Form N-CSR Legg Mason Global Asset For: Jul 31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22338
Legg Mason Global Asset Management Trust
(Exact name of registrant as specified in charter)
620 Eighth Avenue, 47th Floor, New York, NY 10018
(Address of principal executive offices) (Zip code)
Marc A. De Oliveira
Franklin Templeton
100 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-877-721-1926
Date of fiscal year end: July 31
Date of reporting period: July 31, 2021
| ITEM 1. | REPORT TO STOCKHOLDERS |
The Annual Report to Stockholders is filed herewith.
| Annual Report | July 31, 2021 |
MARTIN CURRIE
SMASh SERIES EM FUND
| INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE |
Fund objective
The Fund seeks long-term capital appreciation.
Dear Shareholder,
We are pleased to provide the annual report of Martin Currie SMASh Series EM Fund for the twelve-month reporting period ended July 31, 2021. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions have affected Fund performance.
As always, thank you for your confidence in our stewardship of your assets.
Sincerely,
Jane Trust, CFA
President and Chief Executive Officer
August 31, 2021
| II | Martin Currie SMASh Series EM Fund |
Q. What is the Fund’s investment strategy?
A. The Fund seeks long-term capital appreciation. Under normal market conditions, the Fund pursues its objective by investing at least 80% of its net assets plus borrowings for investment purposes, if any, in securities of issuers with substantial economic ties to one or more emerging market countries and other investments with similar economic characteristics. The material factors that we consider when determining whether an issuer has substantial economic ties to an emerging market country include whether the issuer is included in the MSCI Emerging Markets Indexi, is organized or headquartered in an emerging market country, or maintains most of its assets in one or more such countries, has a primary listing for its securities on a stock exchange of an emerging market country, or derives a majority of its exposure (e.g. percentage of sales, income or other material factors) from one or more emerging market countries. Emerging market countries are predominantly found currently in regions including Asia, the Indian subcontinent, South and Central America, the Middle and Near East, Eastern and Central Europe and Africa.
The Fund will invest primarily in equity and equity-related securities, which may include common stocks, preferred stock, convertible bonds, other securities convertible into common stock, depositary receipts, real estate investment trusts, securities of other investment companies including, exchange-traded funds (ETFs), and synthetic foreign equity securities, including international warrants. The Fund will primarily invest in securities directly in foreign markets, but may gain exposure to foreign markets indirectly through depositary receipts and synthetic foreign equity securities. The Fund will use synthetic foreign equity securities to obtain market exposure where direct access is not otherwise available. The Fund may also enter into index futures contracts, a form of derivative contract, as a substitute for buying or selling securities, to obtain market exposure, in an attempt to enhance returns and to manage cash.
Within an emerging market country, we select securities that we believe have favorable investment potential. For example, the Fund may purchase stocks of companies with prices that reflect a value lower than that which we place on the company. We may also consider factors we believe will cause the stock price to rise. In general, we will consider, among other factors, an issuer’s valuation, financial strength, competitive position in its industry, projected future earnings, cash flows and dividend and environmental, social, and governance risks and opportunities when deciding whether to buy or sell investments. The Fund may invest in companies of any size and market capitalization.
At Martin Currie, the Fund’s subadviser, we assess environmental, social and governance (“ESG”) risks and opportunities that could impact the ability of an issuer to generate future sustainable returns. These may include such factors as: shareholder rights, accounting standards, remuneration, board structure, supply chain, data protection, pollution/hazardous waste policies, water usage, and climate change policies. We assess these factors both quantitatively and qualitatively, through our direct research and engagement process. We consider sustainability risks tied to ESG factors relevant to the returns of the Fund. Because
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 1 |
Fund overview (cont’d)
investing on the basis of ESG criteria involves qualitative and subjective analysis, there can be no assurance that the methodology utilized by, or determinations made by, us will align with the beliefs or values of a particular investor, and other managers may make a different assessment of a company’s ESG criteria. In addition, the Fund seeks to avoid investing in companies that we have determined, based on our exclusionary criteria, to be significantly involved in certain business activities or industries, including the production of tobacco, production of weapons, coal-based power generation, the mining of thermal coal, the production, sale or distribution of dedicated and key components of antipersonnel mines and cluster munitions or we have assessed as ‘fail’ under the principles set forth in the UN Global Compact.
The Fund may invest in companies domiciled in any country that we believe to be appropriate to the Fund’s investment objective. Subject to the Fund’s 80% investment policy, the Fund may invest a substantial amount of assets (i.e., more than 25%) in issuers located in a single country or a limited number of countries but will always be invested in or have exposure to no less than three different emerging market countries. The Fund may invest in securities denominated in foreign currencies or in U.S. dollars.
The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund.
Q. What were the overall market conditions during the Fund’s reporting period?
A. The twelve-month reporting period ended July 31, 2021 in review has been an eventful year, dominated by the impact of COVID-19 on society and companies. The latter half of 2020 saw some recovery from previously tumbling markets, following positive vaccine news and the successful restrictions on movement being gradually lifted. The approval of multiple vaccines in different regions and the announcement of their roll-out were key events during the year in review and helped bolster markets. China played a key role in the broader market rally. Having quickly implemented strict restrictions on movement due to COVID-19 breakouts, it was one of the countries whose recovery came most swiftly. Increased infrastructure investment from China helped to boost commodity prices and to support recovery in broader Asian and global markets. The MSCI Emerging Market Index reached all-time highs going into 2021 but it did not take long before cheers at a return to growth turned into fears over rising inflation. This set the scene for the rest of the first quarter of 2021; inflation concerns took center stage, leading to rising bond yields and a reversal of most of the equity markets’ earlier gains. With signs of inflation appearing, Russia, Brazil and Turkey raised interest rates. New waves of COVID-19 caused some disruption during the latter part of the period but overall, the MSCI Emerging Market Index recovered its recent losses, buoyed by an improving earnings picture as the global economy returned to growth and the roll-out of COVID-19 vaccine programs by national governments.
Other notable events during the period include the outcome of the U.S. presidential election in late 2020, which also provided a boost to emerging markets due to the expectation that U.S.-international trade relations will improve under a Biden presidency, and this should
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Martin Currie SMASh Series EM Fund 2021 Annual Report |
support emerging market exports. In Asia, an important multinational trade agreement was signed, also in late 2020. The Regional Comprehensive Economic Partnership (RCEP) brings together the ten existing members of the Association of Southeast Asian Nations (ASEAN) in a partnership with South Korea, China, Japan, Australia and New Zealand. The deal is significant primarily because of its reach; encompassing nearly one third of the world’s population and 29% of global GDPii.
The Chinese government’s role in financial markets came to the fore in November 2020 when the stock market debut of Chinese financial company, Ant Group, was brought to an abrupt halt just days before listing. The cancellation of what was set to be the world’s largest IPO followed a regulatory proposal to impose new capital requirements on China’s microfinance industry. Another of China’s regulatory bodies, the State Administration for Market Regulation, issued draft rules aimed at preventing monopolistic behavior by internet platforms. At the end of the reporting period, we observed a fresh wave of regulatory concerns relating to China. The proposed regulatory changes included anti-trust rules for online platforms, more stringent regulatory oversight of fintech companies and measures to eliminate for-profit after school tuition in key subjects. This primarily affected the education sector and online platform/e-commerce stocks and appears to be motivated by multiple factors, including social stability concerns and restricting the market power of online behemoths. Chinese authorities are also visibly reluctant to allow further listings of Chinese companies on U.S. exchanges. The subsequent sell-off in these sectors reflected the negative reception of this news by market participants as we arrived at the close of the reporting period.
Q. How did we respond to these changing market conditions?
A. The core facets of our investment business have remained unchanged and as a consequence the Fund continued with its investment strategy. Our emerging markets strategy has remained geographically balanced, with a focus towards highly profitable companies with sustainable balance sheets. This approach proved appropriate for the market conditions, leading to strong outperformance during the period relative to the MSCI Emerging Markets Index. The Fund broadened its exposure towards the theme of electric vehicle (EV) batteries, reducing positions in LG Chem and Samsung SDI and adding to CATL, Wuxi Lead and copper producer Antofagasta, all of which we believe are positioned to benefit from the industry’s growth. The Fund’s holdings in casino operator Genting Malaysia and optical lens manufacturer Largan Precision were sold during the period, replaced with higher conviction holdings.
Emerging market equities remain sensitive to COVID-19 developments especially while the Delta variant continues to spread and vaccination rates are low, particularly in ASEAN markets. Our engagement agenda continues to have a long-term focus and as restrictions are eased in many geographies and new variants of COVID-19 are tackled, it is critically important for the businesses in which we invest to remain resilient from an operational, financial and governance perspective. As a firm, Martin Currie gained recognition from the
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 3 |
Fund overview (cont’d)
PRI (Principles for Responsible Investment) for the fourth year in a row, with their highest rating (A+) in all three categories of Strategy & Governance, Listed Equity Incorporation and Active Ownership. We also launched the Stewardship Institute, founded to facilitate Stewardship and ESG thought leadership at the firm. Our stewardship agenda and focus on sustainability has led us to join the Net Zero Asset Managers Initiative, becoming part of the solution alongside international asset managers committed to supporting the goal of net zero greenhouse gas emissions. The focus on sustainability and stewardship extends to our company as a whole, as well as our investment activities.
As longer-term investors, we remain excited by the powerful combination of technology adoption, urbanization and services-sector growth that is evident in emerging markets. We believe our highly selective, stock-focused approach will continue to prosper through accessing companies with a high return-on-equity, operating in structurally growing industries. We continue to have confidence in the growth drivers that we are accessing in key thematic areas. These areas include: sustainable planet; cloud-based data; financial inclusion; digital disruption.
Performance review
For the twelve months ended July 31, 2021, Martin Currie SMASh Series EM Fund returned 47.25%. The Fund’s unmanaged benchmark, the MSCI Emerging Markets Index, returned 20.64% for the same period.
| Performance Snapshot as of July 31, 2021 (unaudited) |
||||||||
| 6 months |
12 months | |||||||
| Martin Currie SMASh Series EM Fund | 7.83 | % | 47.25 | % | ||||
| MSCI Emerging Markets Index | |
-2.76 |
% |
20.64 | % | |||
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value, investment returns and yields will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please call the Fund at 1-877-721-1926.
Fund returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include the deduction of taxes that a shareholder would pay on Fund distributions. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.
Investors should understand that the Fund is managed within the context of a separately managed account and not with the objective of matching or exceeding the Fund’s stated benchmark, which is used for Fund reporting purposes. As such, comparisons of the Fund’s performance to that of the indicated benchmark are not likely to be meaningful. Additionally, performance figures do not reflect the effect of fees and expenses associated with a separately managed account or the management fee or other operating expenses of the Fund. Such management fees are paid directly or indirectly by the separately managed account sponsor to the Fund’s manager or subadviser. All operating expenses of the Fund (other than interest, brokerage, taxes and extraordinary expenses and acquired fund fees and expenses) were reimbursed by the manager.
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Martin Currie SMASh Series EM Fund 2021 Annual Report |
| Total Annual Operating Expenses (unaudited) |
As of the Fund’s current prospectus dated November 25, 2020, the gross total annual fund operating expense ratio was 0.35%.
Actual expenses may be higher. For example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.
The Fund’s manager has entered into an expense reimbursement arrangement with the Fund, pursuant to which the Fund’s manager has agreed to reimburse 100% of the Fund’s operating expenses. The expense reimbursement arrangement does not cover interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses. This expense reimbursement arrangement cannot be terminated prior to December 31, 2022, without the Board of Trustees’ consent. However, all Fund shareholders are participating in separately managed account programs and pay fees to program sponsors for the costs and expenses of the program, including fees for investment advice and portfolio execution, some of which are used to compensate the Fund’s manager or subadviser for managing the Fund and to reimburse the Fund for all operating expenses.
