|
INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE
VALUE
|
Fund objective
The Fund seeks long-term capital growth.
Fund and subadviser name changes
Prior to
January 1, 2013, the Fund was known as Legg Mason ClearBridge Large Cap Growth Fund. On December 5, 2012, the name of the Funds subadviser changed from ClearBridge Advisors, LLC to ClearBridge Investments, LLC. There was no change in the
Funds investment objective or strategy as a result of these name changes.
Letter from the president
Dear Shareholder,
We are pleased to provide the semi-annual report of ClearBridge Large Cap Growth Fund for the six-month reporting period ended May 31, 2013.
Please read on for Fund performance information and a detailed look at prevailing economic and market conditions during the Funds reporting period.
I am pleased to introduce myself as the new President and Chief Executive Officer of the Fund, succeeding R. Jay Gerken, as he embarks upon his retirement. Jay has most recently served as Chairman of the Board,
President and Chief Executive Officer of the Fund and other funds in the Legg Mason complex. On behalf of all our shareholders and the Funds Board of Trustees, I would like to thank Jay for his vision and guidance, and wish him all the best.
I am honored to have been appointed to my new role with the Fund. During my 23 year career in the financial industry, I have seen it evolve and expand.
Despite these changes, keeping an unwavering focus on our shareholders and their needs remains paramount. This was a consistent focus of Jays, and I look forward to following his lead in the years to come.
As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the
support you receive from your financial advisor. One way we accomplish this is through our website, www.leggmason.com/individualinvestors. Here you can gain immediate access to market and investment information, including:
|
|
Fund prices and performance,
|
|
|
Market insights and commentaries from our portfolio managers, and
|
|
|
A host of educational resources.
|
We look
forward to helping you meet your financial goals.
Sincerely,
Kenneth D. Fuller
President and Chief Executive Officer
June 28, 2013
|
|
|
II
|
|
ClearBridge Large Cap Growth Fund
|
Investment commentary
Economic review
The U.S. economy continued to grow over the six months ended May 31, 2013 (the reporting period), but the pace was far from
robust. Looking back, U.S. gross domestic product (GDP)
i
growth, as reported by the U.S. Department of Commerce, was 1.3% in the second quarter of 2012. Economic
growth accelerated to 3.1% in the third quarter, partially due to increased private inventory investment, higher federal government spending and moderating imports. However, economic activity sharply moderated in the fourth quarter, with GDP
expanding an anemic 0.4%. This was driven by a reversal of the above factors, as private inventory investment and federal government spending weakened. Economic growth then improved, as the U.S. Department of Commerces final reading for first
quarter 2013 GDP growth, released after the reporting period ended, was 1.8%. Accelerating growth was due, in part, to strengthening consumer spending, which rose 2.6% during the first quarter, versus a 1.8% increase during the previous quarter.
While there was some improvement in the U.S. job market, unemployment remained elevated throughout the reporting period. When the period began,
unemployment, as reported by the U.S. Department of Labor, was 7.8%. The unemployment rate fluctuated between 7.8% and 7.9% through January 2013. Unemployment then fell to 7.7% in February, 7.6% in March and 7.5% in April, before edging up to 7.6%
in May. In an encouraging sign, the number of longer-term unemployed has declined in recent months. In February 2013, more than 40% of the people without a job had been out of work for more than six months. This fell to 37.3% in May 2013.
Meanwhile, the housing market brightened, as sales generally improved and home prices continued to rebound. According to the National Association of
Realtors (NAR), existing-home sales rose 4.2% on a seasonally adjusted basis in May 2013 versus the previous month and were 12.9% higher than in May 2012. In addition, the NAR reported that the median existing-home price for all housing
types was $208,000 in May 2013, up 15.4% from May 2012. This marked the fifteenth consecutive month that home prices rose compared to the same period a year earlier. While the inventory of homes available for sale rose 3.3% in May 2013 to a 5.1
month supply at the current sales pace, it was 10.1% lower than in May 2012.
While manufacturing activity was weak in many
international developed countries, it was generally positive in the U.S. Based on the Institute for Supply Managements Purchasing Managers Index
(PMI)
ii
, the U.S. manufacturing sector expanded during the first five months of the reporting period. However, manufacturing then experienced a setback, falling
from 50.7 in April 2013 to 49.0 in May (a reading below 50 indicates a contraction, whereas a reading above 50 indicates an expansion). During May, 10 of the 18 industries within the PMI expanded, versus 14 expanding the prior month.
|
|
|
ClearBridge Large Cap Growth Fund
|
|
III
|
Investment commentary (contd)
Market review
Q. How did the Federal Reserve Board
(Fed)
iii
respond to the economic
environment?
A.
The Fed took a number of actions as it sought to meet its dual mandate of fostering maximum
employment and price stability. As has been the case since December 2008, the Fed kept the federal funds rate
iv
at a historically low range between zero and 0.25%. At its
September 2012 meeting, prior to the beginning of the reporting period, the Fed announced a third round of quantitative easing (QE3), which involves purchasing $40 billion each month of agency mortgage-backed securities (MBS)
on an open-end basis. In addition, the Fed further extended the duration that it expects to keep the federal funds rate on hold, until at least mid-2015. At its meeting in December, the Fed announced that it would continue purchasing $40 billion per
month of agency MBS, as well as initially purchasing $45 billion a month of longer-term Treasuries. The Fed also said that it would keep the federal funds rate on hold
as long as the unemployment rate remains above 6.5%, inflation
between one and two years ahead is projected to be no more than a half percentage point above the Committees 2.0% longer-run goal, and longer-term inflation expectations continue to be well anchored. At its meeting that ended on
June 19, 2013, after the reporting period ended, the Fed did not make any material changes to its official policy statement. However, in a press conference following the meeting, Fed Chairman Bernanke said
the Committee currently
anticipates that it would be appropriate to moderate the monthly pace of purchases later this year; and if the subsequent data remain broadly aligned with our current expectations for the economy, we would continue to reduce the pace of purchases in
measured steps through the first half of next year, ending purchases around midyear.
