
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Investment minimum initial/additional investment
($) |
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Class A |
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Class C1 |
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Class R |
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Class I |
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Class IS |
General |
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1,000/50 |
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1,000/50 |
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N/A |
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1 million/None2 |
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N/A |
Uniform
Gifts or Transfers to Minor Accounts |
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1,000/50 |
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1,000/50 |
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N/A |
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1 million/None2 |
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N/A |
IRAs |
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250/50 |
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250/50 |
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N/A |
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1 million/None2,3 |
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N/A3 |
SIMPLE
IRAs |
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None/None |
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None/None |
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N/A |
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1 million/None2 |
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N/A |
Systematic
Investment Plans |
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25/25 |
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25/25 |
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N/A |
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1 million/None2,4 |
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N/A4 |
Clients
of Eligible Financial Intermediaries |
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None/None |
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N/A |
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None/ None |
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None/None5 |
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None/None5 |
Eligible
Investment Programs |
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None/None |
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N/A |
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None/ None |
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None/
None |
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None/None |
Omnibus
Retirement Plans |
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None/None |
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None/None |
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None/ None |
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None/ None |
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None/None |
Individual
Retirement Plans except as noted |
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None/None |
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None/None |
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N/A |
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1 million/None2 |
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N/A |
Institutional
Investors |
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1,000/50 |
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1,000/50 |
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N/A |
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1 million/None |
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1 million/None |
1 |
Class
C shares are not available for purchase through Distributor
Accounts. |
2 |
Available
to investors investing directly with the fund. |
3 |
IRA
accountholders who purchase Class I or Class IS shares through a Service
Agent acting as agent on behalf of its customers are subject to the
initial and subsequent minimums of $250/$50. If a Service Agent does not
have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
4 |
Investors
investing through a Systematic Investment Plan who purchase Class I or
Class IS shares through a Service Agent acting as agent on behalf of its
customers are subject to the initial and subsequent minimums of $25/$25.
If a Service Agent does not have this arrangement in place with the
Distributor, the initial and subsequent minimums listed in the table
apply. Please contact your Service Agent for more
information. |
5 |
Individual
investors who purchase Class I shares or Class IS shares through a Service
Agent acting as agent on behalf of its customers are subject to the
initial and subsequent minimums of $1,000/$50. If a Service Agent does not
have this arrangement in place with the Distributor, the initial and
subsequent minimums listed in the table apply. Please contact your Service
Agent for more information. |
Your
Service Agent may impose higher or lower investment minimums, or may impose no
minimum investment requirement.
For
more information about how to purchase, redeem or exchange shares, and to learn
which classes of shares are available to you, you should contact your Service
Agent, or, if you hold your shares or plan to purchase shares through the fund,
you should contact the fund by phone at 877-6LM-FUND/656-3863, by regular mail
at Legg Mason Funds, P.O. Box 33030, St. Petersburg, FL 33733-8030 or by
express, certified or registered mail at Legg Mason Funds, 100 Fountain Parkway,
St. Petersburg, FL 33716-1205.
Tax information
The
fund’s distributions are generally taxable as ordinary income or capital
gains.
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ClearBridge Small Cap Value
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Payments to
broker/dealers and other financial intermediaries
The
fund’s related companies pay Service Agents for the sale of fund shares,
shareholder services and other purposes. These payments create a conflict of
interest by influencing your Service Agent or its employees or associated
persons to recommend the fund over another investment. Ask your financial
adviser or salesperson or visit your Service Agent’s or salesperson’s website
for more information.
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8 |
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ClearBridge Small Cap Value
Fund |
More on the fund’s
investment strategies, investments and risks
Important information
The
fund seeks long-term capital growth.
The
fund’s investment objective may be changed by the Board of Trustees (the
“Board”) without shareholder approval and on notice to shareholders. There is no
assurance that the fund will meet its investment objective.
Under
normal circumstances, the fund invests at least 80% of its net assets, plus
borrowings for investment purposes, if any, in common stocks and other equity
securities of small capitalization U.S. companies or in other investments with
similar economic characteristics. Small capitalization companies are those
companies whose market capitalizations at the time of investment do not exceed
(i) $3 billion or (ii) the highest month-end market capitalization
value of any stock in the Russell 2000 Index (the “Index”) for the previous 12
months, whichever is greater. Securities of companies whose market
capitalizations no longer meet this definition after purchase by the fund still
will be considered to be securities of small capitalization companies for
purposes of the fund’s 80% investment policy. The size of companies in the Index
changes with the market conditions and the composition of the Index. The fund
may invest up to 20% of its net assets in shares of companies with larger market
capitalizations.
The
fund’s 80% investment policy may be changed by the Board upon 60 days’ prior
notice to shareholders.
The
fund’s other investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
Prospectus or in the Statement of Additional Information (“SAI”).
Equity investments
Equity
securities include exchange-traded and over-the-counter (“OTC”) common and
preferred stocks, warrants and rights, securities convertible into equity
securities and securities of other investment companies and of real estate
investment trusts (“REITs”).
Foreign investments
The
fund may invest up to 20% of its net assets (at the time of investment) in
foreign securities. The fund may invest directly in foreign issuers or invest in
depositary receipts.
Real estate investment
trusts (REITs)
REITs
are pooled investment vehicles that invest primarily in income producing real
estate or real estate related loans or interests. REITs are generally classified
as equity REITs, mortgage REITs or a combination of equity and mortgage REITs.
Unlike corporations, entities that qualify as REITs for U.S. federal income tax
purposes are not taxed on income distributed to their shareholders, provided
they comply with the applicable requirements of the Internal Revenue Code of
1986, as amended (the “Code”). The fund will indirectly bear its proportionate
share of any management and other expenses that may be charged by the REITs in
which it invests, in addition to the expenses paid by the fund.
Short sales
A
short sale is a transaction in which the fund sells securities it does not own
in anticipation of a decline in the market price of the securities. The fund may
hold no more than 25% of its net assets (taken at the then current market value)
as required collateral for such sales at any one time.
Securities of other
investment companies
The
fund may invest up to 10% of its assets in securities of other investment
companies, including shares in a portfolio of securities that seeks to track the
performance of an underlying equity index or a portion of an equity index.
Cash management
The
fund may hold cash pending investment, may invest in money market instruments
and may enter into repurchase agreements and reverse repurchase agreements
(which have characteristics like borrowings) for cash management purposes. The
fund may invest in money market funds, which may or may not be affiliated with
the fund’s manager or the subadvisers. The amount of assets the fund may hold
for cash management purposes will depend on market conditions and the need to
meet expected redemption requests.
Defensive investing
The
fund may depart from its principal investment strategies in response to adverse
market, economic or political conditions by taking temporary defensive
positions, including by investing in any type of money market instruments and
short-term debt securities or holding cash without regard to any percentage
limitations. Although the subadviser has the ability to take defensive
positions, it may choose not to do so for a variety of reasons, even during
volatile market conditions.
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ClearBridge Small Cap Value
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Other investments
The
fund may also use other strategies and invest in other investments that are
described, along with their risks, in the Statement of Additional Information
(“SAI”). However, the fund might not use all of the strategies and
techniques or invest in all of the types of investments described in this
Prospectus or in the SAI.
Percentage and other
limitations
The
fund’s compliance with its investment limitations and requirements described in
this Prospectus is usually determined at the time of investment. If such a
percentage limitation is complied with at the time of an investment, any
subsequent change resulting from a change in asset values or characteristics
will not constitute a violation of that limitation.
Selection process
The
portfolio managers emphasize individual security selection while spreading the
fund’s investments among industries and sectors. The portfolio managers use both
quantitative and fundamental methods to identify stocks of smaller
capitalization companies the portfolio managers believe have a high probability
of outperforming other stocks in the same industry or sector. The portfolio
managers utilize the subadviser’s fundamental research analysts who, using their
industry expertise, determine the material environmental, social and governance
(“ESG”) factors facing both individual companies and industry sectors and engage
with company management regarding the extent to which they promote best
practices of such factors. ESG factors may include, but are not necessarily
limited to, environmentally-friendly product initiatives, labor audits of
overseas supply chains and strong corporate governance. The choice of ESG
factors for any particular company reflects the specific industry.
The
fundamental research analysts use an established proprietary research and
engagement process to determine a company’s profile on ESG issues. This includes
generating an ESG rating, through its ESG ratings system, by assessing both
quantitatively and qualitatively. This system has four rating levels: AAA, AA, A
& B, assigned to companies based on performance on key ESG issues (such as
health & safety, gender diversity, climate risk, corporate governance
risk and data security), including performance relative to the companies’
industry peer set.
The
portfolio managers use quantitative parameters to select a universe of smaller
capitalized companies that fit the fund’s general investment criteria. In
selecting individual securities from within this range, the portfolio managers
look for “value” attributes, such as:
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Low
stock price relative to earnings, book value and cash
flow |
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High
return on invested capital |
The
portfolio managers also use quantitative methods to identify catalysts and
trends that might influence the fund’s industry or sector focus, or the
portfolio managers’ individual security selection.
More on risks of
investing in the fund
Following
is more information on the principal risks summarized above and additional risks
of investing in the fund.
Stock market and
equity securities risk. The stock
markets are volatile and the market prices of the fund’s equity securities may
decline generally. Equity securities may include warrants, rights, exchange
traded and over-the-counter common stocks, preferred stock, depositary receipts,
trust certificates, limited partnership interests and shares of other investment
companies, including exchange-traded funds and real estate investment trusts.
Equity securities may have greater price volatility than other asset classes,
such as fixed income securities, and may fluctuate in price based on actual or
perceived changes in a company’s financial condition and overall market and
economic conditions and perceptions. If the market prices of the equity
securities owned by the fund fall, the value of your investment in the fund will
decline.
Market events
risk. The market values of securities or
other assets will fluctuate, sometimes sharply and unpredictably, due to changes
in general market conditions, overall economic trends or events, governmental
actions or intervention, actions taken by the U.S. Federal Reserve or foreign
central banks, market disruptions caused by trade disputes or other factors,
political developments, investor sentiment, the global and domestic effects of a
pandemic, and other factors that may or may not be related to the issuer of the
security or other asset. Economies and financial markets throughout the world
are increasingly interconnected. Economic, financial or political events,
trading and tariff arrangements, public health events, terrorism, natural
disasters and other circumstances in one country or region could have profound
impacts on global economies or markets. As a result, whether or not the fund
invests in securities of issuers located in or with significant exposure to the
countries directly affected, the value and liquidity of the fund’s investments
may be negatively affected.
The
rapid and global spread of a highly contagious novel coronavirus respiratory
disease, designated COVID-19, has resulted in extreme volatility in the
financial markets; reduced liquidity of many instruments; restrictions on
international and, in some cases, local travel; significant disruptions to
business operations (including business closures); strained healthcare systems;
disruptions to supply chains, consumer demand and employee availability; and
widespread uncertainty regarding the duration and long-term effects of this
pandemic. Some sectors of the economy and individual issuers have experienced
particularly large losses. In addition, the COVID-19 pandemic may result in a
sustained domestic or even global economic downturn or recession, domestic and
foreign political and social instability, damage to diplomatic and international
trade relations and increased volatility and/or decreased liquidity in the
securities markets. Developing or emerging market countries may be more impacted
by the COVID-19 pandemic as they may have less established health care systems
and may be less able to control or mitigate the effects of the pandemic. The
ultimate economic fallout from the pandemic, and the long-term impact on
economies, markets, industries and individual issuers, are not known.
The
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ClearBridge Small Cap Value
Fund |
U.S.
government and the Federal Reserve, as well as certain foreign governments and
central banks, have taken extraordinary actions to support local and global
economies and the financial markets in response to the COVID-19 pandemic. This
and other government intervention into the economy and financial markets to
address the COVID-19 pandemic may not work as intended, particularly if the
efforts are perceived by investors as being unlikely to achieve the desired
results. Government actions to mitigate the economic impact of the pandemic have
resulted in a large expansion of government deficits and debt, the long term
consequences of which are not known. The COVID-19 pandemic could adversely
affect the value and liquidity of the fund’s investments, impair the fund’s
ability to satisfy redemption requests, and negatively impact the fund’s
performance. In addition, the outbreak of COVID-19, and measures taken to
mitigate its effects, could result in disruptions to the services provided to
the fund by its service providers.
Small capitalization
company risk. The fund will be exposed
to additional risks as a result of its investments in the securities of small
capitalization companies. Small capitalization companies may fall out of favor
with investors; may have limited product lines, operating histories, markets or
financial resources; or may be dependent upon a limited management group. The
prices of securities of small capitalization companies generally are more
volatile than those of large capitalization companies and are more likely to be
adversely affected than large capitalization companies by changes in earnings
results and investor expectations or poor economic or market conditions,
including those experienced during a recession. Securities of small
capitalization companies may underperform large capitalization companies, may be
harder to sell at times or at prices the portfolio managers believe appropriate
and may have greater potential for losses.
Value investing
risk. The value approach to investing
involves the risk that stocks may remain undervalued for long periods,
undervaluation may become more severe, or perceived undervaluation may actually
represent intrinsic value. Value stocks may underperform the overall equity
market for an extended period while the market concentrates on growth stocks.
REITs
risk. Investments in REITs expose the
fund to risks similar to investing directly in real estate. The value of these
underlying investments may be affected by changes in the value of the underlying
real estate, the quality of the property management, the creditworthiness of the
issuers of the investments, demand for rental properties, and changes in
property taxes, interest rates and the real estate regulatory environment.
Investments in REITs are also affected by general economic conditions. REITs are
also subject to heavy cash flow dependency on the property interests they hold,
defaults by borrowers, poor performance by the REIT’s manager and
self-liquidation. REITs usually charge management fees, which may result in
layering the fees paid by the fund. REITs may be leveraged, which increases
risk. In addition, REITs could possibly fail to (i) qualify for favorable
tax treatment under applicable tax law, or (ii) maintain their exemptions
from registration under the Investment Company Act of 1940, as amended. The
above factors may also adversely affect a borrower’s or a lessee’s ability to
meet its obligations to the REIT. In the event of a default by a borrower or
lessee, the REIT may experience delays in enforcing its rights as a mortgagee or
lessor and may incur substantial costs associated with protecting its
investments.
Issuer
risk. The market price of a security can
go up or down more than the market as a whole and can perform differently from
the value of the market as a whole, due to factors specifically relating to the
security’s issuer, such as disappointing earnings reports by the issuer,
unsuccessful products or services, loss of major customers, changes in
management, corporate actions, negative perception in the marketplace, or major
litigation or changes in government regulations affecting the issuer or the
competitive environment. An individual security may also be affected by factors
relating to the industry or sector of the issuer. The fund may experience a
substantial or complete loss on an individual security. A change in financial
condition or other event affecting a single issuer may adversely impact the
industry or sector of the issuer or securities markets as a whole.
Illiquidity risk.
Illiquidity risk exists when particular
investments are impossible or difficult to sell. Although most of the fund’s
investments must be liquid at the time of investment, investments may be or
become illiquid after purchase by the fund, particularly during periods of
market turmoil. Markets may become illiquid when, for instance, there are few,
if any, interested buyers or sellers or when dealers are unwilling or unable to
make a market for certain securities. As a general matter, dealers recently have
been less willing to make markets for fixed income securities. When the fund
holds illiquid investments, the portfolio may be harder to value, especially in
changing markets, and if the fund is forced to sell these investments to meet
redemption requests or for other cash needs, or to try to limit losses, the fund
may be forced to sell at a substantial loss or may not be able to sell at all.
The fund may experience heavy redemptions that could cause the fund to liquidate
its assets at inopportune times or at a loss or depressed value, which could
cause the value of your investment to decline. In addition, when there is
illiquidity in the market for certain investments, the fund, due to limitations
on illiquid investments, may be unable to achieve its desired level of exposure
to a certain sector.
Valuation
risk. Many factors may influence
the price at which the fund could sell any particular portfolio investment. The
sales price may well differ—higher or lower—from the fund’s last valuation, and
such differences could be significant, particularly for illiquid securities and
securities that trade in relatively thin markets and/or markets that experience
extreme volatility. If market conditions make it difficult to value some
investments, the fund may value these investments using more subjective methods,
such as fair value methodologies. These differences may increase significantly
and affect fund investments more broadly during periods of market volatility.
Investors who purchase or redeem fund shares on days when the fund is holding
fair-valued securities may receive fewer or more shares, or lower or higher
redemption proceeds, than they would have received if the fund had not
fair-valued securities or had used a different valuation methodology. The value
of non-U.S. securities, certain fixed income securities and currencies, as
applicable, may be materially affected by events after the close of the markets
in which they are traded, but before the fund determines its net asset
value. The fund’s ability to value its investments may also be impacted by
technological issues and/or errors by pricing services or other third party
service providers. The valuation of the fund’s investments involves subjective
judgment.
Foreign investments
risk. The fund’s investments in
securities of foreign issuers or issuers with significant exposure to foreign
markets involve additional risk as compared to investments in U.S. securities or
issuers with predominantly domestic exposure, such as less liquid, less
regulated,
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ClearBridge Small Cap Value
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less
transparent and more volatile markets. The value of the fund’s investments may
decline because of factors affecting the particular issuer as well as foreign
markets and issuers generally, such as unfavorable or unsuccessful government
actions, tariffs and trade disputes, reduction of government or central bank
support, inadequate accounting standards and auditing and financial
recordkeeping requirements, lack of information and political, economic,
financial or social instability. The Public Company Accounting Oversight Board,
which regulates auditors of U.S. public companies, is unable to inspect audit
work papers in certain foreign countries. Investors in foreign countries often
have limited rights and few practical remedies to pursue shareholder claims,
including class actions or fraud claims, and the ability of the Securities and
Exchange Commission, the U.S. Department of Justice and other authorities to
bring and enforce actions against foreign issuers or foreign persons is limited.
Foreign investments may also be adversely affected by U.S. government or
international interventions, restrictions or economic sanctions, which could
negatively affect the value of an investment or result in the fund selling an
investment at a disadvantageous time.
The
value of the fund’s foreign investments may also be affected by foreign tax
laws, special U.S. tax considerations and restrictions on receiving the
investment proceeds from a foreign country. Dividends or interest on, or
proceeds from the sale or disposition of, foreign securities may be subject to
non-U.S. withholding or other taxes.
It
may be difficult for the fund to pursue claims against a foreign issuer or other
parties in the courts of a foreign country. Some securities issued by non-U.S.
governments or their subdivisions, agencies and instrumentalities may not be
backed by the full faith and credit of such governments. Even where a security
is backed by the full faith and credit of a government, it may be difficult for
the fund to pursue its rights against the government. In the past, some non-U.S.
governments have defaulted on principal and interest payments.
If
the fund buys securities denominated in a foreign currency, receives income in
foreign currencies, or holds foreign currencies from time to time, the value of
the fund’s assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Currency exchange rates can be volatile, and are affected by factors
such as general economic and political conditions, the actions of the U.S. and
foreign governments or central banks, the imposition of currency controls and
speculation. The fund may be unable or choose not to hedge its foreign currency
exposure.
