Benefits of investing in the Western Asset Australian Bond Fund - Class A

The Fund offers a number of significant benefits:

• diversification across many debt issuers that would be difficult to achieve through direct investment;

• professional management of your investment with an experienced investment manager. This includes economic research and credit analysis, as well as active management of interest rate exposure (duration);

• active sector and security selection;

• disciplined portfolio construction; and

• web-based reporting that includes performance, market commentary and portfolio strategy.

Risk level

Low to Medium

Investor suitability

The Fund may be suitable for investors seeking an investment in Australian fixed Income with long-term financial goals.

About the Fund

• Actively managed Australian bond portfolio that invests across Australian government and semi-government bonds, corporate bonds and asset backed securities

• Adds value through multiple actively managed sources, including interest rate management (duration), yield curve positioning, sector and security selection

• Strong focus on risk management through credit research, diversification of holdings and investment guidelines

Significant features

The investment approach aims to capture returns from a variety of actively-managed sources, including interest rate management (duration), yield curve positioning, sector and security selection. Risk management is a core focus and is supported by credit research, diversification of holdings and investment guidelines.

How we invest your money

The Fund generally aims to invest within the following guidelines at the time of initiating investment decisions:

(Asset type: Minimum / Maximum)

• Commonwealth Government & Semi-Government Bonds: 30%-100%

• Supranational & Sovereign Bonds: 0%-80%

• Corporate Bonds: 0%-60%

• Mortgage & Asset Backed Securities: 0%-20%

• Inflation linked: 0%-10%

• Cash: BALANCE

Interest rate duration (a measure of the sensitivity of the price of a fixed income security to a change in interest rates, expressed as a number of years) will generally be positioned within ±1.0 year of the Fund's benchmark.

The intention is not to hold more than 5% of the Fund's market value in a single non-government issuer or related group of non-government issuers.

The intention is not to hold more than 10% of the Fund's market value in an individual unit trust.

The Fund aims to hold no more than 5% of its market value in corporate bonds issued by Australian entities in foreign currency markets. The aim is to fully hedge these positions into Australian dollars.

The Fund aims to hold no more than 5% of its market value in sub-investment grade bonds. Sub-investment grade bonds means bonds rated as sub-investment grade by either S&P or Moody or so rated by the Sub Advisor where a bond is not rated by either credit rating agency. Where the ratings are split the higher will apply.

The Fund will not invest in securities issued by companies involved in:

• the production or distribution of cluster munitions

• the manufacture of tobacco products.

The Fund may also use certain derivatives to implement investment decisions, to manage cash flows or to facilitate timely exposure to securities. The Fund will not hold more than 20% of its market value in net derivative exposure.

The Fund does not intend to borrow.