Q. What were the leading contributors to performance?
A. In terms of Fund holdings, the top contributor to relative performance during the reporting period was Chinese food delivery company Meituan. With the extended restrictions around COVID-19, the online economy thrived and businesses like Meituan were able to benefit from this. LG Chem, the South Korean materials company, was another notable contributor to performance during the period. It produced consistently strong quarterly earnings over the period across business divisions including petrochemicals, advanced materials and energy solutions (batteries). In particular, its EV division demonstrated global leadership in terms of growth, emerging profitability and entry into the Chinese EV market and future plans to expand production in South Korea. The Fund has high exposure to the EV battery supply chain and the global uptake of EVs was a driver of strong performance for other portfolio holdings including CATL and Samsung SDI. Taiwanese silicon wafer manufacturer Globalwafers was another strong performer. Gains were concentrated in the early part of 2021, after the announcement of an agreed offer to buy its German competitor, Siltronic. Globalwafers has a successful track record of growing through acquisition and this deal could bring greater pricing stability to the wafer industry. The company has also stated separately its confidence regarding the outlook for wafer pricing in 2021.
Q. What were the leading detractors from performance?
A. Looking at the stocks that were held in the Fund’s portfolio during the reporting period, the biggest drag on portfolio returns was B3 SA - Brasil Bolsa Balcão (B3). The Brazilian stock exchange B3 provides a wide range of trading services to Brazil’s financial markets. Despite benefitting from high levels of trading activity in Brazil, reflected in its published results, the company saw weakness in its share price performance over the period. We
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 5 |
Fund overview (cont’d)
believe this is a reflection of deteriorating sentiment toward Brazil rather than anything stock specific. The Chinese company Xinyi Solar was a new purchase during the period but has subsequently been transferred to a direct holding within the separately managed account (“SMA”) structure. The company is the largest solar glass manufacturer in the world. Xinyi Solar reported strong full-year 2020 results in March 2021, showing 35% revenue growth and 89% profit growth. However, this gave way to profit-taking in the subsequent months and fears over the sustainability of its high levels of profitability. Reliance Industries, classified as an Indian energy company, is in fact dominated by three businesses – a leading telecom/digital franchise, a leading omnichannel retail business and an established refining and chemicals business. The company’s share price lost momentum during the reporting period, having reached all-time highs in late 2020, exacerbated by weaker than consensus results being published around the same time. During 2021, the share price has not fully recovered and has experienced some volatility despite positive quarterly earnings releases.
Thank you for your investment in Martin Currie SMASh Series EM Fund. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Fund’s investment goals.
Sincerely,
Andrew Mathewson, CFA
Portfolio Manager
Martin Currie Inc.
Alastair Reynolds
Portfolio Manager
Martin Currie Inc.
Divya Mathur
Portfolio Manager
Martin Currie Inc.
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Martin Currie SMASh Series EM Fund 2021 Annual Report |
Paul Desoisa, CFA
Portfolio Manager
Martin Currie Inc.
Paul Sloane
Portfolio Manager
Martin Currie Inc.
Colin Dishington, CFA
Portfolio Manager
Martin Currie Inc.
August 13, 2021
RISKS: Equity securities are subject to market and price fluctuations. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. As a non-diversified fund, the Fund is permitted to invest a higher percentage of its assets in any one issuer than a diversified fund, which may magnify the Fund’s losses from events affecting a particular issuer. The Fund may be significantly overweight to underweight certain companies, industries or market sectors, which may cause the Fund’s performance to be more sensitive to developments affecting those companies, industries or sectors. International investments are subject to special risks, including currency fluctuations, as well as social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Emerging market countries tend to have economic, political and legal systems that are less developed and are less stable than those of more developed countries. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on fund performance relative to a more geographically diversified fund. The Fund may invest in real estate investment trusts (“REITs”), which are closely linked to the performance of the real estate markets. The Fund is subject to the illiquidity, credit and interest rate risks of REITs. Derivatives, such as futures, can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. In addition to the Fund’s operating expenses, the Fund will indirectly bear the operating expenses of any underlying funds it invests in. Please see the Fund’s prospectus for a more complete discussion of these and other risks and the Fund’s investment strategies.
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 7 |
Fund overview (cont’d)
Portfolio holdings and breakdowns are as of July 31, 2021 and are subject to change and may not be representative of the portfolio managers’ current or future investments. Please refer to pages 14 through 16 for a list and percentage breakdown of the Fund’s holdings.
The mention of sector breakdowns is for informational purposes only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional. Portfolio holdings are subject to change at any time and may not be representative of the portfolio managers’ current or future investments. The Fund’s top five sector holdings (as a percentage of net assets) as of July 31, 2021 were: Information Technology (34.9%), Materials (18.5%), Financials (13.9%), Consumer Discretionary (8.9%) and Health Care (6.2%). The Fund’s portfolio composition is subject to change at any time.
All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.
The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.
| i | The MSCI Emerging Markets Index is a free float adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. |
| ii | Gross domestic product (“GDP”) is the market value of all final goods and services produced within a country in a given period of time. |
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Martin Currie SMASh Series EM Fund 2021 Annual Report |
Investment breakdown (%) as a percent of total investments
| † | The bar graph above represents the composition of the Fund’s investments as of July 31, 2021 and July 31, 2020. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time. |
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 9 |
Example
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested on February 1, 2021 and held for the six months ended July 31, 2021.
Actual expenses
The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.
Hypothetical example for comparison purposes
The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| Based on actual total return1 | Based on hypothetical total return1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Actual |
Beginning Account Value |
Ending Account Value |
Annualized Expense Ratio3 |
Expenses Paid During the Period3,4 |
Hypothetical Annualized Total Return |
Beginning Account Value |
Ending Account Value |
Annualized Expense Ratio3 |
Expenses Paid During the Period3,4 | |||||||||||||||||||||||||||||||||||||||||
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7.83% |
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$ | 1,000.00 | $ | 1,078.30 | 0.00 | % | $ | 0.00 | 5.00 | % | $1,000.00 | $ | 1,024.79 | 0.00 | % | $ | 0.00 | |||||||||||||||||||||||||||||||
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Martin Currie SMASh Series EM Fund 2021 Annual Report |
| 1 | For the six months ended July 31, 2021. |
| 2 | Total return is not annualized, as it may not be representative of the total return for the year. Past performance is no guarantee of future results. Performance figures do not reflect any fees stated below in Note 3. If such fees were included, the return shown would have been lower. |
| 3 | All figures do not reflect the effect of fees and expenses associated with a separately managed account, nor a management fee or other operating expenses of the Fund. Such management fees are paid directly or indirectly by the separately managed account sponsor to the Fund’s manager or subadvisers. All operating expenses of the Fund were reimbursed by the manager, pursuant to an expense reimbursement arrangement between the Fund and the manager. The expense reimbursement arrangement does not cover interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses. |
| 4 | Expenses (net of compensating balance arrangements, fee waivers and/or expense reimbursements) are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by 365. |
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 11 |
| Average annual total returns1 | ||||
| Twelve Months Ended 7/31/21 | 47.25 | % | ||
| Inception* through 7/31/21 | 9.11 | |||
| Cumulative total returns1 | ||||
| Inception date of 1/10/18 through 7/31/21 | 36.32 | % | ||
All figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Performance figures do not reflect the effect of fees and expenses associated with a separately managed account or the management fee or other operating expenses of the Fund. Such management fees are paid directly or indirectly by the separately managed account sponsor to the Fund’s manager or subadviser. All operating expenses of the Fund (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) were reimbursed by the manager due to an expense reimbursement arrangement between the Fund and the manager. This arrangement cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.
| 1 | Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value. |
| * | Inception date of the Fund is January 10, 2018. |
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Martin Currie SMASh Series EM Fund 2021 Annual Report |
Historical performance
Value of $10,000 invested in
Martin Currie SMASh Series EM Fund vs. MSCI Emerging Markets Index† — January 10, 2018 - July 31, 2021
All figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Performance figures do not reflect the effect of fees and expenses associated with a separately managed account or the management fee or other operating expenses of the Fund. Such management fees are paid directly or indirectly by the separately managed account sponsor to the Fund’s manager or subadviser. All operating expenses of the Fund (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) were reimbursed by the manager due to an expense reimbursement arrangement between the Fund and the manager. This arrangement cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.
| † | Hypothetical illustration of $10,000 invested in shares of Martin Currie SMASh Series EM Fund on January 10, 2018 (inception date) assuming the reinvestment of all distributions, including returns of capital, if any, at net asset value through July 31, 2021. The hypothetical illustration also assumes a $10,000 investment in the MSCI Emerging Markets Index. The MSCI Emerging Markets Index (the “Index”) is a free float adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Index is calculated assuming the minimum possible dividend reinvestment. The Index is unmanaged and not subject to the same management and trading expenses as a mutual fund. Please note that an investor cannot invest directly in an index. |
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 13 |
July 31, 2021
Martin Currie SMASh Series EM Fund
(Percentages shown based on Fund net assets)
| Security | Shares | Value | ||||||||||||||
| Common Stocks — 98.7% | ||||||||||||||||
| Communication Services — 4.2% | ||||||||||||||||
| Interactive Media & Services — 4.2% |
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| NAVER Corp. |
112,031 | $ | 42,301,985 | (a) | ||||||||||||
| Consumer Discretionary — 8.9% | ||||||||||||||||
| Automobiles — 3.1% |
||||||||||||||||
| Maruti Suzuki India Ltd. |
330,614 | 31,081,041 | (a) | |||||||||||||
| Textiles, Apparel & Luxury Goods — 5.8% |
||||||||||||||||
| Titan Co. Ltd. |
2,549,604 | 58,819,511 | (a) | |||||||||||||
| Total Consumer Discretionary |
89,900,552 | |||||||||||||||
| Consumer Staples — 3.1% | ||||||||||||||||
| Food & Staples Retailing — 0.8% |
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| Robinsons Retail Holdings Inc. |
7,957,180 | 8,553,038 | (a) | |||||||||||||
| Personal Products — 2.3% |
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| LG Household & Health Care Ltd. |
18,105 | 22,987,156 | (a) | |||||||||||||
| Total Consumer Staples |
31,540,194 | |||||||||||||||
| Energy — 3.9% | ||||||||||||||||
| Oil, Gas & Consumable Fuels — 3.9% |
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| Reliance Industries Ltd. |
1,426,516 | 39,105,748 | (a) | |||||||||||||
| Financials — 13.9% | ||||||||||||||||
| Banks — 11.4% |
||||||||||||||||
| Kotak Mahindra Bank Ltd. |
723,549 | 16,144,704 | *(a) | |||||||||||||
| OTP Bank Nyrt |
980,622 | 52,882,237 | *(a) | |||||||||||||
| Ping An Bank Co. Ltd., Class A Shares |
7,598,144 | 20,838,072 | (a) | |||||||||||||
| TCS Group Holding PLC, Registered Shares, GDR |
308,084 | 25,474,897 | (a)(b) | |||||||||||||
| Total Banks |
115,339,910 | |||||||||||||||
| Capital Markets — 2.5% |
||||||||||||||||
| B3 SA - Brasil Bolsa Balcao |
8,476,300 | 24,932,927 | ||||||||||||||
| Total Financials |
140,272,837 | |||||||||||||||
| Health Care — 6.2% | ||||||||||||||||
| Health Care Providers & Services — 1.5% |
||||||||||||||||
| Odontoprev SA |
6,048,200 | 15,154,613 | ||||||||||||||
| Pharmaceuticals — 4.7% |
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| Shanghai Fosun Pharmaceutical Group Co. Ltd., Class H Shares |
5,193,000 | 47,745,969 | (a) | |||||||||||||
| Total Health Care |
62,900,582 | |||||||||||||||
| Industrials — 5.1% | ||||||||||||||||
| Electrical Equipment — 5.1% |
||||||||||||||||
| Contemporary Amperex Technology Co. Ltd., Class A Shares |
595,381 | 50,814,182 | (a) | |||||||||||||
See Notes to Financial Statements.
