1. Legg Mason Private Portfolio Group, LLC Form ADV Part 2A … · Supplement dated October 16,...

October 2018

This PDF document contains the following documents:

1. Legg Mason Private Portfolio Group, LLC

• Form ADV Part 2A Brochure (including Supplement datedOctober 16, 2018)

2. QS Investors, LLC

• Form ADV Part 2A Brochure

• Form ADV Part 2B Supplements

Legg Mason Private Portfolio Group, LLC - Form ADV Part

2A Brochure (including Supplement dated October 16, 2018)

Supplement dated October 16, 2018

To June 2018 Form ADV Disclosure Brochure of

Legg Mason Private Portfolio Group, LLC

relating to Portfolios for which QS Investors, LLC (“QS”) is the Sub-Adviser

This document supplements the accompanying Form ADV Disclosure Brochure (the

“Brochure”) of Legg Mason Private Portfolio Group, LLC (“LMPPG”) and its affiliated sub-

advisers, including ClearBridge Investments, LLC (“ClearBridge”) and Western Asset

Management Company, LLC (“Western Asset”). Any inconsistent disclosure in the Brochure is

superseded by the contents of this document. Defined terms not defined herein shall have the

same meaning as in the Brochure.

Item 5 (FEES AND COMPENSATION)

LMPPG anticipates receiving advisory fees within the following ranges with respect to portfolios

for which QS, an affiliate of LMPPG, is the Sub-Adviser under both Discretionary Model

Programs and Non-Discretionary Model Programs:

Portfolio Annual Advisory Fee

Multi-Asset Class Portfolios .00 - .20%

QS Low Volatility High Dividend Equity Portfolio .20 - .40%

Each Multi-Asset Class Portfolio invests all or a portion of its assets in mutual funds and/or

ETFs that are managed or advised by Legg Mason affiliates, including QS and/or other Legg

Mason investment advisory affiliates, and that pay fees or other compensation to such Legg

Mason affiliates. Please see QS’ Form ADV Part 2A Brochure for more information. Such

fund-related compensation will not be credited against or offset the advisory fee agreed to by

LMPPG and the program sponsor unless such crediting or offset is required by contract or

applicable law. In cases where LMPPG receives no advisory fee or a very small advisory fee for

a Multi-Asset Class Portfolio due to the fund-related compensation that Legg Mason affiliates

will receive in connection with such portfolios, QS will provide compensation to LMPPG for its

services at a rate agreed to by QS and LMPPG.

Form ADV Disclosure Brochure June 27, 2018

This brochure is a Form ADV disclosure document of Legg Mason Private Portfolio Group, LLC (“LMPPG”) and two of its affiliated subadvisers (“Subadvisers”): ClearBridge Investments, LLC (“ClearBridge”) and Western Asset Management Company, LLC (“Western Asset”). LMPPG and the Subadvisers are wholly-owned subsidiaries of Legg Mason, Inc (“Legg Mason”).

This brochure is for clients that select, or are considering selecting, investment management portfolios that LMPPG, together with its Subadvisers, makes available in investment programs sponsored by certain unaffiliated financial firms (“Sponsor Firms”). This brochure provides information about the qualifications and business practices of LMPPG and two of its Subadvisers, ClearBridge and Western Asset. It also provides information about the investment management portfolios for which ClearBridge or Western Asset provide investment subadvisory services to LMPPG. When delivered to clients, this brochure includes an Appendix C identifying the ClearBridge and Western Asset personnel who serve as portfolio managers for the investment management portfolios described in Item 8 of this brochure for which ClearBridge or Western Asset provide investment subadvisory services to LMPPG.

LMPPG may retain other subsidiaries of Legg Mason, in addition to ClearBridge and Western Asset, as Subadvisers. Information concerning investment management portfolios that LMPPG, together with such a Subadviser, makes available in investment programs sponsored by Sponsor Firms, as well as information concerning the qualifications and business practices of such Subadviser, is contained in such Subadviser’s separate Form ADV disclosure document.

This brochure provides information about the qualifications and business practices of Legg Mason Private Portfolio Group, LLC and its Subadvisers: ClearBridge Investments, LLC and Western Asset Management Company, LLC. If you have questions about the contents of this brochure, please contact us at (212) 805-2000. The information in this brochure has not been approved or verified by the U.S. Securities and Exchange Commission (“SEC”) or by any state securities authority.

Additional information about Legg Mason Private Portfolio Group, LLC and each Subadviser is available on the SEC’s website at www.adviserinfo.sec.gov. Investment adviser registration does not imply a certain level of skill or training.

LEGG MASON GLOBAL ASSET MANAGEMENT

Legg Mason Private Portfolio Group, LLC 620 8th Avenue New York, NY 10018 (212) 805-2000

ClearBridge Investments, LLC 620 8th Avenue New York, NY 10018 (212) 805-2000www.clearbridge.com

Western Asset Management Company, LLC 385 East Colorado Boulevard Pasadena, CA 91101 (626) 844-9400www.westernasset.com

http://www.adviserinfo.sec.gov/

http://www.clearbridge.com/

http://www.westernasset.com/

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Item 2 MATERIAL CHANGES There have been no material changes to the brochure since the last annual update of the brochure (dated June 27, 2017). While there are no material changes to report, the following is a summary of the updates, enhancements and clarifications that were made to the brochure since the last annual update (dated June 27, 2017).

• The brochure reflects that LMPPG may retain certain other subsidiaries of Legg Mason, in addition to ClearBridge and Western Asset, as Subadvisers under investment programs sponsored by Sponsor Firms.

• In Item 4, the brochure reflects updates to the description of ClearBridge and Western Asset. The updated description of ClearBridge reflects that ClearBridge integrates Environmental, Social and Governance (“ESG”) considerations into its fundamental research process across all strategies. The updated description of Western Asset reflects that Western Asset’s portfolio managers incorporate ESG considerations in their investment analysis and decision-making.

• In Item 5, the brochure reflects updates to the fee rate ranges for LMPPG-Implemented Programs, Discretionary Model Programs and Non-Discretionary Model Programs and updates to LMPPG’s standard fee rates for certain investment management portfolios in Dual-Contract Programs. In Item 5, the brochure confirms that LMPPG’s fees in Dual-Contract Programs typically are calculated in accordance with procedures established by the client’s Sponsor Firm so that LMPPG’s fees are calculated following a methodology similar to that used in calculating the Sponsor Firm’s fee.

• In Items 5, 7 and 8, the brochure reflects the removal of Western Asset U.S. Managed Cash SMA portfolios as available investment management portfolios.

• In Item 7, the brochure reflects updates to the investment minimum for Western Asset Corporate Bond Ladders.

• In Items 7 and 8, the brochure reflects the addition of ClearBridge Dynamic MDA Global Growth and Value ESG and ClearBridge Dynamic MDA U.S. Dividend Balanced ESG portfolios as available investment management portfolios.

• In Item 8, the brochure reflects that ClearBridge Equity Income portfolios are managed as ClearBridge Private Client Management accounts.

• In Item 12, the brochure has been updated to reflect the fact that in selecting broker-dealers to execute securities transactions on behalf of client accounts, neither LMPPG nor Western Asset considers any tradeaway, stepout, prime brokerage, clearing, settlement or similar processing charges and fees charged by a Sponsor Firm or a Designated Broker on trades executed away from the Sponsor Firm or Designated Broker.

• In Item 12, the brochure has been updated to reflect the fact that LMPPG reserves the ability, in cases where a Sub-Adviser’s investment strategy is included in a single LMPPG-Implemented Program, to execute model change equity trades for client accounts with the Sponsor Firm or Designated Broker if LMPPG determines that doing so would be consistent with best execution.

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Item 3

TABLE OF CONTENTS

Item 1 – COVER PAGE .............................................................................................................................................................. 1 Item 2 – MATERIAL CHANGES .............................................................................................................................................. 2 Item 3 – TABLE OF CONTENTS ............................................................................................................................................. 3 Item 4 – ADVISORY BUSINESS ............................................................................................................................................... 5

A. LMPPG ........................................................................................................................................................................ 5 B. ClearBridge ................................................................................................................................................................. 5 C. Western Asset .............................................................................................................................................................. 6 D. Other Subadvisers ....................................................................................................................................................... 8 E. Wrap Fee Programs .................................................................................................................................................... 8 F. Individual Client Needs .............................................................................................................................................. 9

Item 5 – FEES AND COMPENSATION ................................................................................................................................... 11

A. Compensation of LMPPG and the Subadvisers ........................................................................................................ 11 B. Other Fees and Expenses ........................................................................................................................................... 14

Item 6 – PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT ........................................................... 15

A. Performance-Based Fees and Side-by-Side Management ......................................................................................... 15 B. Additional Side-by-Side Management Information ................................................................................................... 16

Item 7 – TYPES OF CLIENTS................................................................................................................................................... 17

A. Clients .......................................................................................................................................................................... 17 B. Investment Minimums ................................................................................................................................................ 17

Item 8 – METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS ........................................... 20

A. Investment Management Portfolios: Descriptions and Main Risks .......................................................................... 21 B. Custom Asset Management ........................................................................................................................................ 44 C. Certain Additional Information .................................................................................................................................. 46

Item 9 – DISCIPLINARY INFORMATION ............................................................................................................................. 48 Item 10 – OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS ........................................................... 49

A. Certain Arrangements and Relationships with Affiliates .......................................................................................... 49 B. LMPPG and the Subadvisers: Commodity Law-Related Status ................................................................................ 50 C. Other Subadvisers ....................................................................................................................................................... 50

Item 11 – CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING .................................................................................................................................................................................. 51

A. LMPPG ........................................................................................................................................................................ 51 B. ClearBridge ................................................................................................................................................................. 51 C. Western Asset .............................................................................................................................................................. 52 D. Discussion of Potential Conflicts of Interest Associated with Employee Personal Trading .................................... 52 E. Discussion of Potential Conflicts of Interest Associated with Proprietary Accounts ............................................... 53 F. Other Potential Conflicts of Interest .......................................................................................................................... 53 G. Other Subadvisers ....................................................................................................................................................... 53

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Item 12 – BROKERAGE PRACTICES .................................................................................................................................... 54

A. LMPPG ........................................................................................................................................................................ 54 B. ClearBridge’s Communication of Investment Instructions to LMPPG .................................................................... 58 C. Western Asset .............................................................................................................................................................. 58 D. Other Subadvisers ....................................................................................................................................................... 60 E. Error Policies .............................................................................................................................................................. 60

Item 13 – REVIEW OF ACCOUNTS ........................................................................................................................................ 61

A. LMPPG ........................................................................................................................................................................ 61 B. ClearBridge ................................................................................................................................................................. 61 C. Western Asset .............................................................................................................................................................. 61

Item 14 – CLIENT REFERRALS AND OTHER COMPENSATION ................................................................................... 63 Item 15 – CUSTODY ................................................................................................................................................................... 64 Item 16 – INVESTMENT DISCRETION ................................................................................................................................. 65 Item 17 – VOTING CLIENT SECURITIES ............................................................................................................................ 66

A. LMPPG........................................................................................................................................................................ 66 B. ClearBridge ................................................................................................................................................................. 66 C. Western Asset .............................................................................................................................................................. 67 D. Other Subadvisers ....................................................................................................................................................... 68

Item 18 – FINANCIAL INFORMATION ................................................................................................................................ 69

Appendix A – PRIVACY NOTICES Appendix B – EXPLANATIONS OF CERTAIN INVESTMENT RISKS

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Item 4 ADVISORY BUSINESS A. LMPPG Firm Description. LMPPG is a wholly-owned subsidiary of Legg Mason, Inc., a publicly traded company, and has provided separate account investment advisory services since April 2007. Before April 2007, the business now conducted by LMPPG was conducted by certain other Legg Mason, Inc. subsidiaries and, prior to December 2005, by certain Citigroup Inc. affiliates. LMPPG and Legg Mason, Inc. are not affiliated with Citigroup Inc. Types of Advisory Services. LMPPG, together with the Subadvisers, provides investment advisory services primarily in investment programs sponsored by Sponsor Firms. The investment advisory services LMPPG and the Subadvisers provide differ depending on the type of Sponsor Firm investment program in which a client participates.

• LMPPG-Implemented Programs. In these programs, LMPPG has investment discretion and responsibility for applying Subadviser investment advice to client accounts. LMPPG delegates its investment discretion to the Subadviser(s) for the investment management portfolio selected for the client’s account. LMPPG may also delegate its responsibility to apply investment advice to such Subadviser(s).

• Discretionary Model Programs. In these programs, LMPPG has investment discretion, which it delegates

to the applicable Subadviser(s), but not responsibility for applying investment advice to client accounts. LMPPG forwards Subadviser investment advice to the Sponsor Firm, which agrees to apply the advice to client accounts.

• Non-Discretionary Model Programs. In these programs, LMPPG forwards Subadviser investment advice

to the Sponsor Firm, which exercises discretion over client accounts and decides whether to apply this investment advice to client accounts. LMPPG does not have investment discretion or responsibility for applying investment advice to client accounts, and does not have an investment advisory relationship with clients in these programs.

Subadvisers other than ClearBridge and Western Asset provide, in conjunction with LMPPG, investment advisory services primarily under Discretionary Model Programs and Non-Discretionary Model Programs, but may also provide such services under LMPPG-Implemented Programs. In all types of programs, Subadviser investment advice is consistent with the selected investment management portfolio. LMPPG Assets Under Management. As of March 31, 2018, LMPPG managed:

• approximately $52,613,567,332* in assets on a discretionary basis, and • approximately $23,390,670,125* in assets on a non-discretionary basis.

Assets managed on a discretionary basis are client assets for which LMPPG provides investment advisory services in LMPPG-Implemented Programs and Discretionary Model Programs. Assets managed on a non-discretionary basis are client assets for which LMPPG provides investment advisory services in Non-Discretionary Model Programs. B. ClearBridge Firm Description. ClearBridge is a leading global equity manager committed to delivering long-term results through authentic active management, as it has for more than 50 years, by offering investment solutions that emphasize differentiated, bottom-up stock selection. Owned by Legg Mason, ClearBridge operates with investment independence from headquarters in New York and offices in Baltimore, London, San Francisco and Wilmington. ClearBridge’s active approach combines the market knowledge of long tenured portfolio managers with the original research of a specialized group of sector and portfolio analysts and the deep diligence of a dedicated risk management team. The firm offers strategies focused on three primary client objectives in its areas of proven expertise: high active share, income solutions and low volatility. ClearBridge

* These numbers are rounded to the nearest 100,000.

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integrates Environmental, Social and Governance (“ESG”) considerations into its fundamental research process across all strategies. Types of Advisory Services. ClearBridge provides investment advisory services in multiple formats, including institutional and retail separate accounts and mutual funds and other commingled investment vehicles. This brochure is the applicable ClearBridge Form ADV disclosure document only for the separate account investment advisory services ClearBridge provides as a Subadviser to LMPPG. ClearBridge Assets Under Management. As of March 31, 2018, ClearBridge managed:


Assets managed on a discretionary basis include client assets for which ClearBridge, as Subadviser to LMPPG, provides investment advisory services in LMPPG-Implemented Programs and Discretionary Model Programs. Assets managed on a non-discretionary basis include client assets for which ClearBridge, as Subadviser to LMPPG, provides investment advisory services in Non-Discretionary Model Programs. In addition, both categories of managed assets include client assets for which ClearBridge provides investment advisory services other than as a Subadviser to LMPPG. C. Western Asset Firm Description. Western Asset is one of the world’s leading investment management firms. Its sole business is managing fixed income portfolios, an activity it has pursued for over 40 years. Western Asset was founded in October 1971 by United California Bank (which later became First Interstate) before relocating to Pasadena, California, where it is currently headquartered. In December 1986, Western Asset was acquired by Legg Mason, an NYSE-listed, independent asset management firm based in Baltimore, Maryland. Western Asset operates as an autonomous investment management company. Western Asset has entered into a revenue-sharing agreement with Legg Mason, Inc. that allows Western Asset to retain control over a substantial percentage of its revenues. Western Asset seeks to provide clients with diversified, tightly controlled, value-oriented portfolios. Western Asset’s overall investment approach emphasizes the use of multiple strategies and active sector rotation and issue selection, while constraining overall interest rate risk relative to the benchmark. Western Asset typically implements this philosophy by applying the following approaches: • Long-term fundamental value. Long-term value investing is Western Asset’s fundamental approach. Western Asset

seeks out the greatest long-term value by analyzing eligible fixed income market sectors and rotating to those sectors it considers most attractive.

• Multiple diversified strategies. Western Asset employs multiple diversified strategies, proportioned so that one or two investments or a single adverse market event should not have an overwhelming effect. Western Asset believes this approach can add incremental value over time and can help to reduce volatility.

Western Asset’s fixed income investment discipline emphasizes a cohesive team approach in which groups of specialists dedicated to different market sectors constantly interact. The sector teams are comprised of Western Asset’s senior portfolio managers and research analysts and an in-house economist. These individuals are highly skilled and experienced in all major areas of the fixed income securities market. They exchange views on a daily basis and meet more formally twice each month to review Western Asset’s economic outlook and overall investment strategy. This structure seeks to ensure that client portfolios benefit from a consensus that draws on the expertise of all team members. The strategic goal at Western Asset is to add value to client portfolios while adhering to a disciplined risk control process. With this process the management team seeks to exceed benchmark returns while approximating benchmark risk. Western Asset’s investment philosophy combines traditional analysis with innovative technology applied to all sectors of the market.


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Western Asset believes inefficiencies exist in the fixed-income markets and attempts to add incremental value by exploiting these inefficiencies across all eligible market sectors. The key areas of focus are:

• Sector & Sub-Sector Allocation • Issue Selection • Duration • Term Structure

These areas represent the primary sources of value added in active fixed-income management. Different investment approaches result from the relative weight attributed to each factor. Historical analyses of performance attribution indicate that Sector Allocation and Issue Selection contribute the majority of value added by Western Asset, while Duration and Term Structure decisions account for the remainder. Sector & Sub-Sector Allocation – Western Asset rotates among and within sectors of the bond market, preferring non-government sectors because they typically offer higher relative yields and have tended to outperform the broad markets over long market cycles. The investment team analyzes the global economic environment to determine the potential impact on sector performance. They study historical yield spreads, identify the fundamental factors that influence yield spread relationships, and relate these findings to Western Asset’s projections to determine attractive alternatives. Western Asset’s analysts continually augment this process by providing detailed analyses of specific sectors. Corporate analysis includes assiduous credit quality studies and historical yield spread analysis. Mortgage analysis includes the use of external research which integrates the components of prepayment, housing turnover, default, and refinancing. In addition, non-US investment-grade sovereigns, high yield, and/or emerging markets are used opportunistically as additional sectors within the US mandate. Any foreign investments may be held on a hedged or unhedged basis, according to client guidelines and current Western Asset strategy. From a global perspective, Western Asset analyzes the projected economic environment in a wide range of countries to determine how this will affect the market behavior of the various sectors worldwide. Issue Selection – Issue selection is a bottom-up process to determine mispriced or undervalued securities. The sector teams provide an ongoing assessment of changing credit characteristics and of securities with characteristics such as floating interest rates, hidden underlying assets or credit backing and securities issued in mergers. Also assessed are newly issued securities. Armed with these sector and issue analyses, the sector teams and portfolio manager select issues opportunistically. Corporate bonds have long been an area of significant added value for Western Asset. While Western Asset concentrates on investment-grade securities, its analysts have proven very successful in analyzing lower grade credits. Securities rated at the lower end (BBB) of the investment grade scale, and, where allowed, those at the higher ranges below that (BB), have proven particularly attractive. It is anticipated that these securities will continue to offer exceptional risk-adjusted opportunities. Western Asset believes that authority to use at least the full range of investment grade credit, when combined with proper risk control guidelines, is a prudent exercise of fiduciary responsibility. Duration –The investment team decides on a duration target based on a comprehensive analysis of macroeconomic factors as well as the general political environment. The underlying belief is that interest rates are primarily determined by the level and direction of inflation, and that inflation is primarily a monetary phenomenon. The investment team weighs its views against market expectations, taking on more risk as its views diverge from the market and less risk as they converge. The consensus is not to attempt to time the market, but rather to identify and stay with long-term trends. Term Structure – Western Asset closely monitors shifts in yield curves, for the relationship between short, intermediate and long maturity securities is essential to constructing a long-term investment horizon. The investment team determines the implications of yield curve shape, along with projections of central bank policy and market expectations, and formulates a yield curve strategy to be implemented by the portfolio managers. Given the excessive market volatility over the last several years, Western Asset’s yield curve strategies have proven to be an important source of value added. Risk is managed by controlling term structure relative to a target portfolio and by assessing the convexity of Western Asset’s holdings.

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Environmental, Social and Governance (“ESG”) and Principles for Responsible Investing (“PRI”) – ESG factors can affect the creditworthiness of fixed-income issuers’ securities and therefore impact the performance of fixed-income investment portfolios. Accordingly, Western Asset’s portfolio managers incorporate ESG considerations in their investment analysis and decision-making as a matter of good investment principle. Western Asset has adopted an ESG investment policy that seeks to reflect the changing environment in which Western Asset and its clients operate, and incorporates ESG considerations into its credit analysis of corporate bond and other debt issuers. Western Asset is also a signatory to the United Nations–supported PRI initiative—an international network of investors collaborating to put the six Principles for Responsible investing into practice. For investors acting in a fiduciary role, the Principles demonstrate the belief that ESG issues can affect the performance of investment portfolios. In implementing these Principles, signatories contribute to the development of a more sustainable global financial system. Western Asset, as a fixed-income manager, is not an asset-owner but as a PRI signatory, commits to the Principles where consistent with its fiduciary responsibility. Types of Advisory Services. Western Asset provides investment advisory services in multiple formats, including separate accounts and mutual funds and other commingled investment vehicles. This brochure is the applicable Western Asset Form ADV disclosure document for the separate account investment advisory services Western Asset provides as a Subadviser to LMPPG. Western Asset Assets Under Management. As of March 31, 2018, Western Asset managed:


Assets managed on a discretionary basis include client assets for which Western Asset, as Subadviser to LMPPG, provides investment advisory services in LMPPG-Implemented Programs and Discretionary Model Programs. This category of managed assets also includes client assets for which Western Asset provides discretionary investment advisory services other than as a Subadviser to LMPPG. Assets managed on a non-discretionary basis include client assets for which Western Asset, as Subadviser to LMPPG, provides investment advisory services in Non-Discretionary Model Programs. D. Other Subadvisers In the case of a Sub-Adviser other than ClearBridge or Western Asset, please refer to such Subadviser’s Form ADV disclosure document for a description of such Subadviser’s advisory business. E. Wrap Fee Programs Certain Sponsor Firm investment programs for which LMPPG and the Subadvisers provide investment advisory services are wrap fee programs in which LMPPG receives (from the Sponsor Firm) a portion of the wrap fees clients pay to the Sponsor Firm. LMPPG typically pays all or part of the compensation it receives to the Subadvisers as compensation for the investment advisory services they provide for the program. For additional information on LMPPG and Subadviser compensation, see Item 5 in this brochure. The investment advisory services the Subadvisers provide in Sponsor Firm investment programs, including wrap fee and non-wrap fee programs, generally differ from the investment advisory services the Subadvisers provide to clients outside such programs in one or more of the following ways:

1. The Subadvisers’ investment advisory services for clients in Sponsor Firm investment programs generally involve investments only in publicly-traded equity securities, fixed income securities, and/or cash equivalents, while their investment advisory services for other clients may involve additional strategies and investments, such as short selling, privately-offered securities and derivatives (e.g., options, futures, currency forward contracts and swaps).


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2. ClearBridge’s investment advisory service for clients in Sponsor Firm investment programs generally do not involve investments in initial or secondary offerings of equity securities because, as a practical matter, it is unlikely LMPPG would be able to obtain allocations in such offerings for LMPPG-Implemented Program clients (ClearBridge may invest assets of its non-LMPPG clients in such offerings);

3. The Subadvisers’ investment advisory services for clients outside of Sponsor Firm investment programs may

involve different investment strategies or investments in a larger or smaller number of securities than the Subadvisers include in the investment management portfolios they provide to clients in Sponsor Firm investment programs.

4. For separately managed accounts outside of Sponsor Firm investment programs, the Subadvisers may be able

to tailor the investment advisory services they provide more closely to client needs and preferences, as reflected in client investment guidelines and client restrictions.

5. A Subadviser may provide regular reports to clients outside of Sponsor Firm investment programs. As

described in Item 13 below, LMPPG and the Subadvisers typically do not provide such reports to clients in Sponsor Firm investment programs.

A Subadviser may make available certain of its investment strategies and investment advisory services only (i) in a closed or open end fund or other commingled investment vehicle, and/or (ii) to clients that meet the Subadviser’s requirements for entering into an investment advisory agreement directly with the Subadviser (including, potentially, minimum investment and client qualification requirements). F. Individual Client Needs In addition to providing investment management portfolios that reflect a wide range of investment strategies, LMPPG and the Subadvisers may tailor the investment services they provide more closely to the individual needs of clients as described below. Client Restrictions. For client accounts in LMPPG-Implemented Programs, LMPPG accepts client-imposed restrictions on management if LMPPG and the applicable Subadviser, in their discretion, determine that the proposed restriction is reasonably practical as an investment and operational matter. Subject to this standard, clients in LMPPG-Implemented Programs may impose restrictions on investments in specific securities (e.g., stock of Company ABC) or on investments in certain categories of securities (e.g., tobacco company stocks). Where a client restricts investment in a category of securities, LMPPG and the applicable Subadviser determine in their discretion the specific securities in the restricted category. LMPPG relies on the client’s Sponsor Firm to notify LMPPG of any restrictions desired by clients. In LMPPG-Implemented Programs, LMPPG applies client account restrictions it accepts (other than for accounts that select ESG investment management portfolios – see Item 8 below) only at the time of purchase, and does not apply these restrictions to securities transferred into the account, securities already held in the account at the time the restriction is imposed, securities that first come within a restriction following purchase of such securities, and securities acquired as a result of corporate actions (e.g., stock splits, stock dividends). Directed Sales and Temporary ETF Investments. A client in a LMPPG-Implemented Program may direct LMPPG to sell particular securities or types of securities held in the client’s account by contacting his or her Sponsor Firm. LMPPG seeks to begin implementing sell directions no later than the close of business on the business day after LMPPG receives the direction in proper form from the client’s Sponsor Firm (LMPPG determines what constitutes proper form). LMPPG generally does not implement sell directions immediately upon receipt. As a result, the proceeds from a directed sale may be more or less than the client would have received had LMPPG implemented the sell direction immediately. In connection with a client-directed sale of securities, LMPPG in its sole discretion may accept and implement a client direction to temporarily invest the sale proceeds in an exchange-traded fund (“ETF”). Such directions involve an increased risk of loss (or missed gains) to the client relative to client accounts for which such directions are not given. Neither LMPPG nor any of its affiliates, including the Subadvisers, will have any responsibility for the suitability or performance of any client-directed ETF investments. LMPPG will be responsible only for implementing any directions it accepts to make such

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investments, subject to any account-, security- or tax lot-level realized loss or gain minimums LMPPG establishes from time to time. ETFs are unmanaged funds that typically represent U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. securities markets and market sectors (e.g., emerging markets). ETFs generally are subject to the same investments risks associated with the underlying securities they represent. Refer to Appendix B to this brochure for explanations of certain types of investment risks. Also, in addition to fees charged at the account level, a client will bear a proportionate share of the separate fees and expenses incurred by any ETF held in the client’s account. Custom Services. LMPPG and a Subadviser may agree to further tailor to client needs the investment advisory services they provide, including as part of the Custom Asset Management services described in Item 8 of this brochure.

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Item 5 FEES AND COMPENSATION A. Compensation of Legg Mason Private Portfolio Group, LLC and the Subadvisers

How LMPPG is compensated for the services LMPPG and the Subadvisers provide in an investment program depends on whether the program is a Single-Contract Program or a Dual-Contract Program. In Single-Contract Programs and Dual-Contract Programs, LMPPG pays the Subadvisers all or a portion of the fees LMPPG receives as compensation for the Subadvisers’ services. LMPPG Compensation in Single-Contract Programs. In a Single-Contract Program, the client does not enter into an agreement directly with LMPPG. Instead, the client enters into an agreement with the client’s Sponsor Firm that covers investment advisory services LMPPG and one or more Subadvisers provide and also certain investment services the Sponsor Firm provides. The client pays the Sponsor Firm fees for all the services under such agreement. The Sponsor Firm, in turn, compensates LMPPG for the investment advisory services LMPPG and the applicable Subadviser(s) provide. The fees paid to LMPPG by a Sponsor Firm under a program are dependent upon a variety of factors, including without limitation the size of the program, the portfolio selected by the client, Sponsor Firm administrative requirements, Sponsor Firm parameters for compensation of participating managers or advisers, and the nature and extent of the responsibilities of and services provided by each of the Sponsor Firm and LMPPG and its Subadvisers under the program. A Sponsor Firm and LMPPG may agree to a fee rate with respect to a particular account under a Single-Contract Program that is lower than the standard fee rate at which LMPPG is compensated by the Sponsor Firm under such Single-Contract Program. Such fee concessions are very unusual and agreed to by LMPPG only in special circumstances, e.g. in the case of accounts with unusually large asset levels. In addition, a Sponsor Firm and LMPPG may agree to a fee rate with respect to a particular account under a Single-Contract Program that is higher than the fee rate at which LMPPG is compensated under such Single-Contract Program based on such account’s unique servicing needs and compliance requirements. The fees paid to LMPPG in LMPPG-Implemented Programs, where LMPPG is responsible for providing full discretionary portfolio management, implementation and trade placement services with respect to client accounts, generally are higher than the fees paid to LMPPG in Discretionary Model Programs, where LMPPG and its Subadvisers have investment discretion but the Sponsor Firm is responsible for applying Subadviser investment advice forwarded to it by LMPPG to client accounts, and Non-Discretionary Model Programs, where the Sponsor Firm has investment discretion and decides whether to apply Subadviser investment advice, in whole or in part, forwarded to it by LMPPG to client accounts.

• In the case of LMPPG-Implemented Programs, LMPPG generally receives, or anticipates receiving, fees from the

Program Sponsor within the following ranges depending upon the portfolio selected by the client:

Portfolio Category Fee Rate Ranges Equity .32% - .50% Fixed Income .15% - .35% Balanced .34% - .50% Multiple Discipline

• Legg Mason MDA Equity • Legg Mason MDA Balanced • Legg Mason Custom MDA • ClearBridge Dynamic MDA

.30% - .50%

The fees LMPPG receives for managing certain custom accounts may fall outside of the above ranges.

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• In the case of Discretionary Model Programs, LMPPG generally receives, or anticipates receiving, fees from the Program Sponsor within the following range depending upon the portfolio selected by the client:

Portfolio Category Fee Rate Range Equity .28% - .35%

• In the case of Non-Discretionary Model Programs, LMPPG generally receives, or anticipates receiving, fees from

the Program Sponsor within the following ranges or at the following rates depending upon the portfolio selected by the client:

Portfolio Category Fee Rates/Fee Rate Ranges Equity .28% - .43% Fixed Income .14% - .32% Balanced .30% Legg Mason MDA and ClearBridge Dynamic MDA

.30% - .32%

For Single-Contract Program client fee information, clients should refer to their Sponsor Firm’s Form ADV disclosure document or contact their Sponsor Firm representative. LMPPG Compensation in Dual-Contract Programs. In a Dual-Contract Program, the client enters into an investment management agreement directly with LMPPG and a separate agreement with the client’s Sponsor Firm. The client pays an investment management fee directly to LMPPG as compensation for the investment advisory services LMPPG and the applicable Subadviser(s) provide. LMPPG’s standard fee schedules for Dual-Contract Programs are set forth below in this Item 5. The client typically pays a separate fee to the Sponsor Firm for services the Sponsor Firm provides pursuant to its separate agreement with the client. LMPPG may receive higher compensation in Dual-Contract Programs than in Single-Contract Programs.

LMPPG Standard Fee Rates for Dual-Contract Programs. For Dual-Contract Programs, LMPPG’s standard fee rates for the investment management portfolios described in Item 8 of this brochure are set forth below.

Investment Management Portfolio Account Assets Annual Fees Western Asset Active Bond Western Asset Gov/Corp* Western Asset GSM 3-Year, 5-Year and 7-Year Western Asset Intermediate Corporate Bond

First $25,000,000 Over $25,000,000

0.30% 0.25%

Western Asset Current Market Muni Western Asset Municipal Opportunities Western Asset Short-Term Muni Western Asset Tax-Efficient Bond

First $1,000,000 Next $4,000,000 Over $5,000,000

0.35% 0.30% 0.25%

Western Asset Core Western Asset Core Plus

All Assets 0.32%

Western Asset Managed Municipals All Assets 0.30%

Western Asset Enhanced Cash Constrained SMA Western Asset Enhanced Cash SMA Western Asset Tax-Efficient Enhanced Cash SMA

All Assets 0.20%

Western Asset Corporate Bond Ladders Western Asset Municipal Bond Ladders

All Assets 0.16%

* These portfolios are referred to as “Taxable Fixed Income” for Raymond James clients.

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Investment Management Portfolio Account Assets Annual Fees ClearBridge Dynamic MDAs ClearBridge Equity Legg Mason Multiple Discipline Accounts (MDAs) Balanced Accounts

All Assets 0.50%

ClearBridge Non-Taxable Fixed Income Management ClearBridge Taxable Fixed Income Management

All Assets 0.35%

ClearBridge Fixed Income ETF Models All Assets 0.30% LMPPG generally considers client requests to negotiate investment management fee rates lower than the above fee rates. However, LMPPG in its sole discretion may refuse to agree to lower fee rates for any one or more clients. In addition, LMPPG may establish fee rates that are lower than the above fee rates for certain accounts in a particular Dual-Contract Program, based on expectations as to future aggregate asset levels from clients of one or more particular Sponsor Firm representatives. LMPPG may establish fee rates that are higher than the above fee rates for accounts that have unique servicing needs or compliance requirements. In addition, LMPPG may establish fee rates that are different from the above fee rates for accounts in a particular Dual-Contract Program due to Sponsor Firm operational constraints, such as an inability to calculate and process fees under a tiered fee schedule. For client accounts in Dual-Contract Programs, LMPPG typically charges its investment management fee quarterly in advance. Following one of the approaches set forth below, the client’s Sponsor Firm typically deducts LMPPG’s fee from the client’s account and forwards the fee to LMPPG:

1. The Sponsor Firm calculates LMPPG’s fee based on the client’s agreed LMPPG fee rate and the value of the client account assets; or

2. The Sponsor Firm relies on LMPPG’s calculation of LMPPG’s fee based on the client’s agreed LMPPG fee rate

and the value of the client account assets, as set forth in fee invoices LMPPG sends to the Sponsor Firm. Under both approaches, LMPPG’s fees typically are calculated in accordance with procedures, including those applicable to account additions and withdrawals, established by the client’s Sponsor Firm so that LMPPG’s fee is calculated following a methodology that is similar to that used in calculating the Sponsor Firm’s fee. For any one or more client accounts in a Dual-Contract Program, LMPPG may in its sole discretion agree to bill the client directly for its investment management fee instead of having the client’s Sponsor Firm follow one of the above fee-deduction approaches. In addition, LMPPG may in its sole discretion agree to charge its fee in arrears (instead of in advance) or more or less frequently than quarterly. LMPPG Fee Refunds in Dual-Contract Programs. If LMPPG’s management of a client’s Dual-Contract Program account is terminated during a period for which the client pre-paid LMPPG’s investment management fee, LMPPG will calculate the appropriate refund amount and send this amount to the client’s Sponsor Firm for forwarding to the client or deposit into an account the client maintains at the Sponsor Firm. LMPPG calculates refunds in these circumstances by:

1. dividing the number of days left (after termination) in the period for which the client paid the fee by the total number of days in the period; and

2. multiplying the result by the dollar amount of the pre-paid fee.

LMPPG sends termination-related fee refunds to Sponsor Firms on a quarterly basis. Accordingly, there may be a delay of up to approximately ninety days between the time LMPPG’s management of a Dual-Contract Program account is terminated and the time LMPPG sends the related fee refund to the client’s Sponsor Firm. For single-contract program fee refund information, clients should refer to their Sponsor Firm’s Form ADV disclosure document or contact their Sponsor Firm representative.