In
certain foreign markets, settlement and clearance of trades may experience
delays in payment for or delivery of securities not typically associated with
settlement and clearance of U.S. investments. Settlement of trades in these
markets can take longer than in other markets and the fund may not receive its
proceeds from the sale of certain securities for an extended period (possibly
several weeks or even longer) due to, among other factors, low trading volumes
and volatile prices. The custody or holding of securities, cash and other assets
by local banks, agents and depositories in securities markets outside the United
States may entail additional risks. Governments or trade groups may compel local
agents to hold securities in designated depositories that may not be subject to
independent evaluation. Local agents are held only to the standards of care of
their local markets, and thus may be subject to limited or no government
oversight. In extreme cases, the fund’s securities may be misappropriated or the
fund may be unable to sell its securities. In general, the less developed a
country’s securities market is, the greater the likelihood of custody
problems.
The
risks of foreign investments are heightened when investing in issuers in
emerging market countries.
Financial services
sector risk. Companies in the financials
sector of an economy are subject to extensive and increasing governmental
regulation and intervention, which may adversely affect the scope of their
activities, the prices they can charge, the amount of capital they must maintain
and, potentially, their size. Governmental regulation may change frequently and
may have significant adverse consequences for companies in the financials
sector, including effects not intended by such regulation. The impact of more
stringent capital requirements, or recent or future regulation in various
countries of any individual financial company or of the financials sector as a
whole, cannot be predicted. Certain risks may impact the value of investments in
the financials sector more severely than those of investments outside this
sector, including the risks associated with companies that operate with
substantial financial leverage. Companies in the financials sector may also be
adversely affected by increases in interest rates and loan losses, decreases in
the availability of money or asset valuations, credit rating downgrades and
adverse conditions in other related markets. Insurance companies, in particular,
may be subject to severe price competition and/or rate regulation, which may
have an adverse impact on their profitability. The financials sector is
particularly sensitive to fluctuations in interest rates. The financials sector
is also a target for cyber attacks, and may experience technology malfunctions
and disruptions. In recent years, cyber attacks and technology failures have
become increasingly frequent in this sector and have reportedly caused losses to
companies in this sector, which may negatively impact a fund. Interconnectedness
or interdependence among financial services companies increases the risk that
the financial distress or failure of one financial services company may
materially and adversely affect a number of other financial services companies.
Portfolio management
risk. The value of your investment may
decrease if the subadviser’s judgment about the attractiveness or value of, or
market trends affecting, a particular security, industry, sector or region, or
about market movements, is incorrect or does not produce the desired results, or
if there are imperfections, errors or limitations in the models, tools and data
used by the subadviser. In addition, the fund’s investment strategies or
policies may change from time to time. Those changes may not lead to the results
intended by the subadviser and could have an adverse effect on the value or
performance of the fund.
Short sales
risk. If the price of the security sold
short increases between the time of the short sale and the time the fund
replaces the borrowed security, the fund will realize a loss, which may be
substantial. A fund that engages in a short sale or short position may lose more
money than the actual cost of the short sale or short position and its potential
losses may be unlimited if the fund does not own the security sold short or the
reference instrument and it is unable to close out of the short sale or short
position.
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ClearBridge Small Cap Value
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Investment in other
investment companies risk. If the
fund acquires shares of investment companies, including ones affiliated with the
fund, shareholders bear both their proportionate share of expenses in the fund
(including management and advisory fees) and, indirectly, the expenses of the
investment companies (to the extent not offset by LMPFA or its affiliates
through waivers).
Redemptions by
affiliated funds and by other significant investors. The fund may be an investment option for mutual
funds and ETFs that are managed by LMPFA and its affiliates, including Franklin
Templeton investment managers, as “funds of funds,” unaffiliated mutual funds
and ETFs and other investors with substantial investments in the fund. As a
result, from time to time, the fund may experience relatively large redemptions
and could be required to liquidate its assets at inopportune times or at a loss
or depressed value, which could cause the value of your investment to decline.
Cash management and
defensive investing risk. The value of
the investments held by the fund for cash management or defensive investing
purposes can fluctuate. Like other fixed income securities, they are subject to
risk, including market, interest rate and credit risk. If the fund holds cash
uninvested, the cash will be subject to the credit risk of the depository
institution holding the cash and the fund will not earn income on the cash. If a
significant amount of the fund’s assets is used for cash management or defensive
investing purposes, the fund will be less likely to achieve its investment
objective. Defensive investing may not work as intended and the value of an
investment in the fund may still decline.
Risk of increase in
expenses. Your actual costs of investing
in the fund may be higher than the expenses shown in “Annual fund operating
expenses” for a variety of reasons. For example, expenses may be higher if the
fund’s average net assets decrease, as a result of redemptions or otherwise, or
if a fee limitation is changed or terminated. Net assets are more likely to
decrease and fund expense ratios are more likely to increase when markets are
volatile.
Operational
risk. Your ability to transact with
the fund or the valuation of your investment may be negatively impacted because
of the operational risks arising from factors such as processing errors and
human errors, inadequate or failed internal or external processes, failures in
systems and technology, changes in personnel, and errors caused by third party
service providers or trading counterparties. It is not possible to identify all
of the operational risks that may affect the fund or to develop processes and
controls that completely eliminate or mitigate the occurrence of such failures.
The fund and its shareholders could be negatively impacted as a result.
Cybersecurity
risk. Cybersecurity incidents, both
intentional and unintentional, may allow an unauthorized party to gain access to
fund assets, fund or customer data (including private shareholder information),
or proprietary information, cause the fund, the manager, the subadvisers and/or
their service providers (including, but not limited to, fund accountants,
custodians, sub-custodians, transfer agents and financial intermediaries) to
suffer data breaches, data corruption or loss of operational functionality or
prevent fund investors from purchasing, redeeming or exchanging shares or
receiving distributions. The fund, the manager, and the subadvisers have limited
ability to prevent or mitigate cybersecurity incidents affecting third party
service providers, and such third party service providers may have limited
indemnification obligations to the fund or the manager. Cybersecurity incidents
may result in financial losses to the fund and its shareholders, and substantial
costs may be incurred in order to prevent any future cybersecurity incidents.
Issuers of securities in which the fund invests are also subject to
cybersecurity risks, and the value of these securities could decline if the
issuers experience cybersecurity incidents.
Please
note that there are other factors that could adversely affect your investment
and that could prevent the fund from achieving its investment objective. More
information about risks appears in the SAI. Before investing, you should
carefully consider the risks that you will assume.
Portfolio holdings
A
description of the fund’s policies and procedures with respect to the disclosure
of its portfolio holdings is available in the SAI. The fund posts its complete
portfolio holdings at www.franklintempleton.com/mutualfunds (click on the name
of the fund) on a quarterly basis. The fund intends to post its complete
portfolio holdings 14 calendar days following the quarter-end. The fund intends
to post partial information concerning the fund’s portfolio holdings (such as
top 10 holdings or sector breakdowns, for example) on the fund’s website on a
monthly basis. The fund intends to post this partial information 10 business
days following each month-end. Such information will remain available until the
next month’s or quarter’s holdings are posted.
|
|
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|
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|
|
ClearBridge Small Cap Value
Fund |
|
|
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|
13 |
|
More on fund management
Legg
Mason Partners Fund Advisor, LLC (“LMPFA” or the “manager”) is the fund’s
investment manager. LMPFA, with offices at 620 Eighth Avenue, New York,
New York 10018, also serves as the investment manager of other Legg
Mason-sponsored funds. LMPFA provides administrative and certain oversight
services to the fund. As of September 30, 2021, LMPFA’s total assets
under management were approximately $228.1 billion (including approximately
$217.3 million for which LMPFA provides non-discretionary investment models to
certain institutional clients).
ClearBridge
Investments, LLC (“ClearBridge” or the “subadviser”) provides the day-to-day
portfolio management of the fund, except for any portion of the fund’s cash and
short-term instruments that is allocated to Western Asset Management Company,
LLC (“Western Asset”). ClearBridge has offices at 620 Eighth Avenue, New York,
New York 10018 and is an investment adviser that manages U.S. and international
equity investment strategies for institutional and individual
investors. ClearBridge has been committed to delivering long-term results
through active management for more than 50 years, and bases its investment
decisions on fundamental research and the insights of seasoned portfolio
management teams. As of September 30, 2021, ClearBridge’s total assets
under management (including assets under management for ClearBridge, LLC, an
affiliate of ClearBridge) were approximately $196.0 billion, including $35.1
billion for which ClearBridge provides non-discretionary investment models to
managed account sponsors.
Western
Asset manages the portion of the fund’s cash and short-term instruments
allocated to it. Western Asset, established in 1971, has offices at 385 East
Colorado Boulevard, Pasadena, California 91101 and 620 Eighth Avenue, New York,
New York 10018. Western Asset acts as investment adviser to institutional
accounts, such as corporate pension plans, mutual funds and endowment funds. As
of September 30, 2021, the total assets under management of Western Asset
and its supervised affiliates were approximately $478.5 billion.
LMPFA,
ClearBridge and Western Asset are indirect, wholly-owned subsidiaries of
Franklin Resources, Inc. (“Franklin Resources”). Franklin Resources, whose
principal executive offices are at One Franklin Parkway, San Mateo, California
94403, is a global investment management organization operating, together with
its subsidiaries, as Franklin Templeton. As of September 30, 2021, Franklin
Templeton’s asset management operations had aggregate assets under management of
approximately $1.5 trillion.
Portfolio managers
Primary
responsibility for the day-to-day management of the fund lies with the following
portfolio managers. The portfolio managers have the ultimate authority to make
portfolio decisions.
|
|
|
|
|
Portfolio manager |
|
Title and recent biography |
|
Portfolio manager of the fund since |
Albert
Grosman |
|
Mr.
Grosman is a Managing Director and a Portfolio Manager of ClearBridge and
has 28 years of industry experience. He joined ClearBridge in 2007. Mr.
Grosman was formerly an equity analyst specializing in small and mid-cap
companies with Long Trail Investment Management, Phinity Capital,
Cyllenius/BlackRock and Fidelity Management and Research. Mr. Grosman has
an M.B.A. from Columbia Business School and a B.B.A. in Business
Administration from Emory University. |
|
2019 |
Brian
Lund, CFA |
|
Mr.
Lund is a Managing Director and a Portfolio Manager of ClearBridge and has
21 years of industry experience. Mr. Lund joined the manager in 2004. He
was formerly an Equity Analyst at Morningstar, Inc. covering gaming,
lodging, and leisure firms, and a Mutual Fund Analyst. Mr. Lund was a
Writer/Analyst at the Motley Fool, an online investment service, from 2000
to 2001. |
|
2019 |
The
SAI provides information about the compensation of the portfolio managers, other
accounts managed by the portfolio managers and any fund shares held by the
portfolio managers.
Management fee
The
fund pays a management fee at an annual rate of 0.75% of its average daily net
assets.
For
the fiscal year ended September 30, 2021, the fund paid LMPFA an effective
management fee of 0.71% of the fund’s average daily net assets for management
services. The effective management fee reflects any fees waived by the manager
(including any fees waived in connection with investments by the fund in
affiliated investment companies for which the fund paid a management
fee).
|
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14 |
|
|
|
ClearBridge Small Cap Value
Fund |
A
discussion regarding the basis for the Board’s approval of the fund’s management
agreement and subadvisory agreements is available in the fund’s Annual Report
for the period ended September 30, 2020.
Expense limitation
The
manager has agreed to waive fees and/or reimburse operating expenses (other than
interest, brokerage commissions, taxes, extraordinary expenses and acquired fund
fees and expenses) so that the ratio of total annual fund operating expenses
will not exceed 1.35% for Class A shares, 2.10% for Class C shares, 1.60%
for Class R shares, 1.00% for Class I shares and 0.90% for Class IS shares,
subject to recapture as described below. In addition, the ratio of total annual
fund operating expenses for Class IS shares will not exceed the ratio of total
annual fund operating expenses for Class I shares, subject to recapture as
described below. These arrangements are expected to continue until
December 31, 2023, may be terminated prior to that date by agreement of the
manager and the Board, and may be terminated at any time after that date by the
manager. These arrangements, however, may be modified by the manager to decrease
total annual fund operating expenses at any time. The manager is also permitted
to recapture amounts waived and/or reimbursed to a class during the same fiscal
year in which the manager earned the fee or incurred the expense if the class’
total annual fund operating expenses have fallen to a level below the limits
described above. 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
fund operating expenses exceeding the applicable limits described above or any
other lower limit then in effect. In addition, the manager has agreed to waive
the fund’s management fee to an extent sufficient to offset the net management
fee payable in connection with any investment in an affiliated money market
fund. This management fee waiver is not subject to the recapture provision
discussed above.
Additional information
The
fund enters into contractual arrangements with various parties, including, among
others, the fund’s manager and the subadvisers, who provide services to the
fund. Shareholders are not parties to, or intended (or “third-party”)
beneficiaries of, those contractual arrangements.
This
Prospectus and the SAI provide information concerning the fund that you should
consider in determining whether to purchase shares of the fund. The fund may
make changes to this information from time to time. Neither this Prospectus nor
the SAI is intended to give rise to any contract rights or other rights in any
shareholder, other than rights conferred by federal or state securities
laws.
Distribution
Franklin
Distributors, LLC (“Franklin Distributors” or the “Distributor”), an indirect,
wholly-owned broker/dealer subsidiary of Franklin Resources, serves as the
fund’s sole and exclusive distributor.
The
fund has adopted a shareholder services and distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. Under the plan, the
fund pays distribution and/or service fees based on an annualized percentage of
average daily net assets of up to 0.25% for Class A shares; up to 1.00% for
Class C shares; and up to 0.50% for Class R shares. Payments by the fund under
its plan go to the Distributor, financial intermediaries and other parties that
provide services in connection with or are otherwise involved in the
distribution of its shares or administration of plans or programs that use its
shares as their funding medium, and to reimburse certain other expenses and
payments. From time to time, the Distributor and/or financial intermediaries may
agree to a reduction or waiver of these fees. These fees are an ongoing
expense and, over time, will increase the cost of your investment and may cost
you more than other types of sales charges. Class I shares and Class IS shares
are not subject to distribution and/or service fees under the plan.
Additional payments
In
addition to payments made to intermediaries under the fund’s shareholder
services and distribution plan and other payments made by the fund for
shareholder services and/or recordkeeping, the Distributor, the manager and/or
their affiliates make payments for distribution, shareholder servicing,
marketing and promotional activities and related expenses out of their profits
and other available sources, including profits from their relationships with the
fund. These payments are not reflected as additional expenses in the fee table
contained in this Prospectus. The recipients of these payments may include the
Distributor and affiliates of the manager, as well as Service Agents through
which investors may purchase shares of the fund, including your Service Agent.
The total amount of these payments is substantial, may be substantial to any
given recipient and may exceed the costs and expenses incurred by the recipient
for any fund-related marketing or shareholder servicing activities. The payments
described in this paragraph are often referred to as “revenue sharing payments.”
Revenue sharing arrangements are separately negotiated between the Distributor,
the manager and/or their affiliates, and the recipients of these payments.
Revenue
sharing payments create an incentive for an intermediary or its employees or
associated persons to recommend or sell shares of the fund to you. Contact your
Service Agent for details about revenue sharing payments it receives or may
receive. Additional information about revenue sharing payments is available in
the SAI. Revenue sharing payments, as well as payments by the fund under the
shareholder services and distribution plan or for recordkeeping and/or
shareholder services, also benefit the manager, the Distributor and their
affiliates to the extent the payments result in more assets being invested in
the fund on which fees are being charged.
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|
ClearBridge Small Cap Value
Fund |
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|
15 |
|
Choosing a share class
The
fund offers multiple share classes. Each share class represents an investment in
the same portfolio of securities, but each has different availability (for
example, not all Service Agents offer all share classes), eligibility criteria,
expense structures and arrangements for shareholder services or distribution,
allowing you to choose the class that best meets your needs. You should read
this section carefully and speak with your Service Agent (if applicable) to
determine which share class is most appropriate for you. When choosing the
appropriate share class, you should consider the following factors:
• |
|
the
amount you plan to invest; |
• |
|
the
length of time you expect to own the shares; |
• |
|
the
total costs associated with your investment, including any sales charges
that you pay when you buy or sell fund shares and expenses that are paid
out of fund assets over time; |
• |
|
whether
you qualify for any reduction or waiver of the sales
charge; |
• |
|
the
availability of the share class; |
• |
|
the
services that will be available to you and whether you meet any
eligibility criteria; and |
• |
|
the
amount of compensation that your Service Agent will
receive. |
For
example, when choosing between Class A or Class C shares, you should be
aware that, generally speaking, the larger the size of your investment and the
longer your investment horizon, the more likely it will be that Class C shares
will not be as advantageous as Class A shares. The annual distribution
and/or service fees on Class C shares may cost you more over the longer term
than the front-end sales charge and service fees you would pay for larger
purchases of Class A shares. If you are eligible to purchase Class I
shares, you should be aware that Class I shares are not subject to a front-end
sales charge or distribution or service fees and generally have lower annual
expenses than Class A or Class C shares.
Generally
speaking, Class A shares have lower annual operating expenses than Class C
shares but not as low as Class I/Class IS shares. Overall, Class IS shares
generally have the lowest annual expenses of all share classes.
More
information about the fund’s classes of shares is available through the fund’s
website. You’ll find detailed information, free of charge and in a clear and
prominent format, about sales charges and ways you can qualify for reduced or
waived sales charges.
The
fund’s shares are distributed by Franklin Distributors.
Share class features
summary
The
following table summarizes key features of the fund’s share classes. In
addition, you should read carefully this Prospectus, including the fee table and
the expense example at the front of this Prospectus before choosing your share
class. If you are not purchasing shares directly from the fund, you should
contact your Service Agent for help choosing a share class that may be
appropriate for you. Capitalized terms used in the table have the definition
given to them in this Prospectus.