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| 14 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
Martin Currie SMASh Series EM Fund
(Percentages shown based on Fund net assets)
| Security | Shares | Value | ||||||||||||||
| Information Technology — 34.9% | ||||||||||||||||
| Electronic Equipment, Instruments & Components — 8.6% |
||||||||||||||||
| Delta Electronics Inc. |
2,611,000 | $ | 26,872,909 | (a) | ||||||||||||
| Samsung SDI Co. Ltd. |
54,639 | 35,310,062 | (a) | |||||||||||||
| Wuxi Lead Intelligent Equipment Co. Ltd., Class A Shares |
2,067,550 | 24,401,507 | (a) | |||||||||||||
| Total Electronic Equipment, Instruments & Components |
86,584,478 | |||||||||||||||
| Semiconductors & Semiconductor Equipment — 9.0% |
||||||||||||||||
| Globalwafers Co. Ltd. |
1,797,000 | 54,400,996 | (a) | |||||||||||||
| SK Hynix Inc. |
370,364 | 36,434,786 | (a) | |||||||||||||
| Total Semiconductors & Semiconductor Equipment |
90,835,782 | |||||||||||||||
| Technology Hardware, Storage & Peripherals — 17.3% |
||||||||||||||||
| Samsung Electronics Co. Ltd. |
2,001,339 | 136,859,757 | (a) | |||||||||||||
| Samsung Electronics Co. Ltd., Registered Shares, GDR |
21,674 | 37,167,296 | (a) | |||||||||||||
| Total Technology Hardware, Storage & Peripherals |
174,027,053 | |||||||||||||||
| Total Information Technology |
351,447,313 | |||||||||||||||
| Materials — 18.5% | ||||||||||||||||
| Chemicals — 11.9% |
||||||||||||||||
| Asian Paints Ltd. |
921,675 | 36,705,519 | (a) | |||||||||||||
| LG Chem Ltd. |
92,254 | 67,657,575 | (a) | |||||||||||||
| Orbia Advance Corp. SAB de CV |
5,816,100 | 15,850,470 | ||||||||||||||
| Total Chemicals |
120,213,564 | |||||||||||||||
| Construction Materials — 3.1% |
||||||||||||||||
| UltraTech Cement Ltd. |
303,373 | 31,089,357 | (a) | |||||||||||||
| Metals & Mining — 3.5% |
||||||||||||||||
| Antofagasta PLC |
1,683,570 | 34,955,644 | (a) | |||||||||||||
| Total Materials |
186,258,565 | |||||||||||||||
| Total Investments — 98.7% (Cost — $838,284,514) |
994,541,958 | |||||||||||||||
| Other Assets in Excess of Liabilities — 1.3% |
12,817,629 | |||||||||||||||
| Total Net Assets — 100.0% |
$ | 1,007,359,587 | ||||||||||||||
| * | Non-income producing security. |
| (a) | Security is valued in good faith in accordance with procedures approved by the Board of Trustees (Note 1). |
| (b) | Security is exempt from registration under Regulation S of the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees. |
| Abbreviation(s) used in this schedule: | ||
| GDR | — Global Depositary Receipts | |
See Notes to Financial Statements.
|
| ||
| Martin Currie SMASh Series EM Fund 2021 Annual Report | 15 |
Schedule of investments (cont’d)
July 31, 2021
Martin Currie SMASh Series EM Fund
| Summary of Investments by Country** (unaudited) | ||||
| South Korea | 38.1 | % | ||
| India | 21.4 | |||
| China | 14.4 | |||
| Taiwan | 8.2 | |||
| Hungary | 5.3 | |||
| Brazil | 4.0 | |||
| Chile | 3.5 | |||
| Russia | 2.6 | |||
| Mexico | 1.6 | |||
| Philippines | 0.9 | |||
| 100.0 | % | |||
| ** | As a percentage of total investments. Please note that the Fund holdings are as of July 31, 2021 and are subject to change. |
See Notes to Financial Statements.
|
|
||
| 16 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
Statement of assets and liabilities
July 31, 2021
| Assets: | ||||
| Investments, at value (Cost — $838,284,514) |
$ | 994,541,958 | ||
| Foreign currency, at value (Cost — $852,109) |
852,109 | |||
| Cash |
8,429,880 | |||
| Receivable for Fund shares sold |
12,381,761 | |||
| Dividends receivable |
1,724,151 | |||
| Receivable from investment manager |
87,126 | |||
| Prepaid expenses |
103,315 | |||
| Total Assets |
1,018,120,300 | |||
| Liabilities: | ||||
| Payable for securities purchased |
6,277,917 | |||
| Accrued foreign capital gains tax |
4,271,409 | |||
| Payable for Fund shares repurchased |
125,438 | |||
| Trustees’ fees payable |
2,249 | |||
| Accrued expenses |
83,700 | |||
| Total Liabilities |
10,760,713 | |||
| Total Net Assets | $ | 1,007,359,587 | ||
| Net Assets: | ||||
| Par value (Note 5) |
$ | 761 | ||
| Paid-in capital in excess of par value |
835,827,229 | |||
| Total distributable earnings (loss) |
171,531,597 | |||
| Total Net Assets | $ | 1,007,359,587 | ||
| Shares Outstanding | 76,134,523 | |||
| Net Asset Value | $13.23 | |||
See Notes to Financial Statements.
|
| ||
| Martin Currie SMASh Series EM Fund 2021 Annual Report | 17 |
For the Year Ended July 31, 2021
| Investment Income: | ||||
| Dividends |
$ | 10,025,565 | ||
| Less: Foreign taxes withheld |
(1,596,661) | |||
| Total Investment Income |
8,428,904 | |||
| Expenses: | ||||
| Registration fees |
128,081 | |||
| Custody fees |
121,538 | |||
| Fund accounting fees |
81,819 | |||
| Trustees’ fees |
73,280 | |||
| Legal fees |
44,179 | |||
| Audit and tax fees |
31,680 | |||
| Shareholder reports |
11,678 | |||
| Transfer agent fees |
5,378 | |||
| Insurance |
2,302 | |||
| Interest expense |
168 | |||
| Miscellaneous expenses |
15,438 | |||
| Total Expenses |
515,541 | |||
| Less: Fee waivers and/or expense reimbursements (Note 2) |
(515,541) | |||
| Net Expenses |
— | |||
| Net Investment Income | 8,428,904 | |||
| Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions (Notes 1 and 3): | ||||
| Net Realized Gain (Loss) From: |
||||
| Investment transactions |
19,350,705 | † | ||
| Foreign currency transactions |
(1,356,654) | |||
| Net Realized Gain |
17,994,051 | |||
| Change in Net Unrealized Appreciation (Depreciation) From: |
||||
| Investments |
131,769,961 | ‡ | ||
| Foreign currencies |
(11,886) | |||
| Change in Net Unrealized Appreciation (Depreciation) |
131,758,075 | |||
| Net Gain on Investments and Foreign Currency Transactions | 149,752,126 | |||
| Increase in Net Assets From Operations | $ | 158,181,030 | ||
| † | Net of foreign capital gains tax of $71,738. |
| ‡ | Net of change in accrued foreign capital gains tax of $4,271,409. |
See Notes to Financial Statements.
|
|
||
| 18 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
Statements of changes in net assets
| For the Years Ended July 31, | 2021 | 2020 | ||||||
| Operations: | ||||||||
| Net investment income |
$ | 8,428,904 | $ | 1,720,015 | ||||
| Net realized gain (loss) |
17,994,051 | (5,474,524) | ||||||
| Change in net unrealized appreciation (depreciation) |
131,758,075 | 20,769,246 | ||||||
| Increase in Net Assets From Operations |
158,181,030 | 17,014,737 | ||||||
| Distributions to Shareholders From (Note 1): | ||||||||
| Total distributable earnings |
(2,200,035) | (637,507) | ||||||
| Decrease in Net Assets From Distributions to Shareholders |
(2,200,035) | (637,507) | ||||||
| Fund Share Transactions (Note 5): | ||||||||
| Net proceeds from sale of shares |
847,964,906 | 173,678,983 | ||||||
| Cost of shares repurchased |
(181,106,791) | (28,086,672) | ||||||
| Increase in Net Assets From Fund Share Transactions |
666,858,115 | 145,592,311 | ||||||
| Increase in Net Assets |
822,839,110 | 161,969,541 | ||||||
| Net Assets: | ||||||||
| Beginning of year |
184,520,477 | 22,550,936 | ||||||
| End of year |
$ | 1,007,359,587 | $ | 184,520,477 | ||||
See Notes to Financial Statements.
|
| ||
| Martin Currie SMASh Series EM Fund 2021 Annual Report | 19 |
| For a share of beneficial interest outstanding throughout each year ended July 31, unless otherwise noted: |
| 20211 | 20201 | 20191 | 20181,2 | |||||||||||||
| Net asset value, beginning of year | $9.03 | $8.14 | $9.25 | $10.00 | ||||||||||||
| Income (loss) from operations: | ||||||||||||||||
| Net investment income |
0.18 | 0.16 | 0.27 | 0.11 | ||||||||||||
| Net realized and unrealized gain (loss) |
4.08 | 0.81 | (1.26) | (0.86) | ||||||||||||
| Total income (loss) from operations |
4.26 | 0.97 | (0.99) | (0.75) | ||||||||||||
| Less distributions from: | ||||||||||||||||
| Net investment income |
(0.06) | (0.08) | (0.12) | — | ||||||||||||
| Total distributions |
(0.06) | (0.08) | (0.12) | — | ||||||||||||
| Net asset value, end of year | $13.23 | $9.03 | $8.14 | $9.25 | ||||||||||||
| Total return3 |
47.25 | % | 11.92 | % | (10.58) | % | (7.50) | % | ||||||||
| Net assets, end of year (000s) | $1,007,360 | $184,520 | $22,551 | $2,780 | ||||||||||||
| Ratios to average net assets: | ||||||||||||||||
| Gross expenses4 |
0.09 | % | 0.35 | % | 3.68 | % | 10.42 | %5 | ||||||||
| Net expenses6,7 |
0.00 | 0.00 | 0.01 | 0.09 | 5 | |||||||||||
| Net investment income |
1.48 | 2.03 | 3.33 | 2.13 | 5 | |||||||||||
| Portfolio turnover rate | 33 | % | 27 | % | 29 | % | 11 | % | ||||||||
| 1 | Per share amounts have been calculated using the average shares method. |
| 2 | For the period January 10, 2018 (inception date) to July 31, 2018. |
| 3 | Performance figures do not reflect the effect of fees and expenses associated with a separately managed account, nor a management fee or other operating expenses of the Fund. Such management fees are paid directly or indirectly by the separately managed account sponsor to the Fund’s manager or subadviser. All operating expenses of the Fund were reimbursed by the manager, pursuant to an expense reimbursement arrangement between the Fund and the manager. If such fees were included, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized. |
| 4 | Gross expenses do not include management fees paid to the manager and subadviser. Management fees are paid directly or indirectly by the separately managed account sponsor. |
| 5 | Annualized. |
| 6 | The Fund’s manager has entered into an expense reimbursement arrangement with the Fund, pursuant to which the Fund’s manager has agreed to reimburse 100% of the Fund’s ordinary operating expenses. The expense reimbursement arrangement does not cover interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses. This arrangement cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent. Prior to March 7, 2019, the expense reimbursement arrangement did not cover custody holdings charges. |
| 7 | Reflects fee waivers and/or expense reimbursements. |
See Notes to Financial Statements.
|
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| 20 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
1. Organization and significant accounting policies
Martin Currie SMASh Series EM Fund (the “Fund”) is a separate non-diversified investment series of Legg Mason Global Asset Management Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.