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B. Other Fees and Expenses

In addition to the investment management fees LMPPG receives for the investment advisory services LMPPG and the Subadvisers provide, a client generally will incur brokerage and trade execution costs for securities transactions LMPPG and the Subadvisers recommend or effect for the client’s account. These costs generally are imposed by the broker-dealer firms used to execute such transactions. For securities transactions executed by the client’s Sponsor Firm or by a broker-dealer the Sponsor Firm designates, these costs often are included in the fee the client pays to the client’s Sponsor Firm (in both Single-Contract Programs and Dual-Contract Programs). For securities transactions executed by another broker-dealer firm, these costs are in addition to fees the client pays to the client’s Sponsor Firm. For more information on brokerage and transaction costs in investment programs for which LMPPG or a Subadviser selects broker-dealers to execute securities transactions for client accounts, clients should refer to Item 12 of this brochure. A client may also incur any one or more of the costs listed below. The costs described in items 1, 2 and 3 below, as well as the costs of trade execution by a client’s Sponsor Firm or designated broker-dealer (see above), typically are covered by the fees clients pay to their Sponsor Firms.

1. Fees for account custody services and related services such as security transfers and wire transfers. 2. Fees for investment advisory services a Sponsor Firm or other person or firm (other than LMPPG or a

Subadviser) provides to the client. These may include services such as evaluation, recommendation and monitoring of investment managers, financial planning services and asset allocation advice.

3. Fees for account reporting by the client’s Sponsor Firm – for example, preparation of periodic account

statements.

4. Any SEC fees, transfer taxes or other governmental charges based on securities transactions.

5. Conversion and foreign exchange fees and charges associated with purchases and sales of American Depositary Receipts (“ADRs”) in non-U.S. markets for ordinary shares underlying the ADRs. See Item 12 of this brochure for more information.

6. Ongoing custody or service fees charged by ADR depository banks for inventorying the underlying non-U.S.

shares and performing related administrative services.

7. Internal fees and expenses of any mutual fund or ETF purchased or held for the client’s account, as part of the investment management portfolio the client selects or at the client’s direction. Mutual fund and ETF prospectuses, which should be available from Sponsor Firms, include descriptions of these fees and expenses.

Clients should contact their Sponsor Firms and any other service providers for information on the costs associated with the services these firms provide, including the potential costs noted in items 1 – 4 above. The compensation LMPPG and the Subadvisers receive does not cover any of the potential costs noted in items 1 –7 above.

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Item 6 PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT A. Performance-Based Fees and Side-by-Side Management Performance-based fees are investment advisory fees that are based on a share of capital gains on, or capital appreciation of, client assets. Performance-based fees do not include fees that are based merely on a percentage of client account assets managed or advised. LMPPG does not charge performance-based fees, but instead charges fees based on the amount of client account assets for which LMPPG, together with one or more of the Subadvisers, provides investment advisory services. ClearBridge and Western Asset also do not charge performance-based fees for LMPPG client accounts. See Item 5 of this brochure for LMPPG/Subadviser fee information applicable to LMPPG client accounts. Each of ClearBridge and Western Asset charges performance-based fees for certain client accounts that do not access its investment advisory services through LMPPG – i.e., non-LMPPG client accounts. These performance-based fees typically are based on account performance relative to a benchmark index agreed on by the Subadviser and the client. Each of ClearBridge and Western Asset, including any of its portfolio management teams, may simultaneously manage or otherwise provide investment advice for non-LMPPG client accounts that are subject to performance-based fees and LMPPG client accounts that are not subject to performance-based fees. As noted in Section B below, management of non-LMPPG client accounts, including those subject to performance-based fees, may differ from the management of LMPPG client accounts based on the particular needs and circumstances of client accounts. Side-by-side management involves a potential conflict of interest to the extent that ClearBridge or Western Asset determines to purchase or sell the same securities for both non-LMPPG client accounts and LMPPG client accounts. It may give ClearBridge or Western Asset and the applicable portfolio management team an incentive to maximize the Subadviser’s fee compensation by favoring the non-LMPPG client accounts subject to performance-based fees in order to maximize its fee revenues. ClearBridge addresses this potential conflict of interest by generally communicating investment decisions and recommendations that apply to LMPPG client accounts and non-LMPPG client accounts, including performance-based fee accounts, at the same time, as described in Item 12 of this brochure. Western Asset addresses this potential conflict of interest by:

1. maintaining policies and procedures that are designed to ensure that investment opportunities are allocated fairly and equitably to client accounts, including LMPPG client accounts and non-LMPPG client accounts;

2. generally communicating investment decisions and recommendations that apply to LMPPG client accounts and non-LMPPG client accounts, including performance-based fee accounts, at the same time, as described in Item 12 of this brochure;

3. regularly reviewing the performance of LMPPG client accounts and the performance of non-LMPPG client accounts

that Western Asset manages according to the same or similar investment strategies; and

4. maintaining trade allocation policies and procedures designed to ensure that no client participating in an aggregated trade order is favored over another participating client account when Western Asset aggregates trades for LMPPG client accounts and non-LMPPG client performance-based fee accounts that it manages.

In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 6 of such Subadviser’s Form ADV disclosure document for information concerning whether such Subadviser charges performance-based fees for non-LMPPG accounts and how such Subadviser addresses the potential conflict of interest associated with side-by-side management.

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B. Additional Side-by-Side Management Information Portfolio managers of each of ClearBridge and Western Asset may determine, in light of a client account’s available cash, investment objectives, restrictions, permitted investment techniques and other relevant considerations, that an investment opportunity is appropriate for only some of the client accounts under their management or that they should take differing positions with respect to a particular security on behalf of certain client accounts.

Each of ClearBridge and Western Asset may give advice and take action in the performance of its duties to clients which differs from advice given, and/or the timing and nature of action taken, with respect to other clients’ accounts. The timing and nature of action taken for one or more client accounts may positively or negatively impact one or more other client accounts. For example, the value of a security held in client accounts may be positively affected by purchases, and negatively affected by sales, of the same security for other client accounts.

In the case of Western Asset, it may have conflicts of interest relating to its management of accounts, including commingled investment vehicles, in which Western Asset, its affiliate and/or its employees have a significant proprietary interest. The interest of Western Asset, its affiliate and/or its employees in an account may provide an incentive for Western Asset to favor such account over other client accounts. As noted above, Western Asset has adopted policies and procedures that are designed to ensure that investment opportunities are allocated fairly and equitably to client accounts. In addition, Western Asset monitors the trading activity in, and the performance of, accounts in which Western Asset, its affiliate and/or its employees have a significant proprietary interest to ensure that such accounts are not being favored over other client accounts. In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 6 of such Subadviser’s Form ADV disclosure document for additional information concerning side-by-side management.

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Item 7 TYPES OF CLIENTS A. Clients LMPPG, together with the Subadvisers, provides investment advisory services for a wide range of clients in Sponsor Firm investment programs, including individuals, pension and profit sharing plans, endowments, foundations, unions and state and local governmental entities. Sponsor Firms, which include broker-dealer firms, banks and investment advisory firms, are another type of client to which LMPPG and the Subadvisers may provide investment advisory services (for the benefit of underlying clients of those Sponsor Firms). B. Investment Minimums For new client accounts, LMPPG generally imposes the investment minimums listed below. LMPPG, in its sole discretion and in consultation with the applicable Subadvisers, may waive any one or more of these minimums for any one or more client accounts. In addition, for certain investment programs, LMPPG and a Sponsor Firm may establish investment minimums for particular investment management portfolios that are higher or lower than those indicated below.

EQUITY

Equity—$50,000 Equity—$75,000 Equity—$100,000 Equity—$250,000 ClearBridge All Cap Value* ClearBridge Appreciation* ClearBridge Dividend Strategy* ClearBridge Global Value ADR ClearBridge International Growth ADR* ClearBridge International Value ADR* ClearBridge Large Cap Growth* ClearBridge Large Cap Growth II** ClearBridge Large Cap Value* ClearBridge Mid Cap ClearBridge Mid Cap Growth ClearBridge Multi Cap Growth* ClearBridge Small Cap ClearBridge Small Cap Growth ClearBridge Small Cap Value ClearBridge Sustainability Leaders ClearBridge Value Equity

ClearBridge All Cap Growth*

ClearBridge Total Return MLP Portfolios

ClearBridge Equity Income (closed to new

accounts)

* These strategies also may be available as part of ESG portfolios that integrate environmental, social and governance criteria. ** For Ameriprise clients, these portfolios are referred to as “Large Cap Core.”

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FIXED INCOME (Western)

Fixed Income— $100,000



Fixed Income—$500,000

Western Asset Corporate Bond Ladders Western Asset GSM 3-Year Western Asset GSM 5-Year Western Asset GSM 7-Year Western Asset Gov/Corp* Western Asset Intermediate Corporate Bond Western Asset Current Market Muni** Western Asset Short-Term Muni

Western Asset Core Western Asset Core Plus

Western Asset Managed Municipals Western Asset Municipal Bond Ladders (1-15 Year)

Western Asset Municipal Bond Ladders (1-30 Year)

Fixed Income— $1,000,000

Fixed Income—$5,000,000

Fixed Income—

$10,000,000



Western Asset Active Bond Western Asset Custom Western Asset Municipal Opportunities Western Asset Custom Muni

Western Asset Tax- Efficient Bond

Western Asset Enhanced Cash SMA Western Asset Enhanced Cash Constrained SMA

Western Asset Tax-Efficient Enhanced Cash SMA

* These strategies also may be available as part of ESG portfolios that integrate environmental, social and governance criteria. * These portfolios are referred to as “Taxable Fixed Income” for Raymond James clients. ** These portfolios are referred to as “Western Asset U.S. Tax Exempt” for Ameriprise clients.

BALANCED

Balanced—$100,000

Balanced—

$125,000

Balanced—$250,000

Balanced Tax-Favored—

$200,000

Balanced Tax-Favored—

$250,000

Legg Mason All Cap Value* Legg Mason Appreciation* Legg Mason Dividend Strategy* Legg Mason Global Value ADR Legg Mason International Value ADR Legg Mason Large Cap Growth* Legg Mason Large Cap Value* Legg Mason Balanced Income

Legg Mason All Cap Growth*

ClearBridge Large Cap Value with

ClearBridge Taxable Fixed Income

Legg Mason All Cap Growth* Legg Mason All Cap Value Legg Mason Appreciation* Legg Mason Balanced Income with Municipals Legg Mason Dividend Strategy* Legg Mason Global Value ADR Legg Mason International Value ADR Legg Mason Large Cap Growth* Legg Mason Large Cap Value*

ClearBridge Large Cap Value with ClearBridge Non-Taxable Fixed Income

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LEGG MASON MULTIPLE DISCIPLINE ACCOUNT®** Investment Management Portfolio Investment Minimum

Legg Mason MDA1, MDA3 and MDA4 Legg Mason – Multi-Cap Blend I and II

$100,000

Legg Mason – Global Mid-Large Cap Blend $130,000 Legg Mason MDA0, MDA2 and MDA5 $150,000 Legg Mason MDA0 – MDA8 Balanced $200,000 Legg Mason – Balanced Global Mid-Large Cap Blend $230,000 Legg Mason MDA6 – MDA8 $250,000 Legg Mason MDA0 – MDA8 Balanced Tax-Favored $350,000

CLEARBRIDGE DYNAMIC MDAs

Investment Management Portfolio Investment Minimum U.S. Growth Global Growth Global Growth and Value Global Growth and Value ESG U.S. Growth and Income U.S. Dividend Balanced Global Dividend Balanced Income

$300,000

U.S. Dividend Balanced ESG $500,000

CUSTOM ASSET MANAGEMENT

Investment Management Portfolio Investment Minimum Custom MDA $500,000 Custom Portfolios/ClearBridge Private Client Management $1,000,000 ClearBridge Taxable Fixed Income Management $250,000 ClearBridge Non-Taxable Fixed Income Management $250,000 ClearBridge Fixed Income ETF $50,000

** For alternative names of certain Legg Mason Multiple Discipline Account portfolios, see the description of such portfolios contained in Item 8 of this

brochure. Multiple Discipline Account® is a trademark of Morgan Stanley Smith Barney LLC (doing business as “Morgan Stanley Wealth Management”). LMPPG, which is not affiliated with Morgan Stanley Smith Barney, LLC, uses this trademark under license.

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Item 8 METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS LMPPG and the Subadvisers make available a broad range of investment strategies, which are referred to in this brochure as “investment management portfolios” or “portfolios” and are listed below in Section A of this Item 8. Portfolios for which ClearBridge and/or Western Asset provide investment subadvisory services to LMPPG are described below in Section A. Such descriptions include descriptions of how the Subadvisers formulate the investment advice reflected in the portfolios, including the Subadvisers’ methods of investment analysis. In the case of an investment management portfolio for which a Subadviser other than ClearBridge or Western Asset provides investment subadvisory services to LMPPG, please refer to Item 8 of such Subadviser’s Form ADV disclosure document for a description of such portfolio. Each investment management portfolio involves risk of loss, which clients should be prepared to bear. The portfolio descriptions set forth below in Section A of this Item 8 for portfolios for which ClearBridge or Western Asset provides investment subadvisory services to LMPPG identify the main risks for such portfolios. Appendix B to this brochure explains these risks. It is not practical to list all possible risks and one or more risks that this brochure does not identify for a portfolio nevertheless may result in losses for clients. In the case of a portfolio for which a Subadviser other than ClearBridge or Western Asset provides investment subadvisory services to LMPPG, please refer to Item 8 of such Subadviser’s Form ADV disclosure document for a description of the main risks for such portfolios. For all portfolios, there is no assurance or guarantee that client investment objectives will be met. Section B of this Item 8 describes Custom Asset Management services LMPPG, ClearBridge and Western Asset may make available. Section C of this Item 8 sets forth certain additional information relating to the investment management portfolios that LMPPG and the Subadvisers make available.

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A. Investment Management Portfolios: Descriptions and Main Risks The investment management portfolios LMPPG and the Sub-Advisers may make available in Sponsor Firm investment programs include the portfolios listed below. Clients should check with their Sponsor Firm representatives for portfolio availability. Also, as indicated below, certain portfolios may be referred to by different names at particular Sponsor Firms. Portfolios for which ClearBridge or Western Asset provide investment subadvisory services to LMPPG include the following portfolios:

• Style Specific • ClearBridge All Cap Growth* • ClearBridge All Cap Value* • ClearBridge Appreciation* • ClearBridge Dividend Strategy* • ClearBridge Global Value ADR* • ClearBridge International Growth ADR • ClearBridge International Value ADR • ClearBridge Large Cap Growth* • ClearBridge Large Cap Growth II** • ClearBridge Large Cap Value* • ClearBridge Mid Cap • ClearBridge Mid Cap Growth • ClearBridge Multi Cap Growth • ClearBridge Small Cap • ClearBridge Small Cap Growth • ClearBridge Small Cap Value • ClearBridge Value Equity

• Fixed Income—Taxable • Western Asset Active Bond • Western Asset Core • Western Asset Core Plus • Western Asset Corporate Bond Ladders • Western Asset GSM 3-Year • Western Asset GSM 5-Year • Western Asset GSM 7-Year • Western Asset Gov/Corp*** • Western Asset Enhanced Cash SMA • Western Asset Enhanced Cash Constrained SMA • Western Asset Intermediate Corporate Bond • Western Asset Custom

• Fixed Income—Tax Favored • Western Asset Current Market Muni**** • Western Asset Short-Term Muni • Western Asset Managed Municipals • Western Asset Municipal Opportunities • Western Asset Tax-Efficient Enhanced Cash SMA • Western Asset Municipal Bond Ladders • Western Asset Tax-Efficient Bond • Western Asset Custom Muni

• Legg Mason Multiple Discipline Account®* • ClearBridge Dynamic MDAs

• Custom Asset Management

• Custom MDA • Custom Portfolios/ClearBridge Private Client Management • ClearBridge Taxable Fixed Income Management • ClearBridge Non-Taxable Fixed Income Management • ClearBridge Fixed Income ETF Models

• Specialty • Legg Mason Balanced Income • Legg Mason Balanced Income with Municipals • ClearBridge Equity Income • ClearBridge Large Cap Value with ClearBridge Fixed Income • ClearBridge Total Return MLP Portfolios • ClearBridge Sustainability Leaders • ClearBridge All Cap Growth ESG* • ClearBridge All Cap Value ESG* • ClearBridge Appreciation ESG* • ClearBridge Dividend Strategy ESG • ClearBridge International Growth ADR ESG • ClearBridge International Value ADR ESG • ClearBridge Large Cap Growth ESG* • ClearBridge Large Cap Value ESG* • ClearBridge Multi Cap Growth ESG • Legg Mason Multiple Discipline Account®1 ESG*

*May be available in equity and balanced formats. ** For Ameriprise clients, these portfolios are referred to as “Large Cap Core.” *** These portfolios are referred to as “Taxable Fixed Income” for Raymond James clients.

**** These portfolios are referred to as “Western Asset U.S Tax Exempt” for Ameriprise clients.

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One or more of the Subadvisers makes investment decisions or (where another firm has investment discretion) recommendations for each portfolio.

• ClearBridge makes investment decisions and recommendations for portfolios that are branded “ClearBridge”.

• Western Asset makes investment decisions and recommendation for portfolios that are branded “Western Asset”.

• For portfolios that are branded “Legg Mason”, including balanced portfolios and Multiple Discipline Account portfolios, the portfolio description set forth below or separately provided to the client indicates which Subadviser is responsible for each investment style represented in the portfolio.

Working with a Sponsor Firm representative, the client typically determines his or her investment strategy based on personal circumstances and objectives and selects one or more investment management portfolios. Clients are responsible for asset allocation decisions when selecting portfolios. Unless otherwise noted, LMPPG and the Subadvisers do not provide asset allocation advice. LMPPG makes available some of the portfolios in multiple formats, including an equity format, a balanced format, which includes equity and fixed income allocations, and a balanced tax-favored format, where municipal securities represent the fixed income portion of the account.1 The following is a description of the investment management portfolios for which ClearBridge or Western Asset provide investment subadvisory services to LMPPG: Style Specific ClearBridge All Cap Growth The ClearBridge All Cap Growth (“ACG”) portfolios seek long-term capital appreciation by investing in a

diversified portfolio of large, mid and small capitalization stocks the ACG portfolio managers believe have the potential for above-average long term earnings and/or cash flow growth. While most investments are in U.S. companies, the portfolio managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets.

In addition to making ACG portfolios available in an equity format, LMPPG may make these portfolios available in

a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate income. LMPPG refers to balanced portfolios as Legg Mason All Cap Growth balanced portfolios.

Risks. The main risks for ACG portfolios are General Investment Risk, Industry and Issuer Concentration Risk,

Small Cap Risk, Mid Cap Risk, High Volatility Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks.

ClearBridge All Cap Value The ClearBridge All Cap Value (“ACV”) portfolios apply value criteria to attempt to find the most inefficiently

priced stocks in the small, mid and large capitalization sectors. ACV portfolio managers regularly review the investment universe with the goal of finding attractive gaps between a security’s market price and the team’s assessment of the issuer’s underlying business value. ACV portfolio managers continually update their assessment of business value using fundamental analysis, complemented by broad quantitative data on market sectors and individual issues. The goal of this value process is to achieve above-average returns while also seeking to provide downside risk management. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets.

1 LMPPG and the Subadvisers do not provide tax advice. Clients should consult their own tax advisers for tax advice.

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In addition to making ACV portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate income. LMPPG refers to balanced portfolios as Legg Mason All Cap Value balanced portfolios.

Risks. The main risks for ACV portfolios are General Investment Risk, Small Cap Risk, Mid Cap Risk and, for

balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks.

ClearBridge Appreciation The ClearBridge Appreciation portfolios seek long-term capital appreciation by investing primarily in core portfolios of quality large-capitalization companies. The portfolio managers may also invest client portfolios in selected mid and small capitalization companies. The managers seek to create diversified portfolios, believing this approach may help portfolios benefit over time from changes in market and economic cycles and also help reduce overall portfolio volatility. Investments generally include companies the managers believe have superior demonstrated or expected growth characteristics and whose stocks are available at reasonable prices, and/or companies whose assets or earning power the managers believe are either unrecognized or undervalued by the market. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. Also, although the general focus of the ClearBridge Appreciation portfolios is equity investing, the managers may sometimes hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities. In addition to making Appreciation portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate income. LMPPG refers to balanced portfolios as Legg Mason Appreciation balanced portfolios.

Risks. The main risks for ClearBridge Appreciation portfolios are General Investment Risk, Small Cap Risk, Mid Cap Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge Dividend Strategy The ClearBridge Dividend Strategy portfolios seek dividend income, growth of dividend income, and long-term capital appreciation. The portfolio managers invest the portfolios primarily in stocks that either pay an existing dividend or that they expect will pay a dividend in the near future. The managers may also make limited investments in non-dividend-paying stocks that are not expected to pay a dividend in the future. The managers seek to maintain diversified portfolios. In addition, the managers seek to invest at reasonable valuations, and they also seek a target dividend yield for portfolios that exceeds the S&P 500’s dividend yield. The managers seek to keep portfolio turnover low to allow for the positive compounding effect of dividends over time, although market, security and other investment considerations may cause turnover to be higher from time to time. While most investments are in large and mid capitalization U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets, and in small capitalization companies. Also, although the general focus of the ClearBridge Dividend Strategy portfolios is equity investing, the managers may sometimes hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities.

In addition to making Dividend Strategy portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate additional income. LMPPG refers to balanced portfolios as Legg Mason Dividend Strategy balanced portfolios.

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Risks. The main risks for ClearBridge Dividend Strategy portfolios are General Investment Risk, Small Cap Risk, Mid Cap Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge Global Value ADR ClearBridge Global Value ADR portfolios seek to provide a value-based, global equity strategy that will outperform the MSCI World Index over 3-5 years, with risk similar to the Index. The portfolio managers invest in ADRs drawn from the universe of international companies with ADRs listed on the major U.S. exchanges and that have market capitalizations of greater than $100 million. The managers may also make investments in equity securities of U.S. companies. The managers invest the portfolios primarily in ADRs, but may also make limited investments in U.S.-traded stocks of non-U.S. and U.S. companies engaged in significant non-U.S. business. These limited investments may include U.S.-traded stocks that result from the conversion of ADRs, as well as other U.S.-traded stocks. ADRs are U.S.-traded securities that represent shares of a foreign-based corporation held by a custodian. ADRs entitle the shareholder to all dividends, net of any applicable local withholding taxes, and capital gains that would be paid on the company’s ordinary shares. The portfolios’ investments in non-U.S. companies may include companies in emerging markets as well as companies in developed markets. In addition to making Global Value ADR portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate additional income. LMPPG refers to balanced portfolios as Legg Mason Global Value ADR balanced portfolios. Risks. The main risks for ClearBridge Global Value ADR portfolios are General Investment Risk, Non-U.S. Investment Risk, Small Cap Risk and Mid Cap Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge International Growth ADR The ClearBridge International Growth ADR portfolios employ a long-term, bottom-up approach, using proprietary and independent research. The portfolio managers seek long-term growth of capital by investing the portfolios in well-managed businesses whose intrinsic value does not appear to be recognized by the markets. Under normal market conditions, the managers invest at least 80% of a portfolio’s assets in larger companies they believe have strong balance sheets and good management. The managers then complement these core holdings with investments in smaller, less well-known companies that they believe offer unique products or services or have strong niche positions locally or globally. The managers invest the portfolios primarily in ADRs, but may also make limited investments in U.S.-traded stocks of non-U.S. and U.S. companies engaged in significant non-U.S. business. These limited investments may include U.S.-traded stocks that result from the conversion of ADRs, as well as other U.S.-traded stocks. ADRs are U.S.-traded securities that represent shares of a foreign-based corporation held by a custodian. ADRs entitle the shareholder to all dividends, net of any applicable local withholding taxes, and capital gains that would be paid on the company’s ordinary shares. The portfolios’ investments in non-U.S. companies may include companies in emerging markets as well as companies in developed markets.

Risks. The main risks for ClearBridge International Growth ADR portfolios are General Investment Risk, Non-U.S. Investment Risk, Small Cap Risk and Mid Cap Risk. See Appendix B for explanations of these risks.

ClearBridge International Value ADR ClearBridge International Value ADR portfolios seek to provide a value-based, international equity strategy that will outperform the MSCI EAFE Index over 3-5 years, with risk similar to the Index. The portfolio managers invest in ADRs drawn from the universe of international companies with ADRs listed on the major U.S. exchanges and that have market capitalizations of greater than $100 million. The managers invest the portfolios primarily in ADRs, but may also make limited investments in U.S.-traded stocks of non-U.S. and U.S. companies engaged in significant non-U.S. business. These limited investments may include U.S.-traded stocks that result from the conversion of ADRs, as well as other U.S.-traded stocks. ADRs are U.S.-traded securities that represent shares of a foreign-based corporation held by a custodian. ADRs entitle the shareholder to all dividends, net of any applicable local withholding taxes, and capital gains that would be paid on the company’s ordinary shares. The portfolios’

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investments in non-U.S. companies may include companies in emerging markets as well as companies in developed markets. In addition to making International Value ADR portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate additional income. LMPPG refers to balanced portfolios as Legg Mason International Value ADR balanced portfolios. Risks. The main risks for ClearBridge International Value ADR portfolios are General Investment Risk, Non-U.S. Investment Risk, Small Cap Risk and Mid Cap Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge Large Cap Growth The ClearBridge Large Cap Growth (“LCG”) portfolios seek consistent growth of capital while minimizing volatility. They seek to outperform the Russell 1000 Growth Index over a full market cycle and perform well in rising markets while outperforming the Russell 1000 Growth Index in declining markets. While most investments are in U.S. companies, the portfolio managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. In addition to making LCG portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate income. LMPPG refers to balanced portfolios as Legg Mason Large Cap Growth balanced portfolios.

Risks. The main risks for LCG portfolios are General Investment Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge Large Cap Growth II* The ClearBridge Large Cap Growth II portfolios seek to invest in good quality, large capitalization growth companies at reasonable prices. The portfolio managers generally seek companies that are the leaders or are among the leaders in industries where the opportunities for growth are well defined. The managers employ a bottom-up, fundamental approach in selecting companies and may trade positions actively in an effort to provide added return by taking advantage of market inefficiencies. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. Also, although the general focus of the portfolios is equity investing, the managers may sometimes hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities.

Risks. The main risk for ClearBridge Large Cap Growth II portfolios is General Investment Risk. See Appendix B for an explanation of this risk. ClearBridge Large Cap Value The ClearBridge Large Cap Value portfolios seek long-term capital appreciation by employing fundamental research in an effort to identify securities with favorable risk-adjusted return characteristics. The portfolio management team constructs the portfolios on a bottom-up basis by considering a number of variables such as business fundamentals, valuation, free cash flow generation, earnings growth, management quality and competitive positioning. The team invests the portfolios primarily in large capitalization companies, but may also make limited investments in mid-capitalization companies. While most investments are in U.S. companies, the team may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. The benchmark index for the ClearBridge Large Cap Value portfolios is the Russell 1000 Value Index.

* For Ameriprise clients, these portfolios are referred to as “Large Cap Core.”

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In addition to making Large Cap Value portfolios available in an equity format, LMPPG may make these portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate income. LMPPG refers to balanced portfolios as Legg Mason Large Cap Value balanced portfolios.

Risks. The main risks for ClearBridge Large Cap Value portfolios are General Investment Risk, Mid Cap Risk and, for balanced portfolios, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks.

ClearBridge Mid Cap The ClearBridge Mid Cap portfolios seek long-term growth of capital and consistently superior returns relative to the Russell Mid Cap Index. The portfolio managers seek to achieve these objectives by investing in mid capitalization equity securities using a disciplined process combining quantitative and fundamental analysis. The managers seek out companies with the ability to generate strong free cash flow, supportive balance sheets, undervalued earnings potential and/or management teams that demonstrate capital discipline. They generally diversify portfolio investments across several economic sectors, investing primarily in companies having market capitalizations within the capitalization range of the Russell Mid Cap Index. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets.

Risks. The main risks for ClearBridge Mid Cap portfolios are General Investment Risk and Mid Cap Risk. See Appendix B for explanations of these risks.

ClearBridge Mid Cap Growth The ClearBridge Mid Cap Growth portfolios seek long-term capital appreciation and consistently superior returns relative to the Russell Mid Cap Growth Index. The portfolio managers seek to achieve these objectives by investing in a group of mid capitalization equity securities selected for their long-term growth potential. The portfolio managers follow an investment process that seeks out companies with growth potential, competitive advantage and capital discipline. They generally diversify portfolio investments across several economic sectors, investing primarily in companies having market capitalizations within the capitalization range of the Russell Mid Cap Growth Index. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. Risks. The main risks for ClearBridge Mid Cap Growth portfolios are General Investment Risk and Mid Cap Risk. See Appendix B for explanations of these risks. ClearBridge Multi Cap Growth The ClearBridge Multi Cap Growth (“MCG”) portfolios seek long-term capital appreciation by investing in the stocks of companies the portfolio managers believe have the potential for above-average long-term earnings and/or cash flow growth. The managers may invest in stocks of small, mid and large capitalization companies (all capitalization ranges will not necessarily be represented) and may concentrate large portions of client accounts in individual securities and industries they believe have the potential for earnings and/or cash flow growth in excess of that expected for the market as a whole. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets.

Risks. The main risks for MCG portfolios are General Investment Risk, Industry and Issuer Concentration Risk, Small Cap Risk, Mid Cap Risk and High Volatility Risk. See Appendix B for explanations of these risks. ClearBridge Small Cap The ClearBridge Small Cap portfolios seek long-term capital appreciation. The ClearBridge portfolio managers pursue this objective by investing primarily in equity securities of small capitalization companies. The managers may also make limited investments in large and mid-sized companies. The managers follow a value discipline in selecting securities, and seek to purchase securities at discounts to the managers’ assessment of their intrinsic value. While most investments are in U.S. companies, the manager may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets.

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Risks The main risks for ClearBridge Small Cap portfolios are General Investment Risk and Small Cap Risk. See Appendix B for explanations of these risks. ClearBridge Small Cap Growth The ClearBridge Small Cap Growth (“SCG”) portfolios seek long-term growth of capital. ClearBridge’s SCG portfolio managers select investments using a growth-oriented investment style that emphasizes small U.S. companies believed to have one or more positive investment attributes. These attributes may include superior management teams, good prospects for growth, dominant positions in a niche market or large company customers, and strong or improving financial conditions, as well as other positive investment attributes. The managers generally use a bottom-up approach when selecting investments and may concentrate investments in certain geographic regions and/or industries. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets.

Risks. The main risks for SCG portfolios are General Investment Risk, Small Cap Risk and High Volatility Risk. See Appendix B for explanations of these risks. ClearBridge Small Cap Value The ClearBridge Small Cap Value portfolios seek long-term capital growth and to outperform the Russell 2000 Value Index over a full market cycle. The ClearBridge portfolio managers pursue these objectives by investing primarily in equity securities of small capitalization companies that they believe have a high probability of outperforming small cap value stocks in general. The managers may also make limited investments in large and mid-sized companies. In selecting stocks for client accounts, ClearBridge uses both quantitative and fundamental analysis. The managers look for stocks that they believe sell at low prices relative to multiple measures of value and have price appreciation potential based on an anticipated dynamic company or industry change. In addition, the managers generally seek to diversify client accounts across multiple economic sectors and industry groups. While most investments are in U.S. companies, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. Also, although the general focus of the ClearBridge Small Cap Value portfolios is equity investing, the managers may sometimes hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities. The ClearBridge Small Cap Value portfolios also may include limited investments in ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. securities markets and market sectors (e.g., emerging markets). In addition to the fees charged at the account level, a client will bear a proportionate share of the separate fees and expenses incurred by any ETF in which the client’s account is invested.

Risks. The main risks for ClearBridge Small Cap Value portfolios are General Investment Risk and Small Cap Risk. See Appendix B for explanations of these risks.

ClearBridge Value Equity ClearBridge Value Equity portfolios seek to provide long-term capital appreciation by actively selecting securities that the portfolio managers believe are trading at a discount to their intrinsic value. These portfolios invest primarily in equity securities of large capitalization companies that the portfolio managers believe are selling significantly below their expected value due to market inefficiencies or uncertainties about the company. The portfolios may invest in companies of any size. While most investments are in U.S. companies, the portfolio managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. companies. The portfolio managers use a value-investment discipline to determine when a company’s stock price represents a large discount to their assessment of the company’s intrinsic value (the value of all the qualitative and quantitative aspects of the company’s business). To determine intrinsic value, the portfolio managers focus on a company’s cash earnings, discounting projected future cash flows to see what they are worth today. The portfolio managers take a long-term approach, generally holding securities for long periods to realize their growth potential, resulting in relatively low portfolio turnover.

Risks. The main risks for ClearBridge Value Equity portfolios are General Investment Risk, Small Cap Risk and

Mid Cap Risk. See Appendix B for explanations of these risks.

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Specialty Legg Mason Balanced Income The Legg Mason Balanced Income portfolios seek long-term capital growth and high current income. The portfolio managers seek to achieve these objectives through a combination of asset allocation (among equities, fixed income securities and cash equivalents) and fundamental stock analysis stressing a long-term value orientation. ClearBridge determines the portfolios’ allocations among equities, fixed income securities and cash equivalents. ClearBridge selects equity investments for the portfolios and Western Asset selects fixed income investments. Equity investments may include common stocks, convertible and non-convertible preferred stocks, shares of real estate investment trusts (REITs), and other types of equity and equity-related securities. Equity-related securities may include convertible bonds, given their equity conversion features. Many of the equity investments are large capitalization stocks, but the ClearBridge managers may also invest in small and mid capitalization stocks and, to a limited extent, in ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. securities markets and market sectors (e.g., emerging markets). In addition to the fees charged at the account level, a client will bear a proportionate share of the fees and expenses incurred by any ETF held in the client’s account. While most equity investments are in U.S. companies, the ClearBridge managers may also invest the portfolios in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. Fixed income investments for these portfolios have an average maturity of ten years or less and may include U.S. Treasury and U.S. Government agency issues.

Risks. The main risks for Balanced Income portfolios are General Investment Risk, Small Cap Risk, Mid Cap Risk, Illiquidity Risk, Credit Risk, Interest Rate Risk and Asset Allocation Risk. See Appendix B for explanations of these risks. Legg Mason Balanced Income with Municipals These portfolios seek long-term capital growth (taxable) and high current income, some taxable and some exempt from regular U.S. income tax. The portfolio managers seek to achieve these objectives through a combination of asset allocation (among equities, fixed income securities and cash equivalents) and fundamental stock analysis stressing a long-term value orientation. ClearBridge determines the portfolios’ allocations among equities, fixed income securities and cash equivalents. ClearBridge selects equity investments for the portfolios and Western Asset selects fixed income investments. Equity investments may include common stocks, convertible and non-convertible preferred stocks, shares of real estate investment trusts (REITs), and other types of equity and equity-related securities. Equity-related securities may include convertible bonds, given their equity conversion features. Many of the equity investments are large capitalization stocks, but the ClearBridge managers may also invest in small and mid capitalization stocks and, to a limited extent, ETFs representing U.S. securities markets, industry and market capitalization sectors, non-U.S. country and regional markets, and other types of non-U.S. securities markets and market sectors (e.g., emerging markets). In addition to the fees charged at the account level, a client will bear a proportionate share of expenses incurred by any ETF held in the client’s account. While most equity investments are in U.S. companies, the ClearBridge managers may also invest the portfolios in ADRs and U.S.-traded ordinary shares of non-U.S. companies in developed and emerging markets. Fixed income investments for these portfolios consist of municipal bonds. The Western Asset managers select municipal bonds with a focus on diversification within sectors and regions and high credit quality. By actively managing the municipal bond portions of accounts, Western Asset seeks to enhance returns and reduce risks by seeking to take advantage of shifts in the municipal yield curve, credit quality spreads and variations in market sectors. There are no restrictions on the average maturity of the municipal bond portions of client accounts. Depending on Western Asset’s interest rate outlook, the average maturity of municipal bonds in accounts generally ranges from three to seven years.

Risks. The main risks for Balanced Income with Municipals portfolios are General Investment Risk, Small Cap Risk, Mid Cap Risk, Credit Risk, Interest Rate Risk, Illiquidity Risk and Asset Allocation Risk. See Appendix B for explanations of these risks.

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ClearBridge Equity Income (closed to new accounts) The ClearBridge Equity Income portfolios seek a high level of current income as their primary objective and long-term capital growth as their secondary objective. The portfolio managers pursue these objectives by investing primarily in dividend-paying equity and equity-related securities of companies of all sizes. These securities may include common stocks, convertible and non-convertible preferred stocks, shares of real estate investment trusts (REITs), and other types of equity and equity-related securities. The managers may also invest in fixed income securities, which may include corporate bonds, convertible bonds and U.S. Treasury securities. While most investments are in securities of U.S. issuers, the managers may also invest in ADRs and U.S.-traded ordinary shares of non-U.S. issuers. The managers do not use leverage or cause the portfolios to engage in borrowing activities as part of the portfolios’ investment strategy. Given the closure of this strategy to new accounts and the small number of accounts managed in accordance with this strategy, ClearBridge Equity Income portfolios are managed as ClearBridge Private Client Management accounts, as described in Item 8.B. (Custom Asset Management). Risks. The main risks for ClearBridge Equity Income portfolios are General Investment Risk, Small Cap Risk, Mid Cap Risk, Illiquidity Risk, Credit Risk and Interest Rate Risk. See Appendix B for explanations of these risks. ClearBridge Large Cap Value with ClearBridge Taxable Fixed Income or ClearBridge Non-Taxable Fixed Income The ClearBridge Large Cap Value with ClearBridge Fixed Income portfolios combine an allocation to the ClearBridge Large Cap Value portfolios (see separate description in this Item 8) with an allocation to taxable or municipal fixed income securities, as selected by the client. ClearBridge selects both equity securities and fixed income securities for these portfolios.