Performance review
For the six months ended May 31, 2013, Class A shares of ClearBridge Large Cap Growth Fund, excluding sales charges, returned 17.24%.
The Funds unmanaged benchmark, the Russell 1000 Growth Index
v
, returned 13.92% for the same period. The Lipper Large-Cap Growth Funds Category Average
1
returned 12.67% over the same time frame.
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Investments, at value (Cost $518,761,417)
|
|
$
|
866,471,486
|
|
Cash
|
|
|
619
|
|
Receivable for securities sold
|
|
|
5,117,311
|
|
Receivable for Fund shares sold
|
|
|
2,300,501
|
|
Dividends and interest receivable
|
|
|
1,436,513
|
|
Prepaid expenses
|
|
|
54,123
|
|
Total Assets
|
|
|
875,380,553
|
|
|
|
Liabilities:
|
|
|
|
|
Payable for Fund shares repurchased
|
|
|
1,158,744
|
|
Investment management fee payable
|
|
|
560,812
|
|
Service and/or distribution fees payable
|
|
|
325,347
|
|
Trustees fees payable
|
|
|
40,770
|
|
Accrued expenses
|
|
|
1,253,168
|
|
Total Liabilities
|
|
|
3,338,841
|
|
Total Net Assets
|
|
$
|
872,041,712
|
|
|
|
Net
Assets:
|
|
|
|
|
Par value (Note 7)
|
|
$
|
339
|
|
Paid-in capital in excess of par value
|
|
|
472,895,499
|
|
Accumulated net investment loss
|
|
|
(202,862)
|
|
Accumulated net realized gain on investments
|
|
|
51,537,980
|
|
Net unrealized appreciation on investments and foreign currencies
|
|
|
347,810,756
|
|
Total Net Assets
|
|
$
|
872,041,712
|
|
|
|
Shares
Outstanding:
|
|
|
|
|
Class A
|
|
|
21,815,946
|
|
Class B
|
|
|
873,390
|
|
Class C
|
|
|
9,237,616
|
|
Class R
|
|
|
7,282
|
|
Class I
|
|
|
1,996,679
|
|
Class IS
|
|
|
369
|
|
|
|
Net Asset
Value:
|
|
|
|
|
Class A (and redemption price)
|
|
|
$26.57
|
|
Class B*
|
|
|
$23.80
|
|
Class C*
|
|
|
$23.19
|
|
Class R (and redemption price)
|
|
|
$26.09
|
|
Class I (and redemption price)
|
|
|
$28.60
|
|
Class IS (and redemption price)
|
|
|
$28.60
|
|
Maximum Public Offering
Price Per Share:
|
|
|
|
|
Class A (based on maximum initial sales charge of 5.75%)
|
|
|
$28.19
|
|
*
|
Redemption price per share is NAV of Class B and Class C shares reduced by a 5.00% and 1.00% CDSC, respectively, if shares are redeemed within one year from purchase payment (See
Note 2).
|
See Notes to
Financial Statements.
|
|
|
6
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
Statement of operations
(unaudited)
For the
Six Months Ended May 31, 2013
|
|
|
|
|
|
|
Investment
Income:
|
|
|
|
|
Dividends
|
|
$
|
6,104,859
|
|
Interest
|
|
|
1,198
|
|
Less: Foreign taxes withheld
|
|
|
(34,870)
|
|
Total Investment Income
|
|
|
6,071,187
|
|
|
|
Expenses:
|
|
|
|
|
Investment management fee (Note 2)
|
|
|
3,124,910
|
|
Service and/or distribution fees (Notes 2 and 5)
|
|
|
1,836,347
|
|
Transfer agent fees (Note 5)
|
|
|
1,016,832
|
|
Registration fees
|
|
|
51,435
|
|
Fund accounting fees
|
|
|
39,339
|
|
Trustees fees
|
|
|
32,592
|
|
Shareholder reports
|
|
|
27,775
|
|
Legal fees
|
|
|
23,771
|
|
Audit and tax
|
|
|
17,723
|
|
Insurance
|
|
|
8,789
|
|
Custody fees
|
|
|
4,160
|
|
Miscellaneous expenses
|
|
|
7,066
|
|
Total Expenses
|
|
|
6,190,739
|
|
Less: Fee waivers and/or expense reimbursements (Notes 2 and 5)
|
|
|
(9,807)
|
|
Net Expenses
|
|
|
6,180,932
|
|
Net Investment Loss
|
|
|
(109,745)
|
|
|
|
Realized and Unrealized
Gain (Loss) on Investments
and Foreign Currency Transactions (Notes 1 and 3):
|
|
|
|
|
Net Realized Gain from Investment Transactions
|
|
|
54,765,813
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
|
|
|
Investments
|
|
|
77,345,717
|
|
Foreign currencies
|
|
|
(22,262)
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
|
77,323,455
|
|
Net Gain on Investments and Foreign Currency Transactions
|
|
|
132,089,268
|
|
Increase in Net Assets from Operations
|
|
$
|
131,979,523
|
|
See Notes to Financial
Statements.