Shares of the Fund may be purchased only by or on behalf of separately managed account clients where an affiliate of Legg Mason Partners Fund Advisor, LLC (“LMPFA”) has an agreement to serve as investment adviser or subadviser (each affiliate, a “Managed Account Adviser”) to the account with the managed account program sponsor (the “Program Sponsor”) (typically, a registered investment adviser or broker/dealer) or directly with the client. Shareholders of the Fund pay fees to their separately managed account sponsor, some of which are paid to affiliates of LMPFA. LMPFA and the subadvisers do not charge investment management fees to the Fund.
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.
(a) Investment valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services typically use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Trustees.
|
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 21 |
Notes to financial statements (cont’d)
The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Global Fund Valuation Committee (formerly known as Legg Mason North Atlantic Fund Valuation Committee prior to March 1, 2021) (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Trustees. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.
For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Trustees quarterly.
The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.
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| 22 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:
| • | Level 1 — quoted prices in active markets for identical investments |
| • | Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets carried at fair value:
| ASSETS | ||||||||||||||||
| Description | Quoted Prices (Level 1) |
Other Significant Observable Inputs (Level 2)* |
Significant (Level 3) |
Total | ||||||||||||
| Long-Term Investments†: | ||||||||||||||||
| Common Stocks: |
||||||||||||||||
| Financials |
$ | 24,932,927 | $ | 115,339,910 | — | $ | 140,272,837 | |||||||||
| Health Care |
15,154,613 | 47,745,969 | — | 62,900,582 | ||||||||||||
| Materials |
15,850,470 | 170,408,095 | — | 186,258,565 | ||||||||||||
| Other Common Stocks |
— | 605,109,974 | — | 605,109,974 | ||||||||||||
| Total Investments | $ | 55,938,010 | $ | 938,603,948 | — | $ | 994,541,958 | |||||||||
| * | As a result of the fair value pricing procedures for international equities utilized by the Fund, which account for events occurring after the close of the principal market of the security but prior to the calculation of the Fund’s net asset value, certain securities were classified as Level 2 within the fair value hierarchy. |
| † | See Schedule of Investments for additional detailed categorizations. |
(b) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes
|
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 23 |
Notes to financial statements (cont’d)
recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.
(c) Foreign investment risks. The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.
(d) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind securities), adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default or credit event.
(e) Distributions to shareholders. Distributions from net investment income and distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.
(f) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.
(g) Federal and other taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements.
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| 24 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of July 31, 2021, no provision for income tax is required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates. Realized gains upon disposition of securities issued in or by certain foreign countries are subject to capital gains tax imposed by those countries. As of July 31, 2021, there were $4,271,409 of capital gains tax liabilities accrued on unrealized gains.
(h) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. During the current year, the Fund had no reclassifications.
2. Investment management agreement and other transactions with affiliates
LMPFA is the Fund’s investment manager and Martin Currie Inc. (“Martin Currie”) is the Fund’s subadviser. Western Asset Management Company, LLC (“Western Asset”) manages the portion of the Fund’s cash and short-term instruments allocated to it. LMPFA, Martin Currie and Western Asset are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).
LMPFA and the subadviser do not charge investment management fees to the Fund. However, the Fund is an integral part of the separately managed account program, and LMPFA and the subadviser will be compensated directly or indirectly by separately managed account program sponsors. LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the day-to-day portfolio management of the Fund.
LMPFA has entered into an expense reimbursement arrangement with the Fund, pursuant to which LMPFA has agreed to reimburse 100% of the Fund’s ordinary operating expenses. The expense reimbursement arrangement does not cover interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses. This expense reimbursement arrangement cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.
During the year ended July 31, 2021, fees waived and/or expenses reimbursed amounted to $515,541.
Franklin Distributors, LLC (formerly known as Legg Mason Investor Services, LLC prior to July 7, 2021) (“Franklin Distributors”) serves as the Fund’s sole and exclusive distributor. Franklin Distributors is an indirect, wholly-owned broker-dealer subsidiary of Franklin Resources.
All officers and one Trustee of the Trust are employees of Franklin Resources or its affiliates and do not receive compensation from the Trust.
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 25 |
Notes to financial statements (cont’d)
3. Investments
During the year ended July 31, 2021, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:
| Purchases | $847,966,378 | |||
| Sales | 185,575,002 |
At July 31, 2021, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:
| Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation |
|||||||||||||
| Securities | $ | 844,483,462 | $ | 163,577,042 | $ | (13,518,546) | $ | 150,058,496 | ||||||||
4. Derivative instruments and hedging activities
During the year ended July 31, 2021, the Fund did not invest in derivative instruments.
5. Shares of beneficial interest
At July 31, 2021, the Trust had an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per share. Each share represents an identical interest and has the same rights.
Transactions in shares of the Fund were as follows:
| Year Ended July 31, 2021 |
Year Ended July 31, 2020 |
|||||||
| Shares sold | 70,765,451 | 21,146,688 | ||||||
| Shares repurchased | (15,062,508) | (3,487,153) | ||||||
| Net increase | 55,702,943 | 17,659,535 | ||||||
6. Income tax information and distributions to shareholders
The tax character of distributions paid during the fiscal years ended July 31, was as follows:
| 2021 | 2020 | |||||||
| Distributions paid from: | ||||||||
| Ordinary income | $ | 2,200,035 | $ | 637,507 | ||||
As of July 31, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
| Undistributed ordinary income — net | $ | 25,201,708 | ||
| Undistributed long-term capital gains — net | 534,440 | |||
| Total undistributed earnings | $ | 25,736,148 | ||
| Other book/tax temporary differences(a) | 15,608 | |||
| Unrealized appreciation (depreciation)(b) | 145,779,841 | |||
| Total distributable earnings (loss) — net | $ | 171,531,597 |
| (a) | Other book/tax temporary differences are attributable to the realization for tax purposes of unrealized gains (losses) on futures contracts. |
| (b) | The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to the tax deferral of losses on wash sales and other book/tax basis adjustments. |
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| 26 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
7. Recent accounting pronouncement
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered based reference rates as of the end of 2021 and 2023. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.
8. Other matter
The outbreak of the respiratory illness COVID-19 (commonly referred to as “coronavirus”) has continued to rapidly spread around the world, causing considerable uncertainty for the global economy and financial markets. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The COVID-19 pandemic could adversely affect the value and liquidity of the Fund’s investments, impair the Fund’s ability to satisfy redemption requests, and negatively impact the Fund’s performance. In addition, the outbreak of COVID-19, and measures taken to mitigate its effects, could result in disruptions to the services provided to the Fund by its service providers.
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| Martin Currie SMASh Series EM Fund 2021 Annual Report | 27 |
Report of independent registered public accounting firm
To the Board of Trustees of Legg Mason Global Asset Management Trust and Shareholders of Martin Currie SMASh Series EM Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Martin Currie SMASh Series EM Fund (one of the funds constituting Legg Mason Global Asset Management Trust, referred to hereafter as the “Fund”) as of July 31, 2021, the related statement of operations for the year ended July 31, 2021, the statement of changes in net assets for each of the two years in the period ended July 31, 2021, including the related notes, and the financial highlights for each of the three years in the period ended July 31, 2021 and for the period January 10, 2018 (inception date) through July 31, 2018 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended July 31, 2021 and the financial highlights for each of the three years in the period ended July 31, 2021 and for the period January 10, 2018 (inception date) through July 31, 2018 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2021 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Baltimore, Maryland
September 21, 2021
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
| 28 | Martin Currie SMASh Series EM Fund 2021 Annual Report |
Additional shareholder information (unaudited)
Results of special meeting of shareholders
A special meeting of shareholders was held on June 15, 2021 for shareholders of record as of March 1, 2021 (the “Record Date”) to elect the Board of Trustees of the Trust.
Shareholders of the Fund and each other series of the Trust voted together as a single class to elect the Board.
Shareholders of the Trust voted as indicated below (vote totals are rounded to the nearest whole number). Effective July 1, 2021, the Board is composed of the following Trustees:
| Trustee | For | Withheld | ||||||
| Paul R. Ades | 11,915,712,078 | 203,516,727 | ||||||
| Andrew L. Breech | 11,923,087,811 | 196,140,993 | ||||||
| Althea L. Duersten | 11,972,830,693 | 146,398,111 | ||||||
| Stephen R. Gross | 11,919,258,594 | 199,970,210 | ||||||
| Susan M. Heilbron | 11,970,320,096 | 148,908,708 | ||||||
| Howard J. Johnson | 11,919,503,553 | 199,725,251 | ||||||
| Arnold L. Lehman | 11,920,774,188 | 198,454,617 | ||||||
| Robin J.W. Masters | 11,971,843,764 | 147,385,040 | ||||||
| Jerome H. Miller | 11,919,153,082 | 200,075,722 | ||||||
| Ken Miller | 11,922,645,083 | 196,583,722 | ||||||
| G. Peter O’Brien | 11,919,113,936 | 200,114,868 | ||||||
| Thomas F. Schlafly | 11,917,628,123 | 201,600,682 | ||||||
| Jane Trust | 11,985,902,999 | 133,325,805 | ||||||
The above Trustees have also been elected to serve as board members of other mutual funds within the Franklin Templeton fund complex.
| Martin Currie SMASh Series EM Fund | 29 |
Additional information (unaudited)
Information about Trustees and Officers
The business and affairs of Martin Currie SMASh Series EM Fund (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Trustees. The business address of each Trustee is c/o Jane Trust, Legg Mason, 100 International Drive, 11th Floor, Baltimore, Maryland 21202. Information pertaining to the Trustees and officers of the Fund is set forth below.
Previously, the mutual funds of Legg Mason Global Asset Management Trust were overseen by one group of Trustees, and the mutual funds of Legg Mason Partners Equity Trust and Legg Mason Partners Variable Equity Trust (collectively, the “Funds”) were overseen by a different group of Trustees. A joint proxy statement was mailed to solicit shareholder approval for the election of a single slate of Trustees. Shareholders approved the proposed Trustees during a joint special meeting of shareholders on June 15, 2021. Effective July 1, 2021, the Trustees listed above will oversee all of the Funds.