Risks. The main risks for these portfolios are General Investment Risk, Mid Cap Risk, Credit Risk, Interest Rate Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge Total Return MLP Portfolios ClearBridge Total Return MLP portfolios seek a high level of total return with an emphasis on cash distributions from portfolio investments. ClearBridge Total Return MLP portfolios invest primarily in exchange-traded master limited partnerships (MLPs) with a primary focus on MLPs that derive a significant portion of their revenues from the business of exploring, developing, producing, gathering, transporting, processing, storing, refining, distributing, mining or marketing natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal. The ClearBridge Total Return MLP portfolio managers seek to invest in energy-related MLPs with long-lived assets and predictable cash flows. The managers also seek out companies with the potential to grow their businesses, and thereby their distributions, over time. Risks The main risks for ClearBridge Total Return MLP Portfolios are Energy Sector Risk, MLP Related Risk, General Investment Risk, Interest Rate Risk, Illiquidity Risk, Geographic Concentration Risk and Industry Concentration Risk. See Appendix B for explanations of these risks, Special Considerations with respect to ClearBridge Total Return MLP Portfolios Schedules K-1; State Income Tax Returns: ClearBridge Total Return MLP portfolios typically will invest in MLPs that are taxed as partnerships for U.S. federal income tax purposes. Partnerships do not pay U.S. federal income tax at the partnership level. Rather, each partner of a partnership, in computing its U.S. federal income tax liability, must include its allocable share of the partnership’s income, gains, losses, deductions and expenses. A client will receive a Schedule K-1 from each such MLP held in the client’s ClearBridge Total Return MLP portfolio and will need to incorporate the information on the Schedule K-1s into the client’s annual personal tax return filings. In addition, a client may be required to file state income tax returns for each state in which a portfolio MLP operates even if the client is not otherwise required to file tax returns for such states. Unrelated Business Taxable Income (“UBTI”): IRAs, 401(k) plans and other employee benefit plans as well as most other tax-exempt investors are subject to federal income tax on their UBTI of $1,000 or more. A portion of distributions received from a MLP may constitute reportable UBTI and subject a tax-exempt investor to federal

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income tax and tax filing obligations. The federal income tax consequences of receiving UBTI can be particularly significant for a charitable remainder trust. Investing in MLPs is complex and tax regulations are subject to change. Investors should consult with their tax and financial advisors to make sure that they understand the consequences of investing in MLPs, including the special considerations noted above, and how they apply to their particular circumstances before establishing such a portfolio. The information in this brochure does not constitute tax advice. ClearBridge Sustainability Leaders The ClearBridge Sustainability Leaders portfolios seek to provide long-term capital growth by investing in common stocks and other equity securities of companies that meet the portfolio managers’ financial and sustainability/environmental, social and governance (“ESG”) criteria. The portfolios may also invest in companies that the portfolio managers believe are making substantial progress toward becoming a leader in sustainability and ESG policies. The portfolio managers’ ESG and sustainability evaluation is integrated into a thorough assessment of investment worthiness based on financial criteria. The portfolios will invest primarily in common stocks and other equity securities of U.S. companies, but also may invest in ADRs and U.S.-traded equity securities of foreign issuers. Determination of sustainability/ESG leadership is based on ClearBridge’s proprietary research approach and long standing experience managing ESG investment strategies. The portfolio managers consider a sustainable company to be one that (i) offers products and services that have a positive impact on society; and (ii) has well defined strategies in place to ensure longevity as an investment. Sustainability is not limited to environmental stewardship, but also includes a company’s policies in regard to treating employees fairly and furthering their professional development, interacting in a positive way within its local community, promoting safety at all times, managing its supply chain responsibly, and employing corporate governance practices that are shareholder friendly and transparent. ClearBridge’s fundamental analysts assign a proprietary ESG rating to each company under their coverage by sector and lead the company engagements for impact assessments. Risks. The main risks for ClearBridge Sustainability Leaders portfolios are General Investment Risk, ESG Investing Risk, Small Cap Risk and Mid Cap Risk. See Appendix B for explanations of these risks. ClearBridge All Cap Growth ESG ClearBridge All Cap Value ESG ClearBridge Appreciation ESG ClearBridge Dividend Strategy ESG ClearBridge International Growth ADR ESG ClearBridge International Value ADR ESG ClearBridge Large Cap Growth ESG ClearBridge Large Cap Value ESG

ClearBridge Multi Cap Growth ESG Legg Mason Multiple Discipline Account®1 ESG In the Environmental, Social and Governance (“ESG”) portfolios, ClearBridge integrates environmental, social and governance criteria into its fundamental research and portfolio construction process for the following underlying ClearBridge investment strategies: ClearBridge All Cap Growth, ClearBridge All Cap Value, ClearBridge Appreciation, ClearBridge Dividend Strategy, ClearBridge International Growth ADR, ClearBridge International Value ADR, ClearBridge Large Cap Growth, ClearBridge Large Cap Value, ClearBridge Multi Cap Growth and Legg Mason Multiple Discipline Account®1. All portfolio candidates for the ESG strategies are reviewed by the ClearBridge fundamental research analysts (by sector and portfolio), and by the respective portfolio managers, for their investment attractiveness and ESG characteristics. The sector analysts assign a proprietary ESG rating to all companies under their coverage in the ESG strategies and those ratings are communicated in all research notes. The ClearBridge ESG investment process seeks to employ a best-in-class approach, utilizing proprietary, industry-specific and thematic research supported by the fundamental research analysts. As part of its research and engagement process, ClearBridge attempts to communicate directly with portfolio company managements on a regular basis concerning the company’s sustainability strategy and societal impact, as well as with representatives of certain other key company stakeholders. Certain portfolio company candidates may be excluded due to investments in companies that the ESG team determines are significantly involved in the manufacture of tobacco and alcohol products, the provision of gaming services, the production of nuclear power, and the manufacture of weapons

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(investments in other companies may also be excluded based on ClearBridge’s proprietary research evaluation). LMPPG and ClearBridge may offer ESG portfolios that incorporate faith-based screens. In addition, clients may request additional, customized social screens (such as specific mission-consistent, or faith-based screens, etc.), subject to portfolio manager approval. When a security that would be held in portfolios in the underlying, unscreened investment strategy is excluded based on the fundamental research team’s proprietary ESG research, or due to an exclusionary screen (e.g., tobacco), the ClearBridge ESG portfolio managers will seek to invest the cash that would have been invested in such security in an alternate investment and/or allocate such cash to other investments held in the portfolio. In addition, ClearBridge actively votes proxies for portfolio company securities in accordance with ClearBridge’s Proxy Voting Policy and Procedures, as supplemented by ClearBridge’s ESG Proxy Voting Guidelines. In addition to making the ESG portfolios available in an equity format, LMPPG may make certain of the ESG portfolios available in a taxable balanced format (in which U.S. Government and/or corporate debt securities represent the fixed income portion of the portfolios) and a tax-favored balanced format (in which municipal securities represent the fixed income portion of the portfolios). Western Asset manages the fixed income portion of balanced portfolios, seeking to add stability and generate income. While Western Asset incorporates ESG considerations in its investment analysis and decision-making as part of its overall investment philosophy, Western Asset does not apply specific social screens to the fixed income portion of balanced portfolios unless this is separately agreed to with the client. LMPPG refers to balanced ESG portfolios as Legg Mason ESG balanced portfolios. Descriptions of the underlying ClearBridge investment strategies offered as part of the ESG portfolios, including applicable risk information, are presented separately in this Item 8. The ESG portfolios are also subject to ESG Investing Risk. See Appendix B for an explanation of this risk. Fixed Income—Taxable Western Asset Active Bond Western Asset uses a sector rotation among the major areas of U.S. taxable fixed income (government bonds, notes and bills, corporate bonds and mortgage-backed and asset-backed securities), along with limited duration bets around the client’s approved benchmark, in an attempt to maximize total return for Western Asset Active Bond (“AB”) portfolios. Investments may include taxable municipal securities and U.S.-dollar denominated fixed income securities (issued in the United States) of non-U.S. developed and emerging market sovereign and corporate issuers when the portfolio managers believe they are attractive investments. Western Asset manages AB portfolios with the belief that limiting duration and investing in sectors of the market it believes are undervalued will provide strong performance. In managing AB portfolios, Western Asset employs a systematic investment approach that includes four decision layers: Duration position, yield curve position, sector weighting and issue selection. Benchmarks available for selection by clients include: Barclays Capital U.S. Aggregate Bond Index (“Active Bond—Aggregate”), Barclays Capital U.S. Intermediate Government/Credit Bond Index (“Active Bond—Intermediate”), and Barclays Capital U.S. Government/Credit Bond Index (“Active Bond—Gov/Corp”). Risks. The main risks for AB portfolios are General Investment Risk, Credit Risk, Extension Risk, Interest Rate Risk, Non-U.S. Investment Risk and Prepayment Risk. See Appendix B for explanations of these risks. Western Asset Core Western Asset Core portfolios seek to maximize total return consistent with prudent investment management. These portfolios may invest in a range of fixed income sectors, including the U.S. government, federal agency, corporate, mortgage and money market/cash and cash equivalent sectors. Investments may also include U.S.-dollar denominated fixed income securities of non-U.S. developed and emerging market sovereign and corporate issuers. The portfolio managers allocate account assets among such fixed income sectors on a discretionary basis taking into account their views as to the relative attractiveness of such sectors. Western Asset Core portfolios involve investments in individual fixed income securities in the U.S. government, federal agency and corporate sectors, and may also involve investments in taxable municipal securities and in individual U.S.-dollar denominated securities of non-U.S. sovereign and corporate issuers. In addition to investments in individual fixed income securities, the portfolios may involve investments in shares of one or both of

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the Legg Mason Western Asset *SMASh® Series C Fund and the Legg Mason Western Asset SMASh Series M Fund (collectively, the “Core SMASh Funds”). The Core SMASh Funds’ prospectus describes the principal investment strategies of each Core SMASh Fund. The managers use investments in the Core SMASh Funds to obtain efficient exposure to certain fixed income sectors that, due to the nature of the securities involved, generally do not allow for practical and diversified exposure through direct client account investment in such securities. A Western Asset Core portfolio’s allocation to each of the Core SMASh Funds will vary over time based on the managers’ discretionary allocation decisions, as well as market fluctuations. A portfolio’s aggregate allocation to the Core SMASh Funds generally will not exceed 50%. However, a portfolio’s aggregate allocation to the Core SMASh Funds may temporarily exceed 50% due to market fluctuations and pending reallocation by the managers. A Core SMASh Fund may invest a portion of its assets in fixed income sectors other than the above-referenced fixed income sectors, as described in the Core SMASh Funds’ prospectus. A client may obtain a prospectus for the Core SMASh Funds from the client’s Sponsor Firm. The prospectus includes information concerning each Core SMASh Fund’s investment objectives, strategies and risks. The prospectus also contains a description of the tax consequences associated with the redemption of Core SMASh Fund shares and the receipt of dividend and capital gains distributions from the Core SMASh Funds. Core SMASh Fund redemptions may occur as a result of reallocation among fixed income sectors, account withdrawals and account termination. By selecting a Western Asset Core portfolio, a client consents to the investment of account assets in the Core SMASh Funds. The client may revoke this consent by terminating the client’s Western Asset Core portfolio. In the event of such a termination, the managers will redeem the client’s Core SMASh Fund shares. An affiliate of Western Asset serves as the Core SMASh Funds’ manager and Western Asset serves as the Funds’ sub-adviser. Only separately managed account clients of Western Asset or its affiliates may purchase shares of the Core SMASh Funds. While neither the manager nor the sub-adviser of the Core SMASh Funds charges a management fee to the Core SMASh Funds, the manager and sub-adviser do receive portions of the fees clients pay for management of Western Asset Core portfolios. Risks. The main risks associated with Western Asset Core portfolio investments in individual fixed income securities are General Investment Risk, Credit Risk, Extension Risk, Interest Rate Risk, Non-U.S. Investment Risk and Prepayment Risk. See Appendix B for explanations of these risks. The risks associated with investments in the Core SMASh Funds are described in the Funds’ prospectus, which is available from Sponsor Firms. Western Asset Core Plus Western Asset Core Plus portfolios seek to maximize total return consistent with prudent investment management. These portfolios may invest in a range of fixed income sectors, including the U.S. government, federal agency, corporate, mortgage, non-U.S. sovereign and corporate (both U.S. dollar denominated and non-U.S. dollar denominated), emerging market debt, high yield and money market/cash and cash equivalent sectors. The portfolio managers allocate account assets among such fixed income sectors on a discretionary basis taking into account their views as to the relative attractiveness of such sectors. Western Asset Core Plus portfolios involve investments in individual fixed income securities in the U.S. government, federal agency and corporate sectors, and may also involve investments in taxable municipal securities and in individual U.S.-dollar denominated securities of non-U.S. sovereign and corporate issuers. In addition to investments in individual fixed income securities, the portfolios may involve investments in shares of one or more of the Legg Mason Western Asset SMASh Series C Fund, the Legg Mason Western Asset SMASh Series M Fund and the Legg Mason Western Asset SMASh Series EC Fund (collectively, the “Core Plus SMASh Funds”). The Core Plus SMASh Funds’ prospectus describes the principal investment strategies of each Core Plus SMASh Fund. The Legg Mason Western Asset SMASh Series EC Fund may invest without limit in both investment grade and below investment grade debt obligations rated C or above by Standard & Poor’s (or the equivalent). Below investment grade debt obligations are commonly known as “junk bonds” or “high yield securities.” The managers use investments in the Core Plus SMASh Funds to obtain efficient exposure to certain fixed income sectors that, due to the nature of the securities involved, generally do not allow for practical and prudent exposure through direct client account investment in such securities. A Western Asset Core Plus portfolio’s allocation to each of the Core Plus

* SMASh® is a registered service mark of Legg Mason & Co., LLC licensed for use by Legg Mason, Inc. and its subsidiaries including

Legg Mason Private Portfolio Group, LLC and Western Asset Management Company, LLC.

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SMASh Funds will vary over time based on the managers’ discretionary allocation decisions, as well as market fluctuations. A portfolio’s aggregate allocation to the Core Plus SMASh Funds generally will not exceed 50%. However, a portfolio’s aggregate allocation to the Core Plus SMASh Funds may temporarily exceed 50% due to market fluctuations and pending reallocation by the manager. A Core Plus SMASh Fund may invest a portion of its assets in fixed income sectors other than the above-referenced fixed income sectors, as described in the Core Plus SMASh Funds’ prospectus. A client may obtain a prospectus for the Core Plus SMASh Funds from the client’s Sponsor Firm. The prospectus includes information concerning each Core Plus SMASh Fund’s investment objectives, strategies and risks. The risks of investing in the Legg Mason Western Asset SMASh Series EC Fund include the risks associated with investing in “junk bonds” or “high yield securities.” The prospectus also contains a description of the tax consequences associated with the redemption of Core Plus SMASh Fund shares and the receipt of dividend and capital gains distributions from the Core Plus SMASh Funds. Core Plus SMASh Fund redemptions may occur as a result of reallocation among fixed income sectors, account withdrawals and account termination. By selecting a Western Asset Core Plus portfolio, a client consents to the investment of account assets in the Core Plus SMASh Funds. The client may revoke this consent by terminating the client’s Western Asset Core Plus portfolio. In the event of such a termination, the managers will redeem the client’s Core Plus SMASh Fund shares. An affiliate of Western Asset serves as the Core Plus SMASh Funds’ manager and Western Asset serves as the Funds’ sub-adviser. Only separately managed account clients of Western Asset or its affiliates may purchase shares of the Core Plus SMASh Funds. While neither the manager nor the sub-adviser of the Core Plus SMASh Funds charges a management fee to the Core Plus SMASh Funds, the manager and sub-adviser do receive portions of the fees clients pay for management of Western Asset Core Plus portfolios. Risks. The main risks associated with Western Asset Core Plus portfolio investments in individual fixed income securities are General Investment Risk, Credit Risk, Extension Risk, Interest Rate Risk, Non-U.S. Investment Risk and Prepayment Risk. See Appendix B for explanations of these risks. The risks associated with investments in the Core Plus SMASh Funds are described in the Funds’ prospectus, which is available from Sponsor Firms. Western Asset Corporate Bond Ladders Western Asset Corporate Bond Ladders seek to provide periodic income through investment in a diversified portfolio of investment grade (at the time of purchase) corporate bonds with laddered maturities. “Laddering” involves building a portfolio of corporate bonds with staggered maturities so that a portion of the portfolio will mature periodically. The client selects a maturity range for the ladder from among those ranges made available by Western Asset. Currently, 1-5 year and 1-10 year maturity ranges are available but Western Asset may make other maturity ranges available from time to time. Portfolios generally will hold one to three issues for each maturity rung on the ladder. Individual corporate bonds are purchased with the intent to hold such security until maturity unless Western Asset determines to sell such security due to credit concerns or the sale of such security is needed to fund a client withdrawal of funds. To maintain the ladder, money that comes in from maturing bonds is typically reinvested in bonds with longer maturities within the range of the ladder. Western Asset Corporate Bond Ladders will invest in individual corporate bonds that are rated Baa/BBB or above at the time of purchase by one or more Nationally Recognized Statistical Rating Organizations or, if unrated, in securities of comparable quality at the time of purchase, as determined by Western Asset. Western Asset selects and monitors securities for Western Asset Corporate Bond Ladders using Western Asset’s proprietary research. Risks. The main risks for Western Asset Corporate Bond Ladders are General Investment Risk, Credit Risk, Interest Rate Risk, and Non-U.S. Investment Risk. See Appendix B for explanations of these risks. Western Asset GSM 3-Year Western Asset GSM 5-Year Western Asset GSM 7-Year Western Asset Gov/Corp * The Western Asset GSM 3-Year (“GSM3”) portfolios, Western Asset GSM 5-Year (“GSM5”) portfolios and Western Asset GSM 7-Year (“GSM7”) portfolios seek to produce total returns over complete market cycles that exceed appropriate benchmark returns. As part of this total return investment approach, the portfolios also seek to

* These portfolios are referred to as “Taxable Fixed Income” for Raymond James clients.

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preserve principal. Western Asset manages these portfolios based on analysis of specific fundamental factors. The portfolio managers are responsible for monitoring daily market activity in an attempt to provide incremental return exceeding that expected under certain buy and hold and random trading strategies. These portfolios involve investments in U.S. Treasury and federal agency securities with varying maturities. GSM3 portfolios have average maturities of three years or less. GSM5 portfolios have average maturities of five years or less. GSM7 portfolios have average maturities of seven years or less. The Western Asset Gov/Corp portfolios employ the same strategies as the Western Asset GSM portfolios described above, combining the GSM7 portfolio investment approach with intermediate-term investment grade corporate bonds. Gov/Corp accounts may also include taxable municipal securities and investment grade, U.S.-dollar denominated fixed income securities (issued in the United States) of non-U.S. developed and emerging market sovereign and corporate issuers when the managers believe they are attractive investments. Risks. The main risks associated with Western Asset GSM and Western Asset Gov/Corp portfolios are General Investment Risk, Credit Risk, Interest Rate Risk and, for Gov/Corp portfolios, Non-U.S. Investment Risk. See Appendix B for explanations of these risks. Western Asset Enhanced Cash SMA In managing Western Asset Enhanced Cash SMA (“EC”) portfolios, Western Asset analyzes both the economy and specific investments. In performing economic analysis, Western Asset seeks to determine the direction of the economy and the direction of interest rates, as well as the implications that changes in economic fundamentals can have on the various categories of fixed income investments. Western Asset performs both duration and yield curve analysis to determine a maturity position and structure it believes will provide total returns superior to money market investments. Western Asset performs sector and security analysis decisions in an effort to identify value and in order to evaluate portfolio candidates based on credit fundamentals and price. Western Asset may invest EC portfolios in dollar denominated U.S. Treasury or Agency securities, corporate obligations including commercial paper, corporate bonds, Eurobonds and Yankee debt, asset-backed securities, non-U.S. sovereign debt, and U.S. Agency collateralized mortgage obligations. Risks. The main risks associated with EC portfolios are General Investment Risk, Credit Risk, Interest Rate Risk and Non-U.S. Investment Risk. See Appendix B for explanations of these risks. Western Asset Enhanced Cash Constrained SMA In managing Western Asset Enhanced Cash Constrained SMA (“ECC”) portfolios, Western Asset analyzes both the economy and specific investments. In performing economic analysis, Western Asset seeks to determine the direction of the economy and the direction of interest rates, as well as the implications that changes in economic fundamentals can have on the various categories of fixed income investments. Western Asset performs both duration and yield curve analysis to determine a maturity position and structure it believes will provide total returns superior to money market investments. Western Asset performs sector and security analysis decisions in an effort to identify value and in order to evaluate portfolio candidates based on credit fundamentals and price. Western Asset may invest ECC portfolios in dollar denominated U.S. Treasury or Agency securities, corporate obligations including commercial paper, corporate bonds, Eurobonds and Yankee debt, asset-backed securities, non-U.S. sovereign debt, and U.S. Agency collateralized mortgage obligations. An ECC portfolio’s allocation to corporate debt securities typically is constrained to a maximum of 30%, determined at the time of purchase. The maximum maturity of any individual security in an ECC portfolio generally will not exceed five years. ECC portfolios typically have a maximum portfolio duration of three years or less. Duration is a measure of the price sensitivity of a fixed income security to a change in interest rates. Risks. The main risks associated with ECC portfolios are General Investment Risk, Credit Risk, Interest Rate Risk and Non-U.S. Investment Risk. See Appendix B for explanations of these risks. Western Asset Intermediate Corporate Bond Western Asset Intermediate Corporate Bond portfolios seek to produce total returns over complete market cycles that exceed appropriate benchmark returns. As part of this total return investment approach, the portfolios also seek to preserve principal. Western Asset manages these portfolios based on analysis of specific fundamental factors. The portfolio managers are responsible for monitoring daily market activity in an attempt to provide incremental return exceeding that expected under certain buy and hold and random trading strategies. These portfolios involve

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investments primarily in intermediate-term, investment grade (at time of purchase) corporate bonds with varying maturities. Intermediate Corporate Bond accounts may also include investments in U.S. federal agency securities, U.S. Treasury securities and U.S. dollar-denominated fixed income securities (issued in the United States) of non-U.S. corporate issuers. Intermediate Corporate Bond portfolios typically have a duration target of within +/-20% of their benchmark’s duration. Risks. The main risks associated with Western Asset Intermediate Corporate Bond portfolios are General Investment Risk, Credit Risk, Interest Rate Risk and Non-U.S. Investment Risk. See Appendix B for explanations of these risks. Western Asset Custom Western Asset Custom portfolios are customized portfolios of fixed income securities that are professionally managed in accordance with specific investment guidelines developed by the client in conjunction with the client’s financial advisor and Western Asset based on the client’s circumstances (including other investments), financial objectives and needs. Such guidelines may address one or more of the following: maturity and duration limitations applicable to overall portfolio or to individual portfolio holdings; credit quality specifications applicable to overall portfolio or to individual portfolio holdings, including actions that must be taken in the event of credit downgrades; individual issuer concentration limitations; sector exposure limitations or restrictions; exposure guidelines, limitations or restrictions for specific issuers or types of fixed of fixed income securities; extent to which portfolio should focus on “ total return” or “income generation”; income generation targets; limitations on realization of short-term or long-term capital gains; and target levels of cash or short-term maturity investments. Risks. The main risks for Western Asset Custom portfolios are General Investment Risk, Credit Risk and Interest Rate Risk. Depending on the specific investment guidelines established for the portfolio, additional significant risks may include Below Investment Grade Risk, Geographic Concentration Risk, Industry Concentration Risk, Issuer Concentration Risk, Extension Risk, Illiquidity Risk, Non-U.S. Investment Risk and Prepayment Risk. A client should develop investment guidelines for a Western Asset Custom Portfolio only after considering the client’s specific circumstances (including other investments), financial objectives and needs. Fixed Income—Tax Favored Western Asset Current Market Muni** Western Asset Short-Term Muni Western Asset Current Market Muni portfolios seek total return over a market cycle, consisting of capital gain (taxable) and income that is exempt from regular U.S. income tax.2 Western Asset selects municipal securities for the portfolios with a focus on diversification within sectors and regions and high credit quality. Municipal securities include debt securities issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers, and investments with similar economic characteristics, the income from which is exempt from regular U.S. income tax. Some municipal obligations, such as general obligation issues, are backed by the taxing power of the municipal issuer, while other municipal securities, such as revenue issues, are backed only by the revenue from certain facilities or other sources and not by the municipal issuer itself. By actively managing client portfolios, Western Asset seeks to enhance returns and reduce risks by taking advantage of shifts in the municipal yield curve, credit quality spreads and variations in market sectors. There are no restrictions on the average maturity of Current Market Muni portfolios. Depending on Western Asset’s interest rate outlook, the average maturity of bonds in Current Market Muni portfolios generally ranges from three to seven years. In certain Single Contract Programs, Western Asset manages Current Market Muni portfolios as state-specific portfolios for clients that indicate certain states as their state of residence or tax state, unless the client or the client’s Sponsor Firm specifically selects a national or state-biased portfolio. Western Asset invests national portfolios in municipal securities of issuers in multiple states and U.S. jurisdictions. For state-specific portfolios, Western Asset

** For Ameriprise clients, these portfolios are referred to as “Western Asset U.S. Tax Exempt.” 2 LMPPG and the Subadvisers, including Western Asset, do not provide tax advice and, therefore, cannot guarantee that income from a municipal security

will not be taxable. Clients should consult their own tax advisers for tax advice.

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seeks to invest only in municipal securities the income from which is exempt from state income taxes in the specified state, but may also invest, if warranted by market conditions including the available supply of municipal securities, in municipal securities the income from which is not exempt from state income taxes in the specified state. For state-biased portfolios, Western Asset emphasizes investments in municipal securities the income from which is exempt from state income taxes in the specified state, but may also invest in municipal securities the income from which is not exempt from state income taxes in the specified state. Western Asset may limit the states for which state-specific and state-biased portfolios are available. It should be noted that state-specific and state-biased portfolios may have a higher concentration in certain sectors and issuers relative to national portfolios due to more limited diversity of in state issues. Short-Term Muni portfolios seek total return over a market cycle, while aiming for a higher degree of stability and liquidity than Current Market Muni portfolios. Depending on Western Asset’s interest rate outlook, the average maturity of bonds in Short-Term Muni portfolios generally ranges between zero and three years. Risks. The main risks for Western Asset Current Market Muni and Western Asset Short-Term Muni portfolios are General Investment Risk, Credit Risk, Interest Rate Risk, Illiquidity Risk and, for state-specific and state-biased portfolios, Geographic Concentration Risk. See Appendix B for explanations of these risks. Western Asset Managed Municipals Western Asset Managed Municipals (“Managed Municipals”) portfolios seek to maximize current income exempt from regular federal income tax by investing primarily in municipal securities and other investments with similar economic characteristics, the interest of which is exempt from regular federal income tax but which may be subject to the federal alternative minimum tax. Managed Municipals portfolios normally invest in intermediate-term and long-term municipal securities that have remaining maturities from one to more than thirty years at the time of purchase. They typically focus on investment grade bonds (that is, securities rated in the Baa/BBB categories or above or, if unrated, determined to be of comparable credit quality by Western Asset) but may invest up to 20% of their assets in below investment grade bonds (commonly known as “high yield” or “junk” bonds) in order to enhance current income. Managed Municipals portfolios involve investments in individual municipal securities as well as investments in shares of the Western Asset SMASh Series TF Fund, an open-end investment management company registered under the Investment Company Act of 1940, as amended (the “SMASh Series TF Fund”). Western Asset selects individual municipal securities for Managed Municipals portfolios with a focus on diversification within sectors and regions. Municipal securities include debt securities issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers, and investments with similar economic characteristics, the income from which is exempt from regular federal income tax. Some municipal securities, such as general obligation issues, are backed by the taxing power of the municipal issuer, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the municipal issuer itself. By actively managing client portfolios, Western Asset seeks to enhance returns and reduce risks by taking advantage of shifts in the municipal yield curve, credit quality spreads and variations in market sectors. The individual municipal securities portion of Managed Municipals portfolios typically will include securities of issuers in numerous states. Clients who are residents of California or New York have the option of selecting a state-biased portfolio with respect to the portion of the portfolio invested in individual municipal securities. For clients that select such a state-biased portfolio, Western Asset, to the extent consistent with its overall market views, emphasizes investments in municipal securities the income from which is exempt from state income taxes in the specified state, but may also invest in municipal securities the income from which is not exempt from state income taxes in the specified state. The SMASh Series TF Fund’s prospectus describes the principal investment strategies of the SMASh Series TF Fund. The Managed Municipals managers use investments in shares of the SMASh Series TF Fund to obtain efficient exposure to certain types of securities, investment instruments or strategies that, due to their nature and/or factors such as liquidity, volatility and other risk characteristics, generally do not allow for practical and diversified exposure through direct client account investment in such securities, instruments or strategies, including without limitation below investment grade bonds. A Managed Municipals portfolio’s aggregate allocation to the SMASh Series TF Fund will vary over time based on the managers’ discretionary allocation decisions, as well as market fluctuations, but generally will be targeted at 40%-50%. A portfolio’s aggregate allocation to the SMASh Series TF

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Fund may temporarily exceed or be lower than the targeted level due to market fluctuations and pending rebalancing by the portfolio managers. The SMASh Series TF Fund may invest a portion of its assets in fixed income securities and other investments whose interest may be subject to federal income tax, as described in the SMASh Series TF Fund’s prospectus. A client may obtain a prospectus for the SMASh Series TF Fund from the client’s Sponsor Firm. The prospectus includes information concerning the SMASh Series TF Fund’s investment objective, strategies, investments and risks. The prospectus also contains a description of the tax consequences associated with the redemption of the SMASh Series TF Fund shares and the receipt of dividend and capital gains distributions from the SMASh Series TF Fund. The SMASh Series TF Fund redemptions may occur as a result of rebalancing an account’s allocation to the SMASh Series TF Fund, account withdrawals and account termination. By selecting a Managed Municipals portfolio, a client consents to the investment of account assets in the SMASh Series TF Fund. The client may revoke this consent by terminating the client’s Managed Municipals portfolio. In the event of such a termination, the managers will redeem the client’s SMASh Series TF Fund shares. An affiliate of Western Asset serves as the SMASh Series TF Fund’s manager and Western Asset serves as the SMASh Series TF Fund’s sub-adviser. Only separately managed account clients of Western Asset or its affiliates may purchase shares of the SMASh Series TF Fund. While neither the manager nor the sub-adviser of the SMASh Series TF Fund charges a management fee to the SMASh Series TF Fund, the manager and sub-adviser do receive portions of the fees clients pay for management of Managed Municipals portfolios. Risks. The main risks associated with Managed Municipals portfolio investments in individual municipal securities are General Investment Risk, Credit Risk, Interest Rate Risk, Illiquidity Risk, Extension Risk, Prepayment Risk and, for state-specific and state-biased portfolios, Geographic Concentration Risk. See Appendix B for explanations of these risks. The risks associated with investments in the SMASh Series TF Fund are described in the SMASh Series TF Fund’s prospectus, which is available from Sponsor Firms. One of the main risks associated with Managed Municipals portfolio investments in the SMASh Series TF Fund is Below Investment Grade Risk. Western Asset Municipal Opportunities The Western Asset Municipal Opportunities portfolios are professionally managed portfolios of long, short and/or intermediate-term municipal securities. Municipal securities include debt securities issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers, and investments with similar economic characteristics, the income from which is exempt from regular U.S. income tax. Some municipal obligations, such as general obligation issues, are backed by the taxing power of the municipal issuer, while other municipal securities, such as revenue issues, are backed only by the revenue from certain facilities or other sources and not by the municipal issuer itself. Western Asset typically works with clients to develop an investment approach that reflects the client’s desired risk/reward profile for the portfolio and other investment preferences. Western Asset generally manages these portfolios with the objective of generating total return consistent with the provision of tax-exempt income.2 Risks. The main risks for Western Asset Municipal Opportunities portfolios are General Investment Risk, Credit Risk, Interest Rate Risk and Illiquidity Risk. Depending on the specific investment approach a client selects, additional significant risks may include Geographic Concentration Risk and Below Investment Grade Risk. See Appendix B for explanations of these risks. Western Asset Tax-Efficient Enhanced Cash SMA The Western Asset Tax-Efficient Enhanced Cash SMA portfolios may invest in municipal securities, U.S. Treasury and Agency securities, corporate obligations including commercial paper, corporate bonds, Eurobonds and Yankee debt, asset-backed securities, non-U.S. sovereign debt, and U.S. Agency collateralized mortgage obligations. Western Asset typically works with the client to develop an investment approach that reflects the client’s desired risk/reward profile and other investment preferences. Western Asset manages these portfolios with the objective of generating total return, including tax-exempt income from municipal securities and any other tax-favored investments.2 Municipal securities include debt securities issued by any of the 50 states and their political

2 LMPPG and the Subadvisers, including Western Asset, do not provide tax advice and, therefore, cannot guarantee that income from a municipal security

will not be taxable. Clients should consult their own tax advisers for tax advice.

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subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers, and investments with similar economic characteristics, the income from which is exempt from regular U.S. income tax. Some municipal obligations, such as general obligation issues, are backed by the taxing power of the municipal issuer, while other municipal securities, such as revenue issues, are backed only by the revenue from certain facilities or other sources and not by the municipal issuer itself. Risks. The main risks for Western Asset Tax-Efficient Enhanced Cash SMA portfolios are General Investment Risk, Credit Risk, Interest Rate Risk, Illiquidity Risk and Non-U.S. Investment Risk. Depending on the specific investment approach a client selects, additional significant risks may include Geographic Concentration Risk and Below Investment Grade Risk. See Appendix B for explanations of these risks. Western Asset Municipal Bond Ladders Western Asset Municipal Bond Ladders seek to provide periodic income that is exempt from regular U.S. income tax through investment in a diversified portfolio of municipal securities with laddered maturities. Municipal securities include debt securities issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers, and investments with similar economic characteristics, the income from which is exempt from regular U.S. income tax. Some municipal obligations, such as general obligation issues, are backed by the taxing power of the municipal issuer, while other municipal securities, such as revenue issues, are backed only by the revenue from certain facilities or other sources and not by the municipal issuer itself. “Laddering” involves building a portfolio of municipal securities with staggered maturities so that a portion of the portfolio will mature periodically. The client selects a maturity range for the ladder from among those ranges made available by Western Asset. Currently, 1-15 Year and 1-30 Year maturity ranges are available but Western Asset may make other maturity ranges available from time to time. Portfolios generally will hold one to three issues for each maturity rung on the ladder. Individual municipal securities are purchased with the intent to hold such security until maturity unless Western Asset determines to sell such security due to credit concerns or the sale of such security is needed to fund a client withdrawal of funds. To maintain the ladder, money that comes in from maturing bonds is typically reinvested in bonds with longer maturities within the range of the ladder. Western Asset Municipal Bond Ladders will invest in individual municipal securities that are rated Baa/BBB or above at the time of purchase by one or more Nationally Recognized Statistical Rating Organizations or, if unrated, in securities of comparable quality at the time of purchase, as determined by Western Asset. Western Asset selects and monitors securities for Western Asset Municipal Bond Ladders using Western Asset’s proprietary research. Western Asset Municipal Bond Ladders generally will not invest in municipal securities that are subject to the Alternative Minimum Tax (“AMT bonds”). Western Asset Municipal Bond Ladders generally will include securities of issuers in multiple states and U.S. jurisdictions. Clients who are residents of California, New York or certain other states have the option of selecting a state-specific or state-biased portfolio. For state-specific portfolios, Western Asset seeks to invest only in municipal securities the income from which is exempt from state income taxes in the specified state, but may also invest, if warranted by market conditions including the available supply of municipal securities, in municipal securities the income from which is not exempt from state income taxes in the specified state. For state-biased portfolios, Western Asset emphasizes investments in municipal securities the income from which is exempt from state income taxes in the specified state, but may also invest in municipal securities the income from which is not exempt from state income taxes in the specified state. Western Asset may limit the states for which state-specific and state-biased portfolios are available. It should be noted that state-specific and state-biased portfolios may have a higher concentration in certain sectors and issuers relative to national portfolios due to more limited diversity of in state issues. Risks. The main risks for Western Asset Municipal Bond Ladders are General Investment Risk, Credit Risk, Interest Rate Risk, Illiquidity Risk and, for state-specific and state-based portfolios, Geographic Concentration Risk. See Appendix B for explanations of these risks. Western Asset Tax-Efficient Bond Western Asset Tax-Efficient Bond portfolios seek to produce total returns over complete market cycles that exceed benchmark returns through an actively managed, tax-efficient portfolio that has taxable and tax-exempt components. Western Asset determines a portfolio’s allocation to taxable and tax-exempt components in its discretion. Such allocations will vary over time due to market movements and Western Asset’s allocation decisions. Investments may include municipal obligations that are exempt from U.S. federal income tax and taxable fixed income obligations such as U.S. Treasury and agency, corporate and mortgage-backed obligations. U.S. dollar-

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denominated fixed income securities of non-U.S. developed and emerging market sovereign and corporate issuers may also be included in the taxable component of portfolios. Securities will have a minimum rating of Baa3/BBB- at the time of purchase, using the higher of split ratings. Securities downgraded below Baa3/BBB- will be evaluated by Western Asset on a case-by-case basis. A Western Asset Tax-Efficient Bond portfolio’s investment in taxable fixed income obligations will be substantial. Risks. The main risks for Western Asset Tax-Efficient Bond Portfolios are General Investment Risk, Credit Risk, Interest Rate Risk, Extension Risk, Prepayment Risk, Below Investment Grade Risk, Illiquidity Risk and Non-U.S. Investment Risk. See Appendix B for explanations of these risks. Western Asset Custom Muni Western Asset Custom Muni Portfolios are customized portfolios of municipal and other securities that are professionally managed in accordance with specific investment guidelines developed by the client in conjunction with the client’s financial advisor and Western Asset based on the client’s circumstances (including other investments), financial objectives and needs. Such guidelines may address one or more of the following: maturity and duration limitations applicable to overall portfolio or to individual portfolio holdings; credit quality specifications applicable to overall portfolio or to individual portfolio holdings, including actions that must be taken in the event of credit downgrades; individual issuer concentration limitations; sector exposure limitations or restrictions; exposure guidelines, limitations or restrictions for specific states; limitations or restrictions with respect to securities subject to AMT (alternative minimum tax); ability to invest in securities other than tax-free municipal securities, including without limitation taxable municipal bonds, corporate bonds, U.S. Treasury or agency securities, preferred stock and variable rate demand notes; extent to which portfolio should focus on “ total return” or “income generation”; income generation targets; limitations on realization of short-term or long-term capital gains; and target levels of cash or short-term maturity investments.