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
7
|
Statements of changes in net assets
|
|
|
|
|
|
|
|
|
For the Six Months Ended May 31, 2013 (unaudited)
and the Year Ended November 30, 2012
|
|
2013
|
|
|
2012
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(109,745)
|
|
|
$
|
(453,007)
|
|
Net realized gain
|
|
|
54,765,813
|
|
|
|
55,888,416
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
77,323,455
|
|
|
|
80,442,429
|
|
Increase in Net Assets From Operations
|
|
|
131,979,523
|
|
|
|
135,877,838
|
|
|
|
|
Distributions to
Shareholders From (Notes 1 and 6):
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
(55,565,690)
|
|
|
|
(121,762,469)
|
|
Decrease in Net Assets From Distributions to
Shareholders
|
|
|
(55,565,690)
|
|
|
|
(121,762,469)
|
|
|
|
|
Fund Share Transactions
(Note 7):
|
|
|
|
|
|
|
|
|
Net proceeds from sale of shares
|
|
|
51,628,572
|
|
|
|
64,883,287
|
|
Reinvestment of distributions
|
|
|
52,817,516
|
|
|
|
116,195,633
|
|
Cost of shares repurchased
|
|
|
(109,179,743)
|
|
|
|
(206,836,967)
|
|
Decrease in Net Assets From Fund Share Transactions
|
|
|
(4,733,655)
|
|
|
|
(25,758,047)
|
|
Increase (Decrease) in Net Assets
|
|
|
71,680,178
|
|
|
|
(11,642,678)
|
|
|
|
|
Net
Assets:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
800,361,534
|
|
|
|
812,004,212
|
|
End of period*
|
|
$
|
872,041,712
|
|
|
$
|
800,361,534
|
|
* Includes accumulated net investment loss of:
|
|
|
$(202,862)
|
|
|
|
$(93,117)
|
|
See Notes to Financial
Statements.
|
|
|
8
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
Financial highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of
beneficial interest outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
Class A Shares
1
|
|
2013
2
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of period
|
|
|
$24.29
|
|
|
|
$24.01
|
|
|
|
$22.95
|
|
|
|
$21.30
|
|
|
|
$14.92
|
|
|
|
$25.74
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
0.02
|
|
|
|
0.03
|
|
|
|
(0.02)
|
|
|
|
(0.07)
|
|
|
|
(0.03)
|
|
|
|
(0.06)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.89
|
|
|
|
3.77
|
|
|
|
1.08
|
|
|
|
1.70
|
|
|
|
6.41
|
|
|
|
(10.76)
|
|
Proceeds from settlement of a regulatory matter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
3.91
|
|
|
|
3.80
|
|
|
|
1.06
|
|
|
|
1.65
|
|
|
|
6.38
|
|
|
|
(10.82)
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of
period
|
|
|
$26.57
|
|
|
|
$24.29
|
|
|
|
$24.01
|
|
|
|
$22.95
|
|
|
|
$21.30
|
|
|
|
$14.92
|
|
Total return
3
|
|
|
17.24
|
%
|
|
|
18.49
|
%
|
|
|
4.62
|
%
|
|
|
7.75
|
%
4,5
|
|
|
42.76
|
%
5
|
|
|
(42.04)
|
%
|
|
|
|
|
|
|
|
Net assets, end of period
(millions)
|
|
|
$580
|
|
|
|
$535
|
|
|
|
$513
|
|
|
|
$662
|
|
|
|
$1,338
|
|
|
|
$1,259
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.31
|
%
6
|
|
|
1.29
|
%
|
|
|
1.33
|
%
|
|
|
1.40
|
%
|
|
|
1.25
|
%
|
|
|
1.20
|
%
|
Net expenses
7
|
|
|
1.31
|
6
|
|
|
1.29
|
|
|
|
1.33
|
|
|
|
1.40
|
|
|
|
1.25
|
|
|
|
1.20
|
|
Net investment income (loss)
|
|
|
0.14
|
6
|
|
|
0.13
|
|
|
|
(0.09)
|
|
|
|
(0.33)
|
|
|
|
(0.16)
|
|
|
|
(0.26)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
9
|
%
|
|
|
12
|
%
|
|
|
41
|
%
|
|
|
14
|
%
|
|
|
13
|
%
|
|
|
26
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the six months ended May 31, 2013 (unaudited).
|
3
|
Performance figures, exclusive of sales charges, 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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
4
|
The total return reflects a payment received due to the settlement of a regulatory matter. Absent this payment, the total return would have been 7.65%.
Class A received $1,332,739 related to this distribution.
|
5
|
The total return includes gains from settlement of security litigations. Without these gains, the total return would have been 7.65% and 42.49% for 2010 and
2009, respectively.
|
7
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
See Notes to Financial Statements.
