Western Asset Legg Mason U.S. Money Market Fund Western Asset Global Funds Plc U.S. Core Bond Fund Western Asset Euro Core Bond Fund Semi-Annual Report (Unaudited) Western Asset Diversified Strategic Income Bond For the period ended August 31, 2005 Fund Western Asset Global Multi Strategy Fund Western Asset U.S. High Yield Bond Fund Western Asset Emerging Markets Bond Fund Brandywine Global Opportunities Bond Fund Legg Mason Growth Fund Legg Mason Value Fund Royce U.S. Small Cap Equity Fund Royce 100 Equity Fund Batterymarch European Equity Fund Batterymarch Pacific Equity Fund Legg Mason Global Funds Plc Semi-Annual Report August 31, 2005 Table of Contents Introduction – Legg Mason Global Funds Plc 2 Market Commentary & Fund Reviews 4 Portfolio of Investments – Western Asset U.S. Money Market Fund 9 Portfolio of Investments – Western Asset U.S. Core Bond Fund 11 Portfolio of Investments – Western Asset Euro Core Bond Fund 16 Portfolio of Investments – Western Asset Diversified Strategic Income Bond Fund 19 Portfolio of Investments – Western Asset Global Multi Strategy Fund 23 Portfolio of Investments – Western Asset U.S. High Yield Bond Fund 31 Portfolio of Investments – Western Asset Emerging Markets Bond Fund 35 Portfolio of Investments – Brandywine Global Opportunities Bond Fund 37 Portfolio of Investments – Legg Mason Growth Fund 38 Portfolio of Investments – Legg Mason Value Fund 39 Portfolio of Investments – Royce U.S. Small Cap Equity Fund 40 Portfolio of Investments – Royce 100 Equity Fund 44 Portfolio of Investments – Batterymarch European Equity Fund 46 Portfolio of Investments – Batterymarch Pacific Equity Fund 47 Statement of Assets and Liabilities – Legg Mason Global Funds Plc 50 Statement of Operations – Legg Mason Global Funds Plc 54 Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares – Legg Mason Global Funds Plc 56 Notes to Financial Statements – Legg Mason Global Funds Plc 62 Financial Information – Legg Mason Global Funds Plc 82 Statement of Major Portfolio Changes – Western Asset U.S. Money Market Fund 83 Statement of Major Portfolio Changes – Western Asset U.S. Core Bond Fund 84 Statement of Major Portfolio Changes – Western Asset Euro Core Bond Fund 85 Statement of Major Portfolio Changes – Western Asset Diversified Strategic Income Bond Fund 85 Statement of Major Portfolio Changes – Western Asset Global Multi Strategy Fund 86 Statement of Major Portfolio Changes – Western Asset U.S. High Yield Bond Fund 87 Statement of Major Portfolio Changes – Western Asset Emerging Markets Bond Fund 87 Statement of Major Portfolio Changes – Brandywine Global Opportunities Bond Fund 88 Statement of Major Portfolio Changes – Legg Mason Growth Fund 88 Statement of Major Portfolio Changes – Legg Mason Value Fund 89 Statement of Major Portfolio Changes – Royce U.S. Small Cap Equity Fund 89 Statement of Major Portfolio Changes – Royce 100 Equity Fund 90 Statement of Major Portfolio Changes – Batterymarch European Equity Fund 91 Statement of Major Portfolio Changes – Batterymarch Pacific Equity Fund 92 Directors and Other Information 93 1 Legg Mason Global Funds Plc Semi-Annual Report August 31, 2005 Introduction Legg Mason Global Funds Plc Western Asset Management One of the world's premier fixed income managers. Legg Mason Investments are pleased to present the semi-annual Western Asset believes significant inefficiencies exist in fixed income report and accounts for Legg Mason Global Funds Plc for the six- markets and seeks to exploit these inefficiencies across all sectors of month period ending August 31, 2005. Legg Mason Global Funds the global markets. By devoting all of its resources to fixed income, Plc is an Irish domiciled open-ended investment company with Western Asset adds unique value to this asset class through active variable capital and is organised in the form of an umbrella fund management of fixed income portfolios. Western Asset uses long with fourteen constituent sub-funds. term value-driven investment strategies, including sector rotation and issue selection, to maximise returns while at the same time Access to highly regarded investment capabilities managing risk by avoiding any one strategy overwhelming its Legg Mason Investments is part of Legg Mason, Inc., a U.S. based investment performance. financial services company with US$398 billion* under Batterymarch Financial Global investment manager management and offers investors a wide spectrum of investment Management with expertise across U.S., UK, styles through a range of sub-funds within Legg Mason Global European and Asian stock Funds Plc. markets. These sub-funds draw upon the highly regarded investment Batterymarch pioneered the use of quantitative techniques based capabilities of Legg Mason's wholly-owned