Risks: The main risks for Western Asset Custom Muni Portfolios are General Investment Risk, Credit Risk, Interest Rate Risk and Illiquidity Risk. Depending on the specific investment guidelines established for the portfolio, additional significant risks may include Geographic Concentration Risk, Industry Concentration Risk, Issuer Concentration Risk, Extension Risk, Prepayment Risk and Below Investment Grade Risk. See Appendix B for explanations of these risks. A client should develop investment guidelines for a Western Asset Custom Muni Portfolio only after considering the client’s specific circumstances (including other investments), financial objectives and needs. Legg Mason Multiple Discipline Account® The Legg Mason Multiple Discipline Account® enables clients to allocate their assets among multiple investment styles using one client account.3 Currently, LMPPG makes the following portfolios available (generally in pre-set allocation combinations) in the Multiple Discipline Account: ClearBridge All Cap Growth, ClearBridge All Cap Value, ClearBridge Appreciation, ClearBridge Dividend Strategy, ClearBridge International Value ADR, Western Asset GSM 7-Year, Western Asset Core Plus, Western Asset Current Market Muni, ClearBridge International Growth ADR, ClearBridge Large Cap Growth, ClearBridge Large Cap Value and ClearBridge Multi Cap Growth. These portfolios are described in this Section A. LMPPG may make additional portfolios available in Multiple Discipline Accounts for which a Legg Mason Custom Asset Management level of service is selected. See “Legg Mason Custom Asset Management” in Section B of this Item 8 for information about these service levels. LMPPG or the other firm that implements Subadviser investment decisions purchases and sells securities for the client’s Legg Mason Multiple Discipline Account based on instructions received from the Subadvisers responsible for such portfolios. Where LMPPG implements Subadviser investment decisions, it may make adjustments if one or more segments of the client’s allocation becomes over- or under-weighted as a result of market appreciation or depreciation. LMPPG generally makes such adjustments (excluding adjustments requested by clients) with the approval of the applicable Subadviser(s). Where a firm other than LMPPG implements Subadviser investment decisions, such other firm may make adjustments if one or more segments of the client’s allocation become over- or under-weighted as a result of

3 Multiple Discipline Account® is a trademark of Morgan Stanley Smith Barney LLC. LMPPG, which is not affiliated with Morgan Stanley Smith Barney

LLC, uses this trademark under license.

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market appreciation or depreciation. Because all over- and under-weights will not result in allocation adjustments, over time a client’s allocation may shift as markets change. As a result of the possibility of allocation adjustments, the performance and tax attributes of a Legg Mason Multiple Discipline Account may differ from the performance and tax attributes of single-style portfolios that are managed separately. Please see the tables on the following pages for a description of available Legg Mason Multiple Discipline Account portfolios.

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The current equity-oriented investment options offered in Legg Mason’s Multiple Discipline Account are as follows:

Investment Management Portfolio

Target Allocations

Available Substitutions4

MDA0 – Legg Mason All Cap Blend5

50% ClearBridge All Cap Growth 50% ClearBridge All Cap Value

ClearBridge Large Cap Value for ClearBridge All Cap Value

MDA1- Legg Mason Large Cap Blend6

50% ClearBridge Large Cap Growth 50% ClearBridge Large Cap Value,

ClearBridge All Cap Value for ClearBridge Large Cap Value

If this substitution is made, portfolio is referred to as “MDA1A – Legg Mason Multi-Cap Blend II”

MDA2 – Legg Mason Global Large Cap Growth

70% ClearBridge Large Cap Growth 30% ClearBridge International Growth ADR

ClearBridge International Value ADR for ClearBridge International Growth ADR

MDA3 – Legg Mason Dividends & Growth

70% ClearBridge Dividend Strategy 30% ClearBridge Multi Cap Growth

ClearBridge Appreciation for ClearBridge Dividend Strategy

MDA4 – Legg Mason Global Multi-Cap Growth

40% ClearBridge Large Cap Growth 30% ClearBridge International Growth ADR 30% ClearBridge Multi Cap Growth

ClearBridge International Value ADR for ClearBridge International Growth ADR

MDA5 – Legg Mason Multi-Cap Blend III

40% ClearBridge Large Cap Growth 40% ClearBridge Large Cap Value 20% ClearBridge Multi Cap Growth

ClearBridge All Cap Value for ClearBridge Large Cap Value If this substitution is made, portfolio is

referred to as “MDA5A – Legg Mason Diversified All Cap”

MDA6 – Legg Mason Global Large Cap Blend

40% ClearBridge Large Cap Growth 40% ClearBridge Large Cap Value 20% ClearBridge International Growth ADR

• ClearBridge All Cap Value for ClearBridge Large Cap Value

• ClearBridge International Value ADR for ClearBridge International Growth ADR

MDA7 – Legg Mason Global Growth

30% ClearBridge Large Cap Growth 30% ClearBridge Large Cap Value 20% ClearBridge International Growth ADR 20% ClearBridge Multi Cap Growth

• ClearBridge All Cap Value for ClearBridge Large Cap Value

If this substitution is made, portfolio is referred to as “MDA7A – Legg Mason Global All Cap”

• ClearBridge International Value ADR for ClearBridge International Growth ADR

MDA8 – Legg Mason Global All Cap Blend

40% ClearBridge All Cap Growth 40% ClearBridge All Cap Value 20% ClearBridge International Value ADR

• ClearBridge Large Cap Value for ClearBridge All Cap Value

Legg Mason—Multi-Cap Blend I

70% ClearBridge All Cap Value 30% ClearBridge Multi Cap Growth

N/A

Legg Mason—Global Mid- Large Cap Blend

40% ClearBridge Large Cap Growth 30% ClearBridge Mid Cap 30% ClearBridge International Growth ADR

N/A

Legg Mason—Current Income

80% Western Asset GSM 7-Year 20% ClearBridge Large Cap Growth

N/A

Legg Mason—Balanced 60% Western Asset GSM 7-Year 20% ClearBridge Large Cap Value 20% ClearBridge Large Cap Growth

N/A

Legg Mason—Growth & Income

40% Western Asset GSM 7-Year 20% ClearBridge Large Cap Value 20% ClearBridge Large Cap Growth 20% ClearBridge International Growth ADR

N/A

Legg Mason—Moderate Growth

20% Western Asset GSM 7-Year 20% ClearBridge Large Cap Growth 20% ClearBridge Large Cap Value 20% ClearBridge Mid Cap 20% ClearBridge International Growth ADR

N/A

4 Where a substitution is made, an “A” is added at the end of the name of the MDA portfolio to reflect such substitution. For example, a Legg Mason All

Cap Blend portfolio that includes ClearBridge Large Cap Value instead of ClearBridge All Cap Value is referred to as a “MDA0A” portfolio. 5 For Linsco Private Ledger clients, the Legg Mason MDA0 or All Cap Blend portfolios are referred to as “MDA-All Cap Core.” 6 For Ameriprise clients, MDA1 or Large Cap Blend portfolios with allocations to ClearBridge Large Cap Growth and ClearBridge Large Cap Value are

referred to as “Legg Mason Large Cap”.

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Legg Mason—Growth 25% ClearBridge Large Cap Value 25% ClearBridge Large Cap Growth 25% ClearBridge Mid Cap 25% ClearBridge International Growth ADR

N/A

Each of the above equity-oriented options with a numeric identifier and Legg Mason-Global Mid-Large Cap Blend are also offered as part of the following balanced investment options offered in Legg Mason’s Multiple Discipline Account:


Target Allocations

Available Substitutions

Legg Mason Balanced 70/30

70% Equity (see equity allocations above)

30% Western Asset GSM 7-Year7

Western Asset Current Market Muni or Western Asset Core Plus for Western Asset GSM 7-Year8

Legg Mason Balanced 60/40

60% Equity (see equity allocations above)

40% Western Asset GSM 7-Year7

Western Asset Current Market Muni or Western Asset Core Plus for Western Asset GSM 7-Year8

The equity portion of each of the above balanced investment options is invested in one of the Legg Mason Multiple Discipline Account equity investment options set forth above, as designated by the client, provided that the target percentage allocation to an asset class utilized under an equity option is subject to adjustment, based on methodology established by LMPPG, so that the target percentage allocation to such asset class, expressed as a percentage of the client’s entire account, is a whole number percentage allocation. LMPPG and the Subadvisers do not provide asset allocation advice as part of their investment advisory services for Legg Mason Multiple Discipline Accounts. For accounts in excess of $500,000, the client may be able to tailor the asset allocation and investment management portfolios. Certain Legg Mason Multiple Discipline Account portfolios no longer available to new clients, but still provided to existing clients who selected such portfolios, are not specifically described in this brochure herein. LMPPG may have referred to certain of these portfolios with numbers (e.g., MDA3) that now refer to different, currently offered Legg Mason Multiple Discipline Account portfolios. Clients who continue to receive investment management services in accordance with Legg Mason Multiple Discipline Account portfolios no longer specifically described in this brochure should contact their Sponsor Firm representatives if they have questions about such portfolios. Risks: Legg Mason Multiple Discipline Accounts are subject to the risks associated with their underlying investment portfolios, as described in this brochure and in Appendix B.

7 For clients of Morgan Stanley Wealth Management on researched platforms, balanced portfolios typically utilize Western Asset GSM 5-Year rather than

Western Asset GSM 7-Year. 8 If Western Asset Current Market Muni is selected, depending on the total amount of assets in the portfolio, there could be fewer positions and less turnover

with respect to that portion of the Legg Mason Balanced portfolio than would be the case if an investor invested in Western Asset Current Market Muni as a stand-alone investment portfolio. This is due to potentially lower portfolio assets being committed to the Western Asset Current Market Muni strategy as part of the Legg Mason Balanced portfolio than would be the case if the investor invested in the strategy as a stand-alone portfolio, which has a $100,000 investment minimum.

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ClearBridge Dynamic MDAs

LMPPG and ClearBridge make available various ClearBridge Dynamic MDA portfolios that allocate client assets among certain of the ClearBridge equity investment styles described above, certain of the ClearBridge Fixed Income ETF Portfolios described below in “Custom Asset Management-ClearBridge Fixed Income ETF Models”, and the Western Asset Gov/Corp investment style described above. Available ClearBridge Dynamic MDA Portfolios include:


Underlying Investment Styles

Allocation Bands

ClearBridge Dynamic MDA U.S. Growth Portfolio

ClearBridge Large Cap Growth ClearBridge Multi Cap Growth ClearBridge Mid Cap Growth

20% - 55% 20% - 40% 20% - 55%

ClearBridge Dynamic MDA Global Growth Portfolio

ClearBridge All Cap Growth ClearBridge Mid Cap Growth ClearBridge International Growth ADR

20% - 55% 20% - 55% 20% - 55%

ClearBridge Dynamic MDA Global Growth and Value Portfolio

ClearBridge Multi Cap Growth ClearBridge Dividend Strategy ClearBridge International Value ADR

20% - 55% 20% - 55% 20% - 55%

ClearBridge Dynamic MDA Global Growth and Value ESG Portfolio

ClearBridge Large Cap Growth ESG ClearBridge All Cap Value ESG ClearBridge International Growth ADR ESG

20% - 55% 20% - 55% 20% - 55%

ClearBridge Dynamic MDA U.S. Growth and Income Portfolio

ClearBridge Dividend Strategy ClearBridge Large Cap Growth ClearBridge Multi Cap Growth

20% - 50% 20% - 50% 20% - 50%

ClearBridge Dynamic MDA U.S. Dividend Balanced Portfolio

ClearBridge Appreciation ClearBridge Dividend Strategy ClearBridge Select ETF Investment Grade

Bond

20% - 50% 20% - 50% 15% - 55%

ClearBridge Dynamic MDA Global Dividend Balanced Portfolio

ClearBridge Dividend Strategy ClearBridge International Value ADR ClearBridge Select ETF Investment Grade Bond

20% - 55% 20% - 55% 20% - 55%

ClearBridge Dynamic MDA U.S. Dividend Balanced ESG Portfolio

ClearBridge Appreciation ESG ClearBridge Dividend Strategy ESG Western Asset Gov/Corp

20% - 50% 20% - 50% 15% - 55%

ClearBridge allocates a portfolio’s assets among the designated underlying investment styles, generally operating within the allocation bands set forth above. ClearBridge seeks to add value by periodically reviewing and adjusting a portfolio’s allocation among its underlying investment styles within the allocation bands set forth above. In the event that a portfolio’s allocation to an underlying investment style exceeds the upper end of its allocation band or drops below the lower end of its allocation band due to market movements, ClearBridge will take steps to promptly adjust the portfolio’s allocation to such investment style so that such allocation is brought back within the allocation band. ClearBridge’s asset allocation determinations, reviews and adjustments are made using a proprietary, quantitative model that helps ClearBridge assess the relative attractiveness of various asset categories and potential for increased returns relative to risk using various combinations of underlying investment styles. The goal of the process is to seek to enhance an account’s long-term performance and risk-adjusted returns relative to portfolios that are not subject to regular asset allocation reviews and adjustments.

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As a result of the dynamic asset allocation process described above, the performance and tax attributes of a ClearBridge Dynamic MDA will differ from the performance and tax attributes of single-style portfolios that are managed separately. Allocation adjustments among underlying investment styles will result in the realization of capital gains and losses. Risks: ClearBridge Dynamic MDA portfolios are subject to the risks associated with their underlying investment portfolios, including ESG Investing Risk, as described in this brochure and in Appendix B. In addition, such accounts are subject to Asset Allocation Risk. See Appendix B for an explanation of Asset Allocation Risk. B. Custom Asset Management LMPPG and Sponsor Firms may make available two types of customized investment management services: Custom Multiple Discipline Account and Custom Portfolios. Custom Portfolios may also be referred to as “ClearBridge Private Client Management” accounts. Custom MDA As described under “Legg Mason Multiple Discipline Account®,” a Custom Multiple Discipline Account allows the client to tailor asset allocation to two or more management styles using one account. LMPPG does not provide asset allocation advice as part of its investment advisory services in connection with Custom Multiple Discipline Accounts. Apart from the client’s tailoring of the account’s asset allocation (by specifying approximate target allocations for the account), LMPPG manages Custom Multiple Discipline Accounts in the same manner as Legg Mason Multiple Discipline Accounts with pre-set asset allocations. Custom Portfolios/ClearBridge Private Client Management For a Custom Portfolio or ClearBridge Private Client Management account, the client works with a ClearBridge portfolio manager to select one or more ClearBridge investment styles and approximate target allocations. Available ClearBridge investment styles may include not only ClearBridge equity strategies but also ClearBridge Taxable Fixed Income Management or ClearBridge Non-Taxable Fixed Income Management strategies (see below). Custom Portfolios allow for greater tailoring to client needs than may be available for a non-Custom account, including accommodation of a wider range of client-imposed restrictions. Available customization features may include rebalancing based on client needs, responsiveness to tax considerations and coordination of tax-sensitive selling. In addition, although ClearBridge’s separate account management services generally are model-based, ClearBridge may agree to manage Custom Portfolio accounts in accordance with modified investment models, or in some cases without reference to a specific ClearBridge investment style, in order to meet specific income requirements or other client preferences and needs. A Custom Portfolio may have one or more of the following investment features, each of which involves an increased risk of loss to the client: (i) less security holdings (i.e., less diversification) than in non-customized accounts; (ii) different security weightings than in non-customized accounts; and (iii) security holdings that are not held in non-customized accounts. The management and performance of Custom Portfolios typically will vary from the management and performance of non-customized portfolios of the same style(s) due to one or more of the customization features described above. In addition, ClearBridge’s application of customization features to Custom Portfolio accounts may result in trades for such accounts being placed after trades in the same securities are placed for non-customized accounts of the same style. Any such timing differences could negatively impact Custom Portfolios. A Custom Portfolio account will subject a client to the main risks described in this brochure for each investment style represented in the account and generally will also involve additional risks associated with the client’s customization requirements. The additional risks associated with a Custom Portfolio account may include any one or more of the risks explained in Appendix B. Clients should impose customization requirements only after considering the client’s specific circumstances (including other investments), financial objectives and needs. A Custom Portfolio may be invested in shares of closed-end funds, including closed-end funds for which one or more affiliates of LMPPG serves as investment manager or adviser and earns management or advisory fees. A client will bear a proportionate share of the fees and expenses incurred by any closed-end fund held in the client’s account in addition to the wrap or management fees charged at the client account level. Any purchases of such shares are made in secondary market transactions. Accordingly, the purchase of such shares on behalf of client

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accounts does not result in increased compensation for LMPPG’s affiliates. Closed-end funds often utilize leverage, which can increase the risk of large losses and increase portfolio volatility. Shares of closed-end funds frequently trade at a discount from their net asset value due to market and economic conditions and other factors. This risk is separate and distinct from the risk that the fund’s net asset value could decrease as a result of its investment activities. For multi-style Custom Portfolios, ClearBridge may make adjustments if one or more segments of a client’s allocation to multiple investment styles becomes over- or under-weighted as a result of market appreciation or depreciation. Because all over- and under-weights will not result in allocation adjustments, a multi-style Custom Portfolio client’s allocation may shift as markets change. As a result of the possibility of allocation adjustments, the performance and tax attributes of a multi-style Custom Portfolio may differ from the performance and tax attributes of separately managed single-style portfolios. Also, certain Custom Portfolio accounts may include Western Asset investment styles. ClearBridge Taxable Fixed Income Management For clients who select Custom Portfolios, ClearBridge may make available fixed income management for taxable fixed income investments. ClearBridge generally works with such clients who select ClearBridge Taxable Fixed Income Management to develop a fixed income investment approach that reflects the client’s desired risk/reward profile for the portfolio and other investment preferences. A client may request that ClearBridge apply environmental, social and governance criteria and other social screens (such as specific mission-consistent or faith-based screens) in managing the client’s portfolio. Taxable fixed income investments may include U.S. Government and Agency securities, taxable municipal securities, corporate notes and bonds, commercial paper, planned amortization class collateralized mortgage obligations (“CMOs”) and other early-tranche CMOs. ClearBridge Taxable Fixed Income Management portfolios may also make limited investments in shares of preferred stock. Risks. The main risks associated with ClearBridge Taxable Fixed Income Management include General Investment Risk, Credit Risk, Extension Risk, Interest Rate Risk and Prepayment Risk. Depending on the specific investment approach, main risks may also include ESG Investing Risk, Geographic Concentration Risk, Issuer Concentration Risk and Illiquidity Risk. See Appendix B for explanations of these risks. ClearBridge Non-Taxable Fixed Income Management9 For clients who select Custom Portfolios, ClearBridge may make available fixed income management for non-taxable fixed income investments. ClearBridge generally works with such clients who select ClearBridge Non-Taxable Fixed Income Management to develop a fixed income investment approach that reflects the client’s desired risk/reward profile for the portfolio and other investment preferences. A client may request that ClearBridge apply environmental, social and governance criteria and other social screens (such as specific mission-consistent or faith-based screens) in managing the client’s portfolio. Non-taxable fixed income investments consist of municipal securities, which include debt securities issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers, and investments with similar economic characteristics, the income from which is exempt from regular U.S. income tax. Gains from the sale of municipal securities generally are subject to capital gains tax. For clients who choose a state-specific portfolio, ClearBridge seeks to invest only in municipal securities the income from which is exempt from state income taxes in the specified state, but may also invest, if warranted by market conditions including the available supply of municipal securities, in municipal securities the income from which is not exempt from state income taxes in the specified state. For clients who choose a state-biased portfolio, ClearBridge emphasizes municipal securities the income from which is exempt from state income taxes in the specified state, but also may invest in other municipal securities. It should be noted that state-specific and state-biased portfolios may have a higher concentration in certain sectors and issuers relative to national portfolios due to more limited diversity of in state issues. Risks. The main risks associated with ClearBridge Non-Taxable Fixed Income Management include General Investment Risk, Credit Risk, Extension Risk, Interest Rate Risk and Prepayment Risk. Depending on the specific investment approach, main risks may also include ESG Investing Risk, Geographic Concentration Risk, Issuer Concentration Risk and Illiquidity Risk. See Appendix B for explanations of these risks.

9 LMPPG and ClearBridge do not provide tax advice and, therefore, cannot guarantee that income from a municipal security will not be taxable. Clients

should consult their own tax advisers for tax advice.

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ClearBridge Fixed Income ETF Portfolios LMPPG and Sponsor Firms may make available ClearBridge Fixed Income ETF portfolios as part of ClearBridge Dynamic MDA, Custom MDA and multi-style Custom Portfolio accounts that include one or more equity styles (they generally are not available on a standalone basis). The fixed income ETF portfolios clients may be able to select are the ClearBridge Active ETF U.S. Treasury Portfolio, the ClearBridge Active ETF Municipal Portfolio, the ClearBridge Active ETF Taxable Portfolio, the ClearBridge Active ETF High Income Portfolio, the ClearBridge Select ETF Municipal Portfolio and the ClearBridge Select ETF Investment Grade Bond Portfolio. In addition, ClearBridge, in its sole discretion, may agree to client requests for different fixed income ETF portfolios. In determining the composition of each ETF portfolio, ClearBridge seeks to provide the client with investment exposure to the specified fixed income sector(s) through investment in one or more ETFs and to attain any other client objective ClearBridge has specifically agreed to pursue. In the case of an “Active ETF” portfolio, ClearBridge selects the underlying fixed income ETFs and actively manages the portfolio’s allocations to such fixed income ETFs. In the case of a “Select ETF” portfolio, ClearBridge selects the underlying fixed income ETFs, but does not anticipate making changes to the portfolio’s allocations to underlying ETFs except under exceptional market conditions. An ETF is an unmanaged compilation of multiple individual securities and typically represents a particular securities index or sector of the securities market. All ETFs are subject to their own level of expenses. A client will bear a proportionate share of these expenses for each ETF held in the client’s account, in addition to the wrap or management fees charged at the client account level. An ETF’s prospectus describes the ETF’s expenses, along with the risks associated with investing in the ETF. Clients may obtain ETF prospectuses from their Sponsor Firms. Risks. The Main risks for all ClearBridge Fixed Income ETF Portfolios include General Investment Risk, Credit Risk, Extension Risk, Interest Rate Risk and Prepayment Risk. Additional main risks for the ClearBridge Active ETF Taxable Portfolio and the ClearBridge Active ETF High Income Portfolio are Below Investment Grade Risk and Non-U.S. Investment Risk. An additional main risk for the ClearBridge Select ETF Investment Grade Bond Portfolio is Non-U.S. Investment Risk. Additional main risks for the ClearBridge Active ETF Municipal Portfolio and the ClearBridge Select ETF Municipal Portfolio are Illiquidity Risk and Geographic Concentration Risk. See Appendix B for explanations of these risks. C. Certain Additional Information Cash Balances. Significant cash balances may exist in client accounts from time to time, including when a Subadviser instructs account contributions and sales proceeds to be invested gradually. LMPPG and the Subadvisers do not determine the short-term investments in which cash balances are invested and are not responsible for the suitability or performance of such investments. Client Contributions of Securities. If a client contributes securities to the client’s account and they are not included in the selected investment management portfolio, LMPPG or the other firm responsible for applying Subadviser investment decisions or recommendations to the account may sell such securities. Sales of contributed securities may result in taxable gains or losses. Also, investment of sales proceeds in accordance with the selected portfolio may not be immediate. Accounts funded in whole or in part with securities may perform differently and have different holdings and weightings than accounts funded solely with cash equivalents. Account Uniformity and Certain Potential Differences. There may be a substantial degree of uniformity among client accounts (of either LMPPG or a Sponsor Firm) in LMPPG-Implemented Programs, Discretionary Model Programs and Non-Discretionary Model Programs that select the same investment management portfolio. However, many factors may cause differences in the composition and performance of such client accounts, including:

• Date of account inception • Levels and timing of client-initiated activity, such as account contributions and withdrawals • Client-imposed restrictions • Investment limits (see below)

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• A Subadviser’s approach to model portfolio maintenance and adjustment (see below)

• A Subadviser’s and LMPPG’s approach to adjusting or rebalancing account positions in response to market movements (see below)

• The relative outperformance or underperformance of individual portfolio holdings

• Differing portfolio composition requirements and implementation approaches of implementing firms in Discretionary Model Programs and Non-Discretionary Model Programs (see below)

• Differences in the timing of trade executions and prices obtained by LMPPG on behalf of clients in LMPPG-Implemented Programs relative to the timing of trade executions and prices obtained by an implementing firm on behalf of clients in Discretionary Model Programs and Non-Discretionary Model Programs

Certain regulatory or other limits on the amount a Subadviser (alone or together with its affiliates) may invest in a company may cause the composition and performance of client accounts for which the same portfolio is selected to vary from one another more than they otherwise might. For portfolios that involve investments in more volatile securities, these limits may cause even greater performance differences. In the case of certain investment management portfolios, ClearBridge, as subadviser to LMPPG, may utilize a “static” model approach in maintaining and adjusting the model portfolio that it furnishes to LMPPG in LMPPG-Implemented Programs. Under such approach, the model portfolio’s percentage weightings to individual portfolio holdings are not continually adjusted to reflect the relative market performance of such holdings. Accordingly, a new account’s percentage weightings to portfolio holdings typically will differ from the percentage weightings in previously established accounts in the same strategy. In addition, in the case of certain ClearBridge investment management portfolios, client accounts may not be regularly adjusted or rebalanced in response to the relative underperformance or outperformance of such names over time. This will cause differences in portfolio weightings across client accounts over longer periods than in the case of strategies that adjust or rebalance client accounts more frequently. Differences in portfolio weightings across client accounts, combined with the relative outperformance or underperformance of individual portfolio holdings, will cause client accounts in the same investment management portfolio to experience differing performance over time. For Discretionary Model Programs and Non-Discretionary Model Programs, the Sponsor Firm or another firm it selects (not LMPPG or a Subadviser) applies Subadviser investment decisions or recommendations to client accounts. Such a firm may impose model composition requirements, or follow implementation practices, that result in client accounts in these programs having different holdings and performing differently than LMPPG-Implemented Program client accounts for which the same investment management portfolio is selected. Transfers to New Investment Programs—Potential Account Adjustments. If a client transfers an account from one investment program to another and selects the same investment management portfolio, LMPPG or the other firm responsible for implementing Subadviser investment decisions or recommendations for the new program may adjust the account’s holdings. This may result in the realization of capital gains or losses that would not have occurred if the client had not transferred the account. Account adjustments in this situation may result from LMPPG or the other implementing firm treating the transferred account as a new account in the new program, different model composition requirements or implementation practices in the old and new programs, or other factors. Margin Loans. A Sponsor Firm may permit a client to take out a loan secured by assets in the client’s account. Such loans are referred to as “margin loans.” Clients should understand that, if they obtain margin loans secured by assets in their accounts, the Sponsor Firm generally will be able to liquidate all or part of the account at any time to repay any portion of the loan, even if the timing of the liquidation is disadvantageous to the client and disrupts management of the account in accordance with the selected investment management portfolio. Neither LMPPG nor any Subadviser has any responsibility for (i) a client’s decision to take out a margin loan, (ii) the terms of any margin or related agreement to which a client is a party, or (iii) the sale, liquidation, or disposition of securities in the client’s account in order to satisfy the client’s obligations under such an agreement.

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Item 9 DISCIPLINARY INFORMATION There are no reportable legal or disciplinary events for LMPPG and ClearBridge. Western Asset has the following disciplinary matters to report. Such disciplinary matters did not involve or impact client accounts managed by Western Asset, as subadviser to LMPPG, in investment management programs sponsored by Sponsor Firms. ERISA Action Western Asset was alleged to have breached certain provisions of the Investment Advisers Act of 1940 (“Advisers Act”) and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), arising from the purchase by ERISA accounts of a security that was not an eligible investment for ERISA accounts and the subsequent handling of the matter. On January 27, 2014, the Securities and Exchange Commission (“SEC”) issued an order instituting a public administrative proceeding, making findings and imposing sanctions. Without admitting or denying the SEC’s findings, Western Asset consented to the entry of the order, was censured, agreed to undertake certain remedial measures, and agreed to pay a fine of $1,000,000. On January 27, 2014, Western Asset also entered into a settlement with the US Department of Labor on the same matter and agreed to pay a fine of $1,000,000. As part of the settlements Western Asset also made compensatory payments to impacted clients in the amount of $10,000,000 in the aggregate. Cross Trade Action Western Asset was alleged to have breached certain provisions of the Advisers Act, the Investment Company Act of 1940, as amended, and ERISA in connection with certain trades that were alleged to be cross trades. On January 27, 2014, the SEC issued an order instituting a public administrative proceeding, making findings and imposing sanctions. Without admitting or denying the SEC’s findings, Western Asset consented to the entry of the order, was censured, agreed to undertake certain remedial measures, and agreed to pay a fine of $1,000,000. On January 27, 2014, Western Asset also entered into a settlement with the US Department of Labor on the same matter with respect to ERISA clients and agreed to pay a fine of $607,717. As part of the settlements Western Asset also made compensatory payments to impacted clients in the amount of $7,440,881 in the aggregate. In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 9 of the Subadviser’s Form ADV disclosure document for a description of any reportable disciplinary matters.

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Item 10 OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS A. Certain Arrangements and Relationships with Affiliates

In addition to the subadvisory arrangements between LMPPG and each Subadviser described in this brochure, LMPPG, ClearBridge and Western Asset have the following business arrangements and relationships with affiliates that clients may wish to consider. Legg Mason Investor Services, LLC. Legg Mason Investor Services, LLC (“LMIS”) is registered as a broker-dealer under U.S. securities laws and is an affiliate of LMPPG and the Subadvisers. LMIS markets the LMPPG/Subadviser investment advisory services described in this brochure and other Legg Mason investment products and services, including Legg Mason mutual funds managed by the Subadvisers. Certain employees of LMPPG and the Subadvisers, including certain management personnel of each Subadviser, are registered representatives of LMIS. This status enables these employees to assist LMIS with its marketing activities. LMPPG and Subadviser employees do not receive commissions or other sales-based compensation and spend no more than a limited amount of their time assisting LMIS.

Affiliated Investment Funds. Each of ClearBridge and Western Asset manages one or more U.S. registered investment funds for which its affiliate, LMIS, serves as distributor. These funds include the Legg Mason family of open-end mutual funds and certain closed-end funds. ClearBridge and Western Asset manage these registered funds as subadvisers to their investment adviser affiliate, Legg Mason Partners Fund Advisor, LLC. Each of ClearBridge and Western Asset also manages certain unregistered affiliated U.S. investment funds and certain registered and/or unregistered affiliated non-U.S. investment funds. LMPPG/ClearBridge Relationship. LMPPG has a relationship with ClearBridge in which ClearBridge supports LMPPG in the following functional areas: management, compliance, technology, finance and human resources. Affiliated Mutual Fund Investments. As described in Item 8 of this brochure, the Western Asset Core, the Western Asset Core Plus and the Western Asset Managed Municipals investment management portfolios involve investments in shares of certain Legg Mason mutual funds that Western Asset subadvises. Affiliated Closed-End Fund Investments. As described in Item 8 of this brochure, a Custom Portfolio or ClearBridge Private Client Management account may be invested in shares of closed-end investment companies, including closed-end investment companies for which one or more affiliates of LMPPG serves as investment manager or adviser and earn management or advisory fees. Any purchases of such shares are made in secondary market transactions. Accordingly, the purchase of such shares on behalf of client accounts does not result in increased compensation for LMPPG’s affiliates. Supervised Affiliates of Western Asset. Western Asset has certain affiliated investment adviser firms that are under common management and supervision with Western Asset (collectively, the “Supervised Affiliates”). Subject to compliance with applicable legal requirements, Western Asset may delegate its portfolio management responsibilities for a client account to any one of these Supervised Affiliates. Western Asset’s current Supervised Affiliates are:

1. Western Asset Management Company Limited (London), which is authorized and regulated by the United Kingdom’s Financial Conduct Authority and is registered as an investment adviser with the SEC as well as with the Korea Financial Supervisory Commission and the Dubai Financial Services Authority;

2. Western Asset Management Company Pty Ltd (Melbourne) ABN 41 117 767 923, which holds Australian

Financial Services License 303160;

3. Western Asset Management Company Distribuidora de Titulos e Valores Mobiliarios Limitada, which is (i) authorized and regulated by Brazilian securities and banking regulators, and (ii) registered as an investment adviser with the SEC;

4. Western Asset Management Company Pte. Ltd. (Singapore) Co. Reg. No. 200007692R, which holds a Capital

Markets Services License for fund management and is regulated by the Monetary Authority of Singapore and is registered as an investment adviser with the SEC;

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5. Western Asset Management Company Ltd (Tokyo) is a registered financial instruments dealer whose business is

investment advisory or agency business, investment management, and Type II Financial Instruments Dealing business with the registration number KLFB (FID) No. 427, and a member of Japan Investment Advisers Association (membership number 011-01319) and Investment Trust Association, Japan, and is registered with the Securities and Exchange Commission.

Registration with or licensing by a regulator does not imply endorsement by the regulator. Nor does it imply a certain level of skill or training. B. LMPPG and the Subadvisers: Commodity Law-Related Status

The principal business of LMPPG, ClearBridge and Western Asset is providing securities-related investment advisory services to clients. LMPPG, ClearBridge and Western Asset do not provide advice on commodity interests (e.g., futures, options on futures, swaps) as part of the investment advisory services they provide in Sponsor Firm investment programs. LMPPG and ClearBridge are not registered as commodity trading advisors under U.S. commodities laws. Western Asset is registered as a commodity pool operator and a commodity trading advisor and therefore may provide advice on commodity interests to certain clients outside of Sponsor Firm investment programs. This permits Western Asset to manage or operate certain collective investment vehicles that include significant investments in commodity interests. Certain Western Asset employees, including certain management and investment personnel, are registered as associated persons of Western Asset under U.S. commodities laws. Certain additional Western Asset employees may have applications pending for such associated person status. C. Other Subadvisers In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 10 of such Adviser’s Form ADV disclosure document for a description of such Subadviser’s financial industry activities and affiliations that are in addition to the subadvisory arrangement between LMPPG and such Subadviser.