The Statement of Additional Information includes additional information about Trustees and is available, without charge, upon request by calling the Fund at 1-877-721-1926.
| Independent Trustees† | ||
| Paul R. Ades | ||
| Year of birth | 1940 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1983 | |
| Principal occupation(s) during the past five years | Paul R. Ades, PLLC (law firm) (since 2000) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | None | |
| Andrew L. Breech | ||
| Year of birth | 1952 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1991 | |
| Principal occupation(s) during the past five years | President, Dealer Operating Control Service, Inc. (automotive retail management) (since 1985) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | None | |
| 30 | Martin Currie SMASh Series EM Fund |
| Independent Trustees† (cont’d) | ||
| Althea L. Duersten* | ||
| Year of birth | 1951 | |
| Position(s) with Trust | Trustee and Chair of the Board | |
| Term of office1 and length of time served2 | Since 2014 (Chair of the Board since 2021) | |
| Principal occupation(s) during the past five years | Retired (since 2011); formerly, Chief Investment Officer, North America, JPMorgan Chase (investment bank) and member of JPMorgan Executive Committee (2007 to 2011) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | Formerly, Non-Executive Director, Rokos Capital Management LLP (2019 to 2020) | |
| Stephen R. Gross | ||
| Year of birth | 1947 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1986 | |
| Principal occupation(s) during the past five years | Chairman Emeritus (since 2011) and formerly, Chairman, HLB Gross Collins, P.C. (accounting and consulting firm) (1979 to 2011); Executive Director of Business Builders Team, LLC (since 2005); Principal, Gross Consulting Group, LLC (since 2011); CEO, Gross Capital Partners, LLC (since 2014); CEO, Trusted CFO Solutions, LLC (since 2011) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | None | |
| Susan M. Heilbron | ||
| Year of birth | 1945 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1991 | |
| Principal occupation(s) during the past five years | Retired; formerly, President, Lacey & Heilbron (communications consulting) (1990 to 2002); General Counsel and Executive Vice President, The Trump Organization (1986 to 1990); Senior Vice President, New York State Urban Development Corporation (1984 to 1986); Associate, Cravath, Swaine & Moore LLP (1980 to 1984 and 1977 to 1979) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | Formerly, Director, Lincoln Savings Bank FSB (1991 to 1994); Director, Trump Shuttle, Inc. (air transportation) (1989 to 1990); Director, Alexander’s Inc. (department store) (1987 to 1990) | |
| Martin Currie SMASh Series EM Fund | 31 |
Additional information (unaudited) (cont’d)
Information about Trustees and Officers
| Independent Trustees† (cont’d) | ||
| Howard J. Johnson | ||
| Year of birth | 1938 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | From 1981 to 1998 and since 2000 | |
| Principal occupation(s) during the past five years | Retired; formerly, Chief Executive Officer, Genesis Imaging LLC (technology company) (2003 to 2012) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | None | |
| Arnold L. Lehman | ||
| Year of birth | 1944 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1982 | |
| Principal occupation(s) during the past five years | Senior Advisor, Phillips (auction house) (since 2015); formerly, Fellow, Ford Foundation (2015 to 2016); Director of the Brooklyn Museum (1997 to 2015) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | Trustee of American Federation of Arts (since 2002) | |
| Robin J. W. Masters | ||
| Year of birth | 1955 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 2002 | |
| Principal occupation(s) during the past five years | Retired; formerly, Chief Investment Officer of ACE Limited (insurance) (1986 to 2000) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | Director of HSBC Managed Portfolios Limited and HSBC Specialist Funds Limited (since 2020); formerly, Director of Cheyne Capital International Limited (investment advisory firm) (2005 to 2020); Director/ Trustee of Legg Mason Institutional Funds plc, Western Asset Fixed Income Funds plc and Western Asset Debt Securities Fund plc. (2007 to 2011) | |
| Jerome H. Miller | ||
| Year of birth | 1938 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1995 | |
| Principal occupation(s) during the past five years | Retired; formerly, President, Shearson Lehman Asset Management (1991 to 1993), Vice Chairman, Shearson Lehman Hutton Inc. (1989 to 1992) and Senior Executive Vice President, E.F. Hutton Group Inc. (1986 to 1989) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | None | |
| 32 | Martin Currie SMASh Series EM Fund |
| Independent Trustees† (cont’d) | ||
| Ken Miller | ||
| Year of birth | 1942 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1983 | |
| Principal occupation(s) during the past five years | Retired; formerly, President, Young Stuff Apparel Group, Inc. (apparel manufacturer), division of Li & Fung (1963 to 2012) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | None | |
| G. Peter O’Brien | ||
| Year of birth | 1945 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1999 | |
| Principal occupation(s) during the past five years | Retired, Trustee Emeritus of Colgate University (since 2005); Board Member, Hill House, Inc. (residential home care) (since 1999); formerly, Board Member, Bridges School (pre-school) (2006 to 2017); Managing Director, Equity Capital Markets Group of Merrill Lynch & Co. (1971 to 1999) | |
| Number of funds in fund complex overseen by Trustee | Trustee of Legg Mason funds consisting of 61 portfolios; Director/Trustee of the Royce Family of Funds consisting of 16 portfolios | |
| Other board memberships held by Trustee during the past five years | Formerly, Director of TICC Capital Corp. (2003 to 2017) | |
| Thomas F. Schlafly | ||
| Year of birth | 1948 | |
| Position(s) with Trust | Trustee | |
| Term of office1 and length of time served2 | Since 1983 | |
| Principal occupation(s) during the past five years | Chairman, The Saint Louis Brewery, LLC (brewery) (since 2012); formerly, President, The Saint Louis Brewery, Inc. (1989 to 2012); Senior Counsel (since 2017) and formerly, Partner (2009 to 2016), Thompson Coburn LLP (law firm) | |
| Number of funds in fund complex overseen by Trustee | 61 | |
| Other board memberships held by Trustee during the past five years | Director, CNB St. Louis Bank (since 2020); formerly, Director, Citizens National Bank of Greater St. Louis (2006 to 2020) | |
| Martin Currie SMASh Series EM Fund | 33 |
Additional information (unaudited) (cont’d)
Information about Trustees and Officers
| Interested Trustee and Officer | ||
| Jane Trust, CFA3 | ||
| Year of birth | 1962 | |
| Position(s) with Trust | Trustee, President and Chief Executive Officer | |
| Term of office1 and length of time served2 | Since 2015 | |
| Principal occupation(s) during the past five years | Senior Vice President, Fund Board Management, Franklin Templeton (since 2020); Officer and/or Trustee/Director of 138 funds associated with LMPFA or its affiliates (since 2015); President and Chief Executive Officer of LMPFA (since 2015); formerly, Senior Managing Director (2018 to 2020) and Managing Director (2016 to 2018) of Legg Mason & Co., LLC (“Legg Mason & Co.”); Senior Vice President of LMPFA (2015) | |
| Number of funds in fund complex overseen by Trustee | 136 | |
| Other board memberships held by Trustee during the past five years | None | |
|
Additional Officers | ||
| Ted P. Becker Franklin Templeton 620 Eighth Avenue, 47th Floor, New York, NY 10018 | ||
| Year of birth | 1951 | |
| Position(s) with Trust | Chief Compliance Officer | |
| Term of office1 and length of time served2 | Since 2007 | |
| Principal occupation(s) during the past five years | Vice President, Global Compliance of Franklin Templeton (since 2020); Chief Compliance Officer of LMPFA (since 2006); Chief Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Director of Global Compliance at Legg Mason, Inc. (2006 to 2020); Managing Director of Compliance of Legg Mason & Co. (2005 to 2020) | |
| Susan Kerr Franklin Templeton 620 Eighth Avenue, 47th Floor, New York, NY 10018 | ||
| Year of birth | 1949 | |
| Position(s) with Trust | Chief Anti-Money Laundering Compliance Officer | |
| Term of office1 and length of time served2 | Since 2013 | |
| Principal occupation(s) during the past five years | Senior Compliance Analyst, Franklin Templeton (since 2020); Chief Anti-Money Laundering Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2013) and Anti-Money Laundering Compliance Officer (since 2012), Senior Compliance Officer (since 2011) and Assistant Vice President (since 2010) of Legg Mason Investor Services, LLC (“LMIS”); formerly, Assistant Vice President of Legg Mason & Co. (2010 to 2020) | |
| 34 | Martin Currie SMASh Series EM Fund |
| Additional Officers (cont’d) | ||
| Jenna Bailey Franklin Templeton 100 First Stamford Place, 5th Floor, Stamford, CT 06902 | ||
| Year of birth | 1978 | |
| Position(s) with Trust | Identity Theft Prevention Officer | |
| Term of office1 and length of time served2 | Since 2015 | |
| Principal occupation(s) during the past five years | Senior Compliance Analyst of Franklin Templeton (since 2020); Identity Theft Prevention Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2015); formerly, Compliance Officer of Legg Mason & Co. (2013 to 2020); Assistant Vice President of Legg Mason & Co. (2011 to 2020) | |
| Marc A. De Oliveira** Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902 | ||
| Year of birth | 1971 | |
| Position(s) with Trust | Secretary and Chief Legal Officer | |
| Term of office1 and length of time served2 | Since 2020 | |
| Principal occupation(s) during the past five years | Associate General Counsel of Franklin Templeton (since 2020); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Managing Director (2016 to 2020) and Associate General Counsel of Legg Mason & Co. (2005 to 2020) | |
| Thomas C. Mandia Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902 | ||
| Year of birth | 1962 | |
| Position(s) with Trust | Senior Vice President | |
| Term of office1 and length of time served2 | Since 2020 | |
| Principal occupation(s) during the past five years | Senior Associate General Counsel of Franklin Templeton (since 2020); Secretary of LMPFA (since 2006); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); Secretary of LM Asset Services, LLC (“LMAS”) (since 2002) and Legg Mason Fund Asset Management, Inc. (“LMFAM”) (since 2013) (formerly registered investment advisers); formerly, Managing Director and Deputy General Counsel of Legg Mason & Co. (2005 to 2020) | |
| Martin Currie SMASh Series EM Fund | 35 |
Additional information (unaudited) (cont’d)
Information about Trustees and Officers
| Additional Officers (cont’d) | ||
| Christopher Berarducci Franklin Templeton 620 Eighth Avenue, 47th Floor, New York, NY 10018 | ||
| Year of birth | 1974 | |
| Position(s) with Trust | Treasurer and Principal Financial Officer | |
| Term of office1 and length of time served2 | Since 2014 and 2019 | |
| Principal occupation(s) during the past five years | Vice President, Fund Administration and Reporting, Franklin Templeton (since 2020); Treasurer (since 2010) and Principal Financial Officer (since 2019) of certain funds associated with Legg Mason & Co. or its affiliates; formerly, Managing Director (2020), Director (2015 to 2020), and Vice President (2011 to 2015) of Legg Mason & Co. | |
| Jeanne M. Kelly Franklin Templeton 620 Eighth Avenue, 47th Floor, New York, NY 10018 | ||
| Year of birth | 1951 | |
| Position(s) with Trust | Senior Vice President | |
| Term of office1 and length of time served2 | Since 2007 | |
| Principal occupation(s) during the past five years | U.S. Fund Board Team Manager, Franklin Templeton (since 2020); Senior Vice President of certain funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of LMPFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); formerly, Managing Director of Legg Mason & Co. (2005 to 2020); Senior Vice President of LMFAM (2013 to 2015) | |
| † | Trustees who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”). |
| * | Effective July 1, 2021, Ms. Duersten became Chair. |
| ** | Effective August 6, 2020, Mr. De Oliveira became Secretary and Chief Legal Officer. |
| 1 | Each Trustee and officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death, resignation, retirement or removal. |
| 2 | Indicates the earliest year in which the Trustee became a board member for a fund in the Legg Mason fund complex or the officer took such office. |
| 3 | Ms. Trust is an “interested person” of the Fund, as defined in the 1940 Act, because of her position with LMPFA and/or certain of its affiliates. |
| 36 | Martin Currie SMASh Series EM Fund |
Important tax information (unaudited)
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.leggmason.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders with respect to income earned and distributions paid during its fiscal year.
The Fund hereby reports the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended July 31, 2021:
| Pursuant to: | Amount Reported | |||||||
| Qualified Dividend Income (QDI) | § | 854(b)(1)(B) | $ | 6,860,742 | ||||
Under Section 853 of the Internal Revenue Code, the Fund intends to elect to pass through to its shareholders the following amounts, or amounts as finally determined, of foreign taxes paid and foreign source income earned by the Fund during the fiscal year ended July 31, 2021:
| Foreign Taxes Paid | $1,379,435 | |||
| Foreign Source Income | $9,921,730 |
| Martin Currie SMASh Series EM Fund | 37 |
Martin Currie
SMASh Series EM Fund
Trustees*
Paul R. Ades
Andrew L. Breech
Althea L. Duersten**
Chair
Stephen R. Gross
Susan M. Heilbron
Howard J. Johnson
Arnold L. Lehman
Robin J.W.Masters
Jerome H. Miller
Ken Miller
G. Peter O’Brien
Thomas F. Schlafly
Jane Trust
Investment manager
Legg Mason Partners Fund Advisor, LLC
Subadviser
Martin Currie Inc.