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Minimum initial investments1 |
|
Initial sales charge |
|
Contingent deferred
sales charge |
|
Annual distribution
and/or service (12b-1)
fees |
|
Exchange privilege2 |
|
Conversion to Class A
shares |
|
|
|
|
|
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|
Class A |
|
Generally,
$1,000 for all accounts except:
(i)
$25 if establishing a Systematic Investment Plan;
(ii)
$250 for IRAs; and
(iii)
none for certain fee-based programs and retirement plans |
|
Up
to 5.75%; reduced or
waived
for large purchases and certain investors. No charge for purchases of
$1 million or more |
|
1.00%
on purchases of $1 million or more if you redeem within 18 months of
purchase; waived for certain investors |
|
0.25%
of average daily net assets |
|
Class
A shares of funds sold by the Distributor |
|
N/A |
|
|
|
|
|
|
|
Class
C |
|
Generally,
$1,000 for all accounts except:
(i)
$25 if establishing a Systematic Investment Plan;
(ii)
$250 for IRAs; and
(iii)
none for certain fee-based programs and retirement plans |
|
None |
|
1.00%
if you redeem within 1 year of purchase; waived for certain
investors |
|
1.00%
of average daily net assets |
|
Class
C shares of funds sold by the Distributor |
|
Yes;
generally converts to Class A on the next monthly conversion processing
date (generally, the fifteenth day of the month) after the shares have
been held for 8 years from the purchase date; please consult your Service
Agent for more information |
|
|
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|
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|
Class
R |
|
None |
|
None |
|
None |
|
0.50%
of average daily
net
assets |
|
Class
R shares of funds sold by the Distributor |
|
No |
|
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16 |
|
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|
ClearBridge Small Cap Value
Fund |
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Class
I |
|
• $1,000,000;
• Waived for
certain Service Agents with arrangements with the Distributor, Omnibus
Retirement Plans and certain individuals affiliated with Legg Mason;
• However,
investors investing through a Service Agent acting as agent on behalf of
its customers will be subject to the following minimums:
(i)
if investing through a Systematic Investment Plan, $25;
(ii)
if an individual investor, $1,000; and
(iii)
none for certain fee-based programs |
|
None |
|
None |
|
None |
|
Class
I shares of funds sold by the Distributor |
|
No |
|
|
|
|
|
|
|
Class
IS |
|
• $1,000,000;
• Waived for
certain Service Agents with arrangements with the Distributor and Omnibus
Retirement Plans
• However,
investors investing through a Service Agent acting as agent on behalf of
its customers will be subject to the following minimums:
(i)
if investing through a Systematic Investment Plan, $25;
(ii)
if an individual investor $1,000; and
(iii)
none for certain fee-based programs |
|
None |
|
None |
|
None |
|
Class
IS shares of funds sold by the Distributor |
|
No |
1 |
Please
note that the minimum initial investment amount must be met on a per class
basis. In addition, your Service Agent may impose higher or lower
investment minimums, or may impose no minimum investment
requirement. |
2 |
You
or your Service Agent may instruct the fund to exchange shares of any
class for shares of the same class of any other fund sold by the
Distributor, provided that the fund shares to be acquired in the exchange
are available to new investors in such other fund and that you are
eligible to invest in such shares. For investors investing through
retirement and benefit plans or fee-based programs, you should contact
your Service Agent that administers your plan or sponsors the fee-based
program to request an exchange. Certain retirement plan programs with
exchange features in effect prior to November 20, 2006, as approved
by the Distributor, remain eligible for exchange from Class C shares to
Class A shares in accordance with the program terms. Please see the
SAI for more details. In addition, you may exchange shares of the fund for
another share class of the same fund if you meet the eligibility
requirements of that particular class. Please contact your Service Agent
or the fund about funds available for
exchange. |
Share class availability
You
may buy shares of the fund either directly from the fund or through a Service
Agent. Please note that your Service Agent may not offer all classes of shares
since each Service Agent determines which share class(es) to make available to
its clients. Your Service Agent may receive different compensation for selling
one class of shares than for selling another class, which may depend on, among
other things, the type of investor account and the practices adopted by your
Service Agent. Each class of shares, except Class IS shares, is authorized to
pay fees for recordkeeping services, account servicing, networking, or similar
services to Service Agents. As a result, operating expenses of classes that
incur new or additional recordkeeping fees may increase over time. Certain
Service Agents may impose their own investment fees and maintain their own
practices for purchasing and selling fund shares, including higher or lower
investment minimums or none at all; these practices are not described in this
Prospectus or the SAI and will depend on the policies, procedures and trading
platforms of the Service Agent. Your Service Agent may provide shareholder
services that differ from the services provided by other Service Agents.
Services provided by your Service Agent may vary by class.
Plan
sponsors, plan fiduciaries and other Service Agents may choose to impose
qualification requirements that differ from the fund’s share class eligibility
standards as stated in this Prospectus. In certain cases, this could result in
the selection of a share class with higher distribution and/or service fees than
otherwise would have been incurred. The fund is not responsible for, and has no
control over, the decision of any plan sponsor, plan fiduciary or Service Agent
to impose such differing requirements. Please consult with your plan sponsor,
plan fiduciary or Service Agent for more information about available share
classes.
Please
contact your Service Agent about the availability of fund shares, the
shareholder services it provides for each class, the compensation it receives in
connection with the sale of each share class and the Service Agent’s practices
and other information.
|
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|
ClearBridge Small Cap Value
Fund |
|
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17 |
|
The
following table provides information on the availability of each share class
based on investor type, subject to the share class’ eligibility requirements.
Your Service Agent can help you determine which share class is appropriate for
you. The fund reserves the right to modify or
waive the eligibility policies for share class availability at any
time.
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A |
|
C1 |
|
R |
|
I |
|
IS |
Individual
Investors |
|
✓ |
|
✓ |
|
|
|
✓2, 3 |
|
✓2 |
Omnibus
Retirement Plans |
|
✓ |
|
✓ |
|
✓1 |
|
✓ |
|
✓ |
Individual
Retirement Plans |
|
✓ |
|
✓ |
|
|
|
✓ |
|
|
Clients
of Eligible Financial Intermediaries |
|
✓ |
|
✓ |
|
✓ |
|
✓4 |
|
✓4 |
Institutional
Investors |
|
✓ |
|
✓ |
|
|
|
✓ |
|
✓ |
1 |
Shares
are not available for purchase through accounts where the Distributor is
the broker-dealer of record (“Distributor
Accounts”). |
2 |
Individual
investors investing through a Service Agent may be eligible to invest in
Class I or Class IS shares, if such Service Agent is acting solely as an
agent on behalf of its customers pursuant to an agreement with the
Distributor and such investor’s shares are held in an omnibus account on
the books of the fund. Please contact your Service Agent for more
information. |
3 |
Class
I shares may be purchased directly from the fund by the following persons:
(i) current employees of the manager and its affiliates;
(ii) former employees of the manager and its affiliates with existing
accounts; (iii) current and former board members of investment
companies managed by affiliates of Franklin Resources; (iv) current
and former board members of Franklin Resources; and (v) the
“immediate families” of such persons. “Immediate families” are such
person’s spouse (including the surviving spouse of a deceased board
member), parents, grandparents, and children and grandchildren (including
step-relationships). For such investors, the minimum initial investment is
$1,000 and the minimum for each purchase of additional shares is $50.
Current employees may purchase additional Class I shares through a
systematic investment plan. |
4 |
Investors
who qualify as Clients of Eligible Financial Intermediaries or who
participate in Eligible Investment Programs made available through their
Service Agents (such as investors in fee-based advisory or mutual fund
“wrap” programs) are eligible to purchase, directly or via exchange, Class
I or Class IS shares, among other share classes. In such cases your
ability to hold Class I or Class IS shares may be premised on your
continuing participation in a fee-based advisory or mutual fund wrap
program. Your Service Agent may reserve the right to redeem your Class I
or Class IS shares or exchange your Class I or Class IS shares or exchange
them for Class A shares of the same fund, as applicable, if you
terminate your fee-based advisory or mutual fund wrap program and are no
longer eligible for Class I or Class IS shares. You may be subject to an
initial sales charge in connection with such exchange, and you will be
subject to the annual distribution and/or service fee applicable to
Class A shares. Any redemption may generate a taxable gain or loss
and significantly change the asset allocation of your
account. |
|
Omnibus
Retirement Plans are retirement plans held on the books of the fund in a
plan level or omnibus level account and include: (i) 401(k) plans; (ii) 457 plans; (iii)
employer-sponsored 403(b) plans; (iv) profit-sharing plans; (v)
non-qualified deferred compensation plans; (vi) employer-sponsored
benefit plans (including health savings accounts); (vii) defined
benefit plans; (viii) other similar employer-sponsored retirement and
benefit plans; (ix) individual retirement accounts that are administered
on the same IRA recordkeeping platform and that invest in the fund through
a single omnibus account pursuant to a special contractual arrangement
with the fund or the Distributor; and (x) investors who rollover fund
shares from a retirement plan into an individual retirement account
administered on the same retirement plan platform. SIMPLE IRAs are
considered Omnibus Retirement Plans if they are employer-sponsored and
held at the plan level.
|
Individual Retirement Plans include: (i) retirement plans investing through
brokerage accounts; (ii) certain retirement plans with direct
relationships to the fund that are not Institutional Investors nor
investing through omnibus accounts; and (iii) individual retirement
vehicles not held through an omnibus account, such as:
(a) traditional and Roth IRAs; (b) Coverdell education savings
accounts; (c) individual 403(b)(7) custodial accounts; (d) Keogh
plans; (e) SEPs; (f) SARSEPs; and (g) SIMPLE IRAs or
similar accounts. Individual Retirement Plans include plans held at the
individual participant level. Individual Retirement Plans are treated like
individual investors for purposes of determining sales charges and any
applicable sales charge reductions or waivers.
|
Clients
of Eligible Financial Intermediaries include: investors who invest in the fund through
Service Agents that (a) charge such investors an ongoing fee for
advisory, investment, consulting or similar services, or (b) have
entered into an agreement with the Distributor to offer Class A,
Class C,Class R, Class I or Class IS shares through a no-load network or
platform (including college savings vehicles) (“Eligible Investment
Programs”). These investors may include (i) investors who invest in
the fund through the program of a Service Agent where the investor
typically invests $10 million or more in assets under management in
accounts with the Service Agent (“Management Accounts”); (ii) pension
and profit sharing plans; (iii) other employee benefit trusts;
(iv) endowments; (v) foundations; (vi) corporations;
(vii) college savings vehicles such as Section 529 plans; and
(viii) direct retail investment platforms through mutual fund
“supermarkets,” where the sponsor links its client’s account (including
IRA accounts on such platforms) to a master account in the sponsor’s
name.
|
Institutional Investors may include: (i) corporations; (ii) banks;
(iii) trust companies; (iv) insurance companies;
(v) investment companies; (vi) foundations;
(vii) endowments; and (viii) other similar entities. The
Distributor or the Service Agent may impose additional eligibility
requirements or criteria to determine if an investor, including the types
of investors listed above, qualifies as an Institutional
Investor.
|
To visit the website, go
to www.franklintempleton.com/mutualfunds, and click on the name of the fund. On
the selected fund’s page, scroll to the bottom of the page and click on the
disclosure labeled “Click here for funds sales charge and breakpoint
information.”
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18 |
|
|
|
ClearBridge Small Cap Value
Fund |
Additional information
about each share class
Class A shares
The
public offering price of Class A shares is the net asset value per share
plus the applicable sales charge, unless you qualify for a sales charge
waiver.
Sales charges
The
following table shows the front-end sales charge that you may pay, depending on
the amount you purchase. You pay a lower rate as the size of your investment
increases to certain levels called breakpoints. You do not pay a sales charge on
the fund’s distributions or dividends that you reinvest in additional
Class A shares.
It
also shows the amount of compensation that will be paid to your Service Agent
out of the sales charge if you buy shares from a Service Agent. As shown below,
the sales charge may be allocated between your Service Agent and the
Distributor. Service Agents will receive a distribution and/or service fee
payable on Class A shares at an annual rate of up to 0.25% of the average
daily net assets represented by the Class A shares serviced by them.
The
Distributor may not pay Service Agents selling Class A shares to Omnibus
Retirement Plans a commission on the purchase price of Class A shares sold
by them. However, for Omnibus Retirement Plans that are permitted to purchase
shares at net asset value, the Distributor may pay Service Agents commissions of
up to 1.00% of the purchase price of the Class A shares that are purchased
with regular ongoing plan contributions. Please contact your Service Agent for
more information.
|
|
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|
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|
|
|
|
|
|
|
Amount of investment |
|
Sales charge
as a % of
offering price |
|
|
Sales charge
as a % of net
amount
invested |
|
|
Service Agent
commission as
a % of
offering price |
|
Less
than $25,000 |
|
|
5.75 |
|
|
|
6.10 |
|
|
|
5.00 |
|
$25,000
but less than $50,000 |
|
|
5.00 |
|
|
|
5.26 |
|
|
|
4.25 |
|
$50,000
but less than $100,000 |
|
|
4.50 |
|
|
|
4.71 |
|
|
|
3.75 |
|
$100,000
but less than $250,000 |
|
|
3.50 |
|
|
|
3.63 |
|
|
|
2.75 |
|
$250,000
but less than $500,000 |
|
|
2.50 |
|
|
|
2.56 |
|
|
|
2.00 |
|
$500,000
but less than $750,000 |
|
|
2.00 |
|
|
|
2.04 |
|
|
|
1.60 |
|
$750,000
but less than $1 million |
|
|
1.50 |
|
|
|
1.52 |
|
|
|
1.20 |
|
$1
million or more1 |
|
|
-0- |
|
|
|
-0- |
|
|
|
up to 1.00 |
|
1 |
The
Distributor may pay a commission of up to 1.00% to a Service Agent for
purchase amounts of $1 million or more. In such cases, starting in
the thirteenth month after purchase, the Service Agent will also receive
an annual distribution and/or service fee of up to 0.25% of the average
daily net assets represented by the Class A shares held by its
clients. Prior to the thirteenth month, the Distributor will retain
this fee. Where the Service Agent does not receive the payment of
this commission, the Service Agent will instead receive the annual
distribution and/or service fee starting immediately after
purchase. Please contact your Service Agent for more
information. |
Reductions, waivers or
elimination of sales charges for Class A shares
Larger purchases
You
may reduce or eliminate your Class A front-end sales charge by purchasing
greater quantities. You pay a lower rate as the size of your investment
increases to the breakpoint levels indicated in the chart above. You do not pay
an initial sales charge when you buy $1,000,000 or more of Class A shares.
However, if you redeem these Class A shares within 18 months of purchase,
you will pay a contingent deferred sales charge of 1.00%. Please see “Contingent
deferred sales charges—Class A and Class C shares” below.
Letter of intent and
accumulation privilege
There are several ways you can combine Eligible
Purchases (as defined below) within Eligible Accounts (as defined below) to take
advantage of the breakpoints in the Class A sales charge schedule. In
order to take advantage of reductions in sales charges that may be available to
you when you purchase fund shares, you must inform your Service Agent or the
fund if you believe you are eligible for a letter of intent or a right of
accumulation. Whether you made Eligible Purchases through one or more Service
Agents, directly from the fund or through a combination of the foregoing, it is
your responsibility to inform your Service Agent or the fund if you own Eligible
Purchases that you believe are eligible to be aggregated with your purchases.
If you do not do so, you may not receive all
sales charge reductions for which you are eligible. Account statements
may be necessary in order to verify your eligibility for a reduced sales
charge.
Eligible
Purchases include: (i) any class of shares of any other Legg Mason or
Franklin Templeton fund other than shares of such funds offered through
separately managed accounts that are managed by Legg Mason or Franklin
Templeton; and (ii) units of a Section 529 Plan managed by Legg Mason
or Franklin Templeton. For purposes of a letter of intent and the accumulation
privilege, Legg Mason and Franklin Templeton funds include BrandywineGLOBAL
funds, ClearBridge Investments funds, Martin Currie funds, and Western Asset
funds. They do not include the funds in the Franklin Templeton Variable
Insurance Products Trust, Legg Mason Partners Variable Equity Trust, Legg Mason
Partners Variable Income Trust or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
19 |
|
Legg
Mason Partners Money Market Trust (except for shares held in Distributor
Accounts). Please contact your Service Agent or the fund for more
information.
Eligible
Accounts include shares of Legg Mason and Franklin Templeton funds registered to
(or held by a financial intermediary for):
|
• |
|
Your
“family member,” defined as your spouse or domestic partner, as recognized
by applicable state law, or your children; |
|
• |
|
You
jointly with one or more family members; |
|
• |
|
You
jointly with one or more persons who are not family members if that other
person has not included the value of the jointly-owned shares for purposes
of the accumulation privilege (as described below) for that person’s
separate investments in Legg Mason or Franklin Templeton fund
shares; |
|
• |
|
A
Coverdell Education Savings account for which you or a family member is
the identified responsible person; |
|
• |
|
A
trustee/custodian of an IRA (which includes a Roth IRA and an employer
sponsored IRA such as a SIMPLE IRA) or your non-ERISA covered 403(b) plan
account, if the shares are registered/recorded under your or a family
member’s Social Security number; |
|
• |
|
A
529 college savings plan over which you or a family member has investment
discretion and control; |
|
• |
|
Any
entity over which you or a family member has individual or shared
authority, as principal, has investment discretion and control (for
example, an UGMA/UTMA account for a child on which you or a family member
is the custodian, a trust on which you or a family member is the trustee,
a business account (not to include retirement plans) for your solely owned
business (or the solely owned business of a family member) on which you or
a family member is the authorized signer); or |
|
• |
|
A
trust established by you or a family member as
grantor. |
Legg
Mason and Franklin Templeton fund shares held through an administrator or
trustee/custodian of an Employer Sponsored Retirement Plan (see definition
below) such as a 401(k) plan do not qualify for the accumulation
privilege.
Legg
Mason and Franklin Templeton fund assets held in multiple Employer Sponsored
Retirement Plans (as defined below) may be combined in order to qualify for
sales charge breakpoints at the plan level if the plans are sponsored by the
same employer.
An
“Employer Sponsored Retirement Plan” is a Qualified Retirement Plan (as defined
below), ERISA covered 403(b) plan or certain non-qualified deferred compensation
arrangements that operate in a similar manner to a Qualified Retirement Plan,
such as 457 plans and executive deferred compensation arrangements, but not
including employer sponsored IRAs. A “Qualified Retirement Plan” is an employer
sponsored pension or profit sharing plan that qualifies under section 401(a) of
the Internal Revenue Code, including 401(k), money purchase pension, profit
sharing and defined benefit plans.
Letter of intent. You may qualify for a
reduced front-end sales charge by signing a “Letter of Intent”. A Letter of
Intent allows you to combine the current or cost value, whichever is higher, of
Eligible Purchases in Eligible Accounts with the value that you intend to
purchase within the next 13 months, which would, if bought all at once, qualify
you for a reduced sales charge. In addition, current holdings under the
accumulation privilege may be included in the Letter of Intent. Shares or units
redeemed or sold prior to reaching the threshold for a reduced sales charge will
not be counted for these purposes. The 13-month period begins when the Letter of
Intent is received by the fund or your Service Agent and you must inform your
Service Agent or the fund that later purchases are subject to a Letter of
Intent. Account statements may be necessary in order to verify your eligibility.
If you hold Eligible Purchases in accounts at two or more Service Agents, please
contact your Service Agent to determine which shares/units may be credited
toward the Letter of Intent. Certain directors, trustees and fiduciaries may be
entitled to combine accounts in determining their sales charge.
During
the term of the Letter of Intent, the fund will hold Class A shares
representing up to 5% of the indicated amount in an escrow account for payment
of the sales charge due if you do not meet the intended asset level goal during
the 13-month term of the Letter of Intent. If the full amount is not purchased
during the 13-month period, shares in the amount of any sales charge due, based
on the amount of actual purchases will be redeemed from your account.
