Western Launches Short Term Yield
Western Asset, Legg Mason's fixed income subsidiary, announced the launch of the Western Asset Short Term Yield Fund (LGSTX), a short term bond fund that seeks to generate high current income while maintaining a low sensitivity to interest rate volatility. The fund will invest in U. S. dollar-denominated investment grade fixed income securities. The total portfolio duration is expected to be one year or less. The strategy "may be appropriate for investors seeking the potential for greater yield than cash equivalent securities while mitigating volatility via a low duration fixed income portfolio." The fund has both US and Cayman spokes and the ticker symbols are -- Class FI: LGSYX; Class I: WTYIX; Class IS: LGSTX. The fund's SEC filing says, "The fund invests in U.S. dollar denominated investment grade fixed income securities, including corporate debt securities, bank obligations, commercial paper, asset-backed and mortgage-backed securities, structured instruments and securities issued by the U.S. government and its agencies and instrumentalities, U.S. states and municipalities, or foreign governments. Foreign securities will generally be limited to issuers, including banks, corporations and foreign governments, located in the major industrialized countries. The fund is not a money market fund and does not seek to maintain a stable net asset value of $1.00 per share. Under normal circumstances, the effective duration of the fund's portfolio, as estimated by the subadviser, is expected to be one year or less. Duration is a measure of the underlying portfolio's price sensitivity to changes in prevailing interest rates.... The fund expects to maintain a dollar-weighted average effective maturity of not more than 18 months, but in any event will maintain a dollar weighted average effective maturity of not more than three years. The "average effective portfolio maturity" of the fund is a weighted average of all the maturities of the securities in the portfolio, computed by weighting each security's effective maturity, as estimated by the subadviser, by the market value of the security." The portfolio management team consists of Stephen Walsh, Kevin Kennedy and Martin Hanley. On fees, the prospectus says, "Total annual fund operating expenses after waiving fees and/or reimbursing expenses [are]: Class FI 0.70; Class I 0.45; Class IS 0.35."