Distributor
Franklin Distributors, LLC†
Custodian
The Bank of New York Mellon
Transfer agent
BNY Mellon Investment Servicing (US) Inc.
4400 Computer Drive
Westborough, MA 01581
Independent registered public accounting firm
PricewaterhouseCoopers LLP
Baltimore, MD
| * | During a June 15, 2021 special meeting of shareholders, a new group of Trustees were elected to oversee the mutual funds of Legg Mason Global Asset Management Trust, Legg Mason Partners Investment Trust (prior to September 1, 2021, known as Legg Mason Equity Trust) and Legg Mason Partners Variable Equity Trust, effective July 1, 2021. |
| ** | Effective July 1, 2021, Ms. Duersten became Chair. |
| † | Effective July 7, 2021, LMIS was renamed Franklin Distributors, LLC. |
Martin Currie SMASh Series EM Fund
The Fund is a separate investment series of Legg Mason Global Asset Management Trust, a Maryland statutory trust.
Martin Currie SMASh Series EM Fund
Legg Mason Funds
620 Eighth Avenue, 47th Floor
New York, NY 10018
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 1-877-721-1926.
Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling the Fund at 1-877-721-1926, (2) at www.leggmason.com/smashfunds and (3) on the SEC’s website at www.sec.gov.
This report is submitted for the general information of the shareholders of Martin Currie SMASh Series EM Fund and is not intended for distribution to prospective investors.
This report must be preceded or accompanied by a free prospectus. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before investing.
www.leggmason.com/smashfunds
© 2021 Franklin Distributors, LLC, Member FINRA/SIPC. All rights reserved.
Legg Mason Funds Privacy and Security Notice
Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds
This Privacy and Security Notice (the “Privacy Notice”) addresses the Legg Mason Funds’ privacy and data protection practices with respect to nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds’ distributor, Franklin Distributors, LLC, as well as Legg Mason-sponsored closed-end funds. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.
The Type of Nonpublic Personal Information the Funds Collect About You
The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:
| • | Personal information included on applications or other forms; |
| • | Account balances, transactions, and mutual fund holdings and positions; |
| • | Bank account information, legal documents, and identity verification documentation; |
| • | Online account access user IDs, passwords, security challenge question responses; and |
| • | Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individual’s total debt, payment history, etc.). |
How the Funds Use Nonpublic Personal Information About You
The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with other financial institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law.
The Funds may disclose information about you to:
| • | Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators; |
| • | Service providers, including the Funds’ affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds’ behalf, including companies that may perform statistical analysis, market research and marketing services solely for the Funds; |
| • | Permit access to transfer, whether in the United States or countries outside of the United States to such Funds’ employees, agents and affiliates and service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators; |
| • | The Funds’ representatives such as legal counsel, accountants and auditors to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators; |
| • | Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust. |
| NOT PART OF THE ANNUAL REPORT |
Legg Mason Funds Privacy and Security Notice (cont’d)
Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf, including those outside the United States, are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform. The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.
Keeping You Informed of the Funds’ Privacy and Security Practices
The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time they will notify you promptly if this privacy policy changes.
The Funds’ Security Practices
The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.
Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary, so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.
In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, if you have questions about the Funds’ privacy practices, or our use of your nonpublic personal information, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.leggmason.com, or contact the Fund at 1-877-721-1926.
Revised April 2018
Legg Mason California Consumer Privacy Act Policy
Although much of the personal information we collect is “nonpublic personal information” subject to federal law, residents of California may, in certain circumstances, have additional rights under the California Consumer Privacy Act (“CCPA”). For example, if you are a broker,
| NOT PART OF THE ANNUAL REPORT |
Legg Mason Funds Privacy and Security Notice (cont’d)
dealer, agent, fiduciary, or representative acting by or on behalf of, or for, the account of any other person(s) or household, or a financial advisor, or if you have otherwise provided personal information to us separate from the relationship we have with personal investors, the provisions of this Privacy Policy apply to your personal information (as defined by the CCPA).
| • | In addition to the provisions of the Legg Mason Funds Security and Privacy Notice, you may have the right to know the categories and specific pieces of personal information we have collected about you. |
| • | You also have the right to request the deletion of the personal information collected or maintained by the Funds. |
If you wish to exercise any of the rights you have in respect of your personal information, you should advise the Funds by contacting them as set forth below. The rights noted above are subject to our other legal and regulatory obligations and any exemptions under the CCPA. You may designate an authorized agent to make a rights request on your behalf, subject to the identification process described below. We do not discriminate based on requests for information related to our use of your personal information, and you have the right not to receive discriminatory treatment related to the exercise of your privacy rights.
We may request information from you in order to verify your identity or authority in making such a request. If you have appointed an authorized agent to make a request on your behalf, or you are an authorized agent making such a request (such as a power of attorney or other written permission), this process may include providing a password/passcode, a copy of government issued identification, affidavit or other applicable documentation, i.e. written permission. We may require you to verify your identity directly even when using an authorized agent, unless a power of attorney has been provided. We reserve the right to deny a request submitted by an agent if suitable and appropriate proof is not provided.
For the 12-month period prior to the date of this Privacy Policy, the Legg Mason Funds have not sold any of your personal information; nor do we have any plans to do so in the future.
Contact Information
Address: Data Privacy Officer, 100 International Dr., Baltimore, MD 21202
Email: [email protected]
Phone: 1-800-396-4748
Revised October 2020
| NOT PART OF THE ANNUAL REPORT |
www.leggmason.com/smashfunds
© 2021 Franklin Distributors, LLC, Member FINRA/SIPC. All rights reserved.
MCXX466309 9/21 SR21-4234
| ITEM 2. | CODE OF ETHICS. |
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Board of Trustees of the registrant has determined that Stephen R. Gross possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an “audit committee financial expert,” and has designated Stephen R. Gross as the Audit Committee’s financial expert. Stephen R. Gross is an “independent” Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
(a) Audit Fees. The aggregate fees billed in the last two fiscal years ending July 31, 2020 and July 31, 2021 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $27,500 in July 31, 2020 and $25,500 in July 31, 2021.
(b) Audit-Related Fees. The aggregate fees billed in the Reporting Period for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in July 31, 2020 and $0 in July 31, 2021.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $0 in July 31, 2020 and $0 in July 31, 2021. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.
There were no fees billed for tax services by to the service affiliates during the Reporting Periods that required pre-approval by the Audit Auditors Committee.
(d) All Other Fees. The aggregate fees for other fees billed in the Reporting Periods for products and services provided by the Auditor were $0 in July 31, 2020 and $0 in July 31, 2021, other than the services reported in paragraphs (a) through (c) of this item for the Legg Mason Global Asset Management Trust.
All Other Fees. There were no other non-audit services rendered by the Auditor to Legg Mason Partners Fund Advisors, LLC (“LMPFA”), and any entity controlling, controlled by or under common control with LMPFA that provided ongoing services to Legg Mason Global Asset Management Trust requiring pre-approval by the Audit Committee in the Reporting Period.
(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by LMPFA or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the Adviser and any Covered Service Providers if the engagement relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.
The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.
(2) For the Legg Mason Global Asset Management Trust, the percentage of fees that were approved by the audit committee, with respect to: Audit-Related Fees were 100% and 100% for July 31, 2020 and July 31, 2021; Tax Fees were 100% and 100% for July 31, 2020 and July 31, 2021; and Other Fees were 100% and 100% for July 31, 2020 and July 31, 2021.
(f) N/A
(g) Non-audit fees billed by the Auditor for services rendered to Legg Mason Global Asset Management Trust, LMPFA and any entity controlling, controlled by, or under common control with LMPFA that provides ongoing services to Legg Mason Global Asset Management Trust during the reporting period were $657,336 in July 31, 2020 and $773,011 in July 31, 2021.
(h) Yes. Legg Mason Global Asset Management Trust’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Accountant’s independence. All services provided by the Auditor to the Legg Mason Global Asset Management Trust or to Service Affiliates, which were required to be pre-approved, were pre-approved as required.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
| a) | The independent board members are acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act. The Audit Committee consists of the following Board members: |
Paul R. Ades
Andrew L. Breech
Althea L. Duersten**
Stephen R. Gross
Susan M. Heilbron
Howard J. Johnson
Arnold L. Lehman
Robin J.W. Masters
Jerome H. Miller
Ken Miller
G. Peter O’Brien
Thomas F. Schlafly
| * | During a June 15, 2021 special meeting of shareholders, a new group of Trustees were elected to oversee the mutual funds of Legg Mason Global Asset Management Trust, Legg Mason Partners Investment Trust (prior to September 1, 2021, known as Legg Mason Equity Trust) and Legg Mason Partners Variable Equity Trust, effective July 1, 2021. |
| ** | Effective July 1, 2021, Ms. Duersten became Chair. |
| b) | Not applicable |
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
Included herein under Item 1.
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
Not applicable.
| ITEM 11. | CONTROLS AND PROCEDURES. |
| (a) | The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934. |
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting. |
| ITEM 12. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. | EXHIBITS. |
(a) (1) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.CERT
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.
Legg Mason Global Asset Management Trust
| By: | /s/ Jane Trust | |
| Jane Trust | ||
| Chief Executive Officer | ||
Date: September 24, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Jane Trust | |
| Jane Trust | ||
| Chief Executive Officer | ||
Date: September 24, 2021
| By: | /s/ Christopher Berarducci | |
| Christopher Berarducci | ||
| Principal Financial Officer | ||
Date: September 24, 2021
CODE OF ETHICS
I. Introduction
A. Individuals Covered by the Code
This Code applies to all employees of Legg Mason & Co., LLC and interested directors of the Proprietary Funds who are not otherwise subject to another code of ethics adopted pursuant to either Rule 17j-1 under the Investment Company Act or Rule 204A-1 under the Investment Advisers Act (“Covered Persons”).
| 1. | Without limiting the generality of the foregoing, this Code covers all employees of Legg Mason & Co., LLC who perform services on behalf of the Proprietary Funds as part of the following regulated entities: |
| a. | Legg Mason Investor Services, LLC (“LMIS”). |
| b. | Legg Mason Partners Fund Advisor, LLC (“LMPFA”). |
| 2. | For the avoidance of doubt, each of the Legg Mason Registered Advisers (other than LMPFA) have adopted their own codes of ethics, and employees of the Legg Mason Registered Advisers who are subject to the requirements of those codes of ethics (including any who may be registered representatives of LMIS) are not subject to the requirements of this Code. |
B. Standards of Business Conduct
This Code is based on the principle that Legg Mason and its affiliates owe a fiduciary duty to Legg Mason’s clients, and that all Covered Persons must therefore avoid activities, interests and relationships that might (i) present a conflict of interest or the appearance of a conflict of interest, or (ii) otherwise interfere with Legg Mason’s ability to make decisions in the best interests of any of its clients. In particular, Covered Persons must at all times comply with the following standards of business conduct:
| 1. | Compliance with Applicable Law. All Covered Persons must comply with the Federal Securities Laws that apply to the business of Legg Mason. |
| 2. | Clients Come First. Covered Persons must scrupulously avoid serving their personal interests ahead of the interests of clients. For example, a Covered Person may not induce or cause a client to take action, or not to take action, for the Covered Person’s personal benefit at the expense of the client’s best interests. |
| 3. | Avoid Taking Advantage. Covered Persons may not use their knowledge of the Legg Mason Registered Advisers’ investment activities or client portfolio holdings to profit by the market effect of such activities or to engage in short-term or other abusive trading in Reportable Funds. |
| 4. | Avoid Other Inappropriate Relationships or Activities. Covered Persons should avoid relationships or activities that could call into question the Covered Person’s ability to exercise independent judgment in the best interests of Legg Mason’s clients. In particular, Covered Persons should take note of the provisions of the Legg Mason Code of Conduct and the Legg Mason Employee Handbook that pertain to confidentiality, corporate opportunities, gifts and entertainment, insider trading and outside business activities. In addition, Covered Persons who are registered representatives of LMIS should also take note of LMIS’s policies and procedures pertaining to these activities. |
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| 5. | Observe the Spirit of the Code. Doubtful situations should be resolved in favor of Legg Mason’s clients. Technical compliance with the Code’s procedures will not automatically insulate from scrutiny any personal Securities Transactions or other course of conduct that might indicate an abuse of these governing principles. |
C. Duty to Report Violations
Covered Persons must promptly report all violations of this Code to the Compliance Department.
