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Commentary
Legg Mason Global Funds plc
■ INVESTMENT INVOLVES RISKS. The value of the Fund can be volatile and investors may not get back the amount originally invested. Past performance is
not indicative of future results.
■ The Fund is a sub-fund of Legg Mason Global Funds plc, an open-ended umbrella investment company constituted in Ireland. The Fund seeks to generate long-term
capital appreciation by investing in the securities of U.S. companies of any market capitalisation that the Sub-Investment Manager believes are experiencing, or have
potential to experience, above-average growth of earnings and/or cash flow.
■ Investors will be exposed to equity market, US markets, concentration, currency and debt securities risks.
■ The Fund may use certain types of financial derivative instruments, which may involve a higher degree of risk including but not limited to counterparty, volatility,
liquidity, leverage and valuation risks, and the Fund may suffer a substantial loss.
■ Securities of smaller companies generally are less liquid and more volatile than those of larger companies; and smaller companies generally are more likely to be
adversely affected by poor economic or market conditions.
■ Investors should not invest based on this marketing material alone. Offering documents should be read for further details, including the risk factors.
Legg Mason ClearBridge
US Aggressive Growth Fund
QUICK VIEW
Key performance drivers
 The Legg Mason ClearBridge US Aggressive
Growth Fund rose 12.91%1 in US dollar terms
year-to-date, outperformed its benchmark, the
Russell 3000 Growth Index, which was up 6.91%.
Performance1 to 30/09/2014
Legg Mason ClearBridge
US Aggressive Growth Fund
Russell 3000 Growth Index
3 Months
YTD
1 Year
1.16%
12.91%
20.77%
0.88%
6.91%
17.87%
Past performance is no guide to future returns and may not be repeated.
Market Review
Views and positioning
US equities struggled slightly in September amid widespread concerns amongst
investors about the health of the global economy, especially in Asia and Europe, as
well as persistent fears regarding geopolitical issues in the Middle East and Ukraine.
Oil prices fell over the month with markets anticipating that lower growth would mean
a weaker demand for oil despite a steady supply. As a result, energy company
shares were particularly badly affected, although almost all areas of the US equity
market were down over the month. Defensive sectors proved most resilient, with
consumer staples and telecommunication services (telecoms) the only sectors in the
Russell 3000 Growth index in positive territory. Against this backdrop, the index was
down 1.75% in US dollar terms in September, underperforming the S&P 500 Index,
which fell 1.40%.
 The Fund’s largest overweights remain in the
healthcare and energy sectors.
Fund Review
 Energy detracted at both the sector and stock
levels.
 Healthcare exposure was positive both in
September and the third quarter as a whole.
 Stock picking in information technology detracted
over the quarter.
 The largest underweight exposures are in
consumer discretionary, industrials and financials.
 The Fund maintained its lack of exposure to
companies in utilities, telecommunication services
and consumer staples.
The Legg Mason ClearBridge US Aggressive Growth Fund rose 12.91%1 in US
dollar terms year-to-date, outperformed its benchmark, the Russell 3000 Growth
Index, which was up 6.91%.
 The manager will be taking advantage of recent
volatility to add to some of the Fund’s holdings.
In September, energy was the single biggest detractor at both the sector and
stock levels. The sector was by far the worst performer during the month,
against a backdrop of falling oil prices, and overweight exposure here was
detrimental. In terms of stock selection, Anadarko Petroleum and Weatherford
International declined heavily over the month. Nonetheless, both are up
significantly year to date.
 The manager continues to expect the merger and
acquisition environment to be robust, as
companies starved for growth seek to find it
through accretive acquisitions.
Healthcare exposure was positive, despite top holding Biogen Idec being down
over the month (although it is still up considerably year to date). UnitedHealth
fell only slightly, while Actavis and Vertex were up approximately 6% and 20%,
respectively. The Fund’s considerably overweight allocation also added value.
Current activity and manager outlook
 The manager, as it always has, seeks to invest
where it finds growth in earnings and cash flow, as
well as good management teams and solid
balance sheets.
Within information technology (IT), Broadcom, Citrix and Autodesk were up
while SanDisk was flat over the month in absolute terms. However, Seagate
Technology fell in September, while Cree, which released disappointing
earnings and warned on its fiscal first quarter due to weakness in LED products
segments, was down in September and the third quarter. However, the
manager’s long-term investment case is intact, with LED lighting continuing to
gain market share as unit costs continue to fall.
For the third quarter, healthcare, the best-performing sector, added value, owing to
the Fund’s overweight exposure and strong stock selection particularly in
biotechnology. Conversely, stock picking in IT (e.g. Cree, Nuance Communications)
and overweight exposure to energy weighed on relative performance in the July to
September quarter.
FOR PUBLIC IN HONG KONG AND DISTRIBUTORS IN MACAU USE ONLY. PLEASE REFER TO THE IMPORTANT INFORMATION ON THE FINAL PAGE.