Accumulation privilege. The accumulation
privilege allows you to combine the current or cost value, whichever is higher,
of Eligible Purchases in Eligible Accounts with the dollar amount of your next
purchase of Class A shares in determining whether you qualify for a
breakpoint and a reduced front-end sales charge. The current value of shares is
determined by multiplying the number of shares as of the day prior to your
current purchase by their public offering price. The cost value of shares is
determined by aggregating the amount of Eligible Purchases in Eligible Accounts
(including reinvested dividends and capital gains, but excluding capital
appreciation), less any withdrawals, as of the date prior to your current
purchase. The cost value of Eligible Purchases in Eligible Accounts, however,
may only be aggregated for share purchases that took place within 18 months of
your current purchase or your letter of intent start date, if applicable. You
must inform your Service Agent or the fund if you are eligible for the
accumulation privilege and of the other Eligible Purchases you own that are
eligible to be aggregated with your purchases. Account statements may be
necessary in order to verify your eligibility. If you hold Eligible Purchases in
accounts at two or more Service Agents, please contact your Service Agent to
determine which Eligible Purchases may be credited toward the accumulation
privilege.
Waivers for certain
Class A investors
Class A initial
sales charges are waived for certain types of investors, including:
• |
|
Shareholders
investing in Class A shares through Distributor
Accounts |
|
|
|
|
|
20 |
|
|
|
ClearBridge Small Cap Value
Fund |
• |
|
Investors
who redeemed at least the same amount of Class A shares of a fund
sold by the Distributor in the past 90 days, if the investor’s Service
Agent is notified |
• |
|
Directors
and officers of any Legg Mason or Franklin Templeton
fund |
• |
|
Employees
of Franklin Resources and its subsidiaries |
• |
|
Investors
investing through certain retirement plans |
• |
|
Investors
who rollover fund shares from an employer-sponsored retirement plan into
an individual retirement account administered on the same retirement plan
platform |
If
you qualify for a waiver of the Class A initial sales charge, you must
notify your Service Agent or the fund at 877-6LM-FUND/656-3863 at the time of
purchase and provide sufficient information at the time of purchase to permit
verification that the purchase qualifies for the initial sales charge
waiver.
Different Service Agents may impose different sales
loads or offer different ways to reduce sales loads. These variations are
described at the end of this Prospectus in the appendix titled “Appendix:
Waivers and Discounts Available from Certain Service Agents.”
For additional information regarding waivers of
Class A initial sales charges, contact your Service Agent or the fund,
consult the SAI or visit www.franklintempleton.com/mutualfunds and click on the
name of the fund. On the selected fund’s page, scroll to the bottom of the page
and click on the disclosure labeled “Click here for funds sales charge and
breakpoint information.”
Class C shares
You
buy Class C shares at net asset value with no initial sales charge. However, if
you redeem your Class C shares within one year of purchase, you will pay a
contingent deferred sales charge of 1.00%. Omnibus Retirement Plans may not be
subject to a contingent deferred sales charge.
Except
as noted below, the Distributor generally will pay Service Agents selling Class
C shares a commission of up to 1.00% of the purchase price of the Class C shares
they sell. The Distributor will retain the contingent deferred sales charges and
an annual distribution and/or service fee of up to 1.00% of the average daily
net assets represented by the Class C shares serviced by these Service Agents
until the thirteenth month after purchase. Starting in the thirteenth month
after purchase, these Service Agents will receive an annual distribution and/or
service fee of up to 1.00% of the average daily net assets represented by the
Class C shares serviced by them. The Distributor may not pay Service Agents
selling Class C shares to Omnibus Retirement Plans a commission on the purchase
price of Class C shares sold by them. Instead, immediately after purchase, the
Distributor may pay these Service Agents an annual distribution and/or service
fee of up to 1.00% of the average daily net assets represented by the Class C
shares serviced by them.
Class C share conversion
Except
as noted below, Class C shares automatically convert to Class A shares
after the shares have been held for 8 years from the purchase date; the shares
will be converted on the next monthly conversion processing date after the
8-year anniversary of purchase (generally, on the fifteenth of the month, or the
next business day if the fifteenth is not a business day). It is the
responsibility of your Service Agent and not the fund or the Distributor to
ensure that you are credited with the proper holding period. If your Service
Agent does not have records verifying that your shares have been held for at
least 8 years, your Service Agent may not convert your Class C shares to
Class A shares. Group retirement plans held in an omnibus recordkeeping
platform through a Service Agent that does not track participant-level share lot
aging may not convert Class C shares to Class A shares. Customers of
certain Service Agents may be subject to different terms or conditions, as set
by their Service Agent, in connection with such conversions. Please refer to the
appendix titled “Appendix: Waivers and Discounts Available from Certain Service
Agents” on page A-1 of this Prospectus or contact your Service Agent for more
information.
For
Class C shares that have been acquired through an exchange from another fund
sold by the Distributor, the purchase date is calculated from the date the
shares were originally acquired in the other fund. When Class C shares that a
shareholder acquired through a purchase or exchange convert, any other Class C
shares that the shareholder acquired as reinvested dividends and distributions
related to those shares also will convert into Class A shares on a pro rata
basis.
All
conversions from Class C shares to Class A shares will be based on the per
share net asset value without the imposition of any sales load, fee or other
charge. The conversion from Class C shares to Class A shares is not
considered a taxable event for federal income tax purposes.
Contingent deferred sales
charges – Class A and Class C shares
The
contingent deferred sales charge is based on the net asset value at the time of
purchase or redemption, whichever is less, and therefore you do not pay a sales
charge on amounts representing appreciation or depreciation.
In
addition, you do not pay a contingent deferred sales charge:
• |
|
When
you exchange shares for shares of the same share class of another fund
sold by the Distributor |
• |
|
On
shares representing reinvested distributions and
dividends |
• |
|
On
shares no longer subject to the contingent deferred sales
charge |
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
21 |
|
Each
time you place a request to redeem shares, the fund will first redeem any shares
in your account that are not subject to a contingent deferred sales charge and
then redeem the shares in your account that have been held the longest.
If
you redeem shares of a fund sold by the Distributor and pay a contingent
deferred sales charge, you may, under certain circumstances, reinvest all or
part of the redemption proceeds within 90 days in any other fund sold by the
Distributor and receive pro rata credit for any contingent deferred sales charge
imposed on the prior redemption. Please contact your Service Agent or the fund
for additional information.
The
Distributor receives contingent deferred sales charges as partial compensation
for its expenses in selling shares, including the payment of compensation to
your Service Agent.
Contingent deferred sales
charge waivers
The
contingent deferred sales charge for each share class will generally be
waived:
• |
|
On
payments made through certain systematic withdrawal
plans |
• |
|
On
certain distributions from a retirement plan |
• |
|
For
certain Omnibus Retirement Plans |
• |
|
For
involuntary redemptions of small account
balances |
• |
|
For
12 months following the death or disability of a
shareholder |
• |
|
On
redemptions with respect to investors where the Distributor did not pay
the Service Agent a commission |
To
have your contingent deferred sales charge waived, you or your Service Agent
must let the fund know at the time you redeem shares that you qualify for such a
waiver.
Different
Service Agents may offer different contingent deferred sales charge waivers.
These variations are described at the end of this Prospectus in the appendix
titled “Appendix: Waivers and Discounts Available from Certain Service
Agents.”
For additional information regarding waivers of
contingent deferred sales charges, contact your Service Agent or the fund,
consult the SAI or visit the fund’s website,
www.franklintempleton.com/mutualfunds, and click on the name of the fund. On the
selected fund’s page, scroll to the bottom of the page and click on the
disclosure labeled “Click here for funds sales charge and breakpoint
information.”
Class R shares
You
buy Class R shares at net asset value with no initial sales charge and no
contingent deferred sales charge when redeemed.
Service
Agents receive an annual distribution and/or service fee of up to 0.50% of the
average daily net assets represented by the Class R shares serviced by
them.
Class I and Class IS
shares
You
buy Class I or Class IS shares at net asset value with no initial sales charge,
no contingent deferred sales charge when redeemed and no asset-based fee for
sales or distribution. However, if you purchase Class I or Class IS shares
through a Service Agent acting solely as an agent on behalf of its customers
pursuant to an agreement with the Distributor, that Service Agent may charge you
a commission in an amount determined and separately disclosed to you by the
Service Agent.
Because
the fund is not a party to any commission arrangement between you and your
Service Agent, any purchases and redemptions of Class I or Class IS shares will
be made by the fund at the applicable net asset value (before imposition of the
sales commission). Any commissions charged by a Service Agent are not reflected
in the fees and expenses listed in the fee table or expense example in this
Prospectus nor are they reflected in the performance in the bar chart and table
in this Prospectus because these commissions are not charged by the fund.
|
|
|
|
|
22 |
|
|
|
ClearBridge Small Cap Value
Fund |
Buying shares
|
|
|
|
|
Generally |
|
You
may buy shares at their net asset value next determined after receipt by
your Service Agent or the transfer agent of your purchase request in good
order, plus any applicable sales charge.
The
fund may not be available for sale in certain states. Prospective
investors should inquire as to whether the fund is available for sale in
their state of residence.
You
must provide the following information for your order to be
processed:
• Name of
fund being bought
• Class of
shares being bought
• Dollar
amount or number of shares being bought (as applicable)
• Account
number (if existing account) |
|
|
Through a Service
Agent |
|
You
should contact your Service Agent to open an account and make arrangements
to buy shares.
Your
Service Agent may charge an annual account maintenance fee. |
|
|
Through
the
fund |
|
Investors
should contact the fund at 877-6LM-FUND/656-3863 to open an account and
make arrangements to buy shares.
For
initial purchases, complete and send your account application to the fund
at one of the following addresses:
Regular
Mail:
Legg Mason
Funds
P.O. Box
33030
St. Petersburg, FL
33733-8030
Express,
Certified or Registered Mail:
Legg Mason
Funds
100 Fountain
Parkway
St. Petersburg, FL
33716-1205
Subsequent
purchases should be sent to the same address. Enclose a check to pay for
the shares. The fund will accept checks from other fund families and
investment companies as long as the registration name on your fund account
is the same as that listed on the check.
For more
information, please call the fund between 8:00 a.m. and 5:30 p.m. (Eastern
time). |
|
|
Through a systematic investment
plan |
|
You
may authorize your Service Agent or the fund transfer agent to transfer
funds automatically from (i) a regular bank account, (ii) cash held in a
brokerage account with a Service Agent, (iii) another fund sold by the
Distributor or (iv) certain money market funds, in order to buy
shares on a regular basis.
• Amounts
transferred must meet the applicable minimums (see “Purchase and sale of
fund shares”)
• If you do
not have sufficient funds in your account on a transfer date, you may be
charged a fee
• For
amounts transferred from other funds sold by the Distributor, please see
the section titled “Exchanging shares—Through a systematic exchange plan”
in such fund’s prospectus
For more
information, please contact your Service Agent or the fund, or consult the
SAI. |
|
|
Franklin
Templeton
VIP Services® |
|
Effective
on or about February 22, 2022, you may be eligible for Franklin Templeton
VIP Services® if
you currently have $500,000 or more invested in Franklin Templeton
affiliated funds based solely on shares registered directly with the fund
and excluding shares held indirectly through brokerage accounts. Franklin
Templeton VIP Services® shareholders enjoy
enhanced services and transaction capabilities. Please contact Shareholder
Services at (800) 632-2301 for additional information on this
program. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
23 |
|
Additional information
about purchases
If
you pay with a check or ACH transfer that does not clear or if your payment is
not received in a timely manner, your purchase may be cancelled and you may be
liable for any loss to the fund. Please note that the fund will not accept cash,
credit card convenience checks, pre-paid debit cards, non-bank money orders,
traveler’s checks or checks drawn on foreign banks for purchase of fund shares.
The fund and its agents have the right to reject or cancel any purchase due to
nonpayment.
Account registration
changes
Changes
in registration or certain account options for accounts held directly with the
fund must be made in writing. Medallion signature guarantees may be required.
(See “Other things to know about transactions—Medallion signature guarantees”
below.) All correspondence must include the account number and must be sent to
one of the following addresses:
Regular
Mail:
Legg Mason Funds
P.O. Box 33030
St. Petersburg, FL
33733-8030
Express,
Certified or Registered Mail:
Legg Mason Funds
100 Fountain Parkway
St. Petersburg, FL
33716-1205
|
|
|
24 |
|
ClearBridge Small Cap Value
Fund |
Exchanging shares
|
|
|
|
|
Generally |
|
You
or your Service Agent may instruct the fund to exchange shares of any
class for shares of the same class of any other fund sold by the
Distributor, provided that the fund shares to be acquired in the exchange
are available to new investors in such other fund and you are eligible to
invest in such shares. In addition, you may exchange shares of a fund for
a different share class of the same fund provided you meet the eligibility
requirements of the share class into which you are exchanging. You may
exchange shares of the fund for the same class of shares of other funds
sold by the Distributor on any day that both the fund and the fund into
which you are exchanging are open for business. Please contact your
Service Agent or the fund about funds available for exchange.
An
exchange of shares of one fund for shares of another fund is considered a
sale and generally results in a capital gain or loss for federal income
tax purposes, unless you are investing through an IRA, 401(k) or other
tax-advantaged account. An exchange of shares of one class directly for
shares of another class of the same fund normally should not be taxable
for federal income tax purposes. You should talk to your tax advisor
before making an exchange.
The
exchange privilege is not intended as a vehicle for short-term trading.
The fund may suspend or terminate your exchange privilege if you engage in
a pattern of excessive exchanges. |
|
|
Legg Mason offers a
distinctive family of funds tailored to help meet the varying needs of
large and small investors |
|
You
may exchange shares at their net asset value next determined after receipt
by your Service Agent or the transfer agent of your exchange request in
good order.
• If you
bought shares through a Service Agent, contact your Service Agent to learn
which funds your Service Agent makes available to you for exchanges
• If you
bought shares directly from the fund, contact the fund at
877-6LM-FUND/656-3863 to learn which funds are available to you for
exchanges
• Generally,
exchanges may be made only between accounts that have identical
registrations, unless you send written instructions with a signature
guarantee
• Not all
funds offer all classes
• Some funds
are offered only in a limited number of states. Your Service Agent or the
fund will provide information about the funds offered in your state
Always
be sure to read the Prospectus of the fund into which you are exchanging
shares. |
|
|
Investment
minimums, sales charges and other requirements |
|
• In most
instances, your shares will not be subject to an initial sales charge or a
contingent deferred sales charge at the time of the exchange. You may be
charged an initial or contingent deferred sales charge if the shares being
exchanged were not subject to a sales charge
• Except as
noted above, your contingent deferred sales charge (if any) will continue
to be measured from the date of your original purchase of shares subject
to a contingent deferred sales charge, and you will be subject to the
contingent deferred sales charge of the fund that you originally
purchased
• You will
generally be required to meet the minimum investment requirement for the
class of shares of the fund or share class into which your exchange is
made (except in the case of systematic exchange plans or in exchanges of
an entire account balance)
• Your
exchange will also be subject to any other requirements of the fund or
share class into which you are exchanging shares
• The fund
may suspend or terminate your exchange privilege if you engage in a
pattern of excessive exchanges |
|
|
By
telephone |
|
Contact
your Service Agent or, if you hold shares directly with the fund, call the
fund at 877-6LM-FUND/656-3863 between 8:00 a.m. and 5:30 p.m.
(Eastern time) for information. Exchanges are priced at the net asset
value next determined. Telephone exchanges may be made only between
accounts that have identical registrations and may be made on any day the
New York Stock Exchange (“NYSE”) is open. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
25 |
|
|
|
|
|
|
By mail |
|
Contact
your Service Agent or, if you hold shares directly with the fund, write to
the fund at one of the following addresses:
Regular
Mail:
Legg Mason
Funds
P.O. Box
33030
St. Petersburg, FL
33733-8030
Express,
Certified or Registered Mail:
Legg Mason
Funds
100 Fountain
Parkway
St. Petersburg, FL
33716-1205 |
|
|
Through a
systematic exchange plan |
|
You
may be permitted to schedule automatic exchanges of shares of the fund for
shares of other funds available for exchange. All requirements for
exchanging shares described above apply to these exchanges. In
addition:
• Exchanges
may be made monthly, every alternate month, quarterly, semi-annually
or annually
• Each
exchange must meet the applicable investment minimums for systematic
investment plans (see “Purchase and sale of fund shares”)
For more
information, please contact your Service Agent or the fund or consult the
SAI. |
|
|
|
26 |
|
ClearBridge Small Cap Value
Fund |
Redeeming shares
|
|
|
|
|
Generally |
|
You
may redeem shares at their net asset value next determined after receipt
by your Service Agent or the fund transfer agent of your redemption
request in good order, less any applicable contingent deferred sales
charge. Redemptions made through your Service Agent may be subject to
transaction fees or other conditions as set by your Service Agent.
If
the shares are held by a fiduciary or corporation, partnership or similar
entity, other documents may be required. |
|
|
Redemption
proceeds |
|
Your
redemption proceeds normally will be sent within 2 business days after
your request is received in good order, but in any event within 7 days,
regardless of the method the fund uses to make such payment (e.g., check,
wire or electronic transfer (ACH)). If you make a redemption request
before the fund has collected payment for the purchase of shares, the fund
may delay your proceeds until payment is collected, for up to 10
days.
Your
redemption proceeds may be delayed, or your right to receive redemption
proceeds suspended beyond 7 days, if the NYSE is closed (other than on
weekends or holidays) or trading is restricted, if an emergency exists, or
otherwise as permitted by order of the SEC.
If
you have a brokerage account with a Service Agent, your redemption
proceeds may be sent to your Service Agent. Your redemption proceeds can
be sent by check to your address of record or by wire or electronic
transfer (ACH) to a bank account designated by you. To change the bank
account designated to receive wire or electronic transfers, you will be
required to deliver a new written authorization and may be asked to
provide other documents. You may be charged a fee by your bank on a
wire or an electronic transfer (ACH).
In
other cases, unless you direct otherwise, your proceeds will be paid by
check mailed to your address of record.
Under
normal circumstances, the fund expects to meet redemption requests by
using cash or cash equivalents in its portfolio and/or selling portfolio
assets to generate cash. The fund also may pay redemption proceeds using
cash obtained through borrowing arrangements that may be available from
time to time.
The
fund may pay all or a portion of your redemption proceeds by giving you
securities (for example, if the fund reasonably believes that a cash
redemption may have a substantial impact on the fund and its remaining
shareholders). You may pay transaction costs to dispose of the securities,
and you may receive less for them than the price at which they were valued
for purposes of the redemption.