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Item 11 CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING As briefly described below in Sections A, B and C, LMPPG, ClearBridge and Western Asset have adopted codes of ethics designed to comply with applicable legal requirements and address potential conflicts of interest associated with personal trading by their employees. Section D below discusses these potential conflicts of interest. Section E below discusses potential conflicts of interest associated with accounts in which ClearBridge, Western Asset, their affiliates and/or their employees have a proprietary interest. A. LMPPG

LMPPG has adopted a Code of Ethics imposing standards of business conduct, including requirements to put client interests first and not to take inappropriate advantage of employment-related information. The Code is intended to prevent conflicts of interest between employees and clients from affecting the investment advisory services LMPPG provides to clients and to assure compliance with applicable laws. To prevent employees from taking advantage of their knowledge of which securities LMPPG is purchasing and selling (and recommending for purchase and sale) for clients, the Code imposes restrictions on employee personal securities transactions. The Code requires LMPPG employees to obtain pre-approval of most personal securities transactions from LMPPG’s Compliance Department. In addition, except in the case of smaller personal trades in large capitalization stocks (which LMPPG expects will not affect client trades), the Code prohibits personal trades in a security on any day during which there are open, executed or pending LMPPG trades in the same security as a result of a model portfolio change a Subadviser has communicated to LMPPG before the employee’s placing of a personal trade for the security. This prohibition under the Code seeks to prevent employees from “front-running” client trades and possibly benefitting personally from the impact of client trades on the market. In addition, when seeking preclearance for personal trades, LMPPG requires its employees to certify that they are not trading on material non-public information. Additional restrictions imposed by the Code include minimum holding periods for profitable trades, as well as minimum holding periods for ClearBridge managed funds. LMPPG requires all employees to report their personal securities accounts, transactions and holdings to LMPPG’s Compliance Department and to certify to the completeness of the information and their compliance with the Code on an annual basis. Existing and prospective LMPPG clients may obtain copies of the Code of Ethics by mailing a written request to:

Legg Mason Private Portfolio Group, LLC 620 8th Avenue, 47th Floor New York, NY 10018

Attention: Compliance Department B. ClearBridge ClearBridge has adopted a Code of Ethics imposing standards of business conduct, including requirements to put client interests first and not to take inappropriate advantage of employment-related information. The Code is intended to prevent conflicts of interest between employees and clients from affecting the investment advisory services ClearBridge provides to clients and to assure compliance with applicable laws. To prevent employees from taking advantage of their knowledge of which securities ClearBridge is purchasing and selling (and recommending for purchase and sale) for clients, the Code imposes restrictions on employee personal securities transactions. The Code requires ClearBridge employees to obtain pre-approval of most personal securities transactions from ClearBridge’s Compliance Department. In addition, except in the case of smaller personal trades in large capitalization stocks (which ClearBridge expects will not affect client trades), the Code prohibits personal trades in a security if there is then an open order for the security on ClearBridge’s trading desk. The Code imposes greater restrictions on ClearBridge portfolio managers, who cannot trade in a security for their personal accounts for seven days before and after they recommend or direct a trade in the same security for client accounts. By having these “black-out” periods, the Code seeks to prevent employees from “front-running” client trades and possibly benefiting personally from the impact of client trades on the market. In addition, when seeking preclearance for personal trades, ClearBridge requires its employees to certify that they are not (i) taking an investment opportunity from a client, or (ii) trading on material non-public information.

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Additional restrictions imposed by the Code include minimum holding periods for profitable trades so that employees, especially portfolio managers and analysts, devote their time to managing client accounts and not their own, as well as minimum holding periods for mutual funds ClearBridge manages to prevent market timing. ClearBridge requires all employees to report their personal securities accounts, transactions and holdings to ClearBridge’s Compliance Department and to certify to the completeness of the information and their compliance with the Code on an annual basis. Existing and prospective ClearBridge clients may obtain copies of the Code by mailing a written request for such document to:

ClearBridge Investments, LLC 620 8th Avenue, 47th Floor New York, NY 10018 Attention: Compliance Department

C. Western Asset

Employees of Western Asset and its Supervised Affiliates are required to follow Western Asset’s Code of Ethics. Subject to satisfying the Code of Ethics and applicable laws, such employees may trade for their own accounts in securities that are recommended to and/or purchased for client accounts. The Code of Ethics emphasizes Western Asset’s fiduciary obligation to put client interests first. The Code of Ethics is designed to assure that the personal securities transactions, activities and interests of employees will not interfere with the responsibility to make decisions in the best interest of clients. The Code of Ethics places certain restrictions on the personal trading of securities that are also held in client accounts. The Code of Ethics requires Western Asset employees to pre-clear certain transactions that may represent a conflict with Western Asset’s management of client accounts, and imposes a minimum holding period on certain types of investments. Western Asset’s investment personnel are subject to more restrictive requirements based on their position. Western Asset’s Code of Ethics requires employees to make initial disclosures and certifications upon joining the firm and to acknowledge receipt and review of the Code of Ethics on an annual basis. Western Asset receives copies of all broker confirmations and statements for employees’ personal securities transactions in order to monitor compliance with the Code. Western Asset’s Legal and Compliance Department is responsible for monitoring compliance with the Code of Ethics. Violations are reported to Western Asset’s Chief Compliance Officer and Operations Committee. Successive violations are subject to increasingly serious consequences including termination of employment and other sanctions. Existing and prospective clients of Western Asset may obtain copies of Western Asset’s Code of Ethics by mailing a written request to:

Western Asset Management Company, LLC 385 East Colorado Boulevard Pasadena, CA 91101 Attention: Legal and Compliance Department

D. Discussion of Potential Conflicts of Interest Associated with Employee Personal Trading LMPPG employees and ClearBridge and Western Asset employees may make personal investments in the same securities LMPPG and ClearBridge and Western Asset invest in for client accounts. Employees may also make personal investments in related securities or financial instruments, such as options, futures and warrants. In some cases, employees may make these investments at or about the same time LMPPG, ClearBridge or Western Asset is making the same investments or related investments for client accounts. This possibility involves a potential conflict between client interests and the personal interests of the employee. For example, if an LMPPG, ClearBridge or Western Asset employee learns of a ClearBridge or Western Asset investment decision prior to the decision’s implementation for client accounts, the employee may have an incentive to seek to benefit himself or herself by making a personal transaction in the security before such implementation takes place, potentially disadvantaging the client accounts. Another example involves an employee’s personal investment in a particular security giving the employee an incentive to benefit himself or herself by investing client accounts, or recommending client investment, in the same security or a related security (instead of investing client accounts or recommending investments based solely on what the employee believes is in the best interests of clients). LMPPG and each of ClearBridge and Western Asset seek to prevent personal trading-related potential conflicts of interest from affecting their investment advisory services by subjecting their employees’ personal trading activity to the requirements

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and restrictions of the applicable Code of Ethics described above. Examples of requirements and restrictions that address these potential conflicts of interest include:

• pre-clearance requirements for certain personal securities transactions; • prohibitions on certain personal securities transactions at or near the time the same or related securities are

being purchased or sold (or recommended for purchase or sale) for client accounts;

• minimum holding periods for certain employee personal investments; and

• Compliance Department monitoring of employee personal investments and securities transactions. E. Discussion of Potential Conflicts of Interest Associated with Proprietary Accounts Each of ClearBridge and Western Asset may have conflicts of interest relating to its management of accounts, including commingled investment vehicles, in which it, one of its affiliates and/or its employees have a significant proprietary interest. Such interest may provide an incentive for ClearBridge or Western Asset to favor such account over other client accounts. As noted in Item 6 of this brochure, each of ClearBridge and Western Asset has adopted policies and procedures that are designed to ensure that investment opportunities are allocated fairly and equitably to client accounts. In addition, each of ClearBridge and Western Asset monitors the trading activity in, and the performance of, accounts in which it, one of its affiliates and/or its employees have a significant proprietary interest to ensure that such accounts are not being favored over other client accounts. F. Other Potential Conflicts of Interest In addition to their codes of ethics applicable to employee personal securities transactions and their policies and procedures relating to proprietary accounts, LMPPG, ClearBridge and Western Asset have adopted other policies and procedures that are designed to address various potential conflicts of interest that may arise in the course of their business as an investment adviser. Such potential conflicts and related policies and procedures pertain to matters such as political contributions, receipt of gifts and entertainment, prohibition on outside public company board service and business activities, personal investment with business contacts, prohibitions on trading while in possession of material non-public information and error resolution. G. Other Subadvisers In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 11 of such Subadviser’s Form ADV disclosure document for a discussion of such Subadviser’s Code of Ethics, conflicts of interest associated with personal trading by such Subadviser’s employees and with proprietary accounts managed by such Subadviser, and other conflicts of interest that may arise.

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Item 12 BROKERAGE PRACTICES For client accounts in LMPPG-Implemented Programs, LMPPG or Western Asset selects broker-dealers to execute securities transactions as follows:

• LMPPG Broker-Dealer Selection. Except as noted below, LMPPG selects broker-dealers to execute securities transactions for client accounts as described below in Section A.

• Western Asset Broker-Dealer Selection. For Western Asset portfolios and balanced portfolio fixed income

allocations Western Asset manages, Western Asset selects broker-dealers to execute securities transactions as described below in Section C.

In LMPPG-Implemented Programs, each client (or the Sponsor Firm on the client’s behalf) generally directs LMPPG or Western Asset, as applicable, to place securities trades for execution with the client’s Sponsor Firm or a designated broker (“Designated Broker”), subject to the obligation to seek best execution. For clients who enter into investment management agreements directly with LMPPG, LMPPG typically requires such a direction. Also, in many Sponsor Firm investment programs, the Sponsor Firm and/or applicable laws prohibit, or make impractical, the execution of fixed income securities trades with the client’s Sponsor Firm. LMPPG generally does not have trade placement responsibility under Discretionary Model Programs and Non-Discretionary Model Programs. However, LMPPG’s agreement with the Sponsor of such a program may permit LMPPG or Western, as applicable, to include accounts in a block trade that LMPPG or Western, as applicable, places on behalf of accounts under LMPPG-Implemented Programs. Assuming such inclusion is contractually permitted, it is anticipated that the circumstances in which LMPPG or Western, as applicable, will seek in practice to include accounts from non-LMPPG-Implemented Programs in a block trade will be very limited due to the significant operational, coordination and timing challenges presented by such inclusion. In addition to describing how LMPPG and Western Asset select broker-dealers to execute trades for client accounts, Sections A, B and C below describe the trade aggregation, allocation and communication (including model change communication) practices of LMPPG, ClearBridge and Western Asset. In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 12 of such Subadviser’s Form ADV disclosure document for a description of such Subadviser’s trade aggregation, allocation and communication (including model change communication) practices. Subadvisers other than ClearBridge and Western Asset provide, in conjunction with LMPPG, investment advisory services primarily under Discretionary Model Programs and Non-Discretionary Model Programs, but may also provide such services under LMPPG-Implemented Programs. A. LMPPG Selection of Broker-Dealers By LMPPG to Execute Equity Securities Transactions LMPPG seeks best execution when selecting broker-dealers to execute securities transactions. Best execution consists of obtaining the most favorable result for clients within the current parameters of the market. LMPPG does not necessarily measure best execution by the circumstances surrounding a single transaction and may seek best execution over time across multiple transactions. LMPPG selects broker-dealers it believes will provide prompt and reliable execution at favorable security prices with reasonable commission rates and/or other transaction costs. LMPPG considers the best net price, giving effect to any brokerage commissions, commission equivalents, mark-ups, mark-downs, spreads, and other transaction costs, an important factor in selecting broker-dealers to execute securities transactions. LMPPG may also consider other factors, including: the nature of the security being traded; the size and complexity of the transaction; the desired timing of the trade; the activity existing and expected in the market for the particular securities; confidentiality; execution, clearance and settlement capabilities; counterparty financial condition and reliability; the availability of capital commitment; and other appropriate trade execution services of the broker-dealer.

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To the extent practical, LMPPG may select the client’s Sponsor Firm, a Designated Broker or any broker-dealer LMPPG has approved as an executing broker to execute securities transactions for client accounts, including alternative execution venues (e.g., electronic communication networks and crossing networks), as executing brokers. Transactions Driven By Client Account-Specific Activity For equity securities transactions driven by client account-specific activity, such as account contributions and withdrawals, LMPPG expects to select the client’s Sponsor Firm or Designated Broker to execute all or a large percentage of such transactions. Transactions sent to the client’s Sponsor Firm or Designated Broker for execution are subject to the Sponsor Firm’s or Designated Broker’s operational processes. Such processes will impact when and how such transactions are executed and are not within LMPPG’s control. Clients with equity investment management portfolios or allocations to such portfolios typically pay their Sponsor Firms or Designated Brokers wrap fees or other asset-based fees for services that include execution of agency trades (equity securities generally trade on an agency basis and fixed income securities generally trade on a principal basis). In such fee arrangements, clients typically will not pay any transaction-specific commissions on equity securities transactions when LMPPG selects their Sponsor Firms or Designated Brokers to execute those securities transactions. Certain clients may have fee arrangements with their Sponsor Firms or Designated Brokers under which they pay transaction-specific commissions on equity securities transactions instead of wrap fees or other asset-based fees. LMPPG has no role in negotiating the commission schedule that is agreed to by the client and the Sponsor Firm or Designated Broker. Due to regulatory considerations and Sponsor Firm requirements, LMPPG executes fixed income securities transactions through a broker-dealer other than a client’s Sponsor Firm or Designated Broker in most instances, including transactions driven by client account-specific activity. Transactions Driven by a Model Change For equity securities transactions that are driven by a change in a Sub-Adviser’s investment model and that need to be simultaneously effected for many clients (i.e., model-change trades), LMPPG has executed, and expects to continue to execute, all or substantially all of these transactions as an aggregated block trade through a single broker-dealer instead of executing the transactions with each client’s Sponsor Firm or Designated Broker. LMPPG believes that handling equity model change trades in this manner enhances its ability to obtain best execution for client accounts. The main alternative to this approach would be to use a trade rotation process for model change trades, in which LMPPG separately and sequentially transmits orders for the transactions to each Sponsor Firm or Designated Broker for execution. LMPPG believes that effecting model-change trades as block trades eliminates the detrimental impact on market prices of placing separate, successive orders into the marketplace as well as the potential for general movements in securities prices over the extended time period needed to complete a trade rotation. Further, block trading helps to reduce the risks of information leakage (i.e., increasing the number of broker-dealers receiving orders increases the chances that those broker-dealers will trade in anticipation of the orders or seek to use information on LMPPG’s trading to the detriment of LMPPG’s clients), which could result in less advantageous execution prices for clients whose accounts LMPPG trades after making the same trade for other clients. Also, LMPPG believes that effecting model-change trades as block trades often may enable LMPPG to benefit all participating client accounts because more favorable securities prices may be obtained under certain circumstances by trading in larger volumes and because LMPPG may be able to take advantage of additional sources of liquidity that certain broker-dealers and trading venues can provide. In addition, block trading promotes the fair and equitable treatment of client accounts by ensuring that participating client accounts obtain the same execution price and achieve comparable investment performance. A client account included in a block trade for an equity security frequently will be charged commissions, commission equivalents, markups or markdowns or spreads which typically are reflected in the net security price paid or received by the client. Any such commissions, commission equivalents or spreads will be in addition to the asset-based fee, transaction-specific commissions and other fees and charges the client pays to the client’s Sponsor Firm or Designated Broker. In the case of a fee arrangement under which a client pays its Sponsor Firm or Designated Broker transaction-specific commissions, the Sponsor Firm or Designated Broker may charge higher commissions on trades executed away from the Sponsor Firm or Designated Broker. In addition, a client’s Sponsor Firm or Designated Broker may charge tradeaway, stepout, prime brokerage, clearing, settlement or similar processing charges and fees (“processing charges”) on trades executed away from the Sponsor Firm or Designated Broker. Any such processing charges will be in addition to the asset-based fee or transaction-specific commissions the client pays to the client’s Sponsor Firm or Designated Broker. LMPPG has no role in negotiating the commission schedules and processing charges that are agreed to by the client and the Sponsor Firm or Designated Broker and does not consider such commission schedules and processing charges in executing model-change trades as block trades through a single broker-dealer and in selecting broker-dealers to execute such transactions.

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In an effort to monitor that the trading method it utilizes is consistent with its obligation to seek best execution for client transactions, LMPPG does a trade cost analysis on significant block trades. This trade cost analysis includes a review of the percentage of the daily volume each trade represents, a comparison of the execution price versus the arrival price (the price of the security at the time the order was initially implemented), and a comparison of the execution price versus the Volume Weighted Average Price (“VWAP”) during the time the order is active. The trade cost analysis includes any implied commission paid (as this is reflected in the total security price or proceeds), and such information is retained with a record of the trade. In addition, LMPPG‘s Brokerage Committee provides oversight of LMPPG’s trading activities in an effort to ensure that client transactions are being executed in a cost-effective manner consistent with LMPPG’s policies and procedures. The Brokerage Committee meets quarterly. The Committee is provided with trade cost analyses for significant block trades, the average commissions or commission equivalents incurred by client accounts during the quarter and the percentage of trades that incurred such additional costs, as well as a list of the broker-dealers used by LMPPG and their share of volume. To execute client account transactions in ADRs that, in LMPPG’s judgment, have limited liquidity in U.S. markets, LMPPG may select broker-dealers that purchase the ADR issuer’s underlying ordinary shares in non-U.S. markets and then package such shares into an ADR (in the case of an ADR purchase) or convert the ADR into underlying ordinary shares of the ADR issuer and then sell such shares in non-U.S. markets (in the case of an ADR sale). These transactions typically involve foreign exchange, ADR conversion and related costs and charges that are reflected in the net price paid or received by the client. LMPPG expects to execute all or substantially all model-change equity trades as block trades, as described above. However, LMPPG reserves the ability to disaggregate model-change equity trades and follow a trade rotation approach among Sponsor Firms if it decides that a block trade approach is not practical or consistent with seeking best execution for a particular model-change trade, even though LMPPG has not had to implement a trade rotation to date with respect to any model change trade and anticipates that the instances in which it will do so in the future will be rare. If LMPPG makes a decision to do so, LMPPG will communicate trade orders and instructions to Sponsor Firms and Designated Brokers in a manner and sequence that LMPPG believes is fair and equitable to LMPPG’s clients. In addition, LMPPG may decide not to include clients of a particular Sponsor Firm in a block trade due to factors such as a direction from the Sponsor Firm to place all trades for its clients’ accounts with the Sponsor Firm or a Designated Broker without regard for best execution (see below) or temporary operational issues at particular Sponsor Firms or Designated Brokers. In such cases, LMPPG will arrange for execution of the block and non-block trades in a manner that LMPPG believes is fair and equitable to LMPPG’s clients (although all or some clients may receive a less advantageous price than if the trades had been aggregated and executed as a single block order). In the cases where a particular Sub-Adviser investment strategy is included in a single LMPPG-Implemented Program, LMPPG reserves the ability to execute model-change equity trades for client accounts with the Sponsor Firm or Designated Broker, instead of with broker-dealers other than the Sponsor Firm or Designated Broker, if LMPPG determines that doing so would be consistent with seeking best execution. Selection of Broker-Dealers By LMPPG to Execute Fixed Income Securities Transactions To select broker-dealers for execution of fixed income securities transactions, LMPPG generally engages a selected pool of broker-dealer firms in bid/offer negotiations or uses Alternative Trading Systems, which enable LMPPG to see multiple bids or offers at the same time. LMPPG seeks best execution and considers any one or more of the following factors, based on the specific circumstances of the transaction: reliability of the broker-dealer; availability of capital commitment; price level; mark-up, mark-down or spread; quality of execution; promptness of execution; ability to execute the full size of the trade; nature and difficulty of the trade; confidentiality; and specialized expertise. Fixed income securities transactions are executed in most instances with broker-dealers other than a client’s Sponsor Firm or Designated Broker due to regulatory considerations and Sponsor Firm requirements. In addition, a client’s Sponsor Firm or Designated Broker may charge tradeaway, stepout, prime brokerage, clearing, settlement or similar processing charges and fees (“processing charges”) on trades executed away from the Sponsor Firm or Designated Broker. Any such processing charges will be in addition to the asset-based fee or transaction-specific commissions the client pays to the client’s Sponsor Firm or Designated Broker. LMPPG has no role in negotiating the processing charges that are agreed to by the client and the Sponsor Firm or Designated Broker and does not consider such processing charges in selecting broker-dealers to execute securities transactions.

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Directed Brokerage Although LMPPG generally is subject to the obligation to seek best execution, LMPPG in its sole discretion may accept a client or Sponsor Firm direction to use the client’s Sponsor Firm or a Designated Broker to execute all or certain securities trades for the client’s LMPPG-Implemented Program account without regard for whether best execution may be achieved. In the event LMPPG accepts such a direction:

(i) LMPPG will not negotiate the Sponsor Firm’s or Designated Broker’s trade execution services or compensation for such services on behalf of the client account,

(ii) LMPPG will not be in a position to, and will not, monitor for best price and execution of transactions

Sponsor Firm or Designated Broker executes for the client account, and

(iii) the prices and execution quality achieved for the account may be less favorable, including more costly to the client account, than the prices and execution quality LMPPG achieves for other client accounts.

In addition, LMPPG’s business relationship with the applicable Sponsor Firm or Designated Broker may give LMPPG an incentive to recommend that the client or Program Sponsor issue such a direction. A client or Sponsor Firm may terminate such a direction by notifying LMPPG in writing. LMPPG Aggregation of Trade Orders and Trade Allocation. As noted above, LMPPG generally seeks to aggregate equity trades that are driven by a change in a ClearBridge investment model and that need to be simultaneously effected for many client accounts in LMPPG-Implemented Programs. LMPPG generally allocates securities purchased or sold as part of an aggregated order to each participating account in an amount equal to its percentage of the aggregated order. Each participating account receives the average price for the transaction and shares any transaction costs pro rata based upon the account’s level of participation in the aggregated order. If a client’s Sponsor Firm or Designated Broker charges trade away processing, clearing or settlement charges for the trade, the client’s account separately bears these charges. In the case of a partially-filled aggregated order for an equity security, LMPPG allocates the securities purchased or sold among participating accounts according to one or more methods designed to ensure that the allocation is equitable and fair. These methods include pro rata allocation and random allocation. Under the pro rata method, LMPPG allocates all securities purchased or sold pro rata to all of the accounts included in the order based upon the amount of securities LMPPG intended to purchase or sell for each participating account. Under the random allocation method, LMPPG allocates the partially filled order to accounts included in the aggregated order on a random basis. LMPPG generally uses this method only after seeking direction or agreement from the Subadviser portfolio management team responsible for the underlying investment decision. The random allocation method is intended for situations in which the partial execution quantity is an amount that does not allow for a pro rata allocation of securities to all accounts or does not allow for a meaningful allocation of securities to all accounts. Where an aggregated order covers clients in multiple Sponsor Firm investment programs, LMPPG first allocates the securities to the investment programs participating in the order following one of the accepted trade allocation methods. LMPPG then allocates the securities to clients within each investment program following one of the accepted trade allocation methods. With respect to fixed income securities, client accounts are generally traded individually due to client-specific needs and requirements and due to the availability of the appropriate instrument that meets each client’s specific needs and requirements. LMPPG’s Communication and Implementation of ClearBridge Model Changes. As a general matter, LMPPG seeks to communicate trade orders and ClearBridge investment instructions and recommendations for the same equity security to its own trading desk and to any Sponsor Firm or Designated Broker that is responsible for portfolio implementation, trade placement or trade execution at the same time. In certain cases, however, administrative requirements (e.g. formatting requirements) or implementation practices of a Sponsor Firm or Designated Broker (e.g. accepting instructions or recommendations only once daily or only during particular times of the day) may delay the communication of investment instructions or recommendations. Similarly, required portfolio implementation work may delay LMPPG’s communication of trade orders to a Sponsor Firm or Designated Broker for execution. Due to such potential delays, as well as any delays by a Sponsor Firm in acting upon investment instructions or recommendations it receives, LMPPG’s trading desk may be able to place certain trade orders with broker-dealers for certain client accounts before LMPPG is able to place trade orders in the

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same security with a Designated Broker and/or such Sponsor Firm is able to place trade orders in the security for accounts it services. In such cases, accounts serviced by the Sponsor Firm or Designated Broker could be negatively impacted by such timing differences. Trade orders placed by Sponsor Firms or Designated Broker trading desks (where LMPPG forwards ClearBridge investment instructions or recommendations to such firms) in most cases will end up competing in the marketplace with orders placed by LMPPG’s trading desk for LMPPG client accounts with respect to which LMPPG implements ClearBridge investment instructions. This competition may negatively affect both LMPPG’s clients and client accounts managed by Sponsor Firms. LMPPG undertakes to mitigate or offset the negative effect on execution quality from such competition by seeking to tightly control the timing of its executions, limiting orders based on daily trading volume and setting price targets. B. ClearBridge’s Communication of Investment Instructions to LMPPG

ClearBridge provides investment instructions to LMPPG in a manner it believes is fair and equitable in relation to non-LMPPG client accounts for which it provides investment advisory services. For ClearBridge equity investment management portfolios in LMPPG-Implemented Programs, LMPPG’s trading desk places trades for LMPPG-Implemented Program client accounts based on investment instructions furnished by ClearBridge. For such portfolios in Discretionary Model Programs and Non-Discretionary Programs, a trading desk of the Sponsor Firm or such firm’s designee places trades for execution. LMPPG has obtained assurances from ClearBridge that ClearBridge will communicate investment model changes to LMPPG in accordance with procedures designed to be fair and equitable to LMPPG’s clients in relation to other clients of ClearBridge. The trading desks of LMPPG and Sponsor Firms and their designees operate independently of ClearBridge’s trading desk. ClearBridge uses this trading desk to execute trades for non-LMPPG clients, including mutual funds and certain institutional separately managed accounts. Accordingly, trades executed by LMPPG, Sponsor Firm and designee trading desks are not aggregated with trades in the same security that the ClearBridge trading desk executes. ClearBridge seeks to treat all clients fairly and equitably by generally sending investment instructions to its trading desk and to LMPPG at the same time. Trade orders placed by LMPPG’s trading desk and Sponsor Firm and designee trading desks (where LMPPG forwards ClearBridge investment instructions to such firms) in most cases will end up competing in the marketplace with orders placed by the ClearBridge trading desk for non-LMPPG clients. This competition may negatively affect all clients, but ClearBridge expects that, for securities with significant liquidity and trading volume, this liquidity and volume generally will offset all or a significant portion of any negative effect on price from such competition. In addition, for transactions in less liquid securities, ClearBridge may seek to reduce the negative effect of this competition by means such as the use of limit orders and specific price targets. Given the availability of these approaches to lessening the negative effects on price of competing trade orders, ClearBridge believes that simultaneously communicating investment instructions to LMPPG and to its own trading desk is, as a general rule, preferable to following a rotation process. Issues associated with a rotation process include detrimental market impact (i.e. earlier trades move market causing subsequent trades to receive inferior price), “signaling” concerns (i.e. broker-dealers anticipate additional trades in same security and use this information to the detriment of the manager’s client), and timing differences that result in clients obtaining different execution prices and performance dispersion among accounts. Although ClearBridge expects to send all or substantially all of its investment instructions applicable to LMPPG clients and its non-LMPPG clients to LMPPG and ClearBridge’s own trading desk at the same time, it may instead follow a trade rotation approach if it decides the simultaneous communication approach is not practical or consistent with best execution. Any such rotation will be conducted in a manner that is fair and equitable to all affected clients. Since the inception of LMPPG in 2007, ClearBridge has not had to implement a trade rotation between LMPPG and ClearBridge’s own trading desk. C. Western Asset

Western Asset Selection of Broker-Dealers to Execute Securities Transactions. Western Asset maintains an Approved Broker List that includes broker-dealers Western Asset believes demonstrate desk strength, knowledgeable sales coverage, quality research, capital commitment and financial stability. Western Asset may only select broker-dealers on this list to execute securities transactions for client accounts. Fixed income securities transactions are executed in most instances with broker-dealers other than a client’s Sponsor Firm or Designated Broker due to regulatory considerations and Sponsor Firm requirements.

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Western Asset seeks to obtain best execution of its clients’ trades through monitoring and effectively controlling the quality of trade decisions. Because the circumstantial and judgmental aspects involved in obtaining best execution with respect to a particular trade are not always quantifiable, Western Asset does not define a single measurement basis for best execution on a trade-by-trade basis. Instead, Western Asset focuses on establishing processes, disclosures, and documentation, which together form a systematic, repeatable, and demonstrable approach to seeking best execution.

In addition, when selecting a broker-dealer to execute trades, the Western Asset personnel making trades on behalf of clients are obliged to consider the full range and quality of a broker-dealer’s services, which may include execution capability, commission rate, spreads, price, financial responsibility and responsiveness. Western Asset is not obligated to merely get the lowest price or commission, but rather should determine whether the transaction represents the best qualitative execution for the account. Broker-dealers typically do not charge commissions on fixed income securities transactions. New issues are the only meaningful exception to this general rule, and they have a set commission rate that is the same for all executing broker-dealers. Secondary issues, by far the largest proportion of fixed income securities transaction volume, trade at net prices with no commissions charged. In addition, a client’s Sponsor Firm or Designated Broker may charge tradeaway, stepout, prime brokerage, clearing, settlement or similar processing charges and fees (“processing charges”) on trades executed away from the Sponsor Firm or Designated Broker. Any such processing charges will be in addition to the asset-based fee or transaction-specific commissions the client pays to the client’s Sponsor Firm or Designated Broker. Western Asset has no role in negotiating the processing charges that are agreed to by the client and the Sponsor Firm or Designated Broker and does not consider such processing charges in selecting broker-dealers to execute securities transactions. Western Asset may receive research or other services (both solicited and unsolicited) from broker-dealers in the ordinary course of trading on behalf of client accounts. These items are not received pursuant to arrangements or agreements to exchange brokerage activity for services or benefits and are not considered to be obtained using “soft dollars.” Western Asset is not obliged to direct brokerage in order to receive such information. However, Western Asset may consider such research or services in making best execution decisions when executing trades. As a result, Western Asset may have an incentive to select a broker-dealer based on its interest in receiving the research or services that the broker-dealer provides to Western Asset in the ordinary course of trading for client accounts rather than its clients’ interest in receiving the most favorable execution. Western Asset Aggregation of Trade Orders and Trade Allocation. The Western Asset investment team responsible for managing a client’s account generally will aggregate trade orders for the client’s account with one or more accounts of other clients the team services if it determines that the trade is appropriate for such accounts and aggregation is practical and consistent with client requirements and the pursuit of best execution. If the investment team does not aggregate in such a situation and instead has the trades executed separately, the prices and execution quality achieved for all or some of the client accounts for which the trade is appropriate may be less favorable, including more costly to the accounts, than if the team had aggregated the trades. Western Asset completes the allocation of securities purchased or sold in an aggregated order among participating clients no later than the end of the day on which the transaction is completed. In addition, in order to ensure that no client participating in an aggregated order is favored over any other, Western Asset gives each client participating in an aggregated order the average share price for the transaction. Each client shares transaction costs on a pro-rata basis based upon the client’s level of participation in the aggregated order. If the aggregated order is partially filled, each client participating in the transaction receives a pro-rated portion of the securities based upon the client’s level of participation in the aggregated order. However, Western Asset may subject its pro-ration of partially-filled aggregated trade orders to individual client factors such as: investment goals and guidelines, available cash, liquidity requirements, odd lot positions, minimum allocations, existing portfolio holdings compared to the target weightings and regulatory restrictions. Western Asset then weighs allocations by portfolio market value, making adjustments as needed so that final allocations are in round lots. Western Asset periodically reviews all its client accounts to identify situations where a potential conflict of interest may exist. This may include accounts where Western Asset has a proprietary interest or accounts where the investment strategy may conflict with other Western Asset clients. Western Asset follows specific trade allocation procedures to avoid the conflicts inherent in these situations. Prior to the settlement of a trade, Western Asset may revise its allocation of the trade provided the allocation is suitable, fair and equitable. Documentation of the suitability of the allocation should be maintained and reviewed by senior management.

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Western Asset Communication of Investment Instructions. Western Asset communicates investment instructions in accordance with a process that is fair and equitable to LMPPG client accounts in relation to other clients of Western Asset. Sponsor Firm investment programs can raise trade communication conflicts issues if the Sponsor Firm or its designee, and not Western Asset, handles all or a portion of the trading for program accounts. To achieve fair and equitable treatment across client accounts, Western Asset considers not only the manner in which it allocates trades to accounts but also the sequence in which it delivers trade orders to the market for execution and any corresponding investment instructions to third parties that handle trading for LMPPG client accounts. The delivery of certain orders and instructions to a large number of market intermediaries and Program Sponsors at the same time could adversely impact the market price of a security, especially for less liquid instruments. Accordingly, Western Asset’s policy is to address each Sponsor Firm investment program where it does not handle all trading for its accounts with procedures to address these conflicts. As a potential alternative to Western Asset’s standard practice of communicating trade orders and any corresponding investment instructions at approximately the same time, these procedures will normally include a program of trade rotation among Sponsor Firms with trade placement responsibility to prevent any single program’s client accounts from consistently being able to trade first or last within the rotation. Western Asset’s use of such a rotation approach normally will be on an asset weighting basis with investment programs with more managed assets having a pro rata larger weighting in the rotation. As a result, clients in smaller programs may not receive overall as good execution as clients in larger programs. D. Other Subadvisers In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 12 of such Subadviser’s Form ADV disclosure document for a description of such Subadviser’s trade aggregation, allocation and communication (including model change communication) practices. Subadvisers other than ClearBridge and Western Asset provide investment subadvisory services to LMPPG under Discretionary Model Programs and Non-Discretionary Model Programs. E. Error Policies Each of LMPPG and Western Asset maintains an Error Policy aimed at ensuring the prompt detection, reporting and correction of errors affecting the accounts of LMPPG clients for which they have portfolio implementation and trade placement responsibility. Under the policies, the correction method used for an error must put the client in the same position the client would have been in had the error not occurred (i.e., the client must be made whole for any error-related losses and costs suffered). If an error involves multiple security positions, LMPPG or Western Asset, as applicable, may calculate the net loss caused by the error (if any) by aggregating such positions (for a client account) and offsetting any gains that resulted from the error against the gross losses that resulted from the error. LMPPG and Western Asset, like other investment managers, have a conflict of interest in connection with the identification and resolution of trade errors, operational errors and other errors. Specifically, each of LMPPG and Western Asset, as a party who may bear some or all of the financial responsibility to correct an error, has an incentive to determine that an error did not occur or, if one has occurred, to resolve it in a manner that minimizes the financial impact on it. However, each of LMPPG and Western Asset endeavor to make determinations concerning errors in good faith and in accordance with applicable legal standards. In addition, such determinations typically are made in consultation with appropriate compliance personnel. LMPPG’s and Western Asset’s Error Policies generally apply only to the extent that LMPPG or Western Asset, as applicable, has control of resolving errors for client accounts. For many investment programs, the Sponsor Firm may have control over the resolution of errors of participating investment managers.

