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Product Pitchbook 2Q 2021 Separately Managed Accounts WESTERN ASSET MUNICIPAL BOND LADDERS Separately Managed Accounts (SMAs) are investment services provided by Legg Mason Private Portfolio Group, LLC (LMPPG), a federally registered investment advisor. Client portfolios are managed based on investment instructions or advice provided by one or more of the following Franklin Templeton affiliated subadvisors: ClearBridge Investments, LLC. Management is implemented by LMPPG, the designated subadvisor or, in the case of certain programs, the program sponsor or its designee. These materials are being provided for illustrative and informational purposes only. The information contained herein is obtained from multiple sources that are believed to be reliable. However, such information has not been verified, and may be different from the information included in documents and materials created by the sponsor firm in whose investment program a client participates. Some sponsor firms may require that these materials be preceded or accompanied by investment profiles or other documents or materials prepared by such sponsor firms, which will be provided upon a client's request. For additional information, documents and/or materials, please speak to your financial professional or contact your sponsor firm. INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE Introduction | Franklin Templeton Franklin Templeton We aim to offer the best of both worlds: global strength and boutique specialization. Providing real customization backed by the scale and resources of a large company. All driven by our single focus on delivering better client outcomes. Unparalleled in our Guided by long-term Nimble where it matters ability to customize value creation • Autonomous investment teams • Strategy- and vehicle-agnostic • Closely-held public firm where entrepreneurial, independent approach to solving client needs with a strong balance sheet, professionals practice true allowing us to invest with a • Tailored support through a specialization global distribution platform, long-term horizon • ~1300 research and investment technological tools and value- • Track record of product professionals, giving us added services, provides more and technological innovations differentiated insights and an than just investment returns fueled by our Silicon Valley roots “ear to the ground” in 20+ countries • Multi-asset capabilities that • Values-based culture, we do • At-scale capabilities in analytics, advance portfolio construction the right thing for our clients data and servicing combined with and provide true solutions and our people empowered teams makes us uniquely agile As of December 31, 2020. Introduction | Franklin Templeton We offer a full range of investment strategies across asset classes and geographies Our investment capabilities Our investment brands Equity Fixed Income Franklin Templeton (1947) Value Government Western Asset (1971) Deep Value Municipals ClearBridge Investments (2005) Core Value Corporate Credit Blend Bank Loans Brandywine Global (1986) GARP Securitized Growth Multi-Sector Clarion Partners (1982) Convertibles Currencies Sector Sukuk Benefit Street Partners (2008) Shariah Martin Currie (1881) Smart Beta Thematic QS Investors (1999) K2 Advisors (1994) Multi-Asset Solutions Alternatives Royce (1972) Income Private Debt Real Return Hedge Funds Balanced/Hybrid Private Equity Total Return Real Estate Target Date/Risk Infrastructure + Absolute Return 1,300 Tactical Asset Allocation investment professionals in over 20 countries1 Managed Volatility 1 As of 6/30/20. Investment professionals include portfolio managers, research analysts, research associates, investment support and executives of Franklin Templeton, Legg Mason and subsidiary investment management groups. 2 Introduction | Western Asset Western Asset Management Approach and Philosophy Western Asset is a global investment management firm committed to understanding the needs of each client, identifying investment solutions, and delivering superior long-term investment results. Team-managed approach Investment Philosophy Objective-Driven Investing Core Fixed Income§ Enhance Income§ Long-term, fundamental Seeks to: · · · Team unites groups of Intermediate Short-Duration High Income value discipline specialists dedicated to · Protect from rising rates · Core · Emerging Markets Debt · different market sectors Bottom-up · Protect from inflation · Core Full Discretion · High Yield · Top-down · Each group of sector · Preserve capital · · specialists utilizes its Investment-Grade Credit Diversified High Income Diversified strategies expertise in bottom-up · Diversify globally · Agency Mortgage-Backed · Structured Products/REIT/ · Depth of resources analysis of each portfolio · Hedge liabilities CLO sector · Global Generate Total Return§ · Enhance income · Total Return Unconstrained Increase Alpha§ Integrated analytics and risk · · Global Credit Absolute Generate tax-free income · Global Total Return management Return§ · · Relative value