During
periods of deteriorating or stressed market conditions, when an increased
portion of the fund’s portfolio may be comprised of investments that have
lower liquidity, or during extraordinary or emergency circumstances, the
fund may be more likely to pay redemption proceeds with cash obtained
through short-term borrowing arrangements (if available) or by giving you
securities. |
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By
mail |
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Contact
your Service Agent or, if you hold shares directly with the fund, write to
the fund at one of the following addresses:
Regular
Mail:
Legg Mason
Funds
P.O. Box
33030
St. Petersburg, FL
33733-8030
Express,
Certified or Registered Mail:
Legg Mason
Funds
100 Fountain
Parkway
St. Petersburg, FL
33716-1205
Your
written request must provide the following:
• The fund
name, the class of shares being redeemed and your account number
• The dollar
amount or number of shares being redeemed
• Signature
of each owner exactly as the account is registered
• Medallion
signature guarantees, as applicable (see “Other things to know about
transactions”) |
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By
telephone |
|
If
your account application permits, you may be eligible to redeem shares by
telephone. Contact your Service Agent or, if you hold shares directly with
the fund, call 877-6LM-FUND/656-3863 between 8:00 a.m. and 5:30 p.m.
(Eastern time) for more information. Please have the following information
ready when you call: |
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• Name of
fund being redeemed
• Class of
shares being redeemed
• The dollar
amount or number of shares being redeemed
• Account
number |
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Systematic
withdrawal plans |
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You
may be permitted to schedule automatic redemptions of a portion of your
shares. To qualify, you must own shares of the fund with a value of at
least $5,000 and each automatic redemption must be at least $50 per
transaction per month. For retirement plans subject to mandatory
distribution requirements, the minimum withdrawal amounts will not
apply.
The
following conditions apply:
• Redemptions
may be made monthly, quarterly, semi-annually or annually. Redemptions may
be processed on the 1st, 5th, 10th, 15th, 20th and 25th days of the month, if
no day is indicated, redemptions will be made on the 20th day of the
month
• If your
shares are subject to a contingent deferred sales charge, the charge will
be required to be paid upon redemption. However, the charge will be waived
if your automatic redemptions do not exceed 1% monthly, 3% quarterly, 6%
semiannually or 12% annually of your account’s net asset value, depending
on the frequency of your plan
• Your
Service Agent may impose a lower minimum amount for each automatic
redemption on a monthly and quarterly basis.
For more
information, please contact your Service Agent or the fund or consult the
SAI. |
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Other things to know
about transactions
When
you buy, exchange or redeem shares, your request must be in good order. This
means you have provided the following information, without which your request
may not be processed:
• |
|
In
the case of a purchase (including a purchase as part of an exchange
transaction), the class of shares being bought |
• |
|
In
the case of an exchange or redemption, the class of shares being exchanged
or redeemed (if you own more than one class) |
• |
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Dollar
amount or number of shares being bought, exchanged or
redeemed |
• |
|
In
certain circumstances, the signature of each owner exactly as the account
is registered (see “Redeeming shares”) |
In
certain circumstances, such as during periods of market volatility, severe
weather and emergencies, shareholders may experience difficulties placing
exchange or redemption orders by telephone. In that case, shareholders should
consider using the fund’s other exchange and redemption procedures described
under “Exchanging shares” and “Redeeming shares.”
The
transfer agent or the fund will employ reasonable procedures to confirm that any
telephone, electronic or other exchange or redemption request is genuine, which
may include recording calls, asking the caller to provide certain personal
identification information, employing identification numbers, sending you a
written confirmation or requiring other confirmation procedures from time to
time. If these procedures are followed, neither the fund nor its agents will
bear any liability for these transactions, subject to applicable law.
The
fund does not consider the U.S. Postal Service or private delivery services to
be its agents. Therefore, deposits in the mail or with such delivery services,
or receipt at the fund’s post office box, of purchase requests or redemption
orders, do not constitute receipt by the fund or its transfer agent.
The
fund has the right to:
• |
|
Suspend
the offering of shares permanently or for a period of
time |
• |
|
Waive
or change minimum initial and additional investment
amounts |
• |
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Reject
any purchase or exchange order |
• |
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Change,
revoke or suspend the exchange privilege |
• |
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Suspend
telephone transactions |
• |
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Suspend
or postpone redemptions of shares on any day when trading on the NYSE is
restricted or as otherwise permitted by the SEC |
• |
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Redeem
shares if information provided in the application should prove to be
incorrect in any manner judged by the fund to be material (e.g., in a
manner such as to render the shareholder ineligible to purchase shares of
that class) |
• |
|
Delay
sending out redemption proceeds for up to seven days if, in the judgment
of the subadviser, the fund could be adversely affected by immediate
payment. The fund may delay redemptions beyond seven days, or suspend
redemptions, only as permitted by the SEC or the Investment Company Act of
1940, as amended |
• |
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Close
your account after a period of inactivity, as determined by state law, and
transfer your shares to the appropriate state |
For
your protection, the fund or your Service Agent may request additional
information in connection with large redemptions, unusual activity in your
account, or otherwise to ensure your redemption request is in good order. Please
contact your Service Agent or the fund for more information.
Medallion signature
guarantees
To
be in good order, your redemption request must include a Medallion signature
guarantee if you:
• |
|
are
redeeming shares and sending the proceeds to an address or bank account
not currently on file or to an account in another fund sold by the
Distributor with a different account
registration |
• |
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are
redeeming more than $100,000 worth of shares |
• |
|
changed
your account registration or your address within 15 calendar
days |
• |
|
want
the check paid to someone other than the account
owner(s) |
• |
|
are
transferring the redemption proceeds to an account with a different
registration |
For
other types of transactions involving changes to your account registration
information, please contact the fund or your Service Agent.
When
a Medallion signature guarantee is called for, the shareholder should have a
Medallion signature guarantee stamped under his or her signature. You can obtain
a signature guarantee from most banks, dealers, brokers, credit unions and
federal savings and loan institutions, national securities exchanges, registered
securities associations and clearing agencies (each an “Eligible Guarantor
Institution”), but not from a notary public.
The
fund and its agents reserve the right to reject any Medallion signature
guarantee pursuant to written signature guarantee standards or procedures, which
may be revised in the future to permit them to reject Medallion signature
guarantees from Eligible Guarantor Institutions. The fund may change the
signature guarantee requirements from time to time without prior notice to
shareholders.
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Restrictions on the
availability of the fund outside the United States
The
distribution of this Prospectus and the offering of shares of the fund are
restricted in certain jurisdictions. This Prospectus is not an offer or
solicitation in any jurisdiction where such offer or solicitation is unlawful,
where the person making an offer or solicitation is not authorized to make it or
a person receiving an offer or solicitation may not lawfully receive it or may
not lawfully invest in the fund. Investors should inform themselves as to the
legal requirements within their own country before investing in the fund.
This
Prospectus, and the offer of shares hereunder, are not directed at persons
outside the United States. In particular, the fund is not intended to be
marketed to prospective investors in any member state of the European Union,
Iceland, Liechtenstein or Norway (collectively, the “European Economic Area” or
“EEA”). No notification or application has been made to the competent authority
of any member state of the EEA under the Alternative Investment Fund Managers
Directive (or any applicable legislation or regulations made thereunder) to
market the fund to investors in the EEA and it is not intended that any such
notification or application shall be made.
U.S.
citizens with addresses in the United States, and non-U.S. citizens who reside
in the United States and have U.S. addresses, are permitted to establish
accounts with the fund. For these purposes, the “United States” and “U.S.”
include U.S. territories.
The
fund generally does not permit persons who do not reside in the United States or
who do not have U.S. addresses to establish accounts. Therefore, U.S. citizens
residing in foreign countries, as well as non-U.S. citizens residing in foreign
countries, generally will not be permitted to establish accounts with the
fund.
For
further information, you or your Service Agent may contact the fund at
877-6LM-FUND/656-3863.
Anti-money laundering
Federal
anti-money laundering regulations require all financial institutions to obtain,
verify and record information that identifies each person who opens an account.
When you sign your account application, you may be asked to provide additional
information in order for the fund to verify your identity in accordance with
these regulations. If you are opening the account in the name of a legal entity
(e.g. partnership, limited liability company, business trust, corporation,
etc.), you may also be required to supply the identity of the beneficial owners
and a control individual with management authority, prior to the opening of your
account. Accounts may be restricted and/or closed, and the monies withheld,
pending verification of this information or as otherwise required under these
and other federal regulations.
Small account
fees/Mandatory redemptions
Small
accounts may be subject to a small account fee or to mandatory redemption, as
described below. Please contact your Service Agent or the fund for information
on the policy applicable to your account.
Small account fees
To
offset the relatively higher impact on fund expenses of servicing smaller
accounts, the fund may charge you a fee of $3.75 per account that is determined
and assessed quarterly by your Service Agent or by the Distributor for
Distributor Accounts on the next-to-last business day of the quarter (with an
annual maximum of $15.00 per account) if the value of your account is below
$1,000 (if applicable, $250 for retirement plans that are not
employer-sponsored) for any reason (including declines in net asset value). The
small account fee will be charged by redeeming shares in your account. If the
value of your account is $3.75 or less, the amount in the account may be
exhausted to pay the small account fee. If your Service Agent or the Distributor
assesses a small account fee, the small account fee will not be assessed on
systematic investment plans until the end of the first quarter after the account
has been established for 21 months. Payment of the small account fee through a
redemption of fund shares may result in tax consequences to you (see “Taxes” for
more information).
The
small account fee will not be charged on, if applicable: (i) retirement
plans (but will be charged on other plans that are not employer-sponsored such
as traditional and Roth individual retirement accounts, Coverdell education
savings accounts, individual 403(b)(7) custodial accounts, Keogh plans, SEPs,
SARSEPs, SIMPLE IRAs or similar accounts); (ii) Legg Mason funds that have
been closed to subsequent purchases for all classes; (iii) accounts that do
not have a valid address as evidenced by mail being returned to the fund or its
agents; (iv) Class R, Class I and Class IS shares; and (v) for new
accounts (except for new accounts opened by way of an exchange), a small account
fee will not be charged during the calendar quarter in which you open your
account.
If
your share class is no longer offered, you may not be able to bring your account
up to the minimum investment amount (although you may exchange into existing
accounts of other funds sold by the Distributor in which you hold the same share
class, to the extent otherwise permitted by those funds and subject to any
applicable sales charges).
The
small account fee is calculated on a fund-by-fund basis. If you have accounts in
multiple funds, they will not be aggregated for the purpose of calculating the
small account fee.
Some
shareholders who hold accounts in Classes A and C of the same fund may have
those accounts aggregated for the purposes of these calculations. Please contact
the fund or your Service Agent for more information.
Small account balance
liquidations
The
fund reserves the right to ask you to bring your account up to a minimum
investment amount determined by your Service Agent if the aggregate value of the
fund shares in your account is less than $500 or $250 for retirement plans that
are not employer-sponsored for any reason (including solely due to declines in
net asset value and/or failure to invest at least $500 or $250 for retirement
plans that are not employer-sponsored within a
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Fund |
reasonable
period). You will be notified in writing and will have 30 days to make an
additional investment to bring your account value up to the required level. If
you choose not to do so within this 30-day period, the fund may close your
account and send you the redemption proceeds. If your share class is no longer
offered, you may not be able to bring your account up to the minimum investment
amount.
Some
shareholders who hold accounts in multiple classes of the same fund may have
those accounts aggregated for the purposes of these calculations. If your
account is closed, you will not be eligible to have your account reinstated
without imposition of any sales charges that may apply to your new purchase.
Please contact your Service Agent for more information. Any redemption of fund
shares may result in tax consequences to you (see “Taxes” for more
information).
This
policy does not apply to: (i) certain broker-controlled accounts
established through the National Securities Clearing Corporation’s Networking
system; (ii) employer-sponsored retirement plans (such as 401(k) plans,
403(b) plans, profit sharing plans and money purchase plans);
(iii) accounts with an active systematic investment plan;
(iv) accounts with an active systematic withdrawal plan; (v) accounts
that do not have a valid address as evidenced by mail being returned to the fund
or its agents and (vi) accounts identified to us by the applicable Service
Agent as being fee-based accounts.
General
The
fund may, with prior notice, change the minimum size of accounts subject to
mandatory redemption, which may vary by class, implement fees for other small
accounts or change the amount of the fee for small direct accounts.
Subject
to applicable law, the fund may, with prior notice, adopt other policies from
time to time requiring mandatory redemption of shares in certain
circumstances.
For more information,
please contact your Service Agent or the fund or consult the SAI.
Frequent trading of fund
shares
The
Board has adopted the following policies and procedures with respect to frequent
trading in fund shares (“Frequent Trading Policy”).
The
fund does not intend to accommodate short-term or frequent purchases and
redemptions of fund shares that may be detrimental to the fund. For example,
this type of trading activity could interfere with the efficient management of
the fund’s portfolio or materially increase the fund’s transaction costs,
administrative costs or taxes.
In
addition, since the fund invests in foreign securities, it may be vulnerable to
a form of short-term trading that is sometimes referred to as “time-zone
arbitrage.” Time-zone arbitrage occurs when an investor seeks to take advantage
of delays between changes in the value of a mutual fund’s portfolio holdings and
the reflection of those changes in the fund’s net asset value per share. These
delays are more likely to occur in the case of foreign investments, due to
differences between the times during which the fund’s international portfolio
securities trade on foreign markets and the time as of which the fund’s net
asset value is calculated (generally as of the close of the NYSE). Time-zone
arbitrage traders seek to purchase or redeem shares of a fund based on events
occurring after foreign market closing prices are established, but before
calculation of the fund’s net asset value. This can result in the value of the
fund’s shares being diluted. One of the objectives of the fund’s fair value
pricing procedures is to minimize the possibility of this type of arbitrage;
however, there can be no assurance that the fund’s valuation procedures will be
successful in eliminating it.
Since
the fund may invest in securities that are, or may be, restricted, unlisted,
traded infrequently, thinly traded, or relatively illiquid (“relatively illiquid
securities”), it may be particularly vulnerable to arbitrage short-term trading.
Such arbitrage traders may seek to take advantage of a possible differential
between the last available market prices for one or more of those relatively
illiquid securities that are used to calculate the fund’s net asset value and
the latest indications of market values for those securities. One of the
objectives of the fund’s fair value pricing procedures is to minimize the
possibilities of this type of arbitrage; however, there can be no assurance that
the fund’s valuation procedures will be successful in eliminating it.
Through
its transfer agent, the fund performs ongoing monitoring of shareholder trading
in shares of the fund and other Franklin Templeton affiliated funds in order to
try and identify shareholder trading patterns that suggest an ongoing short-term
trading strategy. If shareholder trading patterns identified by the transfer
agent through monitoring or from other information regarding the shareholder’s
trading activity in non-Franklin Templeton affiliated funds leads the transfer
agent to reasonably conclude that such trading may be detrimental to the fund as
described in this Frequent Trading Policy, the transfer agent, on behalf of the
fund, may temporarily or permanently bar future purchases into the fund or,
alternatively, may limit the amount, number or frequency of any future purchases
and/or the method by which you may request future purchases and redemptions
(including purchases and/or redemptions by an exchange or transfer between the
fund and any other mutual fund).
In
considering an investor’s trading patterns, the fund may consider, among other
factors, the investor’s trading history both directly and, if known, through
financial intermediaries, in the fund, in other Franklin Templeton affiliated
funds, in non-Franklin Templeton affiliated mutual funds, or in accounts under
common control or ownership. The transfer agent may also reject any purchase
request, whether or not it represents part of any ongoing trading pattern, if
the manager or the fund’s transfer agent reasonably concludes that the amount of
the requested transaction may disrupt or otherwise interfere with the efficient
management of the fund’s portfolio. In determining what actions should be taken,
the fund’s transfer agent may consider a variety of factors, including the
potential impact of such remedial actions on the fund and its shareholders. If
the fund is a “fund of funds,” the fund’s transfer agent may consider the impact
of the trading activity and of any proposed remedial action on both the fund and
the affiliated underlying funds in which the fund invests.
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Frequent trading
through financial intermediaries. You
are an investor subject to this Frequent Trading Policy whether you are a direct
shareholder of the fund or you are investing indirectly in the fund through a
financial intermediary, such as a broker-dealer, bank, trust company, insurance
company product such as an annuity contract, investment advisor, or an
administrator or trustee of an IRS-recognized tax-deferred savings plan such as
a 401(k) retirement plan and a 529 college savings plan.
Some
financial intermediaries maintain master accounts with the fund on behalf of
their customers (“omnibus accounts”). The fund has entered into “information
sharing agreements” with these financial intermediaries, which permit the fund
to obtain, upon request, information about the trading activity of the
intermediary’s customers that invest in the fund. If the fund’s transfer agent
identifies omnibus account level trading patterns that have the potential to be
detrimental to the fund, the transfer agent may, in its sole discretion, request
from the financial intermediary information concerning the trading activity of
its customers. Based upon its review of the information, if the transfer agent
determines that the trading activity of any customer may be detrimental to the
fund, it may, in its sole discretion, request the financial intermediary to
restrict or limit further trading in the fund by that customer. There can be no
assurance that the transfer agent’s monitoring of omnibus account level trading
patterns will enable it to identify all short-term trading by a financial
intermediary’s customers.
Revocation of
trades. While the fund reserves the
right to reject any purchase order for any reason, the fund may also revoke
executed purchase orders that the transfer agent reasonably concludes in its
sole discretion may have been contrary to the objectives of the fund’s Frequent
Trading Policy.
Record ownership
If
you hold shares through a Service Agent, your Service Agent may establish and
maintain your account and be the shareholder of record. In the event that the
fund holds a shareholder meeting, your Service Agent, as record holder, will be
entitled to vote your shares and may seek voting instructions from you. If you
do not give your Service Agent voting instructions, your Service Agent, under
certain circumstances, may nonetheless be entitled to vote your shares.
Confirmations and account
statements
If
you bought shares directly from the fund, you will receive a confirmation from
the fund after each transaction (except a reinvestment of dividends or capital
gain distributions, an investment made through the Systematic Investment Plan,
exchanges made through a systematic exchange plan and withdrawals made through
the Systematic Withdrawal Plan). Shareholders will receive periodic account
statements.
To
assist you in the management of your account you may direct the transfer agent
to send copies of your confirmations and/or periodic statements to another party
whom you designate, at no charge.
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Dividends, other
distributions and taxes
Dividends and other
distributions
The
fund generally pays dividends and distributes capital gain, if any, once in
December and at such other times as are necessary. Shares will generally begin
to earn dividends on the settlement date of purchase. The fund may pay
additional distributions and dividends in order to avoid a federal tax.
You
can elect to receive dividends and/or other distributions in cash.
Unless
you elect to receive dividends and/or other distributions in cash, your
dividends and capital gain distributions will be automatically reinvested in
shares of the same class you hold, at the net asset value determined on the
reinvestment date. You do not pay a sales charge on reinvested distributions or
dividends.
If
you hold shares directly with the fund and you elect to receive dividends and/or
distributions in cash, you have the option to receive such dividends and/or
distributions via a direct deposit to your bank account or by check.
If
you hold Class A or Class C shares directly with the fund, you may instruct
the fund to have your dividends and/or distributions invested in the
corresponding class of shares of another fund sold by the Distributor (excluding
Western Asset Government Reserves), subject to the following conditions:
• |
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You
meet the initial investment requirement of the other fund;
and |
• |
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The
other fund is available for sale in your state. |
To
change those instructions, you must notify your Service Agent or the fund at
least three days before the next distribution is to be paid.