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
9
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of
beneficial interest outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
Class B Shares
1
|
|
2013
2
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of period
|
|
|
$22.02
|
|
|
|
$22.27
|
|
|
|
$21.46
|
|
|
|
$19.46
|
|
|
|
$13.73
|
|
|
|
$23.86
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.09)
|
|
|
|
(0.17)
|
|
|
|
(0.21)
|
|
|
|
(0.21)
|
|
|
|
(0.14)
|
|
|
|
(0.20)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.50
|
|
|
|
3.44
|
|
|
|
1.02
|
|
|
|
1.56
|
|
|
|
5.87
|
|
|
|
(9.93)
|
|
Proceeds from settlement of a regulatory matter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.65
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
3.41
|
|
|
|
3.27
|
|
|
|
0.81
|
|
|
|
2.00
|
|
|
|
5.73
|
|
|
|
(10.13)
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of
period
|
|
|
$23.80
|
|
|
|
$22.02
|
|
|
|
$22.27
|
|
|
|
$21.46
|
|
|
|
$19.46
|
|
|
|
$13.73
|
|
Total return
3
|
|
|
16.71
|
%
|
|
|
17.38
|
%
|
|
|
3.77
|
%
|
|
|
10.28
|
%
4,5
|
|
|
41.73
|
%
5
|
|
|
(42.46)
|
%
|
|
|
|
|
|
|
|
Net assets, end of period
(millions)
|
|
|
$21
|
|
|
|
$23
|
|
|
|
$37
|
|
|
|
$62
|
|
|
|
$90
|
|
|
|
$102
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
2.39
|
%
6
|
|
|
2.21
|
%
|
|
|
2.16
|
%
|
|
|
2.12
|
%
|
|
|
2.00
|
%
|
|
|
1.93
|
%
|
Net expenses
7
|
|
|
2.30
|
6,8,9
|
|
|
2.21
|
|
|
|
2.16
|
|
|
|
2.12
|
|
|
|
2.00
|
|
|
|
1.91
|
9,10
|
Net investment loss
|
|
|
(0.84)
|
6
|
|
|
(0.80)
|
|
|
|
(0.94)
|
|
|
|
(1.05)
|
|
|
|
(0.89)
|
|
|
|
(0.98)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
9
|
%
|
|
|
12
|
%
|
|
|
41
|
%
|
|
|
14
|
%
|
|
|
13
|
%
|
|
|
26
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the six months ended May 31, 2013 (unaudited).
|
3
|
Performance figures, exclusive of CDSC, 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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
4
|
The total return reflects a payment received due to the settlement of a regulatory matter. Absent this payment, the total return would have been 6.94%. Class B
received $2,411,941 related to this distribution.
|
5
|
The total return includes gains from settlement of security litigations. Without these gains, the total return would have been 10.23% and 41.44% for 2010 and
2009, respectively.
|
7
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
8
|
As a result of an expense limitation arrangement, effective December 1, 2012, the ratio of expenses, other than brokerage, interest, taxes, extraordinary
expenses and acquired fund fees and expenses, to average net assets of Class B shares did not exceed 2.30%. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
|
9
|
Reflects fee waivers and/or expense reimbursements.
|
10
|
Effective February 2, 2007 until April 1, 2008, the manager contractually agreed to waive fees and/or reimburse operating expenses (other than
brokerage, taxes and extraordinary expenses) to limit total annual operating expenses to 1.88% of average net assets of Class B shares.
|
See Notes to Financial Statements.
|
|
|
10
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of
beneficial interest outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
Class C Shares
1
|
|
2013
2
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of period
|
|
|
$21.48
|
|
|
|
$21.77
|
|
|
|
$20.95
|
|
|
|
$19.47
|
|
|
|
$13.73
|
|
|
|
$23.86
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.06)
|
|
|
|
(0.12)
|
|
|
|
(0.17)
|
|
|
|
(0.19)
|
|
|
|
(0.14)
|
|
|
|
(0.19)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.40
|
|
|
|
3.35
|
|
|
|
0.99
|
|
|
|
1.56
|
|
|
|
5.88
|
|
|
|
(9.94)
|
|
Proceeds from settlement of a regulatory matter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
3.34
|
|
|
|
3.23
|
|
|
|
0.82
|
|
|
|
1.48
|
|
|
|
5.74
|
|
|
|
(10.13)
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of
period
|
|
|
$23.19
|
|
|
|
$21.48
|
|
|
|
$21.77
|
|
|
|
$20.95
|
|
|
|
$19.47
|
|
|
|
$13.73
|
|
Total return
3
|
|
|
16.82
|
%
|
|
|
17.63
|
%
|
|
|
3.91
|
%
|
|
|
7.60
|
%
4,5
|
|
|
41.81
|
%
5
|
|
|
(42.46)
|
%
|
|
|
|
|
|
|
|
Net assets, end of period
(millions)
|
|
|
$214
|
|
|
|
$202
|
|
|
|
$214
|
|
|
|
$255
|
|
|
|
$299
|
|
|
|
$263
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
2.02
|
%
6
|
|
|
2.00
|
%
|
|
|
2.00
|
%
|
|
|
2.03
|
%
|
|
|
1.94
|
%
|
|
|
1.90
|
%
|
Net expenses
7
|
|
|
2.02
|
6
|
|
|
2.00
|
|
|
|
2.00
|
|
|
|
2.03
|
|
|
|
1.94
|
|
|
|
1.89
|
8,9
|
Net investment loss
|
|
|
(0.56)
|
6
|
|
|
(0.58)
|
|
|
|
(0.77)
|
|
|
|
(0.95)
|
|
|
|
(0.84)
|
|
|
|
(0.95)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
9
|
%
|
|
|
12
|
%
|
|
|
41
|
%
|
|
|
14
|
%
|
|
|
13
|
%
|
|
|
26
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the six months ended May 31, 2013 (unaudited).
|
3
|
Performance figures, exclusive of CDSC, 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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
4
|
The total return reflects a payment received due to the settlement of a regulatory matter. Absent this payment, the total return would have been 7.04%. Class C
received $1,561,711 related to this distribution.
|
5
|
The total return includes gains from settlement of security litigations. Without these gains, the total return would have been 7.55% and 41.59% for 2010 and
2009, respectively.
|
7
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
8
|
Effective February 2, 2007 until April 1, 2008, the manager contractually agreed to waive fees and/or reimburse operating expenses (other than
brokerage, taxes and extraordinary expenses) to limit total annual operating expenses to 1.85% of average net assets of Class C shares.
