Annual Report Legg Mason Global Funds Plc An umbrella fund with segregated liability between sub-funds For the year ended February 28, 2010 Legg Mason Global Funds Plc Annual Report February 28, 2010 Table of Contents* General Information 2 Letter to Shareholders 9 Directors' Report 10 Independent Auditors' Report 12 Custodian's Report 14 Portfolio of Investments ± Legg Mason Western Asset US Money Market Fund 15 Portfolio of Investments ± Legg Mason Western Asset US Core Bond Fund 17 Portfolio of Investments ± Legg Mason Western Asset US Core Plus Bond Fund 23 Portfolio of Investments ± Legg Mason Western Asset Euro Core Plus Bond Fund 30 Portfolio of Investments ± Legg Mason Western Asset Diversified Strategic Income Fund 34 Portfolio of Investments ± Legg Mason Western Asset Global Multi Strategy Fund 41 Portfolio of Investments ± Legg Mason Western Asset US High Yield Fund 53 Portfolio of Investments ± Legg Mason Western Asset Emerging Markets Bond Fund 61 Portfolio of Investments ± Legg Mason Western Asset Global High Yield Fund 65 Portfolio of Investments ± Legg Mason Western Asset US Short-Term Government Fund 76 Portfolio of Investments ± Legg Mason Western Asset US Adjustable Rate Fund 78 Portfolio of Investments ± Legg Mason Western Asset Inflation Management Fund 81 Portfolio of Investments ± Legg Mason Western Asset Asian Opportunities Fund 83 Portfolio of Investments ± Legg Mason Western Asset Global Blue Chip Bond Fund ^ 87 Portfolio of Investments ± Legg Mason Brandywine Global Fixed Income Fund 90 Portfolio of Investments ± Legg Mason Capital Management Value Fund 92 Portfolio of Investments ± Legg Mason Capital Management Growth Fund 93 Portfolio of Investments ± Legg Mason Capital Management Opportunity Fund ^ 94 Portfolio of Investments ± Legg Mason ClearBridge US Appreciation Fund 96 Portfolio of Investments ± Legg Mason ClearBridge US Fundamental Value Fund 98 Portfolio of Investments ± Legg Mason ClearBridge US Large Cap Growth Fund 100 Portfolio of Investments ± Legg Mason ClearBridge US Aggressive Growth Fund 101 Portfolio of Investments ± Legg Mason Royce US Small Cap Opportunity Fund 103 Portfolio of Investments ± Legg Mason Royce Smaller Companies Fund 107 Portfolio of Investments ± Legg Mason Royce European Smaller Companies Fund ^ 109 Portfolio of Investments ± Legg Mason Royce Global Smaller Companies Fund ^ 111 Portfolio of Investments ± Legg Mason PCM US Equity Fund 113 Portfolio of Investments ± Legg Mason Permal Global Absolute Fund ^ 115 Portfolio of Investments ± Legg Mason GC Global Equity Fund 116 Portfolio of Investments ± Legg Mason Batterymarch European Equity Fund 118 Portfolio of Investments ± Legg Mason Batterymarch Asia Pacific Equity Fund 120 Portfolio of Investments ± Legg Mason Batterymarch International Large Cap Fund 123 Portfolio of Investments ± Legg Mason Batterymarch Emerging Markets Equity Fund 126 Portfolio of Investments ± Legg Mason Congruix Asia Pacific Fund^ 130 Portfolio of Investments ± Legg Mason Congruix Japan Equity Fund 132 Portfolio of Investments ± Legg Mason LMHK China Fund^ 133 Balance Sheet ± Legg Mason Global Funds Plc 136 Profit and Loss Account ± Legg Mason Global Funds Plc 196 Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares ± Legg Mason Global Funds Plc 208 Notes to Financial Statements ± Legg Mason Global Funds Plc 330 Financial Information ± Total Expense Ratios (TER) (Unaudited) ± Legg Mason Global Funds Plc 408 Financial Information ± Portfolio Turnover Rate (PTR) (Unaudited) ± Legg Mason Global Funds Plc 416 Financial Information ± Fund Performance Data (Unaudited) ± Legg Mason Global Funds Plc 417 10 Year Disclosures for Hong Kong Registered Funds (Unaudited) 424 Distribution Statement for Hong Kong Registered Funds ± February 28, 2010 (Unaudited) 436 Distribution Statement for Hong Kong Registered Funds ± February 28, 2009 (Unaudited) 446 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset US Money Market Fund 455 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset US Core Bond Fund 455 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset US Core Plus Bond Fund 456 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Euro Core Plus Bond Fund 456 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Diversified Strategic Income Fund 457 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Global Multi Strategy Fund 457 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset US High Yield Fund 458 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Emerging Markets Bond Fund 