Please
contact your Service Agent or the fund to discuss what options are available to
you for receiving your dividends and other distributions.
The
Board reserves the right to revise the dividend policy or postpone the payment
of dividends, if warranted in the Board’s judgment, due to unusual
circumstances.
Taxes
The
following discussion is very general, applies only to shareholders who are U.S.
persons, and does not address shareholders subject to special rules, such as
those who hold fund shares through an IRA, 401(k) plan or other tax-advantaged
account. Except as specifically noted, the discussion is limited to federal
income tax matters, and does not address state, local, foreign or non-income
taxes. Further information regarding taxes, including certain federal income tax
considerations relevant to non-U.S. persons, is included in the SAI. Because
each shareholder’s circumstances are different and special tax rules may apply,
you should consult your tax adviser about federal, state, local and/or foreign
tax considerations that may be relevant to your particular situation.
In
general, redeeming shares, exchanging shares and receiving dividends and
distributions (whether received in cash or reinvested in additional shares or
shares of another fund) are all taxable events. An exchange between classes of
shares of the same fund normally is not taxable for federal income tax purposes,
whether or not the shares are held in a taxable account.
The
following table summarizes the tax status of certain transactions related to the
fund.
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Transaction |
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Federal income tax status |
Redemption
or exchange of shares |
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Usually
capital gain or loss; long-term only if shares are owned more than one
year |
Dividends
of investment income and distributions of net short-term capital gain |
|
Ordinary
income, or in certain cases qualified dividend income |
Distributions
of net capital gain (excess of net long-term capital gain over net
short-term
capital loss) |
|
Long-term
capital gain |
Distributions
of investment income that the fund reports as “qualified dividend income” may be
eligible to be taxed to noncorporate shareholders at the reduced rates
applicable to long-term capital gain if certain requirements are satisfied.
Distributions of net capital gain reported by the fund as capital gain dividends
are taxable to you as long-term capital gain regardless of how long you have
owned your shares. Noncorporate shareholders ordinarily pay tax at reduced rates
on long-term capital gain.
If
the fund realizes capital gains in excess of realized capital losses in any
fiscal year, it generally expects to make capital gain distributions to
shareholders. You may receive distributions that are attributable to
appreciation of portfolio securities that happened before you made your
investment but had not been realized at the time you made your investment, or
that are attributable to capital gains or other income that, although realized
by the fund, had not yet been distributed at the time you made your investment.
Unless you purchase shares through a tax-advantaged account, these distributions
will be taxable to you even though they economically represent a return of a
portion of your investment. You may want to avoid buying shares when the fund is
about to declare a dividend or capital gain distribution. You should consult
your tax adviser before buying shares no matter when you are
investing.
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A
Medicare contribution tax is imposed at the rate of 3.8% on all or a portion of
net investment income of U.S. individuals if their income exceeds specified
thresholds and on all or a portion of undistributed net investment income of
certain estates and trusts. Net investment income generally includes for this
purpose dividends and capital gain distributions paid by the fund and gain on
the redemption or exchange of fund shares.
A
dividend declared by the fund in October, November or December and paid during
January of the following year will, in certain circumstances, be treated as paid
in December for tax purposes.
The
fund’s investment in certain foreign securities, foreign currencies or foreign
currency derivatives may affect the amount, timing, and character of fund
distributions to shareholders.
After
the end of each year, your Service Agent or the fund will provide you with
information about the distributions and dividends you received and any
redemptions of shares during the previous year. Because each shareholder’s
circumstances are different and special tax rules may apply, you should consult
your tax adviser about your investment in the fund.
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Share price
You
may buy, exchange or redeem shares at their net asset value next determined
after receipt of your request in good order, adjusted for any applicable sales
charge. The fund’s net asset value per share is the value of its assets minus
its liabilities divided by the number of shares outstanding. Net asset value is
calculated separately for each class of shares.
The
fund calculates its net asset value every day the NYSE is open. The fund
generally values its securities and other assets and calculates its net asset
value as of the scheduled close of regular trading on the NYSE, normally at 4:00
p.m. (Eastern time). If the NYSE closes at a time other than the scheduled
closing time, the fund will calculate its net asset value as of the scheduled
closing time. The NYSE is closed on certain holidays listed in the SAI.
In
order to buy, redeem or exchange shares at a certain day’s price, you must place
your order with your Service Agent or the fund transfer agent before the
scheduled close of regular trading on the NYSE on that day to receive that day’s
price. If the NYSE closes early on that day, you must place your order prior to
the scheduled closing time. It is the responsibility of the Service Agent to
transmit all orders to buy, exchange or redeem shares to the fund transfer agent
on a timely basis.
Valuation
of the fund’s securities and other assets is performed in accordance with
procedures approved by the Board. These procedures delegate most valuation
functions to the manager, which generally uses independent third party pricing
services approved by the Board. Under the procedures, assets are valued as
follows:
• |
|
Equity
securities and certain derivative instruments that are traded on an
exchange are valued at the closing price (which may be reported at a
different time than the time at which the fund’s net asset value is
calculated) or, if that price is unavailable or deemed by the manager not
representative of market value, the last sale price. Where a security is
traded on more than one exchange (as is often the case overseas), the
security is generally valued at the price on the exchange considered by
the manager to be the primary exchange. In the case of securities not
traded on an exchange, or if exchange prices are not otherwise available,
the prices are typically determined by independent third party pricing
services that use a variety of techniques and methodologies. Investments
in mutual funds are valued at the net asset value per share of the class
of the underlying fund held by the fund as determined on each business
day. |
• |
|
The
valuations for fixed income 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 fair valuation techniques and
methodologies. |
• |
|
The
valuations of securities traded on foreign markets and certain fixed
income securities will generally be based on prices determined as of the
earlier closing time of the markets in which they primarily trade. The
prices of foreign equity securities typically are adjusted using a fair
value model developed by an independent third party pricing service to
estimate the value of those securities at the time of closing of the NYSE.
When the fund holds securities or other assets that are denominated in a
foreign currency, the fund will normally use the currency exchange rates
as of 4:00 p.m. (Eastern time). Foreign markets are open for trading on
weekends and other days when the fund does not price its shares.
Therefore, the value of the fund’s shares may change on days when you will
not be able to purchase or redeem the fund’s
shares. |
• |
|
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. When such prices or quotations
are not available, or when the manager believes that they are unreliable,
the manager may price securities using fair value procedures approved by
the Board. These procedures permit, among other things, the use of a
formula or other method that takes into consideration market indices,
yield curves and other specific adjustments to determine fair value. Fair
value of a security is the amount, as determined by the manager in good
faith, that the fund might reasonably expect to receive upon a current
sale of the security. The fund may also use fair value procedures if the
manager determines that a significant event has occurred between the time
at which a market price is determined and the time at which the fund’s net
asset value is calculated. |
Many
factors may influence the price at which the fund could sell any particular
portfolio investment. The sales price may well differ—higher or lower—from the
fund’s last valuation, and such differences could be significant, particularly
for securities that trade in relatively thin markets and/or markets that
experience extreme volatility. Moreover, valuing securities using fair value
methodologies involves greater reliance on judgment than valuing securities
based on market quotations. A fund that uses fair value methodologies may value
those securities higher or lower than another fund using market quotations or
its own fair value methodologies to price the same securities. There can be no
assurance that the fund could obtain the value assigned to a security if it were
to sell the security at approximately the time at which the fund determines its
net asset value. Investors who purchase or redeem fund shares on days when the
fund is holding fair-valued securities may receive a greater or lesser number of
shares, or higher or lower redemption proceeds, than they would have received if
the fund had not fair-valued the security or had used a different methodology.
The fund’s fair value policies and procedures and valuation practices may be
subject to change as a result of new Rule 2a-5 under the Investment Company Act
of 1940, as amended. However, no material changes to the fair valuation
methodologies are currently anticipated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
35 |
|
Financial highlights
The
financial highlights tables are intended to help you understand the performance
of each class for the past five years, unless otherwise noted. No financial
highlights are presented for Class R shares because no Class R shares were
outstanding for the periods shown. The returns for Class R shares will differ
from those of the other classes to the extent that their expenses differ.
Certain information reflects financial results for a single fund share. Total
return represents the rate that an investor would have earned (or lost) on an
investment in the fund, assuming reinvestment of all dividends and other
distributions. The information below, for fiscal years ended September 30,
2017 or later, has been audited by the fund’s independent registered public
accounting firm, PricewaterhouseCoopers LLP, whose report, along with the fund’s
financial statements, is incorporated by reference into the fund’s SAI (see back
cover) and is included in the fund’s annual report. The information for the
years prior to the fiscal year ended September 30, 2017 was audited by
another independent registered public accounting firm. The fund’s annual report
is available upon request by calling toll-free 877-6LM-FUND/656-3863 or via the
following hyperlink: (
https://www.sec.gov/Archives/edgar/data/880366/000119312521341159/d220783dncsr.htm).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest
outstanding throughout each year ended
September 30: |
|
Class A Shares1 |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
Net asset value,
beginning of year |
|
|
$12.19 |
|
|
|
$15.97 |
|
|
|
$20.11 |
|
|
|
$22.89 |
|
|
|
$21.07 |
|
|
|
|
|
|
|
Income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss) |
|
|
0.08 |
|
|
|
0.07 |
|
|
|
0.10 |
|
|
|
0.07 |
|
|
|
(0.02) |
|
Net
realized and unrealized gain (loss) |
|
|
7.12 |
|
|
|
(2.91) |
|
|
|
(2.23) |
|
|
|
1.01 |
|
|
|
3.74 |
|
Total income
(loss) from operations |
|
|
7.20 |
|
|
|
(2.84) |
|
|
|
(2.13) |
|
|
|
1.08 |
|
|
|
3.72 |
|
|
|
|
|
|
|
Less distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
(0.05) |
|
|
|
(0.15) |
|
|
|
(0.04) |
|
|
|
— |
|
|
|
— |
|
Net
realized gains |
|
|
— |
|
|
|
(0.79) |
|
|
|
(1.97) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
Total
distributions |
|
|
(0.05) |
|
|
|
(0.94) |
|
|
|
(2.01) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
|
|
|
|
|
|
Net asset value,
end of year |
|
|
$19.34 |
|
|
|
$12.19 |
|
|
|
$15.97 |
|
|
|
$20.11 |
|
|
|
$22.89 |
|
Total
return2 |
|
|
59.21 |
% |
|
|
(19.11) |
% |
|
|
(10.01) |
% |
|
|
5.02 |
% |
|
|
18.08 |
% |
|
|
|
|
|
|
Net assets, end of
year (000s) |
|
|
$108,421 |
|
|
|
$75,068 |
|
|
|
$105,726 |
|
|
|
$110,568 |
|
|
|
$117,057 |
|
|
|
|
|
|
|
Ratios to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
|
|
1.38 |
% |
|
|
1.45 |
% |
|
|
1.39 |
% |
|
|
1.35 |
% |
|
|
1.33 |
% |
Net
expenses3,4 |
|
|
1.34 |
|
|
|
1.35 |
|
|
|
1.35 |
|
|
|
1.35 |
|
|
|
1.33 |
|
Net
investment income (loss) |
|
|
0.43 |
|
|
|
0.54 |
|
|
|
0.61 |
|
|
|
0.34 |
|
|
|
(0.09) |
|
|
|
|
|
|
|
Portfolio turnover
rate |
|
|
53 |
% |
|
|
43 |
% |
|
|
88 |
% |
|
|
30 |
% |
|
|
48 |
% |
1 |
Per
share amounts have been calculated using the average shares
method. |
2 |
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. |
3 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class A shares did not exceed 1.35%. This expense
limitation arrangement cannot be terminated prior to December 31,
2022 without the Board of Trustees’ consent. In addition, the manager has
agreed to waive the Fund’s management fee to an extent sufficient to
offset the net management fee payable in connection with any investment in
an affiliated money market fund. |
4 |
Reflects
fee waivers and/or expense reimbursements. |
|
|
|
36 |
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest
outstanding throughout each year ended
September 30: |
|
Class C Shares1 |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
Net asset value,
beginning of year |
|
|
$8.94 |
|
|
|
$11.89 |
|
|
|
$15.61 |
|
|
|
$18.70 |
|
|
|
$17.64 |
|
|
|
|
|
|
|
Income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment loss |
|
|
(0.04) |
|
|
|
(0.02) |
|
|
|
(0.02) |
|
|
|
(0.05) |
|
|
|
(0.14) |
|
Net
realized and unrealized gain (loss) |
|
|
5.23 |
|
|
|
(2.14) |
|
|
|
(1.73) |
|
|
|
0.82 |
|
|
|
3.10 |
|
Total income
(loss) from operations |
|
|
5.19 |
|
|
|
(2.16) |
|
|
|
(1.75) |
|
|
|
0.77 |
|
|
|
2.96 |
|
|
|
|
|
|
|
Less distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
(0.04) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net
realized gains |
|
|
— |
|
|
|
(0.79) |
|
|
|
(1.97) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
Total
distributions |
|
|
(0.04) |
|
|
|
(0.79) |
|
|
|
(1.97) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
|
|
|
|
|
|
Net asset value,
end of year |
|
|
$14.09 |
|
|
|
$8.94 |
|
|
|
$11.89 |
|
|
|
$15.61 |
|
|
|
$18.70 |
|
Total
return2 |
|
|
58.14 |
% |
|
|
(19.71) |
% |
|
|
(10.57) |
% |
|
|
4.39 |
% |
|
|
17.22 |
% |
|
|
|
|
|
|
Net assets, end of
year (000s) |
|
|
$3,325 |
|
|
|
$3,490 |
|
|
|
$6,183 |
|
|
|
$35,316 |
|
|
|
$41,380 |
|
|
|
|
|
|
|
Ratios to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
|
|
2.14 |
% |
|
|
2.13 |
% |
|
|
2.02 |
% |
|
|
2.01 |
% |
|
|
2.04 |
% |
Net
expenses3,4 |
|
|
2.10 |
|
|
|
2.05 |
|
|
|
1.99 |
|
|
|
2.00 |
|
|
|
2.04 |
|
Net
investment loss |
|
|
(0.34) |
|
|
|
(0.18) |
|
|
|
(0.19) |
|
|
|
(0.30) |
|
|
|
(0.80) |
|
|
|
|
|
|
|
Portfolio turnover
rate |
|
|
53 |
% |
|
|
43 |
% |
|
|
88 |
% |
|
|
30 |
% |
|
|
48 |
% |
1 |
Per
share amounts have been calculated using the average shares
method. |
2 |
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. |
3 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class C shares did not exceed 2.10%. This expense limitation
arrangement cannot be terminated prior to December 31, 2022 without
the Board of Trustees’ consent. In addition, the manager has agreed to
waive the Fund’s management fee to an extent sufficient to offset the net
management fee payable in connection with any investment in an affiliated
money market fund. |
4 |
Reflects
fee waivers and/or expense reimbursements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest
outstanding throughout each year ended
September 30: |
|
Class I Shares1 |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
Net asset value,
beginning of year |
|
|
$13.45 |
|
|
|
$17.52 |
|
|
|
$21.83 |
|
|
|
$24.44 |
|
|
|
$22.32 |
|
Income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
0.16 |
|
|
|
0.13 |
|
|
|
0.16 |
|
|
|
0.15 |
|
|
|
0.05 |
|
Net
realized and unrealized gain (loss) |
|
|
7.87 |
|
|
|
(3.20) |
|
|
|
(2.41) |
|
|
|
1.10 |
|
|
|
3.97 |
|
Total income
(loss) from operations |
|
|
8.03 |
|
|
|
(3.07) |
|
|
|
(2.25) |
|
|
|
1.25 |
|
|
|
4.02 |
|
Less distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
(0.07) |
|
|
|
(0.21) |
|
|
|
(0.09) |
|
|
|
— |
|
|
|
— |
|
Net
realized gains |
|
|
— |
|
|
|
(0.79) |
|
|
|
(1.97) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
Total
distributions |
|
|
(0.07) |
|
|
|
(1.00) |
|
|
|
(2.06) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
|
|
|
|
|
|
Net asset value,
end of year |
|
|
$21.41 |
|
|
|
$13.45 |
|
|
|
$17.52 |
|
|
|
$21.83 |
|
|
|
$24.44 |
|
Total
return2 |
|
|
59.80 |
% |
|
|
(18.84) |
% |
|
|
(9.74) |
% |
|
|
5.45 |
% |
|
|
18.43 |
% |
|
|
|
|
|
|
Net assets, end of
year (000s) |
|
|
$8,851 |
|
|
|
$4,517 |
|
|
|
$6,967 |
|
|
|
$10,191 |
|
|
|
$11,376 |
|
Ratios to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
|
|
1.04 |
% |
|
|
1.10 |
% |
|
|
1.03 |
% |
|
|
1.01 |
% |
|
|
1.01 |
% |
Net
expenses3,4 |
|
|
1.00 |
|
|
|
1.00 |
|
|
|
1.00 |
|
|
|
1.00 |
|
|
|
1.00 |
|
Net
investment income |
|
|
0.79 |
|
|
|
0.88 |
|
|
|
0.92 |
|
|
|
0.70 |
|
|
|
0.22 |
|
|
|
|
|
|
|
Portfolio turnover
rate |
|
|
53 |
% |
|
|
43 |
% |
|
|
88 |
% |
|
|
30 |
% |
|
|
48 |
% |
1 |
Per
share amounts have been calculated using the average shares
method. |
2 |
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 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class I shares did not exceed 1.00%. This expense limitation
arrangement cannot be terminated prior to December 31, 2022 without
the Board of Trustees’ consent. In addition, the manager has agreed to
waive the Fund’s management fee to an extent sufficient to offset the net
management fee payable in connection with any investment in an affiliated
money market fund. |
4 |
Reflects
fee waivers and/or expense reimbursements. |
|
|
|
38 |
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of beneficial interest
outstanding throughout each year ended
September 30: |
|
Class IS Shares1 |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
Net asset value,
beginning of year |
|
|
$13.49 |
|
|
|
$17.57 |
|
|
|
$21.89 |
|
|
|
$24.48 |
|
|
|
$22.33 |
|
|
|
|
|
|
|
Income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
0.17 |
|
|
|
0.15 |
|
|
|
0.18 |
|
|
|
0.18 |
|
|
|
0.07 |
|
Net
realized and unrealized gain (loss) |
|
|
7.91 |
|
|
|
(3.22) |
|
|
|
(2.42) |
|
|
|
1.09 |
|
|
|
3.98 |
|
Total income
(loss) from operations |
|
|
8.08 |
|
|
|
(3.07) |
|
|
|
(2.24) |
|
|
|
1.27 |
|
|
|
4.05 |
|
|
|
|
|
|
|
Less distributions from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
(0.07) |
|
|
|
(0.22) |
|
|
|
(0.11) |
|
|
|
— |
|
|
|
— |
|
Net
realized gains |
|
|
— |
|
|
|
(0.79) |
|
|
|
(1.97) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
Total
distributions |
|
|
(0.07) |
|
|
|
(1.01) |
|
|
|
(2.08) |
|
|
|
(3.86) |
|
|
|
(1.90) |
|
|
|
|
|
|
|
Net asset value,
end of year |
|
|
$21.50 |
|
|
|
$13.49 |
|
|
|
$17.57 |
|
|
|
$21.89 |
|
|
|
$24.48 |
|
Total
return2 |
|
|
60.03 |
% |
|
|
(18.76) |
% |
|
|
(9.67) |
% |
|
|
5.53 |
% |
|
|
18.57 |
% |
|
|
|
|
|
|
Net assets, end of
year (000s) |
|
|
$6,733 |
|
|
|
$3,601 |
|
|
|
$4,500 |
|
|
|
$6,514 |
|
|
|
$7,015 |
|
|
|
|
|
|
|
Ratios to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
expenses |
|
|
0.97 |
% |
|
|
1.00 |
% |
|
|
0.94 |
% |
|
|
0.92 |
% |
|
|
0.88 |
% |
Net
expenses3 |
|
|
0.90 |
4 |
|
|
0.90 |
4 |
|
|
0.90 |
4 |
|
|
0.90 |
4 |
|
|
0.88 |
|
Net
investment income |
|
|
0.89 |
|
|
|
1.00 |
|
|
|
1.02 |
|
|
|
0.79 |
|
|
|
0.32 |
|
|
|
|
|
|
|
Portfolio turnover
rate |
|
|
53 |
% |
|
|
43 |
% |
|
|
88 |
% |
|
|
30 |
% |
|
|
48 |
% |
1 |
Per
share amounts have been calculated using the average shares
method. |
2 |
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 |
As
a result of an expense limitation arrangement, the ratio of total annual
fund operating expenses, other than interest, brokerage, taxes,
extraordinary expenses and acquired fund fees and expenses, to average net
assets of Class IS shares did not exceed 0.90%. In addition, the ratio of
total annual fund operating expenses for Class IS shares did not exceed
the ratio of total annual fund operating expenses for Class I shares.