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Item 13 REVIEW OF ACCOUNTS LMPPG, ClearBridge and Western Asset review client accounts in LMPPG-Implemented Programs as described below. Also, Sections B and C below describe how ClearBridge and Western Asset review the investment strategies they provide for client accounts. LMPPG and the Subadvisers do not have implementation responsibility in Discretionary Model Programs and Non-Discretionary Model Programs and therefore generally do not review client accounts in these Programs. Subadvisers other than ClearBridge and Western Asset typically provide investment subadvisory services to LMPPG under Discretionary Model Programs and Non-Discretionary Model Programs. Sponsor Firms typically prepare and send regular account statements to clients in Sponsor Firm investment programs. LMPPG, ClearBridge and Western Asset typically do not send regular account reports to such clients, but may agree to provide certain account information to one or more Custom Portfolios/Private Client Management clients upon request. A. LMPPG

LMPPG maintains an Implementation Team consisting of Portfolio Associates. The Implementation Team’s responsibilities include implementing Subadviser investment instructions for client accounts in LMPPG-Implemented Programs. The Implementation Team uses a portfolio modeling application to review client accounts in such Programs each business day against certain parameters designed to detect client account investments that may be significantly at variance from the selected investment management portfolios. The Implementation Team also uses this application to review client accounts in connection with LMPPG’s implementation of Subadviser-instructed trading activity (e.g., purchase or sale instructions) and LMPPG’s accommodation of client-directed activity (e.g., account withdrawals and contributions). Client or Sponsor Firm inquiries may cause LMPPG to conduct additional reviews of client accounts in LMPPG-Implemented Programs. B. ClearBridge

The ClearBridge portfolio management teams responsible for providing investment management portfolios for client accounts review the portfolios they provide on an ongoing basis as part of their investment management process. This process is grounded in fundamental research and involves close monitoring of all securities that ClearBridge includes in these portfolios, as well as review of prospective investments by ClearBridge’s portfolio management teams and research team. In evaluating the portfolios, ClearBridge’s portfolio management teams may utilize attribution and sector allocation analysis, and may also review other pertinent investment and portfolio construction characteristics. ClearBridge’s Investment Risk Management group and ClearBridge’s Risk Management Committee meet on a quarterly basis to review investment strategies, including the investment strategies represented by the ClearBridge investment management portfolios described in Item 8 of this brochure. These strategy reviews focus on identifying and managing investment risk by evaluating risk factors associated with each strategy. The Risk Management Committee consists of ClearBridge’s Chief Executive Officer, co-Chief Investment Officers and the Head of Investment Risk and the Head of Business Risk. In addition, on a daily basis, ClearBridge portfolio managers review Custom Portfolios/Private Client Management accounts they manage and any other LMPPG client accounts for which ClearBridge has implementation responsibility. These reviews generally focus on accounts’ performance relative to applicable benchmarks and the continued investment appropriateness of the account’s composition, in light of factors such as the investment management portfolio selected and market conditions. C. Western Asset

Investment Reviews. On a daily basis, Western Asset’s assigned portfolio manager for each Western Asset account (including account portions) is responsible for overseeing that account. As part of this process, Western Asset’s risk management team generates a set of standard reports that focus on account structure and risk relative to the account’s benchmark, as well as any updates to the structure of the investment management portfolio that has been selected for the account. Members of Western Asset’s investment and risk management teams, including portfolio managers, review these

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reports and use them to help ensure that client accounts are structured properly in accordance with Western Asset’s expectations. Western Asset’s investment teams formally review client accounts they manage at regular investment meetings. In connection with these meetings, the team responsible for each Western Asset investment management portfolio, along with Western Asset portfolio analysts and local senior investment officers, review groups of accounts for which clients have selected that portfolio. The analysts provide a series of reports that list common portfolio and risk characteristics, as well as individual account performance. The purpose of the reviews is to ensure that accounts in each group remain in line with the current strategy for the applicable portfolio and any client-specific guidelines. Risk Management Reviews. Western Asset has a dedicated Risk Management Department with a separate reporting structure from Western Asset’s investment teams. The Risk Management Department conducts daily, biweekly and monthly reviews of portfolios and accounts, and provides analysis and reports that are used by Western Asset to monitor portfolios and accounts. Portfolio Compliance Reviews. Western Asset maintains a Portfolio Compliance group as part of its Legal and Compliance Department. For accounts Western Asset manages, Western Asset compliance officers who are part of this group monitor compliance with any applicable client-imposed restrictions or guidelines on a daily basis. These compliance officers alert the investment teams to restriction or guideline violations so they can bring the accounts back into compliance.

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Item 14 CLIENT REFERRALS AND OTHER COMPENSATION LMPPG, ClearBridge, Western Asset and their affiliates may make payments for marketing, promotional and related expenses to Sponsor Firms that may recommend LMPPG/Subadviser investment management portfolios. They also may provide Sponsor Firm personnel, including Sponsor Firm representatives, with related benefits, including:

• training meetings, including related travel, lodging and meals;

• certain client/prospect meeting materials and expenses; and • low-value gifts and promotional items.

These payments and benefits could give Sponsor Firms and their personnel, including Sponsor Firm representatives, incentives to favor LMPPG/Subadviser-affiliated investment management portfolios and other LMPPG/Subadviser-affiliated investment products and services over those of firms that do not provide the same payments, items and benefits. If LMPPG, the Subadvisers or any of their affiliates make such payments or provide such benefits, they will do so in compliance with applicable laws and internal policies aimed at preventing the compromising of advice and recommendations given to clients. In the case of a Subadviser other than ClearBridge or Western Asset, please refer to Item 14 of such Subadviser’s Form ADV disclosure document for a discussion of any payments or benefits that might be made or given to a Sponsor Firm by such Subadviser.

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Item 15 CUSTODY Neither LMPPG nor any of the Subadvisers maintains physical custody of client assets in Sponsor Firm investment programs. Instead, a broker-dealer, bank or other financial firm selected by the client (e.g., the client’s Sponsor Firm) typically maintains physical custody of client account assets. In the case of a client account in a Dual-Contract Program, LMPPG may be deemed under SEC rules to have custody of client assets if LMPPG has the ability, pursuant to client authorization, to deduct client fees directly from the client’s account by directly invoicing the account’s custodian. Clients typically will receive account statements from the firm that maintains physical custody of their accounts. Clients should carefully review these account statements. In addition, if LMPPG, ClearBridge or Western Asset agrees to provide account information, including any type of account statement, to a Custom Portfolios/Private Client Management client as described in Item 13 of this brochure, the client should compare such account information with the account statement the client receives from the custodian of the account.

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Item 16 INVESTMENT DISCRETION In Discretionary Model Programs and LMPPG-Implemented Programs, LMPPG and the Subadvisers possess the authority to determine which securities are purchased, held and sold for client accounts, subject to the investment management portfolio the client has selected – i.e., investment discretion. This authority includes the authority to determine the timing and amount of investments and transactions. In Discretionary Model Programs, LMPPG enters into an agreement with the Sponsor Firm that obligates the Sponsor Firm to implement, or cause its designee to implement, Subadviser investment decisions for client accounts, subject to any client-imposed restrictions or other client directions accepted by the Sponsor Firm or its designee. In LMPPG-Implemented Programs, LMPPG’s discretionary authority over client accounts includes the authority to implement Subadviser investment decisions for client accounts, subject to any client-imposed restrictions or other client directions LMPPG or the Subadviser accepts. This authority typically is derived from a power of attorney contained in the agreement with the Sponsor Firm in the case of a Single-Contract Program or in the agreement with the client in the case of a Dual-Contract Program. As described in Section F of Item 4 of this brochure, clients in LMPPG-Implemented Programs:

1. may impose restrictions on investments in specific securities (e.g., stock of Company ABC) or on investments in certain categories of securities (e.g., tobacco company stocks); and

2. may be able to direct sales of securities and temporary investment in ETFs.

In LMPPG-Implemented Programs, LMPPG or the applicable Subadviser accepts a proposed client account for management in accordance with a selected investment management portfolio before managing the client’s account. If the client enters into an investment management agreement directly with LMPPG, LMPPG countersigns the client’s signed investment management agreement and typically mails the fully-signed document to the client. For all Sponsor Firm investment programs, neither LMPPG nor any Subadviser renders any legal advice or has authority to take action on behalf of clients with respect to legal proceedings, including bankruptcies and shareholder litigation, to which any securities or securities issuers become subject. Accordingly, neither LMPPG nor any Subadviser will initiate or pursue legal proceedings, including without limitation shareholder litigation, for clients in such programs.

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Item 17 VOTING CLIENT SECURITIES LMPPG and the Subadvisers generally will accept authority to vote proxies, or issue proxy voting instructions, for securities held in client accounts. Summaries of the proxy voting practices of LMPPG, ClearBridge and Western Asset appear below in Sections A, B and C. Although LMPPG and the Subadvisers have no responsibility for the distribution of proxies or related solicitation material, LMPPG expects that clients who do not delegate proxy voting authority generally will receive proxies and other related solicitation materials for securities in their accounts. LMPPG and the Subadvisers generally do not provide advice to such clients on proxy solicitations. A. LMPPG

LMPPG does not exercise discretion in determining how to vote proxies for securities held in client accounts. Where a client or Sponsor Firm authorizes LMPPG to vote proxies or issue proxy voting instructions for securities held in client accounts, LMPPG does so based on proxy voting instructions provided by the applicable Subadviser. However, if a multi-style account in a LMPPG-Implemented Program holds a security based on investment instructions from more than one Subadviser and the proxy voting instructions of the Subadvisers differ for the security, LMPPG will follow the instructions of the Subadviser responsible for the largest portion of the account’s entire position in the security (and will disregard the differing instructions of each other Subadviser). A client may request:

(i) a copy of LMPPG’s Proxy Voting Policies and Procedures; and/or (ii) information concerning how LMPPG, as instructed by the applicable Subadviser, voted proxies for

securities held in the client’s account. Clients may obtain this information by sending a written request to:

Legg Mason Private Portfolio Group, LLC 620 8th Avenue, 48th Floor New York, NY 10018 Attention: Head of SMA Operations

B. ClearBridge

ClearBridge is subject to the Proxy Voting Policies and Procedures it has adopted to seek to ensure that it votes proxies and issues proxy voting instructions in the best interests of client accounts. The following is a brief overview of the policies. In making proxy voting decisions, ClearBridge is guided by general fiduciary principles and seeks to act prudently and solely in the best interest of client accounts. ClearBridge attempts to consider all factors that could affect the value of the investment and votes proxies in the manner that it believes is consistent with efforts to maximize shareholder value. ClearBridge may utilize an external service provider to provide it with information and/or a recommendation with regard to proxy votes. However, any such recommendations do not relieve ClearBridge of responsibility for the proxy vote. In the case of a proxy issue for which the policies state a particular position, ClearBridge generally votes in accordance with the stated position. In the case of a proxy issue for which the policies set forth a list of factors to consider, ClearBridge considers those factors and votes on a case-by-case basis in accordance with the general principles set forth above. In the case of a proxy issue for which the policies do not have a stated position or list of factors to consider, ClearBridge votes on a case-by-case basis in accordance with the general principles set forth above. Issues for which the policies state a particular position or a list of factors to consider fall into a variety of categories, including election of directors, ratification of auditors, proxy and tender offer defenses, capital structure issues, executive and director compensation, mergers and corporate restructuring, and social and environmental issues. The ClearBridge investment professionals responsible for a proxy vote, subject to their

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duty to act solely in the best interest of the client accounts whose shares are being voted, can always supersede the stated position on an issue set forth in the policies. Different ClearBridge investment teams may vote differently on the same issue. An investment team (e.g., ClearBridge’s ESG investment team) may adopt proxy voting policies that supplement ClearBridge’s Proxy Voting Policies and Procedures. In addition, in the case of Taft-Hartley clients, ClearBridge will comply with a client direction to vote proxies in accordance with Institutional Shareholder Services’ (ISS) PVS Voting guidelines, which ISS represents to be consistent with AFL-CIO guidelines. In furtherance of ClearBridge’s goal to vote proxies in the best interest of clients, ClearBridge follows procedures designed to identify and address material conflicts that may arise between ClearBridge’s interests and those of clients before voting proxies on behalf of such clients. To seek to identify conflicts of interest, ClearBridge periodically notifies ClearBridge employees in writing that they must (i) be aware of the potential for conflicts of interest on the part of ClearBridge with respect to voting proxies for client accounts as a result of their personal relationships or ClearBridge’s business relationships or the personal or business relationships of other Legg Mason units’ employees, and (ii) bring conflicts of interest of which they become aware to the attention of ClearBridge’s General Counsel/Chief Compliance Officer. ClearBridge also maintains and considers a list of significant ClearBridge relationships that could present a conflict of interest for ClearBridge in voting proxies. ClearBridge’s Proxy Committee reviews and addresses conflicts of interest. A proxy issue that will be voted in accordance with a stated ClearBridge position on such issue or in accordance with the recommendation of an independent third party is not brought to the Proxy Committee’s attention for a conflict of interest review because ClearBridge believes that to the extent a conflict of interest issue exists, voting in accordance with a pre-determined policy or in accordance with the recommendation of an independent third party resolves the issue. With respect to a conflict of interest brought to its attention, the Proxy Committee first determines whether the conflict is material. The Proxy Committee considers a conflict of interest material if it determines that the conflict likely will influence, or appear to influence, ClearBridge’s decision-making in voting proxies. If the Proxy Committee determines that a conflict of interest is not material, ClearBridge may vote proxies notwithstanding the existence of the conflict. If the Proxy Committee determines that a conflict of interest is material, the Proxy Committee is responsible for determining an appropriate method to resolve the conflict before ClearBridge votes the affected proxy. The Proxy Committee makes such materiality determinations based on the particular facts and circumstances, including the importance of the proxy issue and the nature of the conflict of interest. A client may request:

1. a copy of ClearBridge’s Proxy Voting Policies and Procedures; and/or

2. information concerning how ClearBridge voted proxies for securities held in the client’s account. Clients may obtain this information by sending a written request to:

ClearBridge Investments, LLC 620 8th Avenue, 47th Floor New York, NY 10018 Attention: Client Services

C. Western Asset

While proxy voting with respect to fixed income securities is rare, Western Asset has adopted a proxy voting policy and procedures to address the few instances where voting is required. Such policy and procedures are designed and implemented in a way that is reasonably expected to ensure that proxy voting matters are handled in the best interest of clients. Once proxy materials are received, they are processed in the following manner:

a. Proxies are reviewed to determine accounts impacted. b. Impacted accounts are checked to confirm Western Asset voting authority.

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c. A review is undertaken to identify any material conflicts of interest. d. If a material conflict of interest exists, (i) to the extent reasonably practicable and permitted by applicable law, the

client is promptly notified, the conflict is disclosed and Western Asset obtains the client's proxy voting instructions, and (ii) to the extent that it is not reasonably practicable or permitted by applicable law to notify the client and obtain such instructions, Western Asset seeks voting instructions from an independent third party.

e. Research analysts and portfolio managers determine votes on a case-by-case basis taking into account the voting

guidelines contained in Western Asset's procedures. Depending on the best interest of each individual client, Western Asset may vote the same proxy differently for different clients. The analyst's or portfolio manager's basis for their decision is documented.

f. Proxies are voted in accordance with the determination received from steps (d) or (e).

A full copy of the policy and procedures is available upon request. You may also request information detailing how proxies were voted with respect to securities held in your portfolio(s). Such requests may be made by sending a written request to:

Western Asset Management Company, LLC Attn: Legal and Compliance Dept. 385 E. Colorado Blvd. Pasadena, CA 91101

D. Other Subadvisers In the case of a Sub-Adviser other than ClearBridge or Western Asset, please refer to Item 17 of such Subadviser’s Form ADV disclosure document for a description of such Subadviser’s proxy voting practices.

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Item 18 FINANCIAL INFORMATION Not Applicable.

APPENDIX A

Your Privacy at ClearBridge Investments, LLC and Legg Mason Private Portfolio Group, LLC

This notice is being provided for each of ClearBridge Investments, LLC and Legg Mason Private Portfolio Group, LLC. We are concerned about the privacy of the individuals for whom we provide advisory services. We are sending this notice to individuals (“you”) who invest, for personal, family, or household purposes, in accounts that we manage. This is to help you understand how we handle, protect and limit certain nonpublic personal information that we may collect in order to conduct and process your business with us. The provisions of this notice apply to former individual advisory clients as well as current individual advisory clients unless we state otherwise. We protect any personal information we collect about you by maintaining physical, electronic and procedural safeguards that meet or exceed applicable law. Third parties who have access to such personal information must agree to follow appropriate standards of security and confidentiality. We train people who work for us in how to properly handle such personal information, and we restrict access to it. The personal information that we may collect about you comes from the following sources: • Information received from you, such as on applications or other forms. • Information about your transactions with us, our affiliates and nonaffiliated third parties; and • Information we may receive about you from other sources, such as your broker. Our affiliates are the family of companies controlled by Legg Mason, Inc. If you are a customer of other Legg Mason, Inc. affiliates and you receive notices from them, you will need to read those notices separately. We do not disclose any nonpublic personal information about you except as permitted by law. For example, we are permitted to disclose nonpublic personal information to our affiliates and non-affiliated third parties that perform various services on our behalf, including custodians, broker-dealers and companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements. These companies agree to use this information only for the services for which we hired them and are not permitted to use or share this information for any other purpose.

Your Privacy at Western Asset Management Company, LLC

Western Asset is committed to keeping nonpublic personal information about you secure and confidential. This notice is intended to help you understand how we fulfill this commitment. This privacy policy applies only to clients and former clients who are individuals. From time to time, we may collect a variety of personal nonpublic information about you, including:

• Information we receive from you on applications and forms, via the telephone, through our websites, correspondence, e-mail or other communications (including face-to-face meetings), such as your social security number, income, occupation and birth date;

• Information about your transactions with us, our affiliates, or others, such as your purchases, sales, or account

balances; and

• Information we receive from consumer reporting agencies, such as your credit worthiness and credit history. As a matter of policy, we do not disclose your nonpublic personal information, except as permitted by applicable law or regulation or as disclosed below. For example, we may share the information described above with others in order to process your transactions or service your accounts. We may also be obligated to disclose nonpublic personal information if required by the Securities and Exchange Commission or other federal or state regulatory agencies. We may also provide the information described above to companies that perform marketing or administrative services on our behalf, such as printing and mailing, or to other financial institutions with whom we have joint marketing agreements. We will require these companies to protect the confidentiality of this information and to use it only to perform the services for which we hired them. We do not supply your nonpublic personal information to third parties for their marketing purposes. With respect to our internal security procedures, we maintain physical, electronic, and procedural safeguards that comply with federal standards to help protect your nonpublic personal information, and we restrict access to nonpublic, personal information about you to those employees who need to know that information to provide products or services to you. If you decide at some point either to close your account(s) or become an inactive customer, we will continue to adhere to the privacy policies and practices discussed above with respect to your nonpublic personal information. This notice is being provided on behalf of Western Asset.

APPENDIX B: EXPLANATIONS OF CERTAIN INVESTMENT RISKS This Appendix explains the main risks of loss associated with the investment management portfolios described in Item 8 of the brochure for which ClearBridge and/or Western Asset provide investment subadvisory services to LMPPG. Please refer to the portfolio descriptions for which of these main risks apply to each portfolio. As described in Item 8 of the brochure, the portfolios LMPPG, ClearBridge and Western Asset provide may also involve risks that are not identified or explained in the brochure or this Appendix. General Investment Risk. Stocks, bonds and other equity and fixed income securities may decline in value for any one or more of several reasons. The potential reasons these securities may decline in value are almost without limit and may not be foreseeable. Some common reasons securities may decline in value include:

(i) Actual or anticipated negative developments affecting the issuer of the securities or the assets backing the securities, including: losses, earnings, revenues, expenses, profit margins, cash flow, growth rates, component unavailability, dividend levels or other financial or business metrics that do not meet expectations; deterioration in financial position; competition; changes in technology or governmental regulation; loss of or failure to obtain customers, personnel or necessary government approvals; product failures; lawsuits; corruption; government investigations or enforcement actions; loss of intellectual property protection; and loss or reduction of benefits such as exclusive distribution or supplier rights.

(ii) Actual or anticipated negative developments affecting (a) one or more industries in which the issuer of the

securities participates, (b) in the case of governmental issuers, the tax base, economy or other attributes of the country or region where the issuer is located; or (c) in the case of securities backed by specified assets, the type of assets backing the securities, such as mortgages, finance receivables, toll roads, hospitals, etc.

(iii) Broader declines in security prices, including global, regional, country-specific, asset class-specific (e.g.,

equity, fixed income) and investment style-specific (e.g., growth, value) price declines. Potential reasons for these declines include changes in investor preferences; actual or anticipated global, regional or country-specific political, economic, regulatory or social developments (e.g., government changes, monetary policy, inflation, demographic changes, recessions), wars, terrorism, civil unrest, labor stoppages, infrastructure problems (e.g., power outages), and disasters such as earthquakes, floods, droughts, epidemics, oil spills, nuclear incidents, tsunamis, volcano activity, hurricanes and tornadoes.

Asset Allocation Risk. Allocation risk is the risk that the manager’s judgment about market trends and the relative attractiveness of particular asset classes, investment styles or strategies is incorrect. In addition, a manager’s investment models used in making asset allocation decisions may not adequately take into account certain factors or produce intended results over time, which may result in an account realizing a lower return than if the account were managed using another model or strategy. Below Investment Grade Risk. Below investment grade fixed income securities, which are sometimes referred to as “junk” bonds or high yield securities, are fixed income securities that are rated below Baa or BBB and unrated fixed income securities of comparable quality. These securities have a higher risk of declining in value and defaulting than investment grade (i.e., higher quality) fixed income securities. In particular, below investment grade fixed income securities typically are more volatile and involve greater credit risk than investment grade fixed income securities. See “High Volatility Risk” and “Credit Risk” below in this Appendix for explanations of these risks. Below investment grade fixed income securities also tend to be less liquid and more susceptible to general investment risk than investment grade fixed income securities. See “Illiquidity Risk” and “General Investment Risk” in this Appendix for explanations of these risks. Concentration Risk:

Geographic Concentration Risk. Geographic concentration risk is the risk of loss from concentrating investments in a particular geographic region, such as a single U.S. state or region, and not more broadly diversifying investments across multiple geographic regions. An investment management portfolio that concentrates investments in a particular geographic region will have a greater risk of loss from developments that negatively affect securities issuers with significant business or other financial exposure to the region. Examples of such developments include: regional disasters such as earthquakes, hurricanes and floods; deteriorating finances of regional governmental securities issuers (e.g., states, municipalities); regional infrastructure problems such as power outages or transport

facility shutdowns or restrictions; and economic, demographic or regulatory changes that negatively affect the region’s business environment. Industry Concentration Risk. Industry concentration risk is the risk of loss from concentrating investments in a particular industry and not more broadly diversifying investments across multiple industries. An investment management portfolio that concentrates investments in a particular industry will have a greater risk of loss from developments that negatively affect companies in that industry. Examples of such developments include: regulatory or other government policy changes that negatively affect the industry; changes in business methods, technologies or consumer preferences that reduce demand for the industry’s products or services; alternative product/service competition from new or pre-existing industries; and shortages of, or increased costs for, industry personnel, raw materials or product components. Issuer Concentration Risk. Issuer concentration risk is the risk of loss from concentrating investments in individual securities (i.e., making larger investments in individual securities) instead of more broadly diversifying investments across a larger number of securities. An investment management portfolio that concentrates investments in individual securities will have a greater risk of loss from developments that negatively affect the issuers of those securities. See clause (i) of “General Investment Risk” above for examples of developments that may negatively affect the value of a particular issuer’s securities.

Credit Risk. Credit risk, which is sometimes referred to as “default risk”, is the risk that the value of a fixed income security will decline because of:

(1) investor perception that the security issuer’s or guarantor’s future payment of the principal and/or interest obligation represented by the security has become less likely, increasing the likelihood of default; or

(2) actual default by the issuer or guarantor of the security.

Below investment grade fixed income securities generally involve more credit risk than investment grade fixed income securities. See “Below Investment Grade Risk” above for a description of below investment grade fixed income securities. Developments that negatively affect the issuer or guarantor of a fixed income security, or the specified assets backing the security, often will increase the security’s level of credit risk. See “General Investment Risk” above for examples of such developments. Energy Sector Risk. Energy Sector risk includes the risks of declines in energy and commodity prices; decreases in energy demand; reduced volumes of energy commodities needing transportation, processing or storing; new construction and acquisition, which can limit growth potential; availability of competitively priced alternative energy sources; potential for technological obsolescence; threats of attack by terrorists; adverse weather conditions; natural or other disasters; and changes in government regulation and tax laws affecting the energy industry. Environmental, Social and Governance (ESG) Investing Risk. ESG investing risk is the risk that an ESG investment strategy may limit the number of investment opportunities available to a client portfolio invested in accordance with the strategy and, as a result, such client portfolio may underperform portfolios that are not subject to such criteria. For example, an ESG investment strategy may cause the portfolio managers to (1) forgo opportunities to purchase certain securities for a client portfolio it might otherwise be advantageous to buy, or (2) sell certain securities for a client portfolio it might otherwise be disadvantageous to sell. Extension Risk. Extension risk is the risk that issuers of fixed income securities, including mortgage-backed and other asset-backed securities, will repay their obligations more slowly than the market anticipates in the event market interest rates rise. This repayment extension may cause the prices of these securities to fall because their interest rates are lower than market rates and they remain outstanding for longer than originally anticipated. High Volatility Risk. High volatility risk is the risk of loss associated with investments that tend to fluctuate in value more than other investments. An investment management portfolio with high volatility risk typically involves more speculative investments than a portfolio that does not have such risk. More speculative investments increase the client’s risk of loss. In addition, high volatility increases the chance that a client will incur significant investment losses if and when the client or the client’s investment manager decides to sell one or more securities held in the client’s account. Illiquidity Risk. Illiquidity risk is the risk that securities held in a client’s account may be difficult to sell at prices close to recent valuations because few or no market participants are willing to purchase the securities at such prices. This risk, which

generally is greater during times of market turmoil, may result in increased losses (or lesser gains) relative to sales of securities for which more active trading markets exist. Illiquidity risk may also result in client accounts realizing lower prices from smaller-sized sales of securities, including municipal bonds, that usually trade in larger amounts. For example selling a single $5,000 lot of a municipal bond for a client’s account may result in a lower per-bond price than a contemporaneous sale of a $100,000 lot of the same bond. Interest Rate Risk. Interest rate risk is the risk that market interest rates will rise, causing fixed income security prices to fall. This risk stems from the tendency of increases in market interest rates to generally make payment obligations associated with already-outstanding fixed income securities less attractive to investors and therefore the securities themselves less valuable. The risk of securities price declines caused by interest rate increases generally is higher for fixed income securities with longer-term maturities. Mid Cap Risk. Mid cap risk is the additional risk of loss typically associated with investments in securities of mid cap companies. Negative company-specific developments tend to cause securities of mid cap companies to decline in value more than securities of large cap companies. See clause (i) of “General Investment Risk” above for examples of such developments. Reasons for mid cap companies’ increased risk of loss from such developments include the tendency of mid cap companies to have more limited product lines, operating histories, markets and financial resources, and also to be dependent on more limited management groups. Securities of mid cap companies also tend to be more volatile and less liquid than securities of large cap companies. See “High Volatility Risk” and “Illiquidity Risk” above. MLP-Related Risk. MLP-related risk includes the following:

• As compared to common stockholders of a corporation, holders of MLP units have more limited control and

limited rights to vote on matters affecting the partnership. Additionally, conflicts of interest may exist among common unit holders, subordinated unit holders and the general partner or managing member of an MLP.

• Certain MLPs in which the MLP portfolios may invest depend upon their parent or sponsor entities for the

majority of their revenues. If their parent or sponsor entities fail to make such payments or satisfy their obligations, the revenues and cash flows of such MLPs and ability of such MLPs to make distributions to unit holders would be adversely affected.

• The amount and tax characterization of cash available for distribution by an MLP depends upon the amount of

cash generated by such entity’s operations. Cash available for distribution by MLPs will vary widely from quarter to quarter and is affected by various factors affecting the entity’s operations.

• Changes in tax laws could adversely affect the MLPs in which a portfolio invests. Non-U.S. Investment Risk. Non-U.S. investment risk is the additional risk of loss typically associated with investments in securities of non-U.S. issuers. Investments in securities of non-U.S. issuers tend to involve greater risk than investments in U.S. issuers. This increased risk arises from factors that include: many non-U.S. countries having securities markets that are less liquid and more volatile than U.S. securities markets; political and economic instability in some non-U.S. countries; lesser availability of issuer and market information in some non-U.S. countries; and less rigorous accounting and regulatory standards in some non-U.S. countries. In addition, currency exchange rate fluctuations may have a greater negative effect on the value of investments in securities of non-U.S. issuers. Non-U.S. investment risk is increased for securities issuers and markets in emerging market countries. Emerging markets tend to have economic, political and legal systems that are less developed and less stable than those of the United States and other developed countries. In addition, securities markets in emerging market countries may be relatively illiquid and subject to extreme price volatility. See “Illiquidity Risk” and “High Volatility Risk” above. Prepayment Risk. Issuers of many fixed income securities, including certain mortgage-backed and other asset-backed securities, have the right to pay their payment obligations ahead of schedule. If interest rates fall, an issuer may exercise this right. If this happens, the investor’s ability to reinvest the prepayment proceeds and obtain the same yield will be diminished because of the lower market interest rates. In addition, prepayment may cause the investor to lose any premium paid upon purchase of the security. Small Cap Risk. Small cap risk is the additional risk of loss typically associated with investments in securities of small cap companies. Negative company-specific developments tend to cause securities of small cap companies to decline in value more than securities of large cap and mid cap companies. See clause (i) of “General Investment Risk” above for examples of

such developments. Reasons for small cap companies’ increased risk of loss from such developments include the tendency of small cap companies to have more limited product lines, operating histories, markets and financial resources, and also to be dependent on more limited management groups. Securities of small cap companies also tend to be more volatile and less liquid than securities of large cap and mid cap companies. See “High Volatility Risk” and “Illiquidity Risk” above.

QS Investors, LLC

• Form ADV Part 2A Brochure

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US Large C First $25 mNext $75 Balance US Large C First $25 mNext $75 Balance US Large C On all asse

US MidCa

First $25 mNext $75 Balance

rd Fee Sche

ors offers the fortfolios, with

ities

ve Large Capi

million million

ve All Capital

million million

Capitalization

million million

Capitalization

million million

Capitalization

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pitalization (R

million million

edules

following stanh fees based o

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(Russell 1000

(S&P 500)

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Russell Midcap

ndard annualizon the market

Activ

re

Annual Fee 0.65% 0.35% 0.25%

Annual Fee 0.65% 0.35% 0.25%

US Equity

0) Annual Fee

0.65% 0.35% 0.25%

Annual Fee 0.65% 0.35% 0.25%

Annual Fee 0.30%

p)

Annual Fee 0.65% 0.35% 0.25%

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e Equity

M

M

or Investing)

M

M

M

M

management o are subject to

Minimum Ann

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Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann$75,000

Minimum Ann

$162,500

of institutional change.

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee 0

ual Fee

0

| 8

l separate

8

US Small C First $25 mNext $75 Balance

US Large C First $25 mNext $75 Balance US Small C First $25 mNext $75 Balance

DBI US On all asse

US Low Vo On all asse

Global E

Global Op First $25 mNext $75 Balance

Capitalization

million million

Capitalization

million million

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million million

ets

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ets

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million million

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Managed Vo

Managed Vo

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Annual Fee 0.85% 0.70% 0.65%

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latility Annual Fee

0.65% 0.35% 0.25%

latility

Annual Fee 0.85% 0.70% 0.65%

Diversificat

Annual Fee 0.30%

Low V

Annual Fee 0.30%

Global Equ

Annual Fee 0.65% 0.50% 0.45%

aged Volatility

tion Based Inve

Volatility High

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M

y Equity

M

M

esting (“DBI”)

M

Dividend

M

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M

Minimum Ann

$212,500

Minimum Ann

$162,500

Minimum Ann

$212,500

)

Minimum Ann$150,000

Minimum Ann$75,000

)

Minimum Ann

$162,500

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee 0

ual Fee 0

ual Fee

0

| 99

Global Env First $25 mNext $75 Balance Global Inf First $25 mNext $75 Balance Global Sm First $25 mNext $75 Balance Global Dy On all asse

Internation First $25 mNext $75 Balance Internation First $25 mNext $75 Balance Internation First $25 mNext $75 Balance

vironmental S

million million

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million million

mall Capitalizat

million million

namic Long/S

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nal

million million

nal Small Cap

million million

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million million

ocial and Gov

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I

italization (AC

italization (S&

vernance (“ESGAnnual Fee

0.65% 0.50% 0.45%

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Annual Fee 0.85% 0.70% 0.60%

Annual Fee 0.95%

International E

Annual Fee 0.65% 0.50% 0.45%

CWI ex-US)

Annual Fee 0.85% 0.70% 0.60%

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Annual Fee 0.85% 0.70% 0.60%

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M

M

M

M

Factor Investi

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M

Cap)) M

Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann

$212,500

Minimum Ann$237,500

ing)

Minimum Ann

$162,500

Minimum Ann

$212,500

Minimum Ann

$212,500

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee 0

ual Fee

0

ual Fee

0

ual Fee

0

| 100

Global Ma First $25 mNext $75 Balance Global Ma First $25 mNext $75 Balance Internation First $25 mNext $75 Balance European First $25 mNext $75 Balance UK Manag First $25 mNext $75 Balance Emerging First $25 mNext $75 Balance Asia Pacifi First $25 mNext $75 Balance

anaged Volatil

million million

anaged Volatil

million million

nal Managed

million million

Managed Vol

million million

ged Volatility

million million

Markets Man

million million

c ex-Japan Ma

million million

lity

lity Enhanced

Volatility

latility

aged Volatility

anaged Volati

Man

Annual Fee 0.65% 0.50% 0.45%

Annual Fee

0.65% 0.50% 0.45%

Annual Fee 0.65% 0.45% 0.35%

Annual Fee 0.65% 0.45% 0.35%

Annual Fee 0.65% 0.35% 0.25%

y Annual Fee

0.80% 0.70% 0.60%

ility Annual Fee

0.80% 0.70% 0.60%

aged Volatility

y Equity

M

M

M

M

M

M

M

Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann

$162,500

Minimum Ann

$200,000

Minimum Ann

$200,000

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

| 11

DBI Globa First $100Next $400Balance DBI Intern First $100Next $400Balance DBI Emerg First $25 mNext $75 Balance DBI World First $100Next $400Balance DBI ACWI First $100Next $400Balance

Internation On all asse Emerging On all asse

l

million 0 million

ational (EAFE)

million 0 million

ging Markets

million million

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)

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Volatility High

Annual Fee 0.60% 0.50% 0.40%

Annual Fee 0.50% 0.40% 0.30%

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Annual Fee 0.40% 0.30% 0.20%

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dend Annual Fee

0.40%

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0.50%

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Volatility High

M

M

M

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Minimum Ann

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$250,000

Minimum Ann

$200,000

Minimum Ann

$200,000

Minimum Ann

$350,000

Minimum Ann$100,000

Minimum Ann$100,000

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee

0

ual Fee 0

ual Fee 0

| 122

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| 13

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| 14

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| 15

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| 16

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| 17

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pportunities to

fees with an a

ay take on exc

nerate perform

d implementence fee-based 12 (Brokeragees.

mance of specdividual contri

s formal pricinble or unreliab

As such, portounts within a nts and may p mentioned abd on the perfocounts, in add

stment strategunts. Althouglar portfolio ccal holdings. It

mes, which mal accounts wit

| 18

nstead of accounts, the

o accounts

aim to inflate

cessive risk

mance fees.

d to ensure arrangementse Practices) of

ific accounts, butions to

g policies andle.

tfolio given

present bove, QS ormance of dition to other

gies. The Firm h QS Investorsharacteristics,t is important ay lead to a thin a given

8

e

s f

d

r

s

strategy, iinvestmento differenstrategy. Pensure fai

For a variewhile recowithdrawaprocess.

Certain ofsecurities arrangemewhile holddecrease o

Occasionaopposite tportfolio caccounts idifferentlypurposes, despite itsessentiallyby shortincontrols itopposite p

Since certaprocedureensure tha(“Compliafrom the ano inadveno strategbeing syst

nvestment dent objectives, rnt investment Please see Itemr and equitab

ety of reasons,ommending itsal in a particul

f QS Investors’ both long andents exist, theding the same of its value; co

ally, QS Investo transaction by construction ru n other stratey for different a long-only as sell classificaty betting againg it. Both pos is possible fo

positions in th

ain client posies specifically dat all of the Firance”) review appropriate inrtent cross tra

gies or accounematically disa

cisions are ma risk tolerance, decisions, andm 12 (Brokeragle treatment o

, QS Investors s purchase forlar account, Q

’ investment pd short (“side-re may be ins security short

onversely, purc

ors may purch selling it shorules used for c

egies, including investment stccount may htion because inst it. At the sitions reflect ar different acce same securi

tions may be designed to adrm’s clients ar opposite tranvestment team

ansactions. In ats, including tadvantaged.

ade specifically investment gd ultimately dge Practices) o

of all client acc

may simultanr another. For

QS Investors m

professionals m-by-side manatances in whict in another acchasing a secu

hase a securityrt in other acc client accountg accounts thtrategies, and old an underw

t is a large beame time, QS

a negative retucounts managty.

conflicted undddress side-byre treated fairlsactions and pm, if necessary addition, they those paying p

y to meet the uidelines, avaifferent perforof this Brochucounts.

neously recom example, if thay sell a secur

may manage logement arranch QS Investoccount (or viceurity may resu

y in long-only acounts, or vicets in a particulat hold short the timing of weight positionchmark cons Investors mayurn expectatio

ged under diffe

der these array-side managey and equitab

positions in thy. They also rey periodically r performance f

unique objecilable funds ormance, even re for more d

mmend the salehe Firm needsrity that is clas

ong-only accongements”). Wrs holds a longe versa). Sellin

ult in an increa

accounts on te versa. The stolar investment positions. As trades may d

on in a particustituent. Undey be betting aon for the secuerent investm

ngements, QSement arrangebly. QS Investohe same secureview opposit

review accoun fees, appear to

ctives of each cor other restric among similaetail on contro

e of a particuls to raise cash ssified as a bu

ounts alongsidWhen side-by-sg position in ang a security sase in its value

the same day tock selection t strategy may a result, securiffer. For examlar security re

erweighting thagainst the security. The Firment strategies

S Investors hasements that aors’ compliancities for validite transactions

nt performanco receive prefe

client. Differections/prohibitar accounts wiols reasonably

ar security for for a redempy by the Firm’

de accounts thside managem

a security in oshort may resue.

the Firm execu models, risk cy differ from trities may be vmple, for risk clative to its behe security in tcurity in a diff

m believes thats to both bene

s implementere reasonably

ce personnel ty, obtaining js to ensure thae dispersion toerential treatm

| 19

nces in clientsions may leadithin the samey designed to

r one accounttion or ’s investment

hat buy ment ne account ult in a

utes an controls and hose used forviewed control enchmark this case is erent accountt with its risk efit by holding

d policies and designed to

ustification at there are o ensure that ment or are

9

s’

e

t

g

ITEM 7

QS Invest

QS Investotypes, incl

C

Pe

Ta

In

C

En

St

Fo

Re

FoSp

C

Pr

Se

O

Manage

Discretionof instituti

Non-discremay use oan advisor

Conditio

Dependinga conditioHowever, separate-afees.