458 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Global High Yield Fund 459 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset US Short-Term Government Fund 459 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset US Adjustable Rate Fund 460 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Inflation Management Fund 460 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Asian Opportunities Fund 460 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Western Asset Global Blue Chip Bond Fund ^ 461 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Brandywine Global Fixed Income Fund 462 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Capital Management Value Fund 462 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Capital Management Growth Fund 463 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Capital Management Opportunity Fund^ 463 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason ClearBridge US Appreciation Fund 464 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason ClearBridge US Fundamental Value Fund 465 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason ClearBridge US Large Cap Growth Fund 465 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason ClearBridge US Aggressive Growth Fund 466 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Royce US Small Cap Opportunity Fund 466 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Royce Smaller Companies Fund 466 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Royce European Smaller Companies Fund^ 467 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Royce Global Smaller Companies Fund^ 468 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason PCM US Equity Fund 469 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Permal Global Absolute Fund^ 469 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason GC Global Equity Fund 470 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Batterymarch European Equity Fund 471 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Batterymarch Asia Pacific Equity Fund 471 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Batterymarch International Large Cap Fund 471 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Batterymarch Emerging Markets Equity Fund 472 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Congruix Asia Pacific Fund^ 472 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason Congruix Japan Equity Fund 473 Statement of Major Portfolio Changes (Unaudited) ± Legg Mason LMHK China Fund^ 473 Appendix 1 ± Directory of Name Change (Unaudited) 475 * Effective November 16, 2009, all Funds under the Legg Mason Global Funds plc umbrella changed names in accordance with Appendix 1. ^ Not authorised in Hong Kong and not available to Hong Kong residents. 1 Legg Mason Global Funds Plc Annual Report February 28, 2010 General Information Board of Directors** Distributors and Shareholder Servicing Agents John Alldis (Luxembourg) Legg Mason Investor Services, LLC Brian Collins (appointed September 2, 2009) 100 International Drive Joseph Keane Baltimore, Maryland 21202 Joseph LaRocque (U.S.) U.S.A. **Frank Ennis resigned as director on August 25, 2009 and Brian Collins was appointed as a director on September 2, 2009. Legg Mason Investments (Europe) Limited 75 King William Street Registered Office London EC4N 7BE Riverside Two United Kingdom Sir John Rogerson's Quay Grand Canal Dock Legg Mason Asset Management Hong Kong Limited Dublin 2, Ireland 12/F, York House The Landmark Secretary 15 Queen's Road, Central Bradwell Limited Hong Kong Arthur Cox Building Earlsfort Terrace Legg Mason International Equities Asset Management (Singapore) Dublin 2, Ireland Pte. Limited 1 George Street, # 23-02 Singapore 049145 Legg Mason Investments (Taiwan) Limited 55 Floor Ð 1, Taipei 101 Tower Xin Yi Road Section 5, Taipei, 110 Taiwan Distributor Status (relevant to U.K. Shareholders only) Legg Mason Global Funds plc (the ``Company'') has pursued a distribution policy designed to enable certification to be obtained for each launched distributing share class of each of the funds of the Company (the ``funds'') in respect of the twelve-month period ended 28 February 2010. There is no guarantee, however, that the certification will be obtained. The exception to this is the Legg Mason Permal Global Absolute sub fund; it will apply for its relevant share classes to be treated as reporting share classes from 1 March 2010. UK shareholders should be aware that HM Revenue and Customs enacted new UK Offshore Fund rules