These expense limitation arrangements cannot be terminated prior to
December 31, 2022 without the Board of Trustees’ consent. In
addition, the manager has agreed to waive the Fund’s management fee to an
extent sufficient to offset the net management fee payable in connection
with any investment in an affiliated money market
fund. |
4 |
Reflects
fee waivers and/or expense reimbursements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
39 |
|
[This
page intentionally left blank.]
Appendix: Waivers and Discounts Available from Certain
Service Agents
The
availability of certain sales charge waivers and discounts will depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Financial intermediaries may have different policies and
procedures regarding the availability of front-end sales load waivers or
contingent deferred (back-end) sales load waivers, which are discussed below. In
all instances, it is the purchaser’s responsibility to notify the fund or the
purchaser’s financial intermediary at the time of purchase of any relationship
or other facts qualifying the purchaser for sales charge waivers or discounts.
For waivers and discounts not available through a particular financial
intermediary, shareholders will have to purchase fund shares directly from the
fund or through another financial intermediary to receive these waivers or
discounts.
The
information below has been provided by the named financial intermediaries.
Please contact the applicable financial intermediary with any questions
regarding how it applies the policies described below and for assistance in
determining whether you may qualify for a particular sales charge waiver or
discount.
MERRILL LYNCH
Effective
June 30, 2020, shareholders purchasing fund shares through a Merrill Lynch
platform or account will be eligible only for the following load waivers
(front-end sales charge waivers and contingent deferred, or back-end, sales
charge waivers) and discounts, which may differ from those disclosed elsewhere
in this fund’s Prospectus or SAI.
Front-end Sales Load
Waivers on Class A Shares available at Merrill Lynch
• |
|
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
• |
|
Shares
purchased by a 529 Plan (does not include 529 Plan units or 529-specific
share classes or equivalents) |
• |
|
Shares
purchased through a Merrill Lynch affiliated investment advisory
program |
• |
|
Shares
exchanged due to the holdings moving from a Merrill Lynch affiliated
investment advisory program to a Merrill Lynch brokerage (non-advisory)
account pursuant to Merrill Lynch’s policies relating to sales load
discounts and waivers |
• |
|
Shares
purchased by third party investment advisors on behalf of their advisory
clients through Merrill Lynch’s platform |
• |
|
Shares
of funds purchased through the Merrill Edge Self-Directed platform (if
applicable) |
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
• |
|
Shares
exchanged from Class C (i.e. level-load) shares of the same fund pursuant
to Merrill Lynch’s policies relating to sales load discounts and
waivers |
• |
|
Employees
and registered representatives of Merrill Lynch or its affiliates and
their family members |
• |
|
Directors
or Trustees of the fund, and employees of the fund’s investment adviser or
any of its affiliates, as described in this
Prospectus |
• |
|
Eligible
shares purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following
the redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front-end or
deferred sales load (known as Rights of Reinstatement). Automated
transactions (i.e. systematic purchases and withdrawals) and purchases
made after shares are automatically sold to pay Merrill Lynch’s account
maintenance fees are not eligible for
reinstatement |
CDSC Waivers on A, B and
C Shares available at Merrill Lynch
• |
|
Death
or disability of the shareholder |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus |
• |
|
Return
of excess contributions from an IRA Account |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts pursuant to the Internal Revenue Code |
• |
|
Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated by
Merrill Lynch |
• |
|
Shares
acquired through a right of reinstatement |
• |
|
Shares
held in retirement brokerage accounts, that are exchanged for a lower cost
share class due to transfer to certain fee based accounts or platforms
(applicable to A and C shares only) |
• |
|
Shares
received through an exchange due to the holdings moving from a Merrill
Lynch affiliated investment advisory program to a Merrill Lynch brokerage
(non-advisory) account pursuant to Merrill Lynch’s policies relating to
sales load discounts and waivers |
Front-end load Discounts
Available at Merrill Lynch: Breakpoints, Rights of Accumulation &
Letters of Intent
• |
|
Breakpoints
as described in this Prospectus. |
• |
|
Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts
as described in the fund’s Prospectus will be automatically calculated
based on the aggregated holding of fund family assets held by accounts
(including 529 program holdings, where applicable) within
the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
A‑1 |
|
|
purchaser’s
household at Merrill Lynch. Eligible fund family assets not held at
Merrill Lynch may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such
assets |
• |
|
Letters
of Intent (LOI) which allow for breakpoint discounts based on anticipated
purchases within a fund family, through Merrill Lynch, over a 13-month
period of time (if applicable) |
AMERIPRISE FINANCIAL
Class A Shares
Front-End Sales Charge Waivers Available at Ameriprise Financial:
The
following information applies to Class A share purchases if you have an
account with or otherwise purchase fund shares through Ameriprise
Financial:
Effective
January 15, 2021, shareholders purchasing fund shares through an Ameriprise
Financial retail brokerage account are eligible for the following front-end
sales charge waivers, which may differ from those disclosed elsewhere in this
fund’s Prospectus or SAI:
• |
|
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs or
SAR-SEPs. |
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the same fund family). |
• |
|
Shares
exchanged from Class C shares of the same fund in the month of or
following the 7-year anniversary of the purchase date. To the extent that
this Prospectus elsewhere provides for a waiver with respect to exchanges
of Class C shares or conversions of Class C shares following a shorter
holding period, that waiver will apply. |
• |
|
Employees
and registered representatives of Ameriprise Financial or its affiliates
and their immediate family members. |
• |
|
Shares
purchased by or through qualified accounts (including IRAs, Coverdell
Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and
defined benefit plans) that are held by a covered family member, defined
as an Ameriprise Financial advisor and/or the advisor’s spouse, advisor’s
lineal ascendant (mother, father, grandmother, grandfather, great
grandmother, great grandfather), advisor’s lineal descendant (son,
step-son, daughter, step-daughter, grandson, granddaughter, great
grandson, great granddaughter) or any spouse of a covered family member
who is a lineal descendant. |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front-end or
deferred sales load (i.e. Rights of
Reinstatement). |
MORGAN STANLEY WEALTH
MANAGEMENT
Front-end Sales Charge
Waivers on Class A Shares available at Morgan Stanley Wealth Management:
Shareholders
purchasing Fund shares through a Morgan Stanley Wealth Management brokerage
account will be eligible only for the following front-end sales charge waivers
with respect to Class A shares, which may differ from and may be more
limited than those disclosed elsewhere in this Fund’s Prospectus or SAI.
• |
|
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans |
• |
|
Morgan
Stanley employee and employee-related accounts according to Morgan
Stanley’s account linking rules |
• |
|
Shares
purchased through reinvestment of dividends and capital gains
distributions when purchasing shares of the same
fund |
• |
|
Shares
purchased through a Morgan Stanley self-directed brokerage
account |
• |
|
Class
C (i.e., level-load) and Class C2 shares, as applicable, that are no
longer subject to a contingent deferred sales charge and are converted to
Class A shares of the same fund pursuant to Morgan Stanley Wealth
Management’s share class conversion program |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (i) the repurchase occurs within 90 days’ following the
redemption, (ii) the redemption and purchase occur in the same
account, and (iii) redeemed shares were subject to a front-end or
deferred sales charge. |
• |
|
Morgan
Stanley, on your behalf, can convert Class P shares, as applicable, to
Class A shares, generally on a tax-free basis, without clients being
subject to a front-end sales charge. |
In
addition, effective November 12, 2021, for the purpose of calculating
rights of accumulation and letters of intent with respect to purchases made in a
Morgan Stanley Wealth Management brokerage account, the following definition for
“Eligible Purchases” applies. This definition may be more limited than the one
contained in this Fund’s Prospectus or SAI. It is the shareholder’s
responsibility to inform Morgan Stanley at the time of purchase of any
relationship, holdings, or other facts qualifying the purchaser for a discount.
Morgan Stanley can ask for documentation of such circumstance. Shareholders
should contact Morgan Stanley if they have questions.
|
|
|
A‑2 |
|
ClearBridge Small Cap Value
Fund |
Eligible Purchases
include:
• |
|
Any
class of shares of any Franklin Templeton or Legg Mason fund that is
registered in the U.S.; and |
• |
|
Units
of a Section 529 Plan where Franklin Templeton or Legg Mason is the
program manager. |
For
purposes of this section, Franklin Templeton and Legg Mason funds also include
BrandywineGLOBAL funds, ClearBridge Investments funds, Martin Currie funds,
Western Asset funds and certain other funds managed by affiliated investment
advisers. They do not include the funds in the Franklin Templeton Variable
Insurance Products Trust, Legg Mason Partners Variable Equity Trust or Legg
Mason Partners Variable Income Trust.
RAYMOND JAMES &
ASSOCIATES, INC., RAYMOND JAMES FINANCIAL SERVICES, INC. AND EACH ENTITY’S
AFFILIATES (“RAYMOND JAMES”)
Effective
March 1, 2019, shareholders purchasing fund shares through a Raymond James
platform or account, or through an introducing broker-dealer or independent
registered investment adviser for which Raymond James provides trade execution,
clearance, and/or custody services, are eligible only for the following load
waivers (front-end sales charge waivers and contingent deferred, or back-end,
sales charge waivers) and discounts, which may differ from those disclosed
elsewhere in this fund’s Prospectus or SAI.
Front-End Sales Charge
Waivers on Class A Shares Available at Raymond James
• |
|
Shares
purchased in an investment advisory program. |
• |
|
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains distributions and dividend reinvestment when purchasing
shares of the same fund (but not any other fund within the fund
family). |
• |
|
Employees
and registered representatives of Raymond James or its affiliates and
their family members as designated by Raymond
James. |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs with 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front-end or
deferred sales load (known as Rights of
Reinstatement). |
• |
|
A
shareholder in the fund’s Class C shares will have their shares converted
at net asset value to Class A shares (or the appropriate share class)
of the fund if the shares are no longer subject to a contingent deferred
sales charge and the conversion is in line with the policies and
procedures of Raymond James. |
Contingent Deferred Sales
Charge Waivers on Class A and Class C Shares Available at Raymond James
• |
|
Death
or disability of the shareholder. |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus. |
• |
|
Return
of excess contributions from an IRA Account. |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable IRS regulations as described in the fund’s
Prospectus. |
• |
|
Shares
sold to pay Raymond James fees but only if the transaction is initiated by
Raymond James. |
• |
|
Shares
acquired through a right of reinstatement. |
Front-End Load Discounts
Available at Raymond James: Breakpoints, Rights of Accumulation, and/or Letters
of Intent
• |
|
Breakpoints
as described in the fund’s Prospectus. |
• |
|
Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated
holding of the fund family assets held by accounts within the purchaser’s
household at Raymond James. Eligible fund family assets not held at
Raymond James may be included in the calculation of rights of accumulation
only if the shareholder notifies his or her financial advisor about such
assets. |
• |
|
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family over a 13-month time period. Eligible fund
family assets not held at Raymond James may be included in the calculation
of letters of intent only if the shareholder notifies his or her financial
advisor about such assets. |
EDWARD JONES
Policies Regarding
Transactions Through Edward Jones:
Effective
on or after January 1, 2021, the following information supersedes prior
information with respect to transactions and positions held in fund shares
through an Edward Jones system. Clients of Edward Jones (also referred to as
“shareholders”) purchasing fund shares on the Edward Jones commission and
fee-based platforms are eligible only for the following sales charge discounts
(also referred to as “breakpoints”) and waivers, which can differ from discounts
and waivers described elsewhere in the mutual fund Prospectus or statement of
additional information (“SAI”) or through another broker-dealer. In all
instances, it is the shareholder’s responsibility to inform Edward Jones at the
time of purchase of any relationship, holdings of the Franklin Templeton and
Legg Mason Funds (including holdings of 529 Plans where Franklin Templeton or
Legg Mason serve as the primary distributor), or other facts qualifying the
purchaser for discounts or waivers. Edward Jones can ask for documentation of
such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ClearBridge Small Cap Value
Fund |
|
|
|
|
A‑3 |
|
Breakpoints
• |
|
Breakpoint
pricing, otherwise known as volume pricing, at dollar thresholds as
described in the Prospectus. |
Rights of Accumulation
(ROA)
• |
|
The
applicable sales charge on a purchase of Class A shares is determined
by taking into account all share classes (except certain money market
funds and any assets held in group retirement plans) of the Franklin
Templeton and Legg Mason Funds held by the shareholder or in an account
grouped by Edward Jones with other accounts for the purpose of providing
certain pricing considerations (“pricing groups”). If grouping assets as a
shareholder, this includes all share classes held on the Edward Jones
platform and/or held on another platform. The inclusion of eligible fund
family assets in the ROA calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Money
market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares
purchased with a sales charge. |
• |
|
The
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to
establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping as opposed to including all share classes at a
shareholder or pricing group level. |
• |
|
ROA
is determined by calculating the higher of cost minus redemptions or
market value (current shares x NAV). |
Letter of Intent (LOI)
• |
|
Through
a LOI, shareholders can receive the sales charge and breakpoint discounts
for purchases shareholders intend to make over a 13-month period from the
date Edward Jones receives the LOI. The LOI is determined by calculating
the higher of cost or market value of qualifying holdings at LOI
initiation in combination with the value that the shareholder intends to
buy over a 13-month period to calculate the front-end sales charge and any
breakpoint discounts. Each purchase the shareholder makes during that
13-month period will receive the sales charge and breakpoint discount that
applies to the total amount. The inclusion of eligible fund family assets
in the LOI calculation is dependent on the shareholder notifying Edward
Jones of such assets at the time of calculation. Purchases made before the
LOI is received by Edward Jones are not adjusted under the LOI and will
not reduce the sales charge previously paid. Sales charges will be
adjusted if LOI is not met. |
• |
|
If
the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected
to establish or change ROA for the IRA accounts associated with the plan
to a plan-level grouping, LOIs will also be at the plan-level and may only
be established by the employer. |
Sales Charge Waivers
Sales
charges are waived for the following shareholders and in the following
situations:
• |
|
Associates
of Edward Jones and its affiliates and their family members who are in the
same pricing group (as determined by Edward Jones under its policies and
procedures) as the associate. This waiver will continue for the remainder
of the associate’s life if the associate retires from Edward Jones in
good-standing and remains in good standing pursuant to Edward Jones’
policies and procedures. |
• |
|
Shares
purchased in an Edward Jones fee-based program. |
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment. |
• |
|
Shares
purchased from the proceeds of redeemed shares of the same fund family so
long as the following conditions are met: 1) the proceeds are from
the sale of shares within 60 days of the purchase, and 2) the sale
and purchase are made in the same share class and the same account or the
purchase is made in an individual retirement account with proceeds from
liquidations in a non-retirement account. |
• |
|
Shares
exchanged into Class A shares from another share class so long as the
exchange is into the same fund and was initiated at the discretion of
Edward Jones. Edward Jones is responsible for any remaining CDSC due to
the fund company, if applicable. Any future purchases are subject to the
applicable sales charge as disclosed in the
Prospectus. |
• |
|
Exchanges
from Class C shares to Class A shares of the same fund,
generally, in the 84th month following the anniversary of the purchase
date or earlier at the discretion of Edward
Jones. |
Contingent Deferred Sales
Charge (CDSC) Waivers
If
the shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder is responsible to pay the
CDSC except in the following conditions:
• |
|
The
death or disability of the shareholder. |
• |
|
Systematic
withdrawals with up to 10% per year of the account
value. |
• |
|
Return
of excess contributions from an Individual Retirement Account
(IRA). |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts if the redemption is taken in or after the year the shareholder
reaches qualified age based on applicable IRS
regulations. |
• |
|
Shares
sold to pay Edward Jones fees or costs in such cases where the transaction
is initiated by Edward Jones. |
• |
|
Shares
exchanged in an Edward Jones fee-based program. |
• |
|
Shares
acquired through NAV reinstatement. |
• |
|
Shares
redeemed at the discretion of Edward Jones for Minimum Balances, as
described below. |
|
|
|
A‑4 |
|
ClearBridge Small Cap Value
Fund |
Other Important
Information Regarding Transactions Through Edward Jones
1.1 Minimum Purchase
Amounts
• |
|
Initial
purchase minimum: $250 |
• |
|
Subsequent
purchase minimum: none |
1.2 Minimum Balances
• |
|
Edward
Jones has the right to redeem at its discretion fund holdings with a
balance of $250 or less. The following are examples of accounts that are
not included in this policy: |
|
¡ |
|
A
fee-based account held on an Edward Jones
platform |
|
¡ |
|
A
529 account held on an Edward Jones platform |
|
¡ |
|
An
account with an active systematic investment plan or letter of intent
(LOI) |
1.3 Exchanging Share
Classes
• |
|
At
any time it deems necessary, Edward Jones has the authority to exchange at
NAV a shareholder’s holdings in a fund to Class A shares of the same
fund. |
JANNEY MONTGOMERY SCOTT
LLC (“JANNEY”)
Effective
May 1, 2020, if you purchase fund shares through a Janney brokerage
account, you will be eligible for the following load waivers (front-end sales
charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales
charge, waivers) and discounts, which may differ from those disclosed elsewhere
in this fund’s Prospectus or SAI.