The minimmanaged account m

7 - Types o

tors manages

ors provides (ouding, but no

orporations;

ension and pr

aft-Hartley pla

nsurance comp

haritable orga

ndowments a

tate and local

oreign govern

egistered inve

oreign funds, pecialized Inve

ollective trust

rivate investm

ection 529 co

Other US and in

ed Account

ary model-basional clients.

etionary modeour services tory relationship

ons for Op

g on the natun for opening the minimumaccount clients

mum investme account prog

minimum or es

of Clients

s separate ac

or has provideot limited to:

ofit-sharing p

ans;

panies;

anizations;

nd foundation

governmenta

ment entities,

estment comp

such as Undeestment Funds

s;

ent funds (inc

llege savings p

nternational in

t Programs

sed and LMPP

el-based progo assist them i with these cl

ening or M

re of the servig or maintainin

m account size s must execut

ent amount thgrams is $25,0stablish higher

s

ccounts for b

d) institutiona

lans;

ns;

al entities;

, including sov

anies, includin

rtakings for Cs (“SIFs”);

cluding so-call

plans; and

nstitutions.

s

PG-implement

ram clients m n managing

ients.

Maintaining

ices to be provng an account may be waivete advisory con

hat applies to, 000. LMPPG ar or lower min

both institutio

al investment a

vereign funds;

ng mutual fun

ollective Inves

ed “hedge fu

ted program c

may include ba their own und

g an Accou

vided, QS Invet. The minimued and/or channtracts with Q

or in the caseand QS Investnimums under

onal and reta

advisory and s

;

nds and ETFs;

stment in Tran

nds”);

clients may in

anks, broker-dderlying client

unt

estors may requm account siznged at QS In

QS Investors th

e of non-discrtors, in consur a particular m

ail clients.

sub-advisory s

nsferable Secu

nclude individu

dealers or othts. Neither LM

quire a minimze generally is nvestors’ sole dhat stipulate th

retionary progultation with t managed acco

services to a va

urities (“UCITS

uals as well as

her investmenMPPG nor QS

um dollar valu either $25 mdiscretion. Prohe terms of se

grams, is reco the sponsor, mount program

| 20

ariety of client

S”) and

s various type

t advisers tha Investors hav

ue of AUM as illion.

ospective ervice and

mmended for may waive th.

0

t

s

at e

r, e

The investare specifiinvestors acomminglthe govern

tment minimued in their go

and some QS ed fund invesning documen

ms and investoverning docum Investors emptors must exe

nts.

tor qualificatioments. Institutployees may becute subscript

ons for the cotional clients, e eligible to intion or similar

mmingled fun qualified invenvest in some agreements b

nds QS Investoestors, accredit of these combinding them

ors manages oted investors, mingled funds to the terms s

| 2

or sub-advises retail s. Prospective

stipulated in

1

ITEM 8

Method

QS InvestoinvestmenInvestors’ a multifacthey are re

The follow

US Equiti

US Equity

Strategies US Mid Ca

In its activfundamenThese stratrading, re

QS Investoappropriatcompany dday acrosscategoriessentimentincludes mand proprsectors anto use onlfactors.

The Firm stypically band value)develop a structure vpurchasesFirm typicacountry an

8 - Metho

ds of Analy

ors offers a nunt models. The portfolio constor risk modeeleased for ex

wing is a brief

es

(Active Factor

include: US Lapitalization a

e factor investntal analysis totegies are cha

esulting in we

ors constructs te asset class a data. For eachs certain fundas based on eith-oriented dim

multiple measuietary measurd markets or y those factor

scores each stoased on sever) and market c more comple

vary by investm stocks scoredally holds posind region alloc

ods of Ana

ysis and Inv

umber of diffeese models usestruction procl. All trades arecution.

description of

r Investing)

arge Capitaliznd US Small C

ting strategieso objectively scaracterized by ll diversified a

an investable according to ch strategy, theamentally basher valuation ensions assess

ures of attractes that its rese at all times, Qrs that are dee

ock from multral of the follo capitalization.te picture of ement strategyd as “buys” anitions in securcation decisio

alysis, Inv

vestment St

rent investmee financial datess incorporatre reviewed by

f certain of the

zation, US Larg Capitalization

s, QS Investorscore the relativ rigorous, botnd style neutr

stock univers criteria relatede Firm scores ted categories or sentiment. s earnings, groiveness called earch indicate

QS Investors apemed most pre

tiple viewpoinowing conside By incorporat

each stock’s re. Subject to mnd sell stocks sities that are sns are made u

vestment

trategies

ent strategies tta provided thtes multiple ley at least two

e institutional

ge Capitalizat

s uses disciplinve attractiventom-up stock ral portfolios, w

se for these strd to trade voluthe relative att known as “d Valuation-oriowth, expecta “factors.” QS

es are predictivpplies them seedictive at a p

nts. These scorrations: sectorting such diveelative attract

market environ scored as “sel significant ben using propriet

Strategie

that are manahrough databaevels of risk co portfolio man

investment st

ion Enhanced

ned, systematess of an inve selection, inte with moderat

rategies by scrume, analyst ctractiveness ofimensions.” Tented dimensations and behS Investors’ larve of excess reelectively baseparticular time

res represent vr, country, regerse perspectiviveness. The b

nment and risklls.” However,nchmark constary models an

es and Ris

aged utilizing ases licensed fontrol. The Firmnagers for risk

trategies offer

(lower trackin

ic techniques estable universegrated risk cote active bets v

reening all listcoverage and af all stocks in These dimensiosions assess vahavioral chararge factor libreturn. Since nd on periodic

e and are least

various investmgion, investmeves in our scorbuy and sell rak controls, QS , for purposes

stituents regarnd the insights

sk of Loss

its proprietary from multiple m optimizes p

k control purpo

red by QS Inve

ng error),

based on tradse of liquid stoontrol and cos

versus the ben

ted securities w availability of its investable ons fall into b

alue and cash acteristics. Eacary includes bot all factors w retesting. Thet correlated w

ment perspectent style (suchres, QS Investoanges within t Investors gens of risk manardless of scores of the invest

| 22

s

y, quantitative vendors. QS portfolios usingoses before

estors:

ditional ocks daily. st-efficient nchmark.

within the reliable universe everybroader flow, while h dimension

both traditiona work in all e objective is

with other

tives and are as growth ors seeks to his scoring

nerally gement, the

e. Sector, tment team.

2

g

y

al

These straare mispricenvironme

Managed

Strategies

QS Investorisk-adjustuse diversedividends.

Diversifica

Strategies

QS Investodevelopingstock selec

QS Investoinvestmenmarket caperformanhave demoweighted quarterly.

The proce

• G

• Mb

• A

DBI is impindices baBrochure fis to produ

Low Volat

Strategies

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tegies also seeced. Each of tent. Generally

Volatility Equi

include: US L

ors’ Managed ted returns vee risk perspec

tion-Based Inv

include: DBI U

ors’ DBI US strg a diversifiedction and uses

ors utilizes a pnt categories bpitalization. Tnce into a smaonstrated a te to produce a

ss and strateg

eography and

Market sentimeuild and collap

A more diversif

lemented andsed on our DBfor informatiouce above-ave

tility High Divid

include: US L

ors’ Low Volatnt objective. Thle income thro

ek long-term these strategie

, QS Investors

ity

arge Capitaliz

Volatility stratrsus the marktives, includin

vesting (“DBI”)

US

rategies seek t exposure to is analysis of in

roprietary rulebased on indushe process thealler number oendency to be highly diversif

gy is based on

d industries ar

ent can lead topse; and

fied portfolio c

d offered throuBI methodologon about the Ferage long-ter

dend

ow Volatility H

tility High Dividhe strategy is ough investm

capital growthes seeks to ous seeks to add

zation Manage

tegies are deset. Offering dg a fundamen

”)

to take advantindustries. DBndustry correla

es-based procstry. Within eaen combines tof “clusters.” Ahave similarly fied portfolio.

three key bel

e the primary

o momentum

can help avoid

ugh regional mgy. Please see Firm’s commerrm wealth wit

High Dividend

dend strategie designed to trents in stocks

h by investingtperform thei value over a f

ed Volatility, U

signed to provownside protental view, and

tage of macroI US focuses pations to dete

ess that initialach of these in those investm A cluster is a g (high correlat These portfol

iefs:

drivers of glo

effects that c

d concentratio

mandates, or Item 10 (Othercially availablh better risk-a

d

es use a “passrack the inves of profitable

g in common sr respective be

full market cy

US Small Capit

vide a strong yection and up

d invest only in

o and behavio purely on top-

rmine weight

lly groups a re nvestment catment categorie group of investion). Thereaftlios are recons

obal equity risk

cause concent

on risk and les

may be acceser Financial Ine indices. The

adjusted return

sive” or indexitment results US companie

stocks that theenchmark indcle of three to

talization Man

yield componepside return pon stocks that a

ral inefficienc-down allocatis of stocks.

elevant universtegories, secus with more hstment categoter, each of thstituted annua

k and return;

tration risk in e

ssen downside

sed through cdustry Activiti

e investment ons than their i

ing investmen of an index. T

es with relative

e investment tex regardless

o five years.

naged Volatilit

ent while achieotential, these

are expected t

ies in various ons rather tha

se of securitierities are weig

highly correlateories based onhese clusters aally and rebala

equity market

e risk.

commercially aies and Affiliat

objective of th index.

nt approach toThe index seekely high divide

| 23

team believes of the market

ty

eving superiore strategies to pay

markets by an bottom-up

es into multipleghted by ed historical n industry thatare equally anced

ts that tend to

available tions) of this ese strategies

o achieve its ks to provide end yields and

3

t

r

e

t

o

lower pricInvestors. whose yieannually asuperior riof this Bro

Global Eq

Global Equ

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QS Investoenvironmeselection mpertaining

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Managed

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QS Investorisk-adjustuse diversedividends.

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and rebalancedsk-adjusted re

ochure for add

quities

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include: Glob

tegies use a bctor Investing)

ors’ ESG strateental, social an model with a g to ESG consi

ors’ Global Inf to do best in sationary regimnsitive to Con

nal Equity (Ac

include: Inter

tegies use a bctor Investing)

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actor Investing

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ore investment

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ternational (EA

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SG, Global Infl

t process, simi

attractive stock strategy integt uses positive ghts, product

egy is designements. This stad global equiasures.

all Capitalizatio

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AFE), DBI Eme

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m 10 (Other Fins use of self-in

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lar to that wh

ks that meet cgrates QS Inves screening me

t safety and en

ed to identify ttrategy combiity universe. T

on

lar to that wh

Volatility Enha Markets Man

vide a strong yection and up

d invest only in

erging Market

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ve, Global Sma

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client-specific stors’ fundamethodology incnvironmental s

the sectors annes bottom-u

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yield componepside return pon stocks that a

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all Capitalizati

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requirements mentally-based

corporating m strategy.

nd securities thp stock select managed usi

ed above und

ational Managty, Asia Pacific

ent while achieotential, these

are expected t

ex-Australia, D

| 24

ored by QS whole. Stockseconstituted ieving nd Affiliations

on

er US Equity

related to stock

multiple factor

hat are tion with top-ng selection

er US Equity

ged Volatility, c ex-Japan

eving superiore strategies to pay

DBI ACWI Plus

4

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Liquid Alt

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ors’ DBI strategg a diversifiedp stock selecti

ors utilizes a pnt categories b by market cap historical pergeography an

hese clusters aand rebalanced

ss and strateg

eography and

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lemented andsed on our DBfor informatiouce above-ave

tility High Divid

include: Inter

ors’ Low Volatnt objective. Thle income throe and earning Stocks in the lds are not su

and rebalancedsk-adjusted re

ochure for add

ternatives

d Alternatives hese products tors diversify a

gies seek to ta exposure to con and uses a

roprietary rulebased on geogpitalization. Thrformance intond sector that re equally wed quarterly.

gy is based on

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ent can lead topse; and

fied portfolio c

d offered throuBI methodologon about the Ferage long-ter

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rnational LVHD

tility High Dividhe strategy is ough investm

gs volatility. Th index must hapported by ead quarterly. Theturns versus tditional inform

platform is co target absolu

across multipl

ake advantage countries and analysis of cou

es-based procgraphy and seche process theo a smaller nu have demonsighted to prod

three key bel

he primary dr

o momentum

can help avoid

ugh regional mgy. Please see Firm’s commerrm wealth wit

D, Emerging M

dend strategie designed to trents in stocks

he index is basave demonstraarnings are exche index is des the market. Plmation relating

omprised of prte returns wite asset classes

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untry and sect

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iefs:

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roducts that hth low correlats. The platform

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l equity risk an

cause concent

on risk and les

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adjusted return

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the index. Thevide a strong y

m 10 (Other Fins use of self-in

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tration risk in e

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idity and expo traditional assree strategies:

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se of securitietegories, secus with more h of investmentgh correlation portfolios are

equity market

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commercially aies and Affiliat

objective of thindex.

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osure to alternset classes wh

| 25

rkets by ather than

stocks.

es into multipleurities are ighly t categories n). Thereafter, e reconstituted

ts that tend to

available tions) of this ese strategies

o achieve its ks to provide end yields andored by QS whole. Stockseconstituted ieving nd Affiliations

native asset ich seek to

5

e

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global stocworld in aInterBank strategy.

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Risk Mana

Target Risinvestors t

arket Neutral E

al Market Neuims to mainta

ck market mopproximately Offered Rate

ctical Asset Al

ks to identify modity marketation ideas. Thquity index fut client objectiv

zed Solutions

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et Allocation (

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f these strategunds or assetsager/Fund Sele Compensatioon or Interest ation) of this B

by QS Investors Underlying M

agement Advis

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Equity

tral Equity strain zero beta e

ovements on o equal dollar a (“LIBOR”). LIB

llocation (“GTA

and take advas. A risk budghe strategy catures, commoves and needs

s

ons platform e each client’s intematically co to changing mnon-discretionrt positions in

(may also be re

ion strategy isd spectrum ofures, and othebrium and tac an efficient fr

gies are implems managed by ection Advisorn), Item 10 (O in Client Tran

Brochure for as and QS Inveanagers.

sory Services

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ategy seeks caexposure (i.e., overall performamounts and sBOR is not inte

AA”)

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employs a rangnvestment objmbine quantit

market conditary arrangeme futures and c

eferred to as S

s designed to ef asset classeser instrumentsctical signals toontier betwee

mented as Fun QS Investors y Services” an

Other Financiansactions and a discussion ofstors Affiliates

ttractive returnrsified set of a

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currency forwa

Strategic Asse

enhance returs. The strategys. QS Investorso derive returnen the probab

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ns over time masset classes. E

ation indepenall market neu

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allel the risk or

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create investmsk tolerance, Qtive and behaortunities. The products mayard contracts.

et Allocation)

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nd Manager-ors Affiliates. Pged Sleeves anivities and Aff

ding) and Item of interest facvised Funds, A

matched with Exposure to as

dent of stock utrality thereby

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country equityment, mediumons in exchangps and can be

ment productsQS Investors u

avioral analysise platform cany invest in mut. Examples of

tively manageure to these as forecasting mom investable ng objectives a

of-Managers aPlease see the nd QS-Advisediliations), Item 14 (Client Reced by QS InvAffiliated Fund

the risk prefesset classes is v

market directy limiting the

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style of the inv

y, country debm-term cyclical

ge-traded sove customized t

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e risk through sset classes by

module integra assets across

and downside

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m 11 (Code of eferrals and Otvestors relatedds and Non-Af

rence and tole varied over tim

| 26

tion. The effects of

hout the th London vestment

bt, currency and long-

vereign debt to meet

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Solutions

intelligent y investing in ates economic various time e risk.

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| 27

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| 28

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| 29

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| 30

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| 3

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| 32

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| 33

This section ver, it is not nts are subjecpes of

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wth and Valuel equity marketive to marketectations will an other investocks may rem

with investors w

apitalization R n one capitaliz

favor in comp

italization Stoents than larg Their stocks m

may involve g

e issuer or the losses on ind

curities may be

difficult to valu securities thaccount. Furtheing illiquid. If lient account

orating security

nvestors may ties for a perio

egotiated tran33 Act), or purulations permithe 1933 Act.

d and illiquid srice as well as

me investment

h makes thesesure than mors, governmentes investmenatively affect t

e Investing) Riet while the mt movements b not be met, thstments becaumain undervalu

which could re

isk. Risks mayzation range (

parison to othe

ock Risk. Small

ger, better-esta may be less liqgreater risk tha

e competitive ividual securit

e difficult to se

ue. While the t meet certain

ermore, marke a client accoumay be forcedy is unable to

invest in restrod of time (e.gsactions, pursrsuant to an et the sale of ce

securities may to take advan

t strategies ma

e strategies inhre diversified st actions and ts in a smaller

those issuers t

isk. Growth o

market concen because their he prices of guse they oftenued. At any po

esult in the str

y vary dependi(i.e., either lar

ers.

cap compani

ablished compquid and morean investing in

environment, ties.

ell, or be illiqu

investable unin liquidity requet liquidity mayunt is forced tod to sell at a lo be sold becau

icted securitieg., during a “l

suant to a regiexemption fromertain restricte

y restrict QS Inntage of other

ay be less dive

herently riskiestrategies to sp other countryr number of is

than a client a

r value securit

trates on othe market pricesrowth securiti

n do not pay doint in time, a

rategy underp

ng upon an isge, mid or sm

es may be mo

panies and mae volatile thann the securities

or investor se

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iverse for mosuirements, illiqy deteriorate, o sell an illiquoss or at a pricuse the marke

es for some clilock-up period

istration statem registrationed securities o

nvestors abilityr market oppo

ersified than o

er. Strategies inpecific economy- or region-spssuers will havaccount that in

ties as a group

er types of secs tend to refleces typically fa

dividends. The an investment

performing oth

ssuer’s marketmall cap stocks

ore vulnerable

ay have limitedn larger stockss of larger com

entiment. Acc

ly during time

st of QS Investquid securities resulting in aid asset to mece lower thanet is illiquid, lo

ent accounts. d”) or may on

ment filed unn, such as Ruleonly to investo

y to dispose ofortunities.

others in terms

nvesting solelymic cycles, stopecific issues. ve a greater risnvests in a gre

p may be out

curities. Growct future expell. Growth sec value approa style (i.e., gro

her investmen

t capitalizations) take on the

e to adverse bu

d product lines or market avmpanies.

ounts may ex

es of market tu

tors’ primary is may be purc holding that

eet redemptio QS Investors

osses may be m

QS Investors nly be able to s

der the Secure 144 or Rule ors that meet c

f investments

s of region, co

y in one counock market flu Furthermore, sk of loss fromeater number

of favor and u

wth securities tectations. Whecurities may alch to investin

owth or value)

nt styles.

n. Strategies t risk that one

usiness or eco

es, markets or verages in gen

| 34

perience

urmoil. Illiquid

nvestment hased from was n requests or believes is

magnified.

may not be sell the

ities Act of 144A under certain

in a timely

ountry, sector

try or region ctuations, a client m of issuers.

underperform

ypically are en it appears lso be more g involves the) may be out

hat invest category may

onomic

financial eral and

4

,

e

Foreign Inin the US. actions, suthe financalso have the disrupaddition, laccountinginvolve gregains or ad

Emerging have econmore advadevelopedmay be ina

Investing ior the impoccur, inve

Certain emThese rest

Several emInflation amarkets o

Lower tradmarkets minstability account p

Economiesadversely controls, mthose cou

Custodial client accocircumstan

The risks asubstantia

vestment Risk These countruch as currenccial markets in a harmful impted financial mess informatiog and regulatoeater risk thandd to investm

and Frontier Mnomic and polanced countried markets. Lawadequate, esp

n emerging coposition of resestors could lo

merging marketrictions may l

merging countnd rapid fluctf certain emer

ding volumes may experience or fluctuationerformance.

s in emerging by the econom managed adjuntries.

and/or settlemount that are tnces whereby

associated wital losses.

k. Foreign cou

ies may have cy controls or these countri

pact on the se markets, and ton about issueory standards n investments ent losses.

Markets Investitical systems es. Legal systews regulating specially compa

ountries involvtrictions on foose all or a po

et countries re imit QS Invest

tries have expetuations in inflrging countrie

in emerging me dramatic swns will not occ

countries genmic conditionsustments in rel

ment systems traded in such the applicable

h investing in

ntries may hav

economic, po seizures of pries and the abcurities of issu

this could negers and marke than in the U in securities o

tment Risk. Em

that are less dems in some e securities tranared to the leg

ves the risk oforeign investmortion of their

estrict or conttors’ investme

erienced substlation rates mes.

markets may rwings in the va

ur and, if they

nerally depends of the countlative currency

may not be fuh markets ande client custod

emerging ma

ve markets th

litical or sociaivate business

bility of issuersuers located egatively affect ets is available US. As a resultof US issuers. C

merging mark

developed, andmerging mark

nsactions and gal and regula

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rol foreign invnt opportunit

tantial, and inay have very n

result in a lacklue of their cuy do occur, tha

d heavily upontries with whicy values and o

ully developed entrusted to dian will have

arkets could ad

at are less liqu

al instability anses or propertys there to repalsewhere who the value and in some foreit, investments Currency fluct

kets, including

d can be expekets countries investor proteatory framewo

n, nationalizat repatriation ofn that country

vestment in thies in those m

n some cases e negative effec

k of liquidity aurrencies. Therat they will no

n internationach they trade other protectio

d in certain em sub-custodian limited or no

dversely affect

uid, less regula

nd may experiey. Such eventsay their obligao have significd liquidity of aign countries s in securities otuations could

frontier mark

ected to be less may be less dection, and enork in more de

tion, confiscatf capital invesy.

heir securities markets.

extremely highcts on the eco

nd increased re can be no aot have a mate

l trade and, a as well as tradonist measure

merging markens may be exp liability.

t account perf

ated and mor

ence negatives could significations. These ecant exposure an account’s in because of les of foreign issud also erase in

kets in particu

ss stable, than developed thaforcement of

eveloped mark

tion of assets ated. Should su

markets to va

h, rates of inflnomies and se

price volatility assurance thaterial adverse e

ccordingly, mde barriers, exs imposed or

ets. Further, thposed to risk u

formance and

| 35

re volatile than

e government cantly disrupt

events could to issuers in nvestments. Inss rigorous uers may vestment

lar, typically

n those of an in these laws, kets.

and property uch an event

arying degrees

ation. ecurities

y. These t currency

effect on

ay be affectedxchange negotiated by

he assets of a under certain

d result in

5

n

n

.

d

y

Foreign Cuas the excexchange and foreighold foreigrate risk. Ccosts relat

If permittecertain cuexchange that it willlower retuhedging in

Income Trinterests aequities, dfrom an oREITs, whiof their storesources,operating in such pa

REITs are sdifficultiesunderlyingdefaults along as th

Investmendiscussion

Master Limexchange.allocated t

InvestmenRisk).

Tracking Sfinancial ptracking st

urrency Risk. T

hange rates b rates can be vgn governmengn securities tClient accountted to repatria

ed by clients, Qrrencies, with rates. Howeve successfully h

urns or even lon the Firm’s tr

rusts, includingare traded on sdebt instrumenperating entitch invest in reock equity into such as oil an entity is passeayments being

subject to the s associated wg real estate and failure to qey distribute a

nts in income t below under

mited Partners. Because MLP their proportio

nts in MLPs ma

Stocks Risk. Tr

performance otocks may dec

The value of in

between those volatile and arnts or central b that do not hets that transacating foreign c

QS Investors m the objective er, there is nohedge currencosses to client aditional inves

g Real Estate I securities exchnts, royalty intty carrying on eal estate; (b) o an income tnd gas ventureed through tog taxed at the

risks associatewith its valuatio

ssets, inability qualify for spe at least 90% o

trusts (includin Tax Risk).

ships (“MLPs”)Ps are classifieonate share of

ay have tax im

acking stocks,

of specific buscrease even if

nvestments in

e currencies anre affected by

banks, the impedge against cct in foreign securrencies to t

may use forwa of protecting

o guarantee thcy exposures. Q accounts. QS stment strateg

Investment Truhanges similarterests or real a business, as business incom trust capital stes. In a typica

o investors. Th unitholder lev

ed with owninon and sale. Ry to effectivelycial tax treatm

of their incom

ng REITs) may

) Risk. MLPs ar

d as partnershf all tax items.

mplications for

, which are tra

iness units or the common

securities den

nd the US doll factors such aposition of curchanges in curecurities will inhe account’s

ard currency ex the value of c

hat QS InvestoQS Investors’ Investors doegies.

usts (“REITs”) r to corporate properties. Ths well as divideme trusts, whtructure; and (l income trustis has the effevel.

ng real estate,REITs are also sy manage cashment. REITs aree to their unit

have tax imp

re limited part

hips, they avo.

certain types

aded separate

operating div stock of their

nominated in f

lar (or other b as general ecorrency controlrrency exchanncur currency base currency

xchange cont client accountors will employ hedging actioes not use curr

Risk. Income t

stock. An inche trust can reends and a retere individual

(c) royalty/enet structure, theect of reducing

, including its subject to the h flows from te generally extholders.

lications for ce

tnerships that

id corporate in

of investors (s

ely from tradit

isions within cr companies p

foreign curren

base currency) onomic conditls and speculage rates may conversion coy.

tracts to hedgets against advy a hedging stons may be unrency forward

trusts are inve

come trust is aeceive interestturn of capita companies ha

ergy trusts, whe income paidg the trust’s ta

potential dec risk of incom

those assets, bxempt from ta

ertain types o

are publicly t

ncome tax. In

see further dis

tional common

companies. Aserforms well.

ncies increases

change. Foretions, the actioation. Client ac incur significaosts, including

e against flucterse changes trategy or, whnsuccessful, reds for purpose

estment trusts

an investment t, royalty or leal. Income trusave converted

hich invest in nd to an incomeaxable income

line in value ae fluctuation f

borrower prepxation at the t

f investors (se

raded on a se

vestors in MLP

scussion below

n stocks, depe

s a result, the Because share

| 36

s or decreases

ign currency ons of the US ccounts that ant exchange g transaction

tuations in in currency en it does,

esulting in es other than

whose

that may holdase paymentssts include: (a)d some or all natural e trust by the e, but results

and the from payments and trust level as

ee further

curities

Ps also are

w under Tax

end on the

value of eholders in

6

s

d

tracking stliquidation

Investmeninvestmeninclude shInvestmenor other othe same fees, districompaniesexpenses, investing iinvestmenthe underother offetrade on avalue.

Derivativesequivalentnot otherwshort sellinthat will acost effect

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Derivativesindex or o

A swap is other partand any ca

Equity-linkpayout is bequity ind

A participaparticipati

tocks have limn.

nt Companies nt strategy or aares of open-

nt companies aobjective defin risks as investibution fees, ss, with a prop which clients

n investment nt companies. lying securitie

ering documena securities exc

s Risk. If perm

ts in client accwise obtainabng or limits onllow QS Investtive than direc

, QS Investors ed decline in trom an expecture (an “antici

s are financialother investme

an agreementy makes paymapital gains. T

ked notes (“EL based on the ex.

ation certificaton in the rise

mited or no vot

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as a means to end investme

are generally aed by each coing directly in

shareholder seportionate sha typically pay companies co In addition, cs. Please refernts for a morechange, which

mitted by client

counts. QS Invle in certain n

n foreign instittors to invest ct investment.

may use deriv the market vated rise in the ipatory” hedg

instruments went.

t in which onements based oThe underlying

LNs”) are debt return of an u

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ting rights, th

accounts may

gain exposurnt companies,

actively managompany for a m the underlyin

ervice fees andre borne by in

in addition to ould be lower lient accountsr to the under complete dish means their

ts, QS Investo

vestors may alson-US markettutional invest directly in suc

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whose value is

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t instruments underlying ass

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ng assets, but d/or other feesnvestors. Perfo QS Investors’ than if the acs holding inveslying funds’ Pcussion of risk shares may tr

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so use derivatts due to limittors), because ch market, or b

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s payments ba of an underlyin a security, ba

that differ froet, which can

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ccounts investestment comparospectuses, Sks specific to erade at a prem

quity index fut

tives or synthetations impose a client’s cust

because such

e strategies de assets that thr group of ass

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ased on a set rng asset, whicasket of securi

om a standard also be a sing

est in a securiol.

ompany asset

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when permittempanies, unit

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esigned to prohe account owsets which the

e of an under

rate, either fixch includes boties or an equ

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ty or pool of s

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ed by clients). T investment tr

strategy, indext companies gn the form of incurred by th

y these costs ae of client acco the securities rectly exposedf Additional Indditionally, notunt to their ac

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may be more t

otect a client awns or to protee account inte

rlying financia

xed or variableoth the incomeuity index.

e security in thasket of secur

securities that

| 37

t of

heir core

These may rusts and ETFsx, asset class

generally carry managementhe investment

and other ounts held in the

d to the risks oformation, orte that ETFs ctual net asset

r cash

uity exposure h as a ban onal agent bank tax efficient o

ccount from ect the

ends to acquire

l asset(s),

e, while the e it generates

at the final rities or an

t allows

7

s.

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of

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and stock pur typically the is stockholders

hetic securitief such securitie example, hold do not have t

issuer of a syn traded in the

arty risk.

ciated with de

A derivative ma

erivatives usedpportunities o

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ontractual ter

eturns may be

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o guarantee t and their use

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d selling derivmpared to dire account may t, under certa

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rchase rights a ssuer’s comms, while warra

s are not actives typically doders of warranhe rights to sh

nthetic securit secondary ma

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rms related to

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hat QS Investo could result i

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lose more thain market con

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are securities pmon stock. Stoc

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ty may registearkets and, th

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correlated wi

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impacted by

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ain instrument

between two guaranteed by other party toontract. A cliene to insolvenc

permitting, buck purchase rially sold by a c

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r the instrumeerefore, in ad

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tive due to an

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be interpreted

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stors to the efompared to dir

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ent with a listeddition to othe

ty, index or cu

e intended eff

n illiquid secon

obligations;

d differently by

movements; a

ffects of leverarectly buying o

cessfully emploses to a client

olve greater riry complex an

age, which cou investment up

to the derivativ or impossible

y certain types

f an exchangee or clearinghoon (the “counuld face substy or other cau

ng, their holduently issued assuer.

re designed toy afforded to stitled to receiv event of liqui

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urrency to whi

fects and may

ndary market;

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nd

age, which co or selling the

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uld lead to incpon which theves transactio to liquidate o

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. OTC transacouse. When trnterparty”) matantial losses ifses.

er to purchase as a dividend

o be kept to m shareholders ove dividends odation.

these instrumoften have inc

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s, are traded O

ctions are not rading instrumay not be able

f the counterp

| 38

e other to a

maturity. of common or to vote.

ments may notreased

ed

their market or investment

or other

n investing manner

or losses based. As a y, it should bevatives

OTC, which

regulated by aments OTC, a e to fully party is unable

8

e

a

e

Many OTCmay be mthese secu

Counterpacontract dsecurity departies witin increase

market pra

Client acco

QS Investopayment bbrokers, aRehypothea prime brInternationhave incre

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2 Prime broto clients foshort. Asset

C stocks trade ore volatile th

urities at a fair

arty and Settledefaults, is doweclines, the vath whom theyed counterpar

actices in relat

ounts may be

ors become in basis, thereby nd those accoecated securitroker’s creditonal Swaps and

eased counterp

Risk. Leverage

losses if the vorting strategy

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many types ofurities to coveng, unless theon of a large ps flexibility.

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sure to securitously selling aerage. Short swed security in

n value, since rchased long ically unlimitedr price to replag any potentia

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less frequenthan with exchar price.

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wngraded or ialue of an invey trade and marty and settlem

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adversely imp

solvent. QS In greatly reducounts may be ies2 could be f

ors. Certain otd Derivatives Aparty risk.

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value of the ley are inherent

In connection

f derivatives, ar the position.y are replaced

percentage of

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s limited to thd, since the prace it. Additioal losses to an

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the issuer of a

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nvestors typicaing counterpa significantly im frozen if a prither trading ac Association (“

ave greater inv

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a client accoun. Segregated sd with other se a client accou

nvestment str

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onally, purchasn account.

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am believes aren to replace thnt to profit froe time it was bce to repurchaor the security

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that may give

quired to mainnot be sold wqual value. As ay, in some ci

allow it, QS Inv

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vestors may us

Short selling security in thee of the price d when it is rey. While the pa client accounue to rise, ca it may cause t

broker’s name brokers lend to

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nterparty to a

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prime broker

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with broker-de

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involves borroe future. Such of a security. placed, the ac

possible loss ont engaged inausing an acco the price to ris

, to raise cash ao funds that sel

| 39

these stocks asing or selling

financial

derlying a dit risk of pes may resultddition,

creased risks.

rs) selected by

versus-ld by prime y. be claimed byder the

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lic Offerings (“ability of the i

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ment/Model Rissumptions con

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in short sales me assets are hmore conventi frozen and inket movement

on for determ

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t models, used

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ty of an accou

by the approequently less liup periods, an

securities or m

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any quantitati have a negativs, which have r piece of data

ntify and escal

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unt to participa

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ter code. Despr, as with any ve investmentve impact on i a wide range a. Furthermorate in a timely

om outside ve quotations, e

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eve its investm

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| 40

amount of h the short or liquidate a tions will rise

ather than hich may oker’s

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ment team. urities traded s are typically

based on

. The models predictive ent’s specific

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endors and earnings receives pons, alcohol ment ocess using

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ce Risk. While

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| 4

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transaction cove trading straets, especially er developed

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vestment stra

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trategies may

with a buy-anturns. Trading typically highe

consider client

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ster recovery

s and applicatng in the deae recovery timvices. In the evracticable.

ependent on

Firm’s strateghe performan

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ms, networks ous software co

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etwork service

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generate rela

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plan and has

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| 42

demptions in

atively high

egy. The market. e much

or the tax

rate significanrms of taxes. xable income x advisors estors-

successfully

rocedures arey of a group

has outlined erial business

expertise of

ged by a team strategy or

oud”

ors and client ncidents can y cause the system or losere, such as t are used to er means for

ruption. ccess, such as to intended

etary

ders (e.g., financial

2

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m

e

losses to ainability ofshare purcshareholdelitigation cremediatioincidents atransactiobrokers, dservice proInvestors hthe impacincluding tFurthermoany other a result.

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Valuation conditionsthe time o

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a client accounf fund sharehochases and reder information

costs, reputation costs, and/ affecting issuens, governmeealers, insuran

oviders) and o has establishedt of, such cyb

the possibility ore, QS Investo third parties w

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he performan

he compositioonstraints;

ransaction cosnd

lient inflows o

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s, QS Investorsof valuation. T

al Risks that

vestment type

Volatility Inverkets, they hav

Paying Stocks.y fall out of faquired to contuce or elimina. Depending u

be widely availnt account to

nt portfolio, inolders to transdemptions), vin) and attendaonal damage,

/or additional cers of securitiental and othence companie

other parties. Id business conersecurity inci that certain rors cannot con

whose operati

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nce of the inde

on of an accou

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Relate to Ot

es and investm

esting Risk. Wh

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upon market cable and/or m produce curr

nterference wisact business aiolations of apant breach no, reimburseme compliance coes in which a pr regulatory a

es and other fi n addition to ntinuity plans dents. Howev

risks have not ntrol the cybeions may affec

hat seek to tra

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hat result in or

ircumstances,

ly assign a val be different t

her Types of

ment techniqu

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ount’s strategy

stors and unddividends on snt of dividendconditions, divmay be highly cent income w

ith a fund’s ab and the fund pplicable privaotification and ent or other coosts. Similar ad portfolio invesuthorities, excnancial institu

administrative in the event over, there are been identifiersecurity planct a client acco

ack an index a

ctors may incr

dex may not b

ses associated

r create the ne

when holding

lue to an asse than the value

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es involve cert

lity products m

markets.

y of investing

derperform theuch stocks. Th

ds in the futurevidend-paying concentrated

while remaining

bility to calcula to process traacy and other credit monitoompensation dverse conseqsts, counterpachange and otutions (includine, technologic of, and risk m inherent limitaed, as well as ts and systemsount. Client a

are subject to

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be identical at

d with trading

eed for uninve

gs in client ac

t(s) using the e received whe

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ate its NAV, imansactions (inc laws (includinoring costs, re costs, forensicquences couldrties with whither financial ng financial in

cal and procedanagement syations in such the rapid deves put in place accounts could

tracking error

error, includin

all times due

and holding s

ested cash.

counts are dif

best availableen the investm

ment Techniq

al risks:

potential for f

aying stocks in

mpanies that ie is the possibipated acceler

meet a client a market sectofied.

