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Western Asset Emerging Markets Debt Portfolio

Investment Objective¹

The Fund seeks to maximize total return

Investment Philosophy:

The managers believe attractive risk-adjusted returns can be achieved in the emerging markets debt through superior country selection based on fundamental analysis, rigorous quantitative fixed income analysis focusing on market inefficiencies among sectors and securities in each country and a focus on managing risk through active management. The managers focus investments on the area that they consider to be the most attractive segment of the emerging debt markets - U.S. dollar denominated, sovereign debt issued by below investment grade rated countries.

Benchmark:²

JP Morgan Emerging Markets Bond Index Global (EMBI Global)

Investment Process:

The managers use a "top-down" approach and allocate the Fund's investments among various emerging market countries. In allocating among different countries, the following are some of the factors the managers consider: Currency, inflation and interest rate trends, growth rate forecasts, liquidity of markets for that country's debt, fiscal policies, political outlook, and tax environment. The managers then selects those individual securities that appear to be most undervalued and to offer the highest potential returns relative to the amount of credit, interest rate, liquidity and other risks presented by these securities. The managers engage in independent fundamental analysis to evaluate the creditworthiness of corporate and governmental issuers.

Investment Managers:

			S. Kenneth Leech

			Stephen A. Walsh

			Keith J. Gardner

			Matthew C. Duda

¹The investment goals and objectives above should not be relied upon as indications of future results and there is no guarantee that they will be met.

²As of January 1, 2005, the benchmark for the Salomon Brothers Institutional Emerging Markets Debt Fund changed to the JP Morgan Emerging Markets Bond Index Global from the JP Morgan Emerging Markets Bond Index Plus. The J.P. Morgan Emerging Markets Bond Index Global - (EMBI Global) tracks total returns for U.S. dollar denominated debt instruments issued by emerging markets' sovereign and quasi-sovereign entities: Brady bonds, traded loans, Eurobonds, and local market instruments. Investors cannot invest directly in an index.

Prior to October 2, 2006, the Fund was known as Salomon Brothers Institutional Emerging Markets Debt Fund.

Investors should consider the Fund's investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the Fund. To obtain a free prospectus, please call your financial professional or access one from this page. Please read the prospectus carefully before investing.

All investments involve risk, including loss of principal amount invested. The above estimates are targets only. There is no guarantee that they will be met. The consequences of political, social, economic or diplomatic changes in emerging market countries may have disruptive effects on the market prices of investments held by the Fund. Many emerging market countries in which the Fund invests have markets that are less liquid and more volatile than markets in the U.S. and other developed countries. The Fund's investment in non-dollar denominated securities may also result in foreign currency losses caused by devaluations and exchange rate fluctuations. As interest rates rise, bond prices fall, reducing the value of the Fund's share price. The Fund is not diversified, which means that it can invest a higher percentage of its assets in any one issuer. Being nondiversified may magnify the Fund's losses from adverse events affecting a particular issuer. The Fund may, but need not, invest in derivitives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. The Fund may invest without limit in higher-risk, below investment grade securities.

Information on Sales Charges, Breakpoints, Sales Charge Waivers and Exchanges
Click here for more information about: Class A shares:
- what are the front-end sales loads charged on the purchase of Class A shares
- how to qualify for reduced sales charges or breakpoints
- what kinds of accounts can be combined to qualify for reduced sales charges
- what waivers of front-end sales charges are available
Class B shares:
- what are the contingent deferred sales charges payable upon redemption
- what waivers of deferred sales charges are available
Class C shares:
- what are the contingent deferred sales charges payable upon redemption
- what waivers of deferred sales charges are available
Class Y shares:
- who is eligible to purchase Class Y shares
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Managed by Western Asset Management Company.

Investment Products: Not FDIC Insured | No Bank Guarantee | May Lose Value



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