Front-end sales charge*
waivers on Class A shares available at Janney
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family). |
• |
|
Shares
purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by
Janney. |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within ninety (90) days
following the redemption, (2) the redemption and purchase occur in
the same account, and (3) redeemed shares were subject to a front-end
or deferred sales load (i.e., right of
reinstatement). |
• |
|
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement
plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans. |
• |
|
Shares
acquired through a right of reinstatement. |
• |
|
Class
C shares that are no longer subject to a contingent deferred sales charge
and are converted to Class A shares of the same fund pursuant to
Janney’s policies and procedures. |
CDSC waivers on
Class A and C shares available at Janney
• |
|
Shares
sold upon the death or disability of the
shareholder. |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus. |
• |
|
Shares
purchased in connection with a return of excess contributions from an IRA
account. |
• |
|
Shares
sold as part of a required minimum distribution for IRA and other
retirement accounts due to the shareholder reaching age 701⁄2 as described in the fund’s
Prospectus. |
• |
|
Shares
sold to pay Janney fees but only if the transaction is initiated by
Janney. |
• |
|
Shares
acquired through a right of reinstatement. |
• |
|
Shares
exchanged into the same share class of a different
fund. |
Front-end sales charge*
discounts available at Janney: breakpoints, rights of accumulation, and/or
letters of intent
• |
|
Breakpoints
as described in the fund’s Prospectus. |
• |
|
Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated
holding of fund family assets held by accounts within the purchaser’s
household at Janney. Eligible fund family assets not held at Janney may be
included in the ROA calculation only if the shareholder notifies his or
her financial advisor about such assets. |
• |
|
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund
family assets not held at Janney Montgomery Scott may be included in the
calculation of letters of intent only if the shareholder notifies his or
her financial advisor about such assets. |
* |
Also
referred to as an “initial sales charge.” |
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ClearBridge Small Cap Value
Fund |
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A‑5 |
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OPPENHEIMER &
CO. INC.
Effective
May 15th, 2020, shareholders purchasing fund shares through an
Oppenheimer & Co. Inc. (“OPCO”) platform or account are eligible only
for the following load waivers (front-end sales charge waivers and contingent
deferred, or back-end, sales charge waivers) and discounts, which may differ
from those disclosed elsewhere in this fund’s Prospectus or SAI.
Front-end Sales Load
Waivers on Class A Shares available at OPCO
• |
|
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
• |
|
Shares
purchased by or through a 529 Plan |
• |
|
Shares
purchased through a OPCO affiliated investment advisory
program |
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front-end or
deferred sales load (known as Rights of
Restatement). |
• |
|
A
shareholder in the fund’s Class C shares will have their shares converted
at net asset value to Class A shares (or the appropriate share class)
of the fund if the shares are no longer subject to a CDSC and the
conversion is in line with the policies and procedures of
OPCO |
• |
|
Employees
and registered representatives of OPCO or its affiliates and their family
members |
• |
|
Directors
or Trustees of the fund, and employees of the fund’s investment adviser or
any of its affiliates, as described in this
Prospectus |
CDSC Waivers on A, B and
C Shares available at OPCO
• |
|
Death
or disability of the shareholder |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus |
• |
|
Return
of excess contributions from an IRA Account |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable IRS regulations as described in the
Prospectus |
• |
|
Shares
sold to pay OPCO fees but only if the transaction is initiated by
OPCO |
• |
|
Shares
acquired through a right of reinstatement |
Front-end load Discounts
Available at OPCO: Breakpoints, Rights of Accumulation & Letters of
Intent
• |
|
Breakpoints
as described in this Prospectus. |
• |
|
Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts
will be automatically calculated based on the aggregated holding of fund
family assets held by accounts within the purchaser’s household at OPCO.
Eligible fund family assets not held at OPCO may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor
about such assets. |
BAIRD
Effective
June 15, 2020, shareholders purchasing fund shares through a Baird platform
or account will only be eligible for the following sales charge waivers
(front-end sales charge waivers and CDSC waivers) and discounts, which may
differ from those disclosed elsewhere in this Prospectus or the SAI
Front-End Sales Charge
Waivers on Class A-shares Available at Baird
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same
fund |
• |
|
Shares
purchased by employees and registered representatives of Baird or its
affiliate and their family members as designated by
Baird |
• |
|
Shares
purchased from the proceeds of redemptions from another Legg
Mason-sponsored fund, provided (1) the repurchase occurs within 90
days following the redemption, (2) the redemption and purchase occur
in the same accounts, and (3) redeemed shares were subject to a
front-end or deferred sales charge (known as rights of
reinstatement) |
• |
|
A
shareholder in the funds’ Class C Shares will have their share converted
at net asset value to Class A shares of the fund if the shares are no
longer subject to CDSC and the conversion is in line with the policies and
procedures of Baird |
• |
|
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage
account at Baird, including 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans. For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, Simple IRAs or
SAR-SEPs |
CDSC Waivers on
Class A and C shares Available at Baird
• |
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Shares
sold due to death or disability of the
shareholder |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus |
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A‑6 |
|
ClearBridge Small Cap Value
Fund |
• |
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Shares
bought due to returns of excess contributions from an IRA
Account |
• |
|
Shares
sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on
applicable Internal Revenue Service regulations as described in the Fund’s
Prospectus |
• |
|
Shares
sold to pay Baird fees but only if the transaction is initiated by
Baird |
• |
|
Shares
acquired through a right of reinstatement |
Front-End Sales Charge
Discounts Available at Baird: Breakpoints and/or Rights of Accumulations
• |
|
Breakpoints
as described in this Prospectus |
• |
|
Rights
of accumulations which entitles shareholders to breakpoint discounts will
be automatically calculated based on the aggregated holding of Legg
Mason-sponsored fund assets held by accounts within the purchaser’s
household at Baird. Eligible Legg Mason-sponsored fund assets not held at
Baird may be included in the rights of accumulations calculation only if
the shareholder notifies his or her financial advisor about such
assets |
• |
|
Letters
of Intent (LOI) allow for breakpoint discounts based on anticipated
purchases of Legg Mason-sponsored funds through Baird, over a 13-month
period of time |
WAIVERS SPECIFIC TO
STIFEL, NICOLAUS & COMPANY, INCORPORATED (“STIFEL”)
Effective
July 1, 2020, shareholders purchasing fund shares through a Stifel platform
or account or who own shares for which Stifel or an affiliate is the
broker-dealer of record are eligible for the following additional sales charge
waiver.
Front-end Sales Load
Waiver on Class A Shares
• |
|
Class
C shares that have been held for more than seven (7) years will be
converted to Class A shares of the same fund pursuant to Stifel’s
policies and procedures. All other sales charge waivers and reductions
described elsewhere in the fund’s Prospectus or Statement of Additional
Information (“SAI”) still apply. |
PFS INVESTMENTS INC.
(“PFSI”)
Policies Regarding Fund
Purchases Through PFSI
Effective
on or after May 8, 2021, the following information supersedes all prior
information with respect to transactions and positions held in fund shares
purchased through PFSI and held on the mutual fund platform of its affiliate,
Primerica Shareholder Services (“PSS”). Clients of PFSI (also referred to as
“shareholders”) purchasing fund shares on the PSS platform are eligible only for
the following share classes, sales charge discounts (also referred to as
“breakpoints”) and waivers, which can differ from share classes, discounts and
waivers described elsewhere in this prospectus or the related statement of
additional information (“SAI”) or through another broker-dealer. In all
instances, it is the shareholder’s responsibility to inform PFSI at the time of
a purchase of all holdings of the Franklin Templeton and Legg Mason Funds on the
PSS platform, or other facts qualifying the purchaser for discounts or waivers.
PFSI may request reasonable documentation of such facts, and condition the
granting of any discount or waiver on the timely receipt of such documents.
Shareholders should contact PSS if they have questions regarding their
eligibility for these discounts and waivers.
Breakpoints
• |
|
Breakpoint
pricing at dollar thresholds as described in the prospectus of the fund
you are purchasing. |
Rights of Accumulation
(“ROA”)
• |
|
The
applicable sales charge on a purchase of Class A shares is determined
by taking into account all share classes (except any assets held in group
retirement plans) of the Franklin Templeton and Legg Mason Funds held by
the shareholder on the PSS Platform. The inclusion of eligible fund family
assets in the ROA calculation is dependent on the shareholder notifying
PFSI of such assets at the time of calculation. No shares of the Franklin
Templeton and Legg Mason Funds held by the shareholder away from the PSS
platform, will be granted ROA with shares of any Franklin Templeton or
Legg Mason Fund purchased on the PSS platform. |
• |
|
Any
SEP IRA plan or SIMPLE IRA plan on the PSS platform will be defaulted to
plan-level grouping for purposes of ROA, which allows each participating
employee ROA with all other eligible shares held in plan accounts on the
PSS platform. At any time, a participating employee may elect to exercise
a one-time option to change grouping for purposes of ROA to shareholder-
level grouping, which allows the plan account of the electing employee ROA
with her other eligible holdings on the PSS platform, but not with all
other eligible participant holdings in the plan. Eligible shares held in
plan accounts electing shareholder-level grouping will not be available
for purposes of ROA to plan accounts electing plan-level
grouping. |
• |
|
ROA
is determined by calculating the higher of cost minus redemptions or
current market value (current shares x
NAV). |
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ClearBridge Small Cap Value
Fund |
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A‑7 |
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Letter of Intent (“LOI”)
• |
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By
executing a LOI, shareholders can receive the sales charge and breakpoint
discounts for purchases shareholders intend to make over a 13-month period
through PFSI, from the date PSS receives the LOI. The purchase price of
the LOI is determined by calculating the higher of cost or market value of
qualifying holdings at LOI initiation in combination with the dollar
amount the shareholder intends to invest over a 13-month period to arrive
at total investment for purposes of determining any breakpoint discount
and the applicable front-end sales charge. Each purchase the shareholder
makes during that 13-month period will receive the sales charge and
breakpoint discount that applies to the projected total
investment. |
• |
|
Only
holdings of Franklin Templeton and Legg Mason Funds on the PSS platform
are eligible for inclusion in the LOI calculation and the shareholder must
notify PFSI of all eligible assets at the time of
calculation. |
• |
|
Purchases
made before the LOI is received by PSS are not adjusted under the LOI, and
the LOI will not reduce any sales charge previously paid. Sales charges
will be automatically adjusted if the total purchases required by the LOI
are not met. |
• |
|
If
an employer maintaining a SEP IRA plan and/or SIMPLE IRA plan on the PSS
platform has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at
the plan-level and may only be established by the
employer. |
Sales Charge Waivers
Sales charges are waived
for the following shareholders and in the following situations:
• |
|
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment. |
• |
|
Shares
purchased with the proceeds of redeemed shares of the same fund family so
long as the following conditions are met: 1) the proceeds are from the
sale of shares within 90 days of the purchase, and 2) the sale and
purchase are made in the same share class and the same account or the
purchase is made in an individual retirement account with proceeds from
liquidations in a non-retirement account. Shareholders of Franklin
Templeton or Legg Mason Funds on the PSS platform will not be permitted to
redeem shares from either of those fund families and reinvest the proceeds
in the other fund family at NAV or net asset
value. |
• |
|
Shares
exchanged into Class A shares from another share class so long as the
exchange is into the same fund and was initiated at the discretion of
PFSI. PFSI is responsible for any remaining CDSC due to the fund company,
if applicable. Any future purchases are subject to the applicable sales
charge as disclosed in the prospectus. |
Exchanging between
Franklin Templeton and Legg Mason Funds
• |
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Clients
of PFSI that purchase Franklin Templeton or Legg Mason Funds on the PSS
platform will not be permitted to exchange from one of those fund families
to the other at NAV or net asset value. |
D.A. DAVIDSON
Effective
September 1, 2021, shareholders purchasing Fund shares including existing
Fund shareholders through a D.A. Davidson &. Co. (“D.A. Davidson”) platform
or account, or through an introducing broker-dealer or independent registered
investment advisor for which D.A. Davidson provides trade execution, clearance,
and/or custody services, will be eligible for the following sales charge waivers
(front-end sales charge waivers and contingent deferred, or back-end, sales
charge waivers) and discounts, which may differ from those disclosed elsewhere
in this Prospectus or the Fund’s SAI.
Front-End Sales Charge
Waivers on Class A Shares available at D.A. Davidson
• |
|
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains and dividend distributions. |
• |
|
Employees
and registered representatives of D.A. Davidson or its affiliates and
their family members as designated by D.A.
Davidson. |
• |
|
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same
account, and (3) redeemed shares were subject to a front-end or
deferred sales charge (known as Rights of
Reinstatement). |
• |
|
A
shareholder in the Fund’s Class C Shares will have their shares converted
at net asset value to Class A Shares (or the appropriate share class)
of the Fund if the shares are no longer subject to a CDSC and the
conversion is consistent with D.A. Davidson’s policies and
procedures. |
CDSC Waivers on
Class A and Class C Shares available at D.A. Davidson
• |
|
Death
or disability of the shareholder. |
• |
|
Shares
sold as part of a systematic withdrawal plan as described in the Fund’s
prospectus. |
• |
|
Return
of excess contributions from an IRA account. |
• |
|
Shares
sold as part of a required minimum distribution for IRA or other
qualifying retirement accounts pursuant to the Internal Revenue
Code. |
• |
|
Shares
acquired through a right of reinstatement. |
Front-end sales charge
discounts available at D.A. Davidson: breakpoints, rights of accumulation and/or
letters of intent
• |
|
Breakpoints
as described in this Prospectus. |
|
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|
A‑8 |
|
ClearBridge Small Cap Value
Fund |
• |
|
Rights
of accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at D.A. Davidson.
Eligible fund family assets not held at D.A. Davidson may be included in
the calculation of rights of accumulation only if the shareholder notifies
his or her financial advisor about such assets. |
• |
|
Letters
of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund
family assets not held at D.A. Davidson may be included in the calculation
of letters of intent only if the shareholder notifies his or her financial
advisor about such assets. |
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ClearBridge Small Cap Value
Fund |
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A‑9 |
|
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, Franklin Distributors, LLC, as well as Legg
Mason-sponsored closed-end funds. 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; |
• |
|
Bank
account information, legal documents, and identity verification
documentation; |
• |
|
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 individual’s 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 to 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
statistical analysis, market research and marketing services solely for
the Funds; |
• |
|
Permit
access to transfer, whether in the United States or countries outside of
the United States to such Funds’ employees, agents and affiliates and
service providers as required to enable the Funds to conduct ordinary
business, or to comply with obligations to government
regulators; |
• |
|
The
Funds’ representatives such as legal counsel, accountants and auditors to
enable the Funds to conduct ordinary business, or to comply with
obligations to government regulators; |
• |
|
Fiduciaries
or representatives acting on your behalf, such as an IRA custodian or
trustee of a grantor trust. |
Except
as otherwise permitted by applicable law, companies acting on the Funds’ behalf,
including those outside the United States, 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, if you have questions
about the Funds’ privacy practices, or our use of your nonpublic personal
information, 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.franklintempleton.com, or contact the Funds at
877-6LM-FUND/656-3863. Revised April 2018.
|
THIS PAGE IS NOT PART OF THE PROSPECTUS |
Legg Mason California
Consumer Privacy Act Policy
Although
much of the personal information we collect is “nonpublic personal information”
subject to federal law, residents of California may, in certain circumstances,
have additional rights under the California Consumer Privacy Act (“CCPA”). For
example, if you are a broker, dealer, agent, fiduciary, or representative acting
by or on behalf of, or for, the account of any other person(s) or household, or
a financial advisor, or if you have otherwise provided personal information to
us separate from the relationship we have with personal investors, the
provisions of this Privacy Policy apply to your personal information (as defined
by the CCPA).
In
addition to the provisions of the Legg Mason Funds Security and Privacy Notice,
you may have the right to know the categories and specific pieces of personal
information we have collected about you.
You
also have the right to request the deletion of the personal information
collected or maintained by the Funds.
If
you wish to exercise any of the rights you have in respect of your personal
information, you should advise the Funds by contacting them as set forth below.
The rights noted above are subject to our other legal and regulatory obligations
and any exemptions under the CCPA. You may designate an authorized agent to make
a rights request on your behalf, subject to the identification process described
below. We do not discriminate based on requests for information related to our
use of your personal information, and you have the right not to receive
discriminatory treatment related to the exercise of your privacy rights.
We
may request information from you in order to verify your identity or authority
in making such a request. If you have appointed an authorized agent to make a
request on your behalf, or you are an authorized agent making such a request
(such as a power of attorney or other written permission), this process may
include providing a password/passcode, a copy of government issued
identification, affidavit or other applicable documentation, i.e. written
permission. We may require you to verify your identity directly even when using
an authorized agent, unless a power of attorney has been provided. We reserve
the right to deny a request submitted by an agent if suitable and appropriate
proof is not provided.
For
the 12-month period prior to the date of this Privacy Policy, the Legg Mason
Funds have not sold any of your personal information; nor do we have any plans
to do so in the future.
Contact
Information
Address:
Data Privacy Officer, 100 International Dr., Baltimore, MD 21202
Phone:
1-800-396-4748
Revised
October 2020
|
THIS PAGE IS NOT PART OF THE PROSPECTUS |
ClearBridge
Small Cap Value Fund
You
may visit www.franklintempleton.com/mutualfundsliterature for a free copy of a
Prospectus, Statement of Additional Information (“SAI”) or an Annual or
Semi-Annual Report.
Shareholder
reports Additional information about the
fund’s investments is available in the fund’s Annual and Semi-Annual Reports to
shareholders. In the fund’s Annual Report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund’s performance during its last fiscal year. The independent registered
public accounting firm’s report and financial statements in the fund’s Annual
Report are incorporated by reference into (are legally a part of) this
Prospectus.
The
fund sends only one report to a household if more than one account has the same
last name and same address. Contact your Service Agent or the fund if you do not
want this policy to apply to you.
Statement of
additional information The SAI provides
more detailed information about the fund and is incorporated by reference into
(is legally a part of) this Prospectus.
You
can make inquiries about the fund or obtain shareholder reports or the SAI
(without charge) by contacting your Service Agent, by calling the fund at
877-6LM-FUND/656-3863, or by writing to the fund at Legg Mason Funds, P.O. Box
33030 St. Petersburg, FL 33733-8030.
Reports
and other information about the fund are available on the EDGAR Database on the
Securities and Exchange Commission’s Internet site at
http://www.sec.gov. Copies of this information may be obtained for a
duplicating fee by electronic request at the following E-mail address:
[email protected].
If
someone makes a statement about the fund that is not in this Prospectus, you
should not rely upon that information. Neither the fund nor the Distributor is
offering to sell shares of the fund to any person to whom the fund may not
lawfully sell its shares.
(Investment
Company Act
file
no. 811-06444)