|
9
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
11
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of
beneficial interest outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
Class R Shares
1
|
|
2013
2
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of period
|
|
|
$23.90
|
|
|
|
$23.75
|
|
|
|
$22.76
|
|
|
|
$21.18
|
|
|
|
$14.86
|
|
|
|
$25.69
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
(0.01)
|
|
|
|
(0.04)
|
|
|
|
(0.09)
|
|
|
|
(0.12)
|
|
|
|
(0.06)
|
|
|
|
(0.09)
|
|
Net realized and unrealized gain (loss)
|
|
|
3.83
|
|
|
|
3.71
|
|
|
|
1.08
|
|
|
|
1.70
|
|
|
|
6.38
|
|
|
|
(10.74)
|
|
Total income (loss) from operations
|
|
|
3.82
|
|
|
|
3.67
|
|
|
|
0.99
|
|
|
|
1.58
|
|
|
|
6.32
|
|
|
|
(10.83)
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of
period
|
|
|
$26.09
|
|
|
|
$23.90
|
|
|
|
$23.75
|
|
|
|
$22.76
|
|
|
|
$21.18
|
|
|
|
$14.86
|
|
Total return
3
|
|
|
17.09
|
%
|
|
|
18.08
|
%
|
|
|
4.35
|
%
|
|
|
7.46
|
%
4
|
|
|
42.53
|
%
4
|
|
|
(42.16)
|
%
|
|
|
|
|
|
|
|
Net assets, end of period
(000s)
|
|
|
$190
|
|
|
|
$282
|
|
|
|
$218
|
|
|
|
$307
|
|
|
|
$338
|
|
|
|
$189
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.81
|
%
5
|
|
|
1.70
|
%
|
|
|
1.85
|
%
|
|
|
1.83
|
%
|
|
|
1.49
|
%
|
|
|
1.41
|
%
|
Net expenses
6
|
|
|
1.60
|
5,7,8
|
|
|
1.60
|
7,8
|
|
|
1.60
|
7,8
|
|
|
1.59
|
7,8
|
|
|
1.43
|
7,8
|
|
|
1.41
|
|
Net investment loss
|
|
|
(0.12)
|
5
|
|
|
(0.17)
|
|
|
|
(0.37)
|
|
|
|
(0.53)
|
|
|
|
(0.34)
|
|
|
|
(0.44)
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
9
|
%
|
|
|
12
|
%
|
|
|
41
|
%
|
|
|
14
|
%
|
|
|
13
|
%
|
|
|
26
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the six months ended May 31, 2013 (unaudited).
|
3
|
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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
4
|
The total return includes gains from settlement of security litigations. Without these gains, the total return would have been 7.41% and 42.33% for 2010 and
2009, respectively.
|
6
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
7
|
As a result of an expense limitation arrangement, effective September 18, 2009, the ratio of expenses, other than brokerage, interest, taxes, extraordinary
expenses and acquired fund fees and expenses, to average net assets of Class R shares did not exceed 1.60%. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
12
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of each class of
beneficial interest outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
Class I Shares
1
|
|
2013
2
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net asset value, beginning
of period
|
|
|
$25.96
|
|
|
|
$25.32
|
|
|
|
$24.12
|
|
|
|
$22.28
|
|
|
|
$15.55
|
|
|
|
$26.74
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.08
|
|
|
|
0.15
|
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.04
|
|
|
|
0.02
|
|
Net realized and unrealized gain (loss)
|
|
|
4.19
|
|
|
|
4.01
|
|
|
|
1.15
|
|
|
|
1.79
|
|
|
|
6.69
|
|
|
|
(11.21)
|
|
Total income (loss) from operations
|
|
|
4.27
|
|
|
|
4.16
|
|
|
|
1.20
|
|
|
|
1.84
|
|
|
|
6.73
|
|
|
|
(11.19)
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
(1.63)
|
|
|
|
(3.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of
period
|
|
|
$28.60
|
|
|
|
$25.96
|
|
|
|
$25.32
|
|
|
|
$24.12
|
|
|
|
$22.28
|
|
|
|
$15.55
|
|
Total return
3
|
|
|
17.54
|
%
|
|
|
19.03
|
%
|
|
|
4.98
|
%
|
|
|
8.26
|
%
4
|
|
|
43.28
|
%
4
|
|
|
(41.85)
|
%
|
|
|
|
|
|
|
|
Net assets, end of period
(millions)
|
|
|
$57
|
|
|
|
$40
|
|
|
|
$48
|
|
|
|
$132
|
|
|
|
$110
|
|
|
|
$169
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
0.80
|
%
5
|
|
|
0.81
|
%
|
|
|
1.08
|
%
|
|
|
0.88
|
%
|
|
|
0.92
|
%
|
|
|
0.83
|
%
|
Net expenses
6
|
|
|
0.80
|
5,7
|
|
|
0.81
|
7
|
|
|
1.03
|
7,8
|
|
|
0.88
|
7
|
|
|
0.92
|
7
|
|
|
0.83
|
|
Net investment income
|
|
|
0.64
|
5
|
|
|
0.61
|
|
|
|
0.19
|
|
|
|
0.20
|
|
|
|
0.20
|
|
|
|
0.11
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
9
|
%
|
|
|
12
|
%
|
|
|
41
|
%
|
|
|
14
|
%
|
|
|
13
|
%
|
|
|
26
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the six months ended May 31, 2013 (unaudited).
|
3
|
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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
4
|
The total return includes gains from settlement of security litigations. Without these gains, the total return would have been 8.21% and 42.96% for 2010 and
2009, respectively.