D. Fiduciary Duty / Political Contributions
Covered Persons are prohibited from making political contributions for the purpose of obtaining or retaining any Legg Mason Registered Adviser or its affiliates as investment advisers. Covered Persons are specifically prohibited from making political contributions to any person for the purpose of influencing the selection or retention of an investment adviser by a government entity. Covered Persons will be required to certify annually that they have and will comply with this provision.
II. Personal Securities Transactions
A. Prohibited Transactions in Individual Securities
Covered Persons are subject to the following restrictions on their personal trading activities in individual securities:
| 1. | Fraudulent Transactions. In connection with the purchase or sale, directly or indirectly, by a Covered Person of (A) a Reportable Security which, within the most recent fifteen (15) calendar days, (i) is or has been held by a Legg Mason client, or (ii) is being or has been considered by a Legg Mason Registered Adviser for purchase by a client, or (B) an Equivalent Security thereof, Covered Persons are prohibited from: |
| a. | Employing any device, scheme or artifice to defraud Legg Mason’s clients; |
| b. | Making any untrue statement of a material fact or omitting to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading; |
| c. | Engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on Legg Mason’s clients; or |
| d. | Engaging in any manipulative practice with respect to Legg Mason’s clients. |
| 2. | Inside Information. Covered Persons are prohibited from engaging in any transaction in a Security (or Equivalent Security) at a time when the Covered Person is in possession of material non-public information regarding the Security or the issuer of the Security. |
| 3. | Market Manipulation. Covered Persons are prohibited from engaging in any transactions in a Security (or Equivalent Security) intended to raise, lower or maintain the price of that Security or to create a false appearance of active trading in that Security. |
| 4. | Trading on the Knowledge of Client Transactions. Covered Persons are prohibited from engaging in any transactions in a Security (or an Equivalent Security) on the basis of any information they may be in possession of to the effect that (i) a Legg Mason Registered Adviser is or may be considering an investment in or sale of such Security on behalf of its clients or (ii) has or may have an open order in such Security on behalf of its clients. |
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| 5. | Legg Mason, Inc. Stock. Covered Persons are prohibited from engaging in any transaction in Legg Mason securities that is not in compliance with the “Legg Mason, Inc. Policies and Procedures Regarding Acquisitions and Dispositions of Legg Mason Securities,” as the same may be amended from time to time. A copy of this policy is available on the Legg Mason Legal and Compliance Website. |
B. Prohibited Transactions in Reportable Funds
| 1. | Market Timing in Reportable Funds. No Covered Person may use his or her knowledge of the portfolio holdings or investment activities of a Reportable Fund to engage in any short-term or other abusive trading strategy involving such Fund that may conflict with the best interests of the Fund and its shareholders. |
| 2. | 60-Day Holding Period for Investments in Proprietary Funds. Subject to the exemptions set forth below, no Covered Person may sell (or exchange out of) shares of a Proprietary Fund in which the Covered Person has a Beneficial Interest if the Covered Person has not held the shares of the same Proprietary Fund for sixty (60) calendar days, including any individual retirement account or 401(k) participant account. |
| 3. | Additionally, Proprietary Funds that are sold in the LM 401(k) account are also subject to a 60-day minimum waiting period. No Covered Person may buy (or exchange into) shares of a Proprietary Fund within sixty (60) calendar days of a sell of (or exchange out of) shares of the same Proprietary Fund within the same LM 401(k) account. |
The following Securities Transactions involving Proprietary Funds are exempt from the 60-day minimum holding period requirement set forth in this Section II.B.2 and II.B.3:
| a. | Money Market Funds and Other Short-Term Trading Vehicles. Purchases or redemptions of Proprietary Funds that are money market funds or that hold themselves out as short-term trading vehicles. |
| b. | Managed Accounts. Transactions in Proprietary Funds held in a Managed Account in connection with which the Covered Person has no direct or indirect influence or control over the account, is neither consulted nor advised of the trade before it is executed, and has no knowledge of specific management actions taken by a trustee or investment manager. |
| c. | Systematic Investment. Purchases or redemptions of Proprietary Funds pursuant to an Automatic Investment Plan where a prescribed purchase or sale is made automatically on a regular predetermined basis without affirmative action by the Covered Person or pursuant to a similar arrangement approved by the Compliance Department (for example, automated payroll deduction investments by 401(k) participants or automatic dividend reinvestment). |
C. Pre-Approval of Investments in Initial Public Offerings and Private Placements
Covered Persons are prohibited from acquiring a Beneficial Interest in a Reportable Security through an initial public offering (other than a new offering of securities issued by a registered open-end investment company) or Private Placement without the prior written approval of the Compliance Department. Requests for such approval shall be submitted to the Compliance Department through Fidelity National Information Services, Inc. (“FIS”)/PTA using substantially the form of “Request for Approval to Invest in an Initial Public Offering or Private Placement” attached hereto as Appendix A.
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D. Reporting and Trading Requirements
| 1. | Acknowledgement of Receipt; Initial and Periodic Disclosure of Personal Holdings; Annual Certification. |
| a. | Within ten (10) calendar days of being identified as a Covered Person under this Code, each Covered Person must acknowledge that he or she has received and reviewed a copy of the Code, and has disclosed all Securities holdings in which such Covered Person has a Beneficial Interest.. |
| b. | Thereafter, on an annual basis, each Covered Person shall give the same acknowledgements and, in addition, shall certify that he or she has complied with all applicable provisions of the Code. |
| c. | Such acknowledgments and certifications shall be provided through FIS/PTA using substantially the form of the “Acknowledgement of Receipt of Code of Ethics, Personal Holdings Report and Annual Certification” attached hereto as Appendix B. |
| 2. | Execution of Personal Securities Transactions. |
| a. | Approved Accounts. Unless one of the following exceptions applies, Covered Persons must execute their personal securities transactions involving any Reportable Securities or Reportable Funds in which they have or acquire a Beneficial Interest through one of the following two types of accounts (“Approved Accounts”): |
| i. | Approved Securities Accounts. Securities accounts (including IRA accounts) with financial intermediaries that have been approved by the Compliance Department (an “Approved Securities Account”); or |
| ii. | Approved Retirement Accounts. Participant accounts in retirement plans approved by the Compliance Department on the grounds that either (i) automated feeds into FIS/PTA have been established, or (ii) sufficient policies and procedures are in place to protect any Reportable Funds that may be in the plan from the types of activities prohibited by Sections A and B above (an “Approved Retirement Account”).1 |
| b. | Exceptions. The following types of accounts are exempt from the requirements of section 2.a above, subject to compliance with the conditions set forth below: |
| i. | Mutual Fund-Only and Managed Accounts. Covered Persons may have or acquire a Beneficial Interest in Mutual Fund-Only and Managed Accounts that are not Approved Securities Accounts, provided that the requirement set forth in this Code relating to a Managed Account or Mutual Fund-Only Account, as the case may be, are satisfied. To qualify for this exemption, a Covered Person must deliver to the Compliance Department through FIS/PTA a certification in substantially the form of the “Certificate for Managed Accounts or Mutual Fund-Only Accounts” attached hereto as Appendix D. |
| ii. | Outside Retirement Accounts. Covered Persons may have or acquire a Beneficial Interest in a retirement account other than an Approved Retirement Account (an “Outside Retirement Account”), provided that the Covered Person complies with the certification or reporting requirements set forth in Section 3.c below, and provided further that, for purposes of this Code, an IRA account shall be treated as a securities account and not as a retirement account. |
| 1 | A list of the approved financial intermediaries and retirement plans may by found on the Legal and Compliance home page on LMEX. |
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| iii. | Dividend Reinvestment Plans. Covered Person may have or acquire a Beneficial Interest in securities held in a dividend reinvestment plan account directly with the issuer of the securities or its transfer agent (a “Dividend Reinvestment Plan”), subject to compliance with the requirements of Section 3.a below. |
| c. | Outside Securities Accounts. Covered Persons that have or acquire a Beneficial Interest in a securities account (including an IRA account) other than an Approved Account, Mutual Fund-Only Account, Managed Account or Outside Retirement Account (an “Outside Securities Account”) must obtain the prior written approval to maintain such account from the Compliance Department. |
| i. | A request for such approval must be submitted to the Compliance Department through FIS/PTA using substantially the form of “Request for Approval for an Outside Securities Account” attached hereto as Appendix C. Such approvals will only be granted in extraordinary circumstances. |
| ii. | If the Compliance Department does not approve such request, the Covered Person must arrange to transfer or convert such account into an Approved Account, Managed Account, Mutual Fund-Only Account or Outside Retirement Account as promptly as practicable. |
| 6. | Transaction Reporting Requirements. Covered Persons shall report all Securities Transactions in which they have a Beneficial Interest to the Compliance Department in accordance with the following provisions: |
| a. | Approved Accounts, Managed Accounts, Mutual Fund Only and Dividend Reinvestment Plan Accounts. Covered Persons will not be required to arrange for the delivery of duplicate copies of confirmations or periodic statements for any Approved Accounts, Managed Accounts, Mutual Fund Only Accounts or Dividend Reinvestment Plans in which they have or acquire a Beneficial Interest. However, the existence of all such accounts must be disclosed to the Compliance Department pursuant to either Section II.D.1 above or II.D.4 below. In addition, copies of any statements for any Managed Accounts, Mutual Fund Only Accounts or Dividend Reinvestment Plans must be made available for review at the specific request of the Compliance Department. |
| b. | Outside Securities Accounts. For any Outside Securities Account approved by the Compliance Department, a Covered Person must arrange for the Compliance Department to receive, directly from the applicable broker-dealer, bank or other financial intermediary, duplicate copies of each confirmation and periodic statement issued by such financial intermediary in respect of such Outside Securities Account. |
| i. | Periodic statements must be received by the Compliance Department no later than thirty (30) calendar days after the close of each calendar quarter. Confirmations must be delivered to the Compliance Department contemporaneously with delivery to the applicable Covered Person. |
| ii. | A form of letter that may be used to request duplicate confirmations and periodic statements from financial intermediaries is attached as Appendix E. If a Covered Person is not able to arrange for duplicate confirmations and periodic statements to be sent, the Covered Person must immediately cease trading in such account and notify the Compliance Department. |
| iii. | It shall be the Covered Person’s responsibility to promptly input into FIS/PTA all initially required information relating to any holdings in an Outside Securities Account. and to notify the Compliance Department on the same day of any subsequent Securities Transactions in such Outside Retirement Account. |
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| d. | Outside Retirement Accounts. For any Outside Retirement Account in which a Covered Person has a Beneficial Interest, such Covered Person must either: |
| i. | Certify that such account does not hold any shares of a Reportable Fund or Reportable Security and that no Securities Transactions involving a Reportable Fund or Reportable Security have been executed in such account (such certifications shall be provided to the Compliance Department through FIS/PTA using substantially the form of the “Certificate for Outside Retirement Accounts” attached hereto as Appendix F); or. |
| ii. | If a Covered Person is unable to provide such certification with respect to an Outside Retirement Account, the Covered Person must notify the Compliance Department and provide the Compliance Department with duplicate copies of each confirmation and periodic statement issued by such financial intermediary in respect of such Outside Retirement Account. |
| (a) | Periodic statements must be received by the Compliance Department no later than thirty (30) calendar days after the close of each calendar quarter. |
| (b) | It shall be the Covered Person’s responsibility to promptly input into FIS/PTA all initially required information relating to any holdings in an Outside Retirement Account and to notify the Compliance Department on the same day of any subsequent Securities Transactions in such Outside Retirement Account. |
| 7. | New Reportable Accounts. If a Covered Person opens a new reportable account that has not previously been disclosed, the Covered Person must notify the Compliance Department in writing within ten (10) calendar days of the existence of the account and make arrangements to comply with the requirements set forth in Sections II.D.2 & 3 above. |
| 8. | Disclaimers. Any report of a Securities Transaction for the benefit of a person other than the individual in whose account the transaction is placed may contain a statement that the report should not be construed as an admission by the person making the report that he or she has any direct or indirect beneficial ownership in the Security to which the report relates. |
| 9. | Availability of Reports. All information supplied pursuant to this Code may be made available for inspection to the CCO of any affected Legg Mason Registered Adviser or Reportable Fund, the board of directors of each company employing the Covered Person, the board of directors of any affected Reportable Fund, the Compliance Department, the Covered Person’s department manager (or designee), any party to which any investigation is referred by any of the foregoing, the Securities and Exchange Commission, any self-regulatory organization of which Legg Mason is a member, any state securities commission, and any attorney or agent of the foregoing or of the Reportable Funds. |
| 10. | Outside Business Activities. No Covered Person may engage in outside business activities or serve on the board of directors of a publicly-held company absent prior written authorization of (i) the Compliance Department, and (ii) in the case of service on the board of directors of a publicly-held company, the General Counsel of Legg Mason, Inc. |
| a. | A request for such approval must be submitted to the Compliance Department through FIS/PTA using substantially the form of “Request for Approval of Outside Business Activities” attached hereto as Appendix G. |
| b. | Requests for approval to serve as a director of a publicly held company will rarely be approved. |
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III. Personal Securities Transactions
A. Surveillance
The Compliance Department shall be responsible for maintaining a surveillance program reasonably designed to monitor the personal trading activities of all Covered Persons for compliance with the provisions of this Code and for investigating any suspected violation of the Code. Upon reaching the conclusion that a violation of the Code has occurred, the Compliance Department shall report the results of such investigation to the applicable Covered Person, the Covered Person’s department manager and to the CCOs of any affected Legg Mason Registered Adviser or Reportable Fund.