analysis Generate total return · Global Multi-Sector · Macro Opportunities§ · Achieve ESG objectives · Transparency and · Dynamic Fixed Income communication · Credit Opportunities Hedge Liabilities§ · Long Duration§ · MBS Opportunities · Long Credit§ · Emerging Market Opportunities · Liability-Driven Investing · Tail Risk Management§ Your investment portfolio | Municipal Bond Ladders Western Asset Municipal Bond Ladders Overview Key differentiators The Western Asset Municipal Bond Ladders are designed to deliver Team-managed approach tax-free income opportunities while preserving capital and reducing · Team unites groups of specialists dedicated to different market interest rate risk by investing in laddered municipal bonds. The sectors strategy invests in a diversified portfolio of credit-monitored · Each group of specialists draws on its distinctive expertise in the investment-grade municipal securities with equally weighted bottom-up analysis of its respective sector, to efficiently maturities from 1-15 or 1-30 years.§ implement and monitor the portfolios Objectives In-depth bond research · The strategy seeks to maintain a competitive level of tax-free · Looks across sectors and issues to select attractive income income while preserving principal by investing Ð and reinvesting opportunities and ensure diversification when reinvesting cash Ð in a well-diversified portfolio of investment-grade municipal flows bonds with laddered maturities.§ Overseen by a fixed income leader We believe: · A highly regarded proprietary credit research team that selects and · Laddered portfolios may offer advantages over self-managed monitors holdings portfolios in creating a stable stream of income · Over four decades of municipal bond trading, with access to the · Ladders represent a disciplined approach that allows investors to full inventory of municipal offerings and the ability to purchase manage changes in interest rates quality securities · Credit monitoring may enhance income by providing opportunities · Exclusive focus on fixed income management to allocate across the full range of investment-grade securities · Long tenure in managing separately managed accounts in taxable · A diversified set of municipal bonds with staggered maturities and and tax-exempt markets coupon stream may provide continued opportunities for reinvestment Risks: All investments involve risk, including the loss of principal, and there is no guarantee that investment objectives will be met. Fixed income securities are subject to interest rate and credit risk, which is a possibility that the issuer of a security will be unable to make interest payments and repay the principal on its debt. As interest rates rise, the price of fixed income securities falls. Fixed income securities are subject to illiquidity risk, which is the risk that securities may be difficult to sell at certain prices when no market participants are willing to purchase the securities at such prices. For tax-exempt securities, certain investors may be subject to the Federal Alternative Minimum Tax, and state and local taxes may apply. Capital gains, if any, are fully taxable. Depends on individual tax situation. Please see important tax information. State-specific and state-biased portfolios within this Portfolio focus on individual states and are more vulnerable to losses caused by adverse developments in those states than are national portfolios, which diversify investments across multiple states. Your investment portfolio | Municipal Bond Ladders Why invest in a Municipal Bond Ladder? How reinvesting can advance the Initial principal investment $200K ($6.6K per year x 30 years) ladder As bonds in each rung of the ladder mature, the principal plus interest are typically reinvested into longer-maturing, higher-yielding securities. · Help minimize impact of rising rates by allowing municipal bonds to roll 3 4 5 6 7 8 9 3 4 5 6 7 8 9 3 4 5 6 7 8 9 30 31 32 40 41 42 50 51 down curve until maturity 22 20 202 202 202 202 202 202 202 20 20 20 203 203 203 203 203 203 203 20 20 20 204 204 204 204 204 204 204 20 20 YEAR 3 · May provide greater income from 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 investing at potentially higher rates Principal + interest (%) creates a new 30-year rung · May benefit from owning well- 3 4 5 6 7 8 9 3 4 5 6 7 8 9 3 4 5 6 7 8 9 30 31 32 40 41 42 50 22 diversified portfolio of individual 21 20 20 202 202 202 202 202 202 202 20 20 20 203 203 203 203 203 203 203 20 20 20 204 204 204 204 204 204 204 20 bonds, and ongoing professional YEAR 2 credit monitoring 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Principal + interest (%) creates a new 30-year rung 3 4 5 6 7 8 9 3 4 5 6 7 8 9 3 4 5 6 7 8 9 30 31 32 40 41 42 2020 2022 2021 202 202 202 202 202 202 202 20 20 20 203 203 203 203 203 203 203 20 20 20 204 204 204 204 204 204 204 YEAR 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 The investment process may change over time. There is no guarantee that the manager’s investment process will be successful.
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