|
6
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
7
|
As a result of an expense limitation arrangement, effective September 18, 2009, the ratio of expenses, other than brokerage, interest, taxes, extraordinary
expenses and acquired fund fees and expenses, to average net assets of Class I shares did not exceed 1.05%. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
13
|
Financial highlights (contd)
|
|
|
|
|
For a share of each class of
beneficial interest outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
Class IS Shares
1
|
|
2013
2
|
|
|
|
Net asset value, beginning
of period
|
|
|
$27.11
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
Net investment income
|
|
|
0.03
|
|
Net realized and unrealized gain
|
|
|
1.46
|
|
Total income from operations
|
|
|
1.49
|
|
|
|
Net asset value, end of
period
|
|
|
$28.60
|
|
Total return
3
|
|
|
5.50
|
%
|
|
|
Net assets, end of period
(000s)
|
|
|
$11
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
Gross expenses
4
|
|
|
1.02
|
%
|
Net expenses
4,5,6,7
|
|
|
0.80
|
|
Net investment income
4
|
|
|
0.44
|
|
|
|
Portfolio turnover rate
|
|
|
9
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the period March 15, 2013 (inception date) to May 31, 2013 (unaudited).
|
3
|
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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
5
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
6
|
As a result of an expense limitation arrangement, the ratio of expenses, other than brokerage, interest, taxes, extraordinary expenses and acquired fund fees and
expenses, to average net assets of Class IS shares did not exceed those of Class I Shares. This expense limitation arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
|
7
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Financial Statements.
|
|
|
14
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
Notes to financial statements
(unaudited)
1. Organization and significant accounting policies
ClearBridge Large Cap Growth Fund (the Fund) is a separate diversified investment series of Legg Mason Partners Equity 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.
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 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.
Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investments fair value. 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 Funds Board of Trustees.
The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North American
Fund Valuation Committee (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 Funds
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
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
15
|
Notes to financial statements
(unaudited)
(contd)
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 issuers 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.
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 Funds 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 Funds assets carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Common stocks
|
|
$
|
864,468,486
|
|
|
|
|
|
|
|
|
|
|
$
|
864,468,486
|
|
Short-term investments
|
|
|
|
|
|
$
|
2,003,000
|
|
|
|
|
|
|
|
2,003,000
|
|
Total investments
|
|
$
|
864,468,486
|
|
|
$
|
2,003,000
|
|
|
|
|
|
|
$
|
866,471,486
|
|
|
See Schedule of Investments for additional detailed categorizations.
|
(b) Repurchase agreements.
The Fund may enter into repurchase agreements with institutions that
its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of
the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Funds holding period. When entering into
|
|
|
16
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
repurchase agreements, it is the Funds policy that its custodian or a third party custodian, acting on the Funds behalf, take possession of the underlying collateral securities, the
market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is
marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase
transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral
by the Fund may be delayed or limited.
(c) 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 recorded on the Funds 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.
(d) Foreign investment risks.
The Funds
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 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.
(e) Security transactions and investment
income.
Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend
income is recorded on the ex-dividend date. 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
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
17
|
Notes to financial statements
(unaudited)
(contd)
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.
(f) 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.
(g)
Compensating balance arrangements.
The Fund has an arrangement with its custodian bank whereby a portion of the custodians fees is paid indirectly by credits earned on the Funds cash on
deposit with the bank.
(h) Share class accounting.
Investment income, common expenses and realized/unrealized gains (losses) on investments are allocated to the various classes of the Fund on the basis of daily net assets of each class. Fees relating to a specific
class are charged directly to that share class.
(i) Federal and other
taxes.
It is the Funds 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 Funds financial statements.
Management has analyzed the Funds tax positions taken on income tax returns for all open tax
years and has concluded that as of May 31, 2013, no provision for income tax is required in the Funds financial statements. The Funds 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.
(j) 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.
2. Investment management
agreement and other transactions with affiliates
Legg Mason Partners Fund Advisor, LLC (LMPFA) is the Funds investment manager and
ClearBridge Investments, LLC (formerly ClearBridge Advisors, LLC) (ClearBridge) is the Funds subadviser. Western Asset Management Company (Western Asset) manages the Funds cash and short-term instruments. LMPFA,
ClearBridge and Western Asset are wholly-owned subsidiaries of Legg Mason, Inc. (Legg Mason).
Under the investment management agreement, the
Fund pays a investment management fee, calculated daily and paid monthly, in accordance with the following breakpoint schedule:
|
|
|
|
|
Average Daily Net Assets
|
|
Annual Rate
|
|
First $1 billion
|
|
|
0.750
|
%
|
Next $1 billion
|
|
|
0.725
|
|
Next $3 billion
|
|
|
0.700
|
|
Next $5 billion
|
|
|
0.675
|
|
Over $10 billion
|
|
|
0.650
|
|
|
|
|
18
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the
day-to-day portfolio management of the Fund, except for the management of cash and short term instruments, which is provided by Western Asset. For its services, LMPFA pays ClearBridge and Western Asset an aggregate fee equal to 70% of the net
management fee it receives from the Fund.
As a result of expense limitation arrangements between the Fund and LMPFA, the ratio of expenses other than
brokerage, interest, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class B, Class R and Class I shares did not exceed 2.30%, 1.60% and 1.05% respectively. In addition, the total annual operating expenses
for Class IS shares did not exceed those for Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2014 without the Board of Trustees consent.
During the six months ended May 31, 2013, fees waived and/or expenses reimbursed amounted to $9,807.
The investment manager is permitted to recapture amounts waived or reimbursed to a class during the same fiscal year if the class total annual operating expenses have fallen to a level below the expense
limitation (expense cap) in effect at the time the fees were earned or the expenses incurred. In no case will the investment manager recapture any amount that would result, on any particular business day of the Fund, in the class
total annual operating expenses exceeding the expense cap or any other lower limit then in effect.