asset management on the tenets of bottom-up fundamental analysis. As a global subsidiaries, which act as autonomous companies retaining the investment manager, Batterymarch invests in over 50 countries, independence of their individual investment styles and their unique customising their investment process for the specific characteristics cultures. of each market. Batterymarch has been active in managing UK and The Legg Mason asset management subsidiaries managing the European equities for over 25 years - and involved in emerging range of sub-funds within Legg Mason Global Funds Plc follow a market equities since 1989. specific investment process and discipline that only focuses on finding investment opportunities in their core area of expertise. This Brandywine Asset Management Focuses on ‘classic value’ brings unique focus to these sub-funds - which are managed by the investing, which includes the following Legg Mason subsidiaries: Legg Mason Funds management of global fixed Management, Royce & Associates, Western Asset Management, income portfolios. Batterymarch Financial Management and Brandywine Asset Brandywine Asset Management focuses on purchasing 'value' Management. priced securities in fixed income and equity markets. The firm is * As at June 30, 2005 well-established in the fixed income arena and utilises a style that focuses on wealth creation. Brandywine's management style Legg Mason Funds Management Follows a unique investment emphasises the search for fixed income securities with the highest management philosophy and real yields, controlling risk by purchasing undervalued securities and approach to undervalued stocks managing currency to protect and increase returns. Other factors across a number of U.S. equity that are key to the investment process are issue selection, duration strategies. management, country rotation and active currency management. Adhering firmly to a value-driven, research intensive investment process, the firm focuses on assessing intrinsic business value of companies and strives to buy stocks at significant discounts to Legg Mason Funds Management's assessment of their worth. Intrinsic value is assessed by employing a multi-factor, quantitative valuation methodology combined with rigorous business analysis, concentrating on a company's ability to generate excess cash flow, earn high rates of returns on capital and allocate capital efficiently. Royce & Associates Based in New York, Royce & Associates are a highly regarded investment manager that focuses exclusively on U.S. small and micro-cap company investing. For more than 30 years Royce has utilised a disciplined value approach that strives to compound wealth while reducing risk over the long term. Inherent in this approach is a basic belief that the price one pays for an investment makes a significant difference in the long term returns that an investor receives. Royce takes a contrary view to the emotional process of buying and selling stocks - they attempt to reduce risk at times when others are ignoring it and to pursue risk opportunities at times when others may avoid them, in an attempt to capitalise on valuation discrepancies. 2 Legg Mason Global Funds Plc Semi-Annual Report August 31, 2005 Introduction - (continued) The range of funds Fund Asset Class Investment Manager Fixed Income Funds Western Asset U.S. Money Market Fund Money Market Western Asset Management Western Asset U.S. Core Bond Fund U.S. Fixed Income Western Asset Management Western Asset Euro Core Bond Fund Euro Fixed Income Western Asset Management Western Asset Diversified Strategic Income Bond Fund Global Fixed Income Western Asset Management Western Asset Global Multi Strategy Fund Global, including Emerging Markets Western Asset Management Western Asset U.S. High Yield Bond Fund U.S. High Yield Western Asset Management Western Asset Emerging Markets Bond Fund Emerging Markets Western Asset Management Brandywine Global Opportunities Bond Fund Global Fixed Income Brandywine Asset Management Equity Funds Legg Mason Growth Fund U.S. Large Cap Legg Mason Funds Management Legg Mason Value Fund U.S. Large Cap Legg Mason Funds Management Royce U.S. Small Cap Equity Fund U.S. Small & Micro Cap Royce & Associates Royce 100 Equity Fund U.S. Small Cap Royce & Associates Batterymarch European Equity Fund Europe, excluding UK Batterymarch Financial Management Batterymarch Pacific Equity Fund Asia Pacific Batterymarch Financial Management For More Information For further information on the range of sub-funds within Legg Mason Global Funds Plc, contact: For professional investors in the UK and Europe For authorised dealers in the Americas Legg Mason Investments Legg Mason Investments 32 Harbour Exchange Square 255 Alhambra Circle London Suite