B. Remedies
| 1. | Authority. The Compliance Department has authority to determine the remedy for any violation of the Code, including appropriate disposition of any monies forfeited pursuant to this provision. Failure to promptly comply with any sanction directive may result in the imposition of additional sanctions.. |
| 2. | Sanctions. If the Compliance Department determines that a Covered Person has committed a violation of the Code, the Compliance Department may, in consultation with the Human Resources Department and the Covered Person’s supervisor, as appropriate, impose sanctions and take other actions as it deems appropriate, including a verbal warning, a letter of caution or warning, suspension of personal trading rights, suspension of employment (with or without compensation), fine, civil referral to the Securities and Exchange Commission, criminal referral, and termination of employment of the violator for cause. The Compliance Department may also require the Covered Person to reverse the transaction in question and forfeit any profit or absorb any loss associated or derived as a result. The amount of profit shall be calculated by the Compliance Department. No member of the Compliance Department may review his or her own transaction or those of his or her supervisors. If necessary, the General Counsel of Legg Mason or the CCO of the relevant Legg Mason Registered Adviser shall review these transactions.. |
C. Exceptions to the Code
Although exceptions to the Code will rarely be granted, the Compliance Department may grant exceptions to the requirements of the Code if the Compliance Department finds that the proposed conduct involves negligible opportunity for abuse. All such exceptions must be in writing..
IV. Definitions
When used in the Code, the following terms have the meanings set forth below:
A. General Defined Terms
“CCO” means the Chief Compliance Officer of any Reportable Fund, Legg Mason Registered Adviser or Legg Mason entity that is a principal underwriter of a Reportable Fund.
“Code” means this Code of Ethics, as the same may be amended from time to time.
“Compliance Department” means the Legal and Compliance Department of Legg Mason.
“Covered Person” means any employee of Legg Mason & Co., LLC who is covered by this Code in accordance with the provisions of Section I.A above.
7
“Federal Securities Laws” means the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act of 2002, the Investment Company Act, the Investment Advisers Act, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the Securities and Exchange Commission under any of these statutes, the Bank Secrecy Act as it applies to Legg Mason and any Reportable Funds, and any rule adopted thereunder by the Securities and Exchange Commission or the Department of the Treasury.
“Investment Advisers Act” means the Investment Advisers Act of 1940, as amended.
“Investment Company Act” means the Investment Company Act of 1940, as amended.
“Legg Mason” means Legg Mason, Inc. and its subsidiaries and affiliates.
“Legg Mason Registered Advisers” means those subsidiaries of Legg Mason that are registered as investment advisers under the Investment Advisers Act.
“FIS/PTA” means FIS Personal Trading Assistant, a web browser-based automated personal trading compliance platform used by the Compliance Department to administer this Code.
B. Terms Defining the Scope of a Beneficial Interest in a Security
“Beneficial Interest” means the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to profit, or share in any profit derived from, a transaction in the subject Securities.
A Covered Person is deemed to have a Beneficial Interest in the following:
| 1. | Any Security owned individually by the Covered Person. |
| 2. | Any Security owned jointly by the Covered Person with others (for example, joint accounts, spousal accounts, partnerships, trusts and controlling interests in corporations). |
| 3. | Any Security in which a member of the Covered Person’s Immediate Family has a Beneficial Interest if: |
| a. | The Security is held in an account over which the Covered Person has decision making authority (for example, the Covered Person acts as trustee, executor, or guardian); or |
| b. | The Security is held in an account for which the Covered Person acts as a broker or investment adviser representative. |
A Covered Person is presumed to have a Beneficial Interest in any Security in which a member of the Covered Person’s Immediate Family has a Beneficial Interest if the Immediate Family member resides in the same household as the Covered Person.
Any uncertainty as to whether a Covered Person has a Beneficial Interest in a Security should be brought to the attention of the Compliance Department. Such questions will be resolved in accordance with, and this definition shall be subject to, the definition of “beneficial owner” found in Rules 16a-1(a) (2) and (5) promulgated under the Securities Exchange Act of 1934, as amended.
8
“Immediate Family” of a Covered Person means any of the following persons:
| child |
grandparent |
son-in-law | ||
| stepchild |
spouse |
daughter-in-law | ||
| grandchild |
sibling |
brother-in-law | ||
| parent |
mother-in-law |
sister-in-law | ||
| stepparent |
father-in-law |
Immediate Family includes adoptive relationships, domestic partner relationships and other relationships (whether or not recognized by law) that the Compliance Department determines could lead to the possible conflicts of interest, diversions of corporate opportunity, or appearances of impropriety, which this Code is intended to prevent.
C. Terms Defining the Scope of a Reportable Transaction
“Automatic Investment Plan” means a program in which regular periodic purchases (or withdrawals) are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.
“Equivalent Security” means any Security issued by the same entity as the issuer of a subject Security, including options, rights, stock appreciation rights, warrants, preferred stock, restricted stock, phantom stock, bonds, and other obligations of that company or Security otherwise convertible into that Security. Options on Securities are included even if, technically, they are issued by the Options Clearing Corporation or a similar entity.
“Managed Account” means an account where a Covered Person has no:
| • | Direct or indirect influence or control over the account (for example, the trustee or investment manager simply summarizes, describes, or explains account activity without the Covered Person providing directions or suggestions); |
| • | Knowledge of the transaction before it is completed (for example, transactions effected for a Covered Person by a trustee of a blind trust, or discretionary trades made by an investment manager retained by the Covered Person, in connection with which the Covered Person is neither consulted nor advised of the trade before it is executed); and |
| • | Knowledge of the specific management actions taken by a trustee or investment manager and no right to intervene in the trustee’s or investment manager’s management (for example, the Covered Person is not consulted as to the allocation of investments for the account). |
“Mutual Fund-Only Account” means a Securities account or account held directly with a mutual fund that holds only non-Reportable Funds and in which no other type of Securities may be held. For purposes of this Code, a Mutual Fund-Only Account includes a 529 plan or variable annuity life insurance account that holds only non-Reportable Funds and in which no other type of Securities may be held.
9
“Private Placement” means a Securities offering that is exempt from registration pursuant to Section 4(2) or Section 4(6) of the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to Rules 504, 505 or 506 of Regulation D under the Securities Act.
“Proprietary Fund” means an open-end investment company registered under the Investment Company Act (or any portfolio or series thereof, as the case may be) that is part of one of the fund families sponsored by Legg Mason or its affiliates.
“Reportable Fund” means (a) any fund registered under the Investment Company Act for which a Legg Mason Registered Adviser serves as an investment adviser, or (b) any fund registered under the Investment Company Act whose investment adviser or principal underwriter is controlled by or under common control with Legg Mason. For purposes of this definition, “investment adviser” has the same meaning as it does in section 2(a)(20) of the Investment Company Act, and “control” has the same meaning as it does in Section 2(a)(9) of the Investment Company Act.
“Reportable Security” means any Security (as defined herein) other than the following types of Securities:
| 1. | Direct obligations of the Government of the United States; |
| 2. | Bankers acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements; and |
| 3. | Shares of open-end mutual funds that are not Reportable Funds. |
“Securities Transaction” means a purchase or sale of Securities in which a Covered Person has or acquires a Beneficial Interest.
“Security” includes stock, notes, bonds, debentures, and other evidences of indebtedness (including loan participations and assignments), limited partnership interests, investment contracts, closed-end investment companies, and all derivative instruments of the foregoing, such as options and warrants. “Security” does not include futures or options on futures, but the purchase and sale of such instruments are nevertheless subject to the reporting requirements of the Code.
10
CERTIFICATIONS PURSUANT TO SECTION 302
EX-99.CERT
CERTIFICATIONS
I, Jane Trust, certify that:
| 1. | I have reviewed this report on Form N-CSR of Legg Mason Global Asset Management Trust – Martin Currie SMASh Series EM Fund; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: September 24, 2021 | /s/ Jane Trust | |||||
| Jane Trust | ||||||
| Chief Executive Officer |
CERTIFICATIONS
I, Christopher Berarducci, certify that:
| 1. | I have reviewed this report on Form N-CSR of Legg Mason Global Asset Management Trust – Martin Currie SMASh Series EM Fund; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: September 24, 2021 | /s/ Christopher Berarducci | |||||
| Christopher Berarducci | ||||||
| Principal Financial Officer |
CERTIFICATIONS PURSUANT TO SECTION 906
EX-99.906CERT
CERTIFICATION
Jane Trust, Chief Executive Officer, and Christopher Berarducci, Principal Financial Officer of Legg Mason Global Asset Management Trust – Martin Currie SMASh Series EM Fund (the “Registrant”), each certify to the best of their knowledge that:
1. The Registrant’s periodic report on Form N-CSR for the period ended July 31, 2021 (the “Form N-CSR”) fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| Chief Executive Officer | Principal Financial Officer | |||
| Legg Mason Global Asset Management Trust— | Legg Mason Global Asset Management Trust— | |||
| Martin Currie SMASh Series EM Fund | Martin Currie SMASh Series EM Fund | |||
| /s/ Jane Trust | /s/ Christopher Berarducci | |||
| Jane Trust | Christopher Berarducci | |||
| Date: September 24, 2021 | Date: September 24, 2021 | |||
This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.
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