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0316
Managed Volatility Brochure
Legg Mason Global Funds plc
MANAGED VOLATILITY STRATEGIES
DEFENDING RETURNS
IN VOLATILE MARKETS
Lower volatility stocks have historically outperformed the overall market on a risk adjusted basis over time*.
A managed volatility strategy seeks to invest in the stock market by minimising steep price declines whilst
participating on the upside. This would potentially translate into equity returns similar if not better than the
market, with potentially attractive yields and lower volatility than traditional equity portfolios.
PROTECT ASSETS DURING DOWNTURNS; ENHANCE OVERALL PORTFOLIO STABILITY
• Market volatility in recent years has raised awareness that traditional strategies may not be enough to protect assets.
• Low volatility products seems especially relevant in today’s unpredictable and low growth environment, being able to
add value across a broad range of market conditions.
• Investors are using low volatility strategies to complement core equity allocations or as core allocations themselves,
with the goal of enhancing income while preserving capital and generating more stable long term returns.
The Power of Numbers: Importance of Limiting Downside
$100
$100
$100
Portfolio When portfolio falls
A
10%
Has to rise 11% to recover
$90
$90
Portfolio When portfolio falls
B
$80
20%
Has to rise 25% to recover
$80
Portfolio When portfolio falls
C
$70
$70
Period 1
Period 2
30%
Has to rise 43% to recover!
Period 3
Source: Legg Mason, for illustrative purpose only and not representative of an actual portfolio.
STRATEGY’S SOLUTIONS
INVESTORS CONCERNS
LOWER VOLATILITY
Seeks to lose less in down markets whilst
participating in up markets
MARKET VOLATILITY
STABLE PERFORMANCE
CAPITAL PRESERVATION
Aims to provide stability of returns across a
variety of market environments
NEED FOR INCOME
Aims to generate potentially attractive yields
above the benchmark
ATTRACTIVE INCOME
%
PLEASE REFER TO IMPORTANT INFORMATION ON FINAL PAGE.
LEGG MASON’S SUITE OF MANAGED VOLATILITY FUNDS SEEKS TO MANAGE VOLATILITY
THROUGH A PROCESS THAT:
Invests in stocks with characteristics indicative of return stability
Recognise that downside protection and income are key drivers of long-term total return
Blend quantitative and fundamental perspectives to help forecast volatility through time
SELECTION FOCUSES ON DRIVERS OF PERFORMANCE STABILITY
SOUND FINANCIAL HEALTH
Helps reduce volatility in times of market stress
Seek stocks that
 Pay dividends
 Have a history of dividend growth
 Exhibit consistent cash flows to support future dividend payment
LOW MARKET SENSITIVITY
Multiple inputs help to provide downside protection in volatile and
declining markets
Look for stocks that have relatively lower
 Geographic sensitivity (global and regional)
 Economic sensitivity (sector and industry group)
 Stock specific volatility
ATTRACTIVE FUNDAMENTALS
Combine fundamental characteristics to support return stability and
outperformance
 Tilt portfolios toward stocks that have certain characteristics, such as
‒ Attractive valuations (Forecasted P/E EV/EBITDA)
‒ Strong sentiment (Earnings Estimate Revisions, Earnings Growth)
‒ Technical Support (Put/call ratios, Short interest)
The Managed Volatility strategies are designed to potentially provide attractive
yields and equity returns with lower volatility than traditional equity portfolios. The
strategies combine downside protection with upside return potential using diverse
risk perspective, including a fundamental view, while investing only in stocks that
are expected to pay dividends.
PLEASE REFER TO IMPORTANT INFORMATION ON FINAL PAGE.
STRATEGY HIGHLIGHTS
Managed volatility process that aims to provide downside protection with upside return potential
Aims to provide stability of returns across a variety of market environments
Potential to offer attractive income payouts on a monthly basis
Potential to offer capital growth in equity markets
Managed volatility strategies available across 3 distinct funds – Global, Europe and Asia Pacific ex Japan
MANAGED VOLATILITY PERFORMANCE EXPECTATIONS
Relative to a cap-weighted benchmark, this strategy has the potential to
Market Direction
Down
Up
Outperform in most markets
Provide protection in down markets
Lag in sharply rising and
highly volatile markets
Provide Market Like Returns
Lag Market
Modestly Outperform
Outperform
High
Low
Market Volatility
SUITE OF LEGG MASON MANAGED VOLATILITY FUNDS AVAILABLE
Managed Volatility
Strategies
Fund Name
Investment Universe
Annual Management Fee1
Fund Inception Date
Benchmark
Number of Holdings
Global
Europe
Asia Pacific ex Japan
Legg Mason QS MV Global
Equity Growth and Income
Fund
Legg Mason QS MV European
Equity Growth and Income
Fund
Legg Mason QS MV Asia
Pacific ex Japan Equity
Growth and Income Fund
Dividend paying stocks in
Primarily large cap stocks from
Europe; may invest up to 20% in
developed countries globally
EM Europe
Dividend paying stocks
domiciled in Asia Pacific exJapan
Up to 1.40%
Up to 1.35%
Up to 1.50%
29 December 2010
30 August 2002
25 February 2004
MSCI AC World Index (Net)
MSCI Europe Index (Net)
MSCI AC Asia Pacific ex Japan
Index (Net)^
110 – 170
75 – 125
125 – 175
PLEASE REFER TO IMPORTANT INFORMATION ON FINAL PAGE.