Legg Mason Investor Services, LLC (LMIS),
a wholly-owned broker-dealer subsidiary of Legg Mason, serves as the Funds sole and exclusive distributor.
There is a maximum initial sales charge
of 5.75% for Class A shares. There is a contingent deferred sales charge (CDSC) of 5.00% on Class B shares, which applies if redemption occurs within 12 months from purchase payment. This CDSC declines by 1.00% per year until
no CDSC is incurred. Class C shares have a 1.00% CDSC, which applies if redemption occurs within 12 months from purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which applies if redemption occurs within 18 months from
purchase payment (or within 12 months for shares purchased prior to August 1, 2012). This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of other shares of funds sold by LMIS, equal or
exceed $1,000,000 in the aggregate. These purchases do not incur an initial sales charge.
For the six months ended May 31, 2013, LMIS and its
affiliates retained sales charges of $24,628 on sales of the Funds Class A shares. In addition, for the six months ended May 31, 2013, CDSCs paid to LMIS and its affiliates were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
CDSCs
|
|
$
|
49
|
|
|
$
|
5,728
|
|
|
$
|
1,274
|
|
All officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive compensation from the
Trust.
3. Investments
During the
six months ended May 31, 2013, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:
|
|
|
|
|
Purchases
|
|
$
|
76,579,809
|
|
Sales
|
|
|
143,408,860
|
|
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
19
|
Notes to financial statements
(unaudited)
(contd)
At May 31, 2013, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
348,348,190
|
|
Gross unrealized depreciation
|
|
|
(638,121)
|
|
Net unrealized appreciation
|
|
$
|
347,710,069
|
|
4. Derivative instruments and hedging activities
GAAP requires enhanced disclosure about an entitys derivative and hedging activities.
During the six months
ended
May 31, 2013, the Fund did not invest in any derivative instruments.
5. Class specific expenses, waivers and/or
expense reimbursements
The Fund has adopted a Rule 12b-1 distribution plan and under that plan the Fund pays a service fee with respect to its
Class A, Class B, Class C and Class R shares calculated at the annual rate of 0.25% of the average daily net assets of each respective class. The Fund also pays a distribution fee with respect to its Class B, Class C and Class R shares
calculated at the annual rate of 0.75%, 0.75% and 0.25% of the average daily net assets of each class, respectively. Service and distribution fees are accrued daily and paid monthly.
For the six months ended May 31, 2013, class specific expenses were as follows:
|
|
|
|
|
|
|
|
|
|
|
Service and/or
Distribution Fees
|
|
|
Transfer Agent
Fees
|
|
Class A
|
|
$
|
690,064
|
|
|
$
|
723,642
|
|
Class B
|
|
|
110,725
|
|
|
|
64,880
|
|
Class C
|
|
|
1,034,937
|
|
|
|
227,178
|
|
Class R
|
|
|
621
|
|
|
|
628
|
|
Class I
|
|
|
|
|
|
|
499
|
|
Class IS*
|
|
|
|
|
|
|
5
|
|
Total
|
|
$
|
1,836,347
|
|
|
$
|
1,016,832
|
|
*
|
For the period March 15, 2013 (inception date) to May 31, 2013.
|
For the six months ended May 31, 2013, waivers and/or expense reimbursements by class were as follows:
|
|
|
|
|
|
|
Waivers/Expense
Reimbursements
|
|
Class A
|
|
|
|
|
Class B
|
|
$
|
9,546
|
|
Class C
|
|
|
|
|
Class R
|
|
|
256
|
|
Class I
|
|
|
|
|
Class IS*
|
|
|
5
|
|
Total
|
|
$
|
9,807
|
|
*
|
For the period March 15, 2013 (inception date) to May 31, 2013.
|
|
|
|
20
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
6. Distributions to shareholders by class
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
May 31, 2013
|
|
|
Year Ended
November 30, 2012
|
|
Net Realized
Gains:
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
35,887,325
|
|
|
$
|
74,833,357
|
|
Class B
|
|
|
1,694,250
|
|
|
|
5,822,408
|
|
Class C
|
|
|
15,164,768
|
|
|
|
34,417,433
|
|
Class R
|
|
|
19,398
|
|
|
|
32,542
|
|
Class I
|
|
|
2,799,949
|
|
|
|
6,656,729
|
|
Class IS*
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
55,565,690
|
|
|
$
|
121,762,469
|
|
*
|
For the period March 15, 2013 (inception date) to May 31, 2013.
|
7. Shares of beneficial interest
At May 31, 2013, the Trust had an unlimited number of
shares of beneficial interest authorized with a par value of $0.00001 per share. The Fund has the ability to issue multiple classes of shares. Each class of shares represents an identical interest and has the same rights, except that each class
bears certain direct expenses, including those specifically related to the distribution of its shares.