Brandywine Global • ClearBridge Investments • LMM • Martin Currie • Permal • QS Batterymarch • QS Legg Mason Global Asset Allocation
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0914
Commentary
Legg Mason Global Funds plc
Legg Mason ClearBridge
US Aggressive Growth Fund
Fund Review
The Fund’s largest active overweight allocations continue to be in the healthcare and energy sectors, while its largest underweight exposures
included the industrials, financials and consumer discretionary segments (although the Fund still has a significant exposure to cable and media
companies within this space). The manager maintained the Fund’s lack of exposure to companies in the utilities, telecoms and consumer staples
sectors.
Outlook
The recent pullback was expected by the manager and it has been keeping “dry powder” for precisely that purpose. As such, the manager will be
taking advantage of recent volatility to add to some of the Fund’s holdings. It is also worth noting that, despite recent weakness, a number of the
Fund’s holdings have performed well for the year to date, with the Fund increasing 12.9% 1 against the benchmark’s 6.91% and the S&P 500’s
8.34% returns over this period.
Looking further ahead, the manager continues to expect the merger and acquisition environment to be robust, as companies starved for growth
seek to find it through accretive acquisitions. Although interest rates remain at historically low levels, cues from the US Federal Reserve about a
rising-rate environment may be helping to pull forward deals. So far, the Fund has seen increased levels of takeovers, both on the acquisition side
(e.g. Comcast and Time Warner Cable) and the target side (e.g. Forest Laboratories and Actavis).
In the manager’s opinion, large segments of the market (such as utilities and telecoms) appear expensive, while healthcare, energy, media and
some parts of information technology continue to offer the best combination of attractive valuations, solid fundamentals and the potential for
consolidation. The manager believes that many of the names that have been added to the portfolio recently should benefit from lower oil prices.
Many of the energy names held are still profitable at US$60 & US$65 per barrel so the manager does not think low oil prices will impact the
business as much as it will their stock prices. The manager believes that, as the consumer benefits from the lower cost of capital and lower costs of
energy, global growth will ultimately benefit over the long term and that near-term global concerns are already priced into these energy names.
The market this year, as expected by the manager, is proving much more challenging, against a backdrop of disappointingly subdued economic
recovery. Nonetheless, the manager continues to see compelling opportunities. Due to the manager’s bottom-up, fundamental-driven stock
selection process, the Fund tends to look very different to the benchmark index. The manager, as it always has, seeks to invest where it finds
growth in earnings and cash flow, as well as good management teams and solid balance sheets. On the whole, the manager believes that the
market is actually becoming more and more attractive in light of recent downside volatility events.
This Fund is managed by ClearBridge Investments
¹ Source: Legg Mason, as of 30 September 2014. Class A Acc USD performance is net of fees and is calculated on a NAV to NAV basis (USD). Performance is based
on reinvestment of any income and capital gains distribution derived from securities held in the Fund. Class A Acc USD calendar year net of fees performance for yearto-date (12.91%), 2013 (37.52%), 2012 (18.69%), 2011 (-2.64%), 2010 (23.50%), 2009 (34.82%). On 27 August 2010 the Legg Mason US Aggressive Growth Fund
merged into the Legg Mason ClearBridge US Aggressive Growth Fund. Benchmark: Russell 3000 Growth Index. Investment involves risks. Past performance is not
indicative of future results.
IMPORTANT INFORMATION
Source: Legg Mason and ClearBridge Investments. This document is for information only and does not constitute a financial promotion or other financial, professional or
investment advice in any way. All data, opinions, estimates and other information are provided as of the date of this document and may be subject to change without
notice. Where past performance is quoted, such figures are not indicative of future performance. This document does not constitute an offer or solicitation to buy or sell
any units or shares in any fund. INVESTMENT INVOLVES RISKS. The value of investments and the income from them can go down as well as up and investors may
not get back the amount originally invested. Please refer to the most current offering documents for further details, including the risk factors.
If this document is distributed in Macau, this may not be used other than by the Distributors.
Any views expressed are opinions of the respective investment affiliates as of the date of this document and are subject to change without notice based on market and
other conditions and may differ from other investment affiliates or of the firm as a whole. These opinions are not intended to be a forecast of future events, a guarantee of
future results or investment advice. The mention of any individual securities should neither constitute nor be construed as a recommendation to purchase or sell
securities, and the information provided regarding such individual securities is not a sufficient basis upon which to make an investment decision.
Exchange rate changes may cause the value of overseas investments to rise or fall. Where the Fund’s base currency is not US/ HK Dollars, US/HK Dollar-based
investors are exposed to exchange rate fluctuations.
Neither Legg Mason nor any officer or employee of Legg Mason accepts any liability whatsoever for any loss arising from any use of this document or its contents. The
information in this document is confidential and proprietary and may not be used other than by the intended user. This document may not be reproduced, distributed or
published without prior written permission from Legg Mason.
This document has not been reviewed by the Securities and Futures Commission in Hong Kong or Monetary Authority of Macao in Macau.
Issuer: Legg Mason Asset Management Hong Kong Limited.
HK1410034
FOR PUBLIC
IN TO
HONG
AND DISTRIBUTORS
MACAU
USE ONLY.
PLEASE
REFER
THEKONG
IMPORTANT
INFORMATIONINON
THE FINAL
PAGE.
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