0316
Managed Volatility Brochure
Legg Mason Global Funds plc
Fund Details and share classes
Brandywine Global
Legg Mason QS MV Global Equity
Growth and Income Fund
ClearBridge Investments
Class A Distr. (M) USD Plus
Martin Currie
Class A Distr. (M) SGD (Hedged)
Plus3
ISIN
Bloomberg
IE00BYML7R43 LMGEADS ID
Latest
Annualised
Dividend Rate2
4.75%
Not incepted yet4
Permal
ISIN
Bloomberg
Latest
Annualised
Dividend Rate2
Royce & Associates
Class A Distr. (M) USD (Hedged)
Plus3
IE00BQJZX424
LMEEAMU ID
4.25%
Western Asset Management
Class A Distr. (M) SGD (Hedged)
Plus3
IE00BWDBJ516
LMEEAMS ID
4.25%
ISIN
Bloomberg
Latest
Annualised
Dividend Rate2
IE00B19Z5X02
LEPEUAA ID
N/A
IE00BQJZWZ67
LMPEMPU ID
4.25%
QS Investors
RARE Infrastructure
www.leggmason.com.sg
Legg Mason QS MV European Equity
Growth and Income Fund
Legg Mason QS MV Asia Pacific ex
Japan Equity Growth and Income
Fund
Class A Acc. USD
Class A Distr. (M) USD
Plus3
Class A Distr. (M) SGD (Hedged)
Plus3
Not incepted yet4
* Source: Benchmarks as Limits to Arbitrage: Understanding the Low-Volatility Anomaly (22 March 2010), Malcolm Baker,
Brendan Bradley, and Jeffrey Wurgler, archive.nyu.edu/fda/bitstream/2451/29593/2/Benchmarks15.pdf. Academic studies have
shown that lower-volatility stocks have outperformed higher-volatility issues on both an absolute and risk-adjusted basis since at
least the 1920s, across a variety of market conditions.
Source: Legg Mason and QS Investors. All data as at March 2016 unless otherwise stated. 1Applicable to class A Shares only.
2Source: BNY Mellon, as at 21 March 2016, based on latest Annualised Dividend Rate which is paid out monthly. Annualised
Dividend Rate = (Dividend per Unit / Fund NAV as of Ex-Date) x (365 / Days in distribution period) x 100%. Dividend rate is not
indicative of fund performance. Past dividend rate is not indicative of future dividend rate. Net asset value of the funds may be
volatile subject to market factors. 3Distributing Plus share classes may pay dividend out of capital. The payment of dividends out
of capital effectively amounts to a return or withdrawal of an investor´s original capital investment or of capital gains attributable to
that original investment. Such distribution will result in a corresponding immediate decrease in the Net Asset Value of these share
classes. 4This Share Class has not been launched as at the date of the Singapore Prospectus. Investors may wish to check with
authorised dealers or sub-distributors in Singapore on the future availability of this Share Class. ^ Prior to 13 May 2015, the
benchmark was MSCI AC Asia ex Japan (Net) Index.
IMPORTANT INFORMATION
Source: QS Investors and Legg Mason. The funds are sub-funds of Legg Mason Global Funds Plc, an open-ended umbrella
investment company constituted in Ireland.
This document, provided by Legg Mason Asset Management Singapore Pte. Limited (“Legg Mason”), is for information only and
does not constitute an offer or solicitation to buy or sell any units in any fund.
The funds may invest in certain types of derivative instruments for efficient portfolio management purposes. Please refer
to the prospectus for more information. Distributing Plus share classes may pay dividend out of capital. The payment of
dividends out of capital effectively amounts to a return or withdrawal of an investor´s original capital investment or of
capital gains attributable to that original investment. Such distribution will result in a corresponding immediate decrease
in the Net Asset Value of these share classes.
The prospectus of the funds is available and may be obtained from Legg Mason or its authorised distributors. Investors should read
the prospectus prior to any subscription. All applications for units in the funds must be made on the application forms
accompanying the prospectus. Past performance is not necessarily indicative of future performance. All investments involve risk,
including possible loss of principal. The value of the units in the fund and the income accruing to the units, if any, may fall or rise.
Distribution of this document may be restricted in certain jurisdictions. Any persons coming into possession of this document should
seek advice for details of, and observe such restrictions (if any). This document does not constitute the distribution of any
information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized
or to any person to whom it is unlawful to distribute such a document or make such an offer or solicitation. This fund is not
available to US citizens, residents or greencard holders and may not be available in all jurisdictions.
Neither Legg Mason nor any officer or employee of Legg Mason accepts any liability whatsoever for any loss arising from any use
of this document or its contents. The information in this document is proprietary and may not be used other than by the intended
user. This document may not be reproduced, distributed or published without prior written permission from Legg Mason.
The mention of any individual securities / funds should neither constitute nor be construed as a recommendation to purchase or sell
securities, and the information provided regarding such individual securities / funds is not a sufficient basis upon which to make an
investment decision. Portfolio allocations, holdings and characteristics are subject to change at any time. Although information has
been obtained from sources that Legg Mason believes to be reliable, no guarantee can be given as to its accuracy and such
information may be incomplete or condensed and may be subject to change at any time without notice. Legg Mason, its affiliates,
officers or directors, may have an interest in the acquisition or disposal of the securities mentioned herein.
The views expressed are opinions of the portfolio managers as of the date of this document and are subject to change based on
market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not
intended to be a forecast of future events, a guarantee of future results or investment advice.
Legg Mason Asset Management Singapore Pte. Limited is the legal representative of Legg Mason, Inc. in Singapore.
Registration Number (UEN) : 200007942R.
SG160349