Transactions in shares of each class were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
May 31, 2013
|
|
|
Year Ended
November 30, 2012
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
Class
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
996,564
|
|
|
$
|
24,854,818
|
|
|
|
1,856,183
|
|
|
$
|
41,899,236
|
|
Shares issued on reinvestment
|
|
|
1,534,899
|
|
|
|
34,934,304
|
|
|
|
3,543,633
|
|
|
|
72,927,967
|
|
Shares repurchased
|
|
|
(2,742,555)
|
|
|
|
(67,035,614)
|
|
|
|
(4,729,403)
|
|
|
|
(106,241,648)
|
|
Net increase (decrease)
|
|
|
(211,092)
|
|
|
$
|
(7,246,492)
|
|
|
|
670,413
|
|
|
$
|
8,585,555
|
|
|
|
|
|
|
Class
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
3,065
|
|
|
$
|
67,522
|
|
|
|
6,910
|
|
|
$
|
137,463
|
|
Shares issued on reinvestment
|
|
|
80,416
|
|
|
|
1,646,924
|
|
|
|
299,933
|
|
|
|
5,647,731
|
|
Shares repurchased
|
|
|
(263,306)
|
|
|
|
(5,859,825)
|
|
|
|
(916,300)
|
|
|
|
(18,864,786)
|
|
Net decrease
|
|
|
(179,825)
|
|
|
$
|
(4,145,379)
|
|
|
|
(609,457)
|
|
|
$
|
(13,079,592)
|
|
|
|
|
|
|
Class
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
206,503
|
|
|
$
|
4,487,105
|
|
|
|
433,624
|
|
|
$
|
8,672,523
|
|
Shares issued on reinvestment
|
|
|
736,933
|
|
|
|
14,687,079
|
|
|
|
1,823,565
|
|
|
|
33,425,941
|
|
Shares repurchased
|
|
|
(1,091,400)
|
|
|
|
(23,554,704)
|
|
|
|
(2,700,438)
|
|
|
|
(53,980,650)
|
|
Net decrease
|
|
|
(147,964)
|
|
|
$
|
(4,380,520)
|
|
|
|
(443,249)
|
|
|
$
|
(11,882,186)
|
|
|
|
|
|
|
Class
R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
1,302
|
|
|
$
|
31,403
|
|
|
|
2,564
|
|
|
$
|
57,040
|
|
Shares issued on reinvestment
|
|
|
867
|
|
|
|
19,397
|
|
|
|
1,601
|
|
|
|
32,542
|
|
Shares repurchased
|
|
|
(6,687)
|
|
|
|
(165,576)
|
|
|
|
(1,536)
|
|
|
|
(34,940)
|
|
Net increase (decrease)
|
|
|
(4,518)
|
|
|
$
|
(114,776)
|
|
|
|
2,629
|
|
|
$
|
54,642
|
|
|
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
|
21
|
Notes to financial statements
(unaudited)
(contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
May 31, 2013
|
|
|
Year Ended
November 30, 2012
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
Class
I
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
846,490
|
|
|
$
|
22,177,724
|
|
|
|
600,667
|
|
|
$
|
14,117,025
|
|
Shares issued on reinvestment
|
|
|
62,595
|
|
|
|
1,529,812
|
|
|
|
190,107
|
|
|
|
4,161,452
|
|
Shares repurchased
|
|
|
(466,512)
|
|
|
|
(12,564,024)
|
|
|
|
(1,129,441)
|
|
|
|
(27,714,943)
|
|
Net increase (decrease)
|
|
|
442,573
|
|
|
$
|
11,143,512
|
|
|
|
(338,667)
|
|
|
$
|
(9,436,466)
|
|
|
|
|
|
|
Class
IS*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
369
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
|
|
|
369
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
*
|
For the period March 15, 2013 (inception date) to May 31, 2013.
|
|
|
|
22
|
|
ClearBridge Large Cap Growth Fund 2013 Semi-Annual Report
|
ClearBridge
Large Cap Growth Fund
Trustees
Paul R. Ades
Andrew L. Breech
Dwight B. Crane
Kenneth D. Fuller*
President
Frank G. Hubbard
Howard J. Johnson*
Chairman
Jerome H. Miller
Ken Miller
John J. Murphy
Thomas F. Schlafly
Jerry A. Viscione
Investment manager
Legg Mason Partners Fund Advisor, LLC
Subadviser
ClearBridge Investments, LLC
Distributor
Legg Mason Investor
Services, LLC
Custodian
State
Street Bank and Trust Company
Co-transfer agents
Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, MA 02169
BNY Mellon Asset Servicing
4400 Computer Drive
Westborough, MA 01581
Independent registered public accounting firm
KPMG LLP
345 Park Avenue
New York, NY 10154
*
|
Effective June 1, 2013, Mr. Johnson became Chairman and Mr. Fuller became a Trustee, President and Chief Executive Officer.
|
ClearBridge Large Cap Growth Fund
The Fund is a separate investment series of Legg Mason Partners Equity Trust, a Maryland statutory trust.
ClearBridge Large Cap Growth Fund
Legg Mason Funds
620 Eighth Avenue, 49
th
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 on Form N-Q. The Funds Forms
N-Q are available on the SECs website at www.sec.gov. The Funds Forms N-Q may be reviewed and copied at the SECs Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q, 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) on the Funds website at www.leggmason.com/individualinvestors and (3) on the SECs website at www.sec.gov.
This report is submitted for the general information of the shareholders of ClearBridge
Large Cap Growth Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by a current prospectus.
Investors should consider the Funds 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/individualinvestors
©2013 Legg Mason Investor Services, LLC
Member FINRA, SIPC
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, Legg Mason Investor Services, LLC, as well as Legg Mason-sponsored closed-end funds and certain closed-end funds managed or
sub-advised by Legg Mason or its affiliates. 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;
|
|
|
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 individuals 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 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 marketing services solely for the Funds;
|
|
|
The Funds representatives such as legal counsel, accountants and auditors; and
|
|
|
Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.
|
|
NOT PART OF THE SEMI-ANNUAL REPORT
|
Legg Mason Funds Privacy and Security Notice (contd)
Except as otherwise permitted by applicable law, companies acting on the Funds
behalf 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, or if you have questions about the Funds privacy practices, 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 2011
|
NOT PART OF THE SEMI-ANNUAL REPORT
|
www.leggmason.com/individualinvestors
©2013
Legg Mason Investor Services, LLC Member FINRA, SIPC
FD1520 7/13 SR13-1957