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| 43

o trading, thement of fund of private s, penalties, n and ybersecurity ngages in

ators, banks, and other ds, QS vent or reducestems,

new threats. providers or y impacted as

t be able to

her things:

uidity

er securities;

e given market

available at

tive returns in

sk that such

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3

e

s

t

ks

a y

ESG Investaccounts iInvestors t

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currency ebecause thdeflation, indexed se

Cash Manmanagemratings of institutiondefensive

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ting Risk. An a

nvested in a sto avoid or liq

ties Risk. A cli

han investmenn overall markn interest ratephenomena, livents.

ndexed Securies in real interee to rise faster f nominal inteely decrease. A maturity receecurities in the it may experien expected ducurity than on

erest rates rise

exchange rateshe principal am a client accouecurities are ti

agement and ent or defens the investmen holding the c investing purp

ate Risk. To th

interest rate r A change in i with longer m different internterest rates o

amount or in

xed income se ntervals, whiles, these reset

account or str

similar strategyuidate a well-

ent account’s

nts in traditionket movements or factors afvestock diseas

ities Risk. The

est rates (apprr than nominaerest rates incrAlthough the peive no less thae secondary mence a loss if turing the perio a convention

(i.e., if interes

s), the value omount of inflaunt will be subed to indices t

d Defensive Invive investing pnts. If client ac

cash. If a signiposes, it may

he extent that

risk. Generally interest rates wmaturities are g

est rate meas on different ty the same dire

curities pay ine floating rate provisions red

ategy subject

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investment in

nal securities. ts, commodityffecting a partse, embargoes

values of infla

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market whose here is a subseod a client accal bond.

st rates rise fo

of inflation-indation-indexed bject to deflati that are calcu

vesting Risk. T

purposes may ccount holds cficant amounbe more diffic

a client accou

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nterest at variae securities maduce the impa

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ation-indexed

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than the inflate of inflation-iue of the secu

principal valueequent period

count holds an

or reasons othe

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be affected b cash uninvestet of a client accult for the clie

unt is exposed

st rates will le the same impe sensitive to c short- and lonties or securiti

able or floatingay reset wheneact of changes

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fixed income

rates minus tf inflation-indtion rates, thendexed secururity. Howevees have been d of deflation n inflation-ind

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by changing ined, it will be sccount’s assetent account to

d to fixed incom

ead to a decreact on all fixe

changing inteng-term interees of differen

g rates. Variabever there is as in market int

nd restrictions

the ESG guide meet the ESG

ments may sub

nked instrume or intense speity, such as dr

economic, pol

securities gen

the inflation raexed securitie

e value of inflaities declines ir, if a client ac adjusted upw or lower levelexed security,

on, for examp

lient account wed downward nvestments ination for prior

s held by a clie

nterest rates asubject to the ts are used foro achieve its in

me securities,

ase in the valud income secu

erest rates thaest rates and Ut issuers, may

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will decline. M during a perio

n these securitr periods.

ent account fo

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nvestment obj

the account m

ue of fixed incurities. Fixed inn shorter termUS and foreigny not necessar

ities tend to re specified inden the value of

| 44

perform

quire QS

unt to greater

ffected by nvestors,

, other ulatory

te in response

e, if inflation y increase. In securities

deflation, ases inflation-flation since If inflation is may earn less

anges in

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or cash

es in credit the depositoryement or jective.

may be

come ncome

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y

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Credit Riskfinancial cobligationworthines

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Risk of Incor terminaratios are

Affiliated Fmay preseclient’s assAffiliationsOther Com

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some securitieg effect; otherhese securitie

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condition. The, or a downgrs.

account entere agreementsdit risk presenes experiencinnvests. Howevecurities rated stics.

ociated with

ccount that ino the followin

unds Cost Risk An Underlyin

ce a client to wn, one Underly

would indirectl

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ent QS Investosets to QS-Ads), Item 11 (Compensation) o

tfolio Rebalanancing of a QSg Fund may beng may increapenses or resu affect an Undng is likely to b

es do not tracs may also pros may fluctuat

f a fixed incom

se may includrade of a secu

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nted by the cong these eventver, ratings are in the lowest

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vests in Undeng additional t

k. A client’s co

g Fund may cwithdraw its inying Fund mayy bear the cos

nses. A client’

age net assetso increase whe

ssets in a clien

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of this Brochur

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S Investors’ clie required to

ase brokerage ult in the Undeerlying Fund’s

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more likely to d

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conflicts of int

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ment in such ash at a time wosts of the Un small to be ece client accoungnificant inve

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repurchase agmitment transmay incur expredit ratings ouing them and may possess

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| 45

ay produce a he market

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ccount’s Undeuity or fixed in

age of its asses). Depending

eeves at any gi the client accoded allocation

a client accou

derlying Manaor, country or rlying Fund’s prtain assumpt

of these factoal crises. Althorotect againstorrect, or thatnderlying Fund

nd in which a c

or by other enely large rede advantageounderlying Fundonomically viat account’s pe

could receive

ment, particu (for example, gn market aff

ation and Fu

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rlying Funds ocome). Howe

ts in these sec upon the periven time and ount’s actual for that asset

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ager about the region, or abo

portfolio manations concernirs may change

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client invests a

ntities as “funmptions or invs to do so. Sud, increase theble. Such activ

erformance.

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und/Manager

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ability to achi

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or Sleeves will ver, under no

curities (subjecrcentage of se the percentag exposure to tt class.

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erlying Fund’s osses, there is succeed. Hedg of a client acc

also may be a

ds-of-funds.”vestments anduch investmene Underlying Fvity also may a

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r Selection A

volve the follo

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invest principormal market c

ct to any applecurities in a pge of the accohe securities i

gment of an U

ss of, value ofovements, is inderlying Manlay of market

historical patte portfolio mans no assuranceging strategiescount may be

n underlying

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o investment m

e in thin or voor its price is n traded in or cu

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ment objective

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pally in the sec conditions, an

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n a particular

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or market tre ncorrect. In anagers to eval factors and doerns due to pronagers or an Ue that their juds may not alw worse off tha

| 46

investment fo

rom time to quired to sell y increase ses or result inect an

may differ

olatile marketsot readily urrency of tha

ces

nal risks:

e depends

erlying Funds dgment abou

Managers is

curities n Underlying

ment t class held by

nvested in asset class

nd’s portfolio

ends affectingddition, the uate securitieso not assure olonged

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ways work as n if it had not

6

r

s

t

t

y

s

t

t

Multi-Manand monitinvestmenby an UndManagersmay buy tof these tr

Fund-of-Fuclient accoobjective oinvestmenFund may bear the c

Affiliated FFunds andand to SleItem 10 (OTransactioconflicts o

Non-Diverallocates itnegative e Additiona

Interest Rasecurities, a decreaseincome serates thanrates and issuers, ma

Certain fixspecified imost caseHowever, leveragingprices of t

Credit Riskfinancial c

nager Risk. Wh

tors the overant decisions foderlying Mana, which could he same securades without

unds Cost Riskount that only or policies witnt from such U buy the same

costs of these

Funds and Affd Affiliated Funeeves managedOther Financiaons) and Item of interest.

rsification Risk ts assets to a sevents affectin

al Risks that

ate Risk. To th

the Underlyine in the value ecurities. Fixed shorter term

US and foreigay not necessa

xed income se ntervals, whiles, these reset some securitieg effect; otherhese securitie

k. The value o

condition. The

hile QS Investo

ll managemenr client accouger for a Sleev adversely afferities that ano accomplishin

k. A client acc

y invests directhout the clien

Underlying Fune securities tha trades withou

filiated Managnds. Assets in d by Affiliatedl Industry Act

14 (Client Ref

k. To the exten

smaller numbng such Under

Relate Prima

he extent that

ng Fund or Sle of fixed incom income secur securities. In a

gn interest ratearily change in

curities pay ine floating rate provisions redes do not tracs may also pros may fluctuat

f a fixed incom

ese may includ

ors monitors e

nt of client accnts independeve will not alwect the perfor

other Underlyig any investm

count that inve

tly in individuant account’s apnd at a time that another Unut accomplishi

gers Risk. Asse

a Manager-od Managers. Tivities and Affferrals and Oth

nt that a client

er of Underlyirlying Funds o

arily to Fixed

an Underlying

eeve may be sume securities. Arities with long addition, diffees), or interestn the same am

nterest at variae securities maduce the impack the underlyovide for interte significantly

me investmen

de insolvency

each Underlyin

counts, QS Invently from oneways be compmance of a clng Manager s

ment purpose.

ests in Underly

al securities. Approval, whichhat is unfavoraderlying Fundng any investm

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f-Managers clhis may prese

filiations), Itemher Compensa

t account inve

ng Managers,r the securitie

Income Inve

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ubject to interA change in inger maturitieserent interest t rates on diffemount or in th

able or floatingay reset wheneact of changesing index direrest payments y when intere

t may be nega

or bankruptcy

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vestors and eae another. It islementary to tient’s account

sells. Therefore

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An Underlying h could force able to the cli

d sells. Therefoment purpose

of-Funds clien

lient account ent QS Investom 11 (Code of ation) of this B

ests in a smalle

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estments in U

eve of a client

rest rate risk. Gnterest rates ws are generally rate measureserent types of

he same direct

g rates. Variabever there is as in market intectly, but reset that vary invest rates chang

atively impact

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n a Manager-o

ach Underlyings possible that those used byt. In addition, e, the client a

ay have highe

Fund may cha the client accent account. Iore, the client e.

nt account ma

may be allocaors with a conf Ethics, Partici

Brochure for a

er number of

count will be managed by su

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account is ex

Generally, risi will not have ty more sensitivs (such as shof securities or tion.

ble rate securi a change in a terest rates ont based on forersely with mage.

ted by adverse

efault, inability

of-Managers a

g Manager mat the investmey other Underl one Underlyinccount would

er investment c

ange its investount to withd

In addition, on account wou

y be invested

ated to QS-Maflict of interestipation or Inte

a discussion of

Underlying Fu

more susceptuch Underlying

unds or Sleev

posed to fixed

ng interest rat the same impave to changingrt- and long-te securities of d

ities tend to re specified inden the value of rmulas that market rates. Th

e changes to a

y to meet a fin

| 47

arrangement

ake ent styles usedlying ng Manager

d bear the cost

costs than a

tment draw its ne Underlyingld indirectly

in QS-Advised

anaged Sleevet. Please see

erest in Client f such

unds or

ible to g Managers.

ves

d income

tes will lead toact on all fixedg interest erm interest

different

eset at ex rate. In the security. ay produce a

he market

an issuer’s

nancial

7

d

t

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s

o d

obligationworthines

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Prepaymenmaturity dof a clientincrease inthe securitwould be purchasesUnderlying

Extension backed sesecurities aSleeve of a

Sovereign emerging Fund or Sl

AdditionaUnderlyin

Closed-Enpremium opay broke

, or a downgrs.

erlying Fund opurchase agre the credit risk

to protect its i the securities s issuing thema/BBB) may po

d or “Junk Bongher risk of issds tend to be v subjects an Unater risk of lospayments due the risk of ne These negativ

nt or Call Riskdate. Issuers of account hold

n value that otty, the Underl lower than th a fixed incomg Fund or Slee

Risk. When in

curities, may o and locking in a client accou

Debt Risk. So

market investeeve may be

al Risks that ng Funds or S

d Fund Risk. S

or discount torage commiss

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or a Sleeve enteements, and wk presented by interest in sec in which an U

m and are not ossess certain

nd” Risk. Debt

uer default, te volatile and mnderlying Fundss because of d to adverse co

egative percepve perceptions

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ften exercise tds a fixed incother fixed incoying Fund or S

he yield of the me security at aeve may lose t

nterest rates ri

occur more slon below markent to be more

overeign gover

tments as wel unable to enfo

Relate PrimaSleeves

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urity or issuer’s

ters into financ when-issued, y the counterpurities experie

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t securities tha

end to be less more susceptib

d or a Sleeve o default or decompany specifptions of the hs could last fo

income securit

this right wheme security suome securities Sleeve would security that w

a premium (at the amount of

se, repaymen

owly than antet interest ratee volatile.

rnment and su

l as the risk oforce its rights

arily to Other

ed-end funds

et asset value.ction with the

s rating, a mea

cial contracts delayed deliveparty. In additencing these end or a Sleeves to quality. Seharacteristics.

at are below in

liquid and arele to adverse

of a client accclining credit qfic events or chhigh yield markor a significant

ties give the is

n interest rateubject to preps generally exp also be forced was paid off. t a price that ef the premium

ts of fixed inc

ticipated, extees. This may c

upranational d

f debt morato against the is

r Types of Inv

in which an U

An Underlyine purchase an

asure used to

(such as certaery and forwation, an Underevents. Credit e invests. Howecurities rated

nvestment gra

e more difficu events and necount to increa

quality, or an ihanges in ecoket depressingt period of tim

ssuer the opti

es fall. Accordayment or cal

perience whend to reinvest t In addition, if exceeds its stam paid in the e

ome securities

nding the effeause the inves

debt involves m

orium, repudiassuers.

vestments an

Underlying Fun

ng Fund or Sled sale of shar

help evaluate

ain derivativesard commitmerlying Fund or risk is broadly

wever, ratings ad in the lowest

ade, or “junk

ult to value thaegative sentimased price sen

issuer’s inabilionomic conditg the price an

me.

on to repay o

ingly, if an Unll risk, it may nn interest rateshe proceeds af the Underlyinated par or prevent of prepa

s, particularly

ective duratiostments in an

many of the r

ation or renego

nd Investmen

nd or Sleeve in

eeve that inveses of closed-e

e a borrower’s

, repurchase aent transactionr a Sleeve mayy gauged by th are only the ot category of i

bonds,” are s

an higher gradments. Investinnsitivity to chaty to make intions. Junk bond liquidity of h

r call the secu

nderlying Fund not benefit fus fall. Upon pr

at then currenng Fund or Sleincipal value),ayment.

asset- and mo

n of these fixe Underlying Fu

isks of foreign

otiation, and a

nt Techniques

nvests may tra

sts in closed-eend funds.

| 48

s credit

agreements, ns), it will be y incur he credit opinions of the investment

peculative,

de securities. g in these

anging interestterest and/or nds are also high yield

urity prior to it

d or a Sleeve lly from the repayment of t yields, whicheeve the

ortgage-

ed income und or in the

n and

an Underlying

s in

ade at either a

end funds will

8

e

t

s

h

g

a

Hedge Funwhose poinvestor ininvestmen

Mortgagesecurities prepay the(extensionprepaymeyielding seSleeve to i

Mortgageissued by by the fullgovernmethese or o

Non-Publicand may rUnderlyingfor publiclrealized frFurther, coprotection

Convertiblsecurities athe equityits yield ansecurity ris

Repurchasof the selledispose ofUnderlying

Leveragingamong otFund or Slor Sleeve wthe effect investmen

nds Risk. An U

rtfolio managn the Underlyinnt companies.

-Backed and A is subject to ine principal on n risk), which wnts may causeecurities and s invest in highe

-Backed Secur GSEs such as faith and cre

ent has provideother GSEs in t

cly Traded Secresult in substag Fund or a Sly traded secuom these saleompanies whon requirements

le Securities R and to the crey security undend other fixed ses, the conve

se Agreementser, including lf the underlying Fund or Slee

g Risk and Revher things, eneeve engages

will be more v of any increas

nt risk with res

Underlying Fun

ers may not bng Funds wou

Asset-Backed nterest rate ris their loans m

will affect the e the Underlyislower than exer yielding sec

rity Risk (Gove FNMA and FHdit of the US ged financial su

the future.

curities. Non-p

antial losses. Teeve of a clienrities. Althoug

es could be lesose securities s that would b

isk. Convertib

edit and intereerlying a conve income chara

ertible security

ts Risk. Repurc

osses and posng securities. Teve has purcha

verse Repurchngaging in ders in transaction

volatile and allse or decreasespect to a larg

nd or Sleeve m

be registered auld not have th

Securities Risksk and credit rore quickly th yield, averageng Fund or Slexpected prepacurities.

ernment-SponHLMC are neit government. Support to FNM

publicly traded

These securitient account magh these securss than those o are not public be applicable

ble securities a

est rate risks aertible securityacteristics. As y tends to trad

chase agreeme

ssible delays o To the extent ased has decre

ase Agreemenrivative transacns that have al other risks tee in the value er pool of ass

may invest in in

as an investmehe benefit of c

k. The value o

risk. These secan expected (

e life and priceeeve of a clienyments may r

nsored Enterprher insured noSuch securitie

MA and FHLMC

d securities ma

es may be lessay take longerrities may be r originally paidcly traded may if their securit

re subject bot

ssociated withy decreases, t the market prde on the basis

ents could inv

or restrictions u that, in the meased, the Un

nts. An Under

ctions or revera leveraging efend to be com of the Underlysets than the U

nvestment com

ent adviser. As certain protec

f investments

curities are als (prepayment re of the securnt account to

reduce the pot

rises or “GSEsor guaranteed

es are only supC, but there c

ay involve a h

s liquid than pr to liquidate t

resold in privad by an Undery not be subjeties were publ

th to the stock

h fixed incomehe convertiblerice of the equs of its equity

volve certain ri

upon an Undemeantime, the nderlying Fund

rlying Fund or

rse repurchaseffect on its po

mpounded. Thying Fund’s o

Underlying Fun

mpanies that

s a result, the ctions afforded

in mortgage-

o subject to th risk) or more sities. In additio invest the pretential for suc

”). Debt and m

d by the US Trpported by thecan be no assu

igh degree of

publicly traded these positiontely negotiatelying Fund or

ect to the discllicly traded.

k market risk a

e securities. We security tenduity security u conversion fe

sks in the eve

erlying Fund’s value of the sd or Sleeve cou

Sleeve may ta

e agreementsortfolio, the vais is because ler Sleeve’s undnd or Sleeve w

are not regist

client accound to investors

-backed and a

he risk that bo slowly than exon, faster tha

epaid principach Underlying

mortgage-bac

reasury and are credit of theurance that it

business and

d securities, ans than would

ed transaction Sleeve of a clilosure and oth

associated wit

When the markds to trade onnderlying a co

eatures.

ent of default o

or Sleeve’s ab securities that uld experience

ake on leverag

. When an Unalue of the Un everage genederlying assets would otherw

| 49

tered and

nt as an in registered

asset-backed

orrowers will xpected n expected l in lower Fund or

cked securities

re not backed e GSE. The US will support

financial risk

nd an be the case s, the prices ient account. her investor

th equity

ket price of the basis of onvertible

or insolvency

bility to the e a loss.

ging risk by,

nderlying derlying Fundrally magnifie

s or creates wise have.

9

d s

Engaging advantage

Securities recovery oUnderlyingover the p

Risks Assoutilized bythose of athat may rcorrelatedconduct athe index securities t

Additiona

QS Investo

AllocationdeterminindetermininRisk Manadiscretion is increasegreater loswill work a

Defensive result of imshort-termmore diffic

Dynamic Rin implemmay deviavolatility mtrading coperformanto addition

Event Riskinvolving o

in such transaeous to do so

Lending Risk.

of the securitieg Fund or Slee

period of the lo

ociated with Iny QS Investors particular be

result in an ind to the returnny fundament tracking inves that are less a

al Risks Assoc

ors’ risk manag

Risk. An acco

ng the accounng when to enagement strate in determinin

ed at inopportsses. There is as intended o

Investing Riskmplementatio

m defensive inscult for the ac

Risk Managementing the Dyte significantl

may result in gosts due to impnce. If derivatinal risks.

k Managemen options and fu

actions may ca to satisfy its o

Lending secu

es when the loeve could also oan.

ndex Tracking to invest certanchmark indedex tracking es of the indextal, company-sting process, attractive than

ciated with Q

gement adviso

ount’s ability t

nt’s asset allocngage in risk megies, a client

ng the accountune times or f

no guarantee r prevent an a

k. A client acco

n of the Dynastruments or eccount to achi

ment Strategy ynamic Risk My from their n

greater losses tplementation ves are used t

t Strategy Riskutures that are

ause the Undeobligations or

rities involves

oan is called o lose money if

Investing. The

ain client accox may cause s

error that is grx with respect specific secur

the value of a other securit

QS Investors’

ory services in

to achieve its i

cation, creatin management account will bt’s asset alloca

for extended p that the Dyna

account from

ount may hav

amic Risk Man engages in opeve high tota

Risk. A client

anagement stnet asset value than redeemin of the Dynam

to implement

k. The Event R

e expected to

erlying Fund o meet segrega

the risk of po

or possible lossf its short-term

e assumptions

ount assets in such models areater than exp to a client accity analysis wi

a client accounies in the inde

Risk Manage

volve the follo

nvestment ob

g and applyin strategies. In be subject to ation. If an acc periods of timamic Risk Man incurring losse

e significant e

agement stratptions and futul returns.

account may

trategy. Duringes. Therefore, ng mutual fun

mic Risk Manag the Dynamic

Risk Managem

increase in va

or Sleeve to liqation requirem

ossible delay in

s of collateral m investment

s built into the

a manner desand software tpected and, thcount. In addith respect to nt may decreaex from a fund

ement Adviso

owing additio

bjectives depen

ng formulas fo implementing heightened alcount’s expos

me, the accounnagement or tes.

exposure to sh

tegy. If a clienures transactio

sell underlying

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ment strategy m

alue during th

quidate positioments.

n receiving ad

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signed to prod to produce invherefore, retuition, because securities purcase if account damental inve

ory Services

nal risks:

nds upon QS

or de-risking og the Dynamicllocation risk, sure to short-tnt may experie the Event Risk

hort-term defe

nt account hasons for hedgin

g fund holding

market volatilit of ETFs durin

A client accounegy, which mament strategy,

may involve en

e occurrence

ons when it m

ditional collat

orrower fail finollateral declin

and optimizat

duce returns cvestment reco

urns that are ne QS Investors chased and so assets are inv

estment perspe

Investors’ skill

r ending de-ric Risk Manage as QS Investoterm defensiveence lower pek Managemen

ensive instrum

s significant exng purposes, i

gs, including s

ty, the share pg periods of mnt may incur aay reduce the a, the account

ntering into tr

of certain ma

| 50

ay not be

teral, delay in

nancially. An nes in value

tion software

comparable toommendationsnot closely does not old as part of vested in ective.

l in

isking, and ement or Evenrs will have e instruments rformance or t strategies

ments as a

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shares of ETFs

prices of ETFs market additional account’s will be subjec

ransactions

rket events.

0

o s

t

s,

t

An instrumstress. Impcontradictaccount’s are derivatrisks assoc

ment used to hplementation otory views on return. An actives and thusciated with ho

hedge market of the strategy market movemcount may nos a client accoolding derivativ

t risk could losy may result inments. The coot be able to cunt that emplves.

se all or a portn a client accoosts of purchaclose out a posoys an Event

tion of its valuount holding oasing and sellinsition at the d Risk Managem

ue even in a pe options and fung these instr

desired time orment strategy

eriod of severutures positionuments may rr price. Option is subject to t

| 5

re market ns that take

reduce an ns and futures

the additional

1

s

ITEM 9

There are of QS Inve

9 - Discipl

no legal or disestors’ busines

inary Info

sciplinary evenss or the integ

ormation

nts to report tgrity of the Firm

that would be m’s managem

material to a ment.

client’s or proospective clien

| 52

nt’s evaluation

2

n

ITEM 1

On May 3became a on the Ne

As a wholaffiliated cgain accesa conflict oprocedure

To elimina

The follow

Advisory In

Mupatobe

InLeanSc

Qmad

QLM

Sub-adv

In

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0 - Other

0, 2014, Legg wholly ownedw York Stock

ly owned subs companies. Soss to investors of interest betes are designed

ate a potential

wing is a descr

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nvestment maManagement,

nder commonartner, QS Invo the provisionetween acting

nvestment maegg Mason Invnd provides cecholars Choice

QS Investors hamanaged accoudvisory service

QS Investors mMPPG relation

visory Servi

nvestment adv

England/Walesnd Registrar fo

nvestment subEurope) Limiteervices, LLC, L

r Financia

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sidiary of Leggome of these r who might otween QS Inved to ensure th

l conflict of in

ription of the m

nager of QS In LLC, a wholly n managemenvestors Fund Mns of the fundg in the best in

nager of the Svestor Serviceertain marketie College Savi

as entered intount programs es for one or m

ay also providnship.

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viser to offsho

s). Legg Masoor these funds

b-adviser to offd is the invest

Legg Mason In

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pleted its acquntly operated cker symbol: L

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terest, QS Inve

material advis

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Global Emergindiary of QS Investors, is the g LLC has full atnership agreed investors an

ce College Savrves as the maative and reco is a Fund-of-F

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for Legg Masoer and promoturope) Limited

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ss relationshipsaterial becauseAlthough theseestors’ clients,

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m, a Section 52d the distributrvices with resf QS Investors

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broker-dealer

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affairs of the f face a conflicterest; and 29 college savtor of interestsspect to such .

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d). Legg MasoLegg Mason Igement Hong

| 53

QS Investors ock is traded

Legg Mason-he Firm to s could createolicies and

rs.

panies:

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fund, subject of interest

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f-Funds and

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| 54

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| 55

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| 56

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| 57

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| 58

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| 59

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onsor and/or mdditional inform

rd parties.

ted, owned, m DBI Developevestors and FTte of this Broc

tion prior to pblic informatioyee accounts, sonnel involvehe output from

rovide investmmmodity interedingly, QS Inveonal Futures Associated Perso behalf of a CT clients and p

hicles

manage privatmation about

managed and ed Ex-Japan anTSE. The indicchure, QS Inve

public disseminon. To ensure QS Investors d in the creat

m their researc

ment advice orests subject toestors is regist

Association (“Nons and PrinciTA, which allorospects.

te placements these vehicle

| 60

commercially nd FTSE DBI Aes are createdestors does

nation, the that this has ion of these ch.

r o the tered with theNFA”). In ipals of QS ws such

offered to s is provided

0

ll

d

e

ITEM 1Person

Code of

As part of1940, as aassociatedInvestors oactivities, interest winterests oincluding informatiotransactio

Investin

QS Investopurchasedemployee interests. T

• Djo

• In

• Oac

• Fiac

• Fica

• C

• Re

The Code

• Em

1 - Code nal Tradin

f Ethics and

an overall int amended (the d policies and owes a fiducia interests and ith QS Investo

of the Firm’s c requirements on. The Code ns and accoun

ng and Trad

ors’ employeesd or sold for th trading activit The Code of E

isclose personoint or benefic

nstruct their br

Obtain approvaccounts (certa

le a quarterly ccounts during

le an annual halendar year-e

onfirm annua

eport any viol

of Ethics also

mployees are

o Employ“buy”

o Investmtraded

of Ethicsng

d Personal

ternal complia “Advisers Act procedures. Tary duty to its relationships tors’ clients; or lients. The Co to put client i of Ethics also nts.

ding in Sec

s are permittehe Firm’s clienty to ensure th

Ethics requires

nal brokerage cial interest or

rokers to prov

al for securitieain exclusions

transaction reg the prior ca

holdings reporend;

ally that they h

ation or poten

contains furt

subject to the

yees may not or “sell” orde

ment personne (or contempl

, Particip

Trading

nce program,t”), QS Investo

The Code of Et clients. The C that might: (1 (2) otherwise

ode of Ethics a nterests first a imposes restr

curities Rec

ed to trade forts. To help mahat clients’ ints QS Investors’

accounts and control (“emp

vide Complian

s transactions apply);

eport containilendar quarter

rt containing

have read, und

ntial violation

her restriction

e following spe

knowingly buer for the sam

el may not buated to be tra

ation or I

and pursuantors has adoptethics and assoode of Ethics ) present a co interfere withnd associated

and not to takictions, descri

commende

r their personaanage this inhterests are pla’ employees, a

holdings to Cployee-related

ce with duplic

s from Compli

ng informatior;

information a

derstand and w

of the Code o

ns regarding p

ecific blackout

uy or sell a sece security, un

y or sell a secaded) for a clie

Interest i

t to Rule 204Aed a code of e

ociated policie emphasizes th

onflict of intereh QS Investorsd policies impoke inappropriabed below, on

d to Client

al accounts in herent conflictaced ahead of among other t

Compliance, ind accounts”);

cate trade con

ance prior to

on about repo

bout all holdin

will comply w

of Ethics to Co

ersonal tradin

t period restri

curity on a daytil that order

urity seven (7)ent account w

n Client T

A-1 of the Inv ethics (“Codes are based onhat QS Investoest or the apps’ ability to maose standards ate advantagen employee p

ts

securities wht of interest, th the Firm’s or

things, to:

ncluding any a

nfirmations an

executing trad

rtable trades i

ngs in employ

with the Code

ompliance.

ng activity, suc

ctions (certain

y during which is executed or

) days before with which the

Transactio

estment Advis of Ethics”) ann the principleors’ employeepearance of a cake decisions i of business co

e of employmeersonal securi

ich are recomhe Code of Et employees’ p

accounts in w

nd account sta

des in employ

in employee-r

yee-related acc

of Ethics; and

ch as the follo

n exclusions ap

h any client acr withdrawn; a

or after the sae individual is a

| 6

ons and

sers Act of nd other e that QS es must avoid conflict of in the best onduct, ent-related ities

mended, thics limits ersonal

which they hav

atements;

yee-related

elated

counts as of

wing:

pply):

ccount has a and

ame security is associated;

1

e

s

• Em

• EmM

• Em

• Em

• Emar

In additioninclude pr

• Rein

• Liem

• Pras

• Rean

The Code engaging index fundof applica

As noted aQS Investocould also

Employeesmutual fudirect knomaintain iinformatioin Sleeves disclosure publicly di

While thesInvestors bdesigned t

mployees mus

mployees musMason or its af

mployees may

mployees may

mployees are re in possessio

n to restrictionovisions that a

eporting of alncluding client

mits on the tymployees;

re-clearance associate” as d

eporting of alnd/or duty to

of Ethics also in certain trands, and knowible law or the

above, employors purchases,o be different i

s may hold a bnds, ETFs and

owledge of cur nformational on relating to managed by policies that asclosed.

se activities mbelieves that it to address the

st hold a secur

st hold proprieffiliates (includ

y not purchase

y not participa

prohibited froon of material

ns and require address other

l gifts and entts, consultants

ype, frequency

and reporting efined under

l outside busin the Firm’s clie

places restricnsactions in Lengly participa

e provisions of

yees or family holds or sells

in nature or ti

beneficial inte other commirrent fund hol barrier policie the investmen Affiliated Man allow QS Inves

ay create potets Code of Ethese matters.

rity for at leas

etary funds, dding QS-Advise

e a security wh

ate in IPOs or o

om buying, sel, non-public in

ements regard areas where t

tertainment exs, brokers and

y and value of

of all political Rule 206(4)-5

ness activities ents.

tions on emplegg Mason stoting in or faci

f a fund’s gove

y members mas the same secming from the

rest in QS Invengled funds (ildings, which

es and procedunt intentions, anagers. In addstors and emp

ential conflictshics, combined

t thirty (30) da

efined as opeed Funds and

hile a client or

other new issu

lling or recomnformation.

ing personal t the potential f

xchanged betw vendors;

f business gift

contributions5 promulgated

that may be i

loyees servingock, including litating late trerning docum

ay purchase, hcurities for cliee advice and a

estors-managincluding QS-A is non-public ures that restr activities, trandition, the Affiployee access

s of interest bd with the Firm

ays;

n-ended inves Affiliated Fun

rder is pendin

ues; and

mmending the

trading, the C for conflicts o

ween employ

s and entertai

s or gifts maded under the Ad

n conflict with

g on the board a ban on purading, market

ments.

hold or sell secent accounts. T actions taken

ed (or sub-advAdvised Funds information. Qrict QS Investonsactions and iliated Funds a only to portfo

etween QS Inm’s other poli

stment compands), for at lea

g (certain exc

purchase or s

Code of Ethics of interest exis

ees and exter

inment given

e by employeedvisers Act; an

h an employe

d of directors orchases for cliet timing or an

curities at or a The personal a by QS Investo

vised) investms). In these caQS Investors a

ors’ access to m portfolio hold are subject to olio holdings in

vestors, its emcies and proce

any sponsoredast sixty (60) d

lusions apply)

sale of a secur

and associatet. These includ

nal business p

to or received

es and any othnd

e’s job respon

of a publicly hent accounts oy other activit

round the sam actions by theors for client a

ment products,ses, employee

and QS Investo material non-pdings of Affilia portfolio hold

nformation th

mployees and edures, are re

| 62

d by Legg ays;

;

rity while they

ed policies alsode:

partners,

d by

her “covered

nsibilities

held company, other than ty in violation

me time that ese individualsccounts.

, including es may have ors Affiliates public

ated Funds anddings hat has been

clients, QS asonably

2

o

,

d

Despite threlieve all resolve the

How to

QS InvestoComplianc

Securitie

As describ14 (Client indirectly bin additionthat is a QIn the caseadvisory feaffiliate min the modfees paid bbe credite


QS InvestoFunds mayInvestors amay be vieThese conItem 10 (O

Particip

QS Investothe Firm’s scenarios,

he measures o potential confe situation in t

Request a

ors’ clients or ce or an accou

es in which

bed in Item 5 ( Referrals and

bear the fees n to any invest

QS-Advised Fune of an Underee paid to theay make a padel fund portf by a QS-Advisd against the





ors’ advice to ay cause fees toand other QS ewed as havinflicts of intere

Other Financia

ation or In

ors may, in lim parent compa proprietary ca

utlined aboveflicts of intere the best intere

Copy of Q

prospective clunt representa

h QS Invest

(Fees and Com Other Compe

and expenses tment advisornd, the QS-Adlying Fund tha Affiliate. Sepyment to QS Ifolio. Dependsed Fund to QS advisory or se


a Fund-of-Funo be paid to Q Investors Affilng certain conest, and the ml Industry Act

nterest in O

mited circumstaany, Legg Maapital will typi

, clients shoulst. If an unantests of the Firm

QS Investors

ients may reqative at 212-8

tors or a QS

mpensation), Itensation) of th charged by thry fee that maydvised Fund’s at is an Affiliatparately, subje Investors out oding on the coS Investors an

ervice fees oth



nds client to inQS Investors aniates from sucflicts of intere

manner in whicivities and Aff

Other Clien

ances, invest ason, for the pcally be withd

ld be aware thticipated confm’s clients.

s’ Code of

uest a copy of86-9200.

S Investors

tem 10 (Otherhis Brochure, he Underlyingy be paid dire fees and expeted Fund, the ect to an agree of its general ontractual arra

d by an Affiliaherwise charge


nvest in QS-Adnd other QS Inch funds will vest in providingch QS Investorfiliations) of th

t Transacti

and manage purposes of see

drawn from th

hat no set of plict of interest

Ethics

f QS Investors

Affiliate h

r Financial Ind a Fund-of-Fung Funds in whiectly to QS Invenses will inclu Affiliate Fundement betwee resources in cangement agreated Fund to aed by QS Inves


dvised Funds, nvestors Affilia

vary. In light og asset allocatrs mitigates thhis Brochure.

ions

proprietary caeding new inv

he vehicles upo

policies and pt should arise,

s’ Code of Eth

has a Mate

dustry Activitiends client adviich it invests. Sestors. In the ude an advisod’s fees and exen QS Investoconsideration oeed to by the

a QS Investorsstors.




Affiliated Funates. The amo

of such fee arrtion and fund

hose conflicts o

pital of the Firvestment vehion client inves

rocedures can QS Investors

ics by contact

rial Financ

es and Affiliatiised by QS Inv

Such fees and case of an Unry fee paid to xpenses will in

ors and the aff of the Fund b client and QSs Affiliate may



plan participan

ds and Non-Aount of fees rerangements, Q selection adv

of interest, are

rm, the Firm’scles or strategstment in the

| 63

n anticipate or will seek to

ting

cial Interest

ons) and Itemvestors will d expenses arenderlying Fund QS Investors. nclude an filiate, the eing included

S Investors, y or may not


nts in

Affiliated eceived by QS QS Investors visory services.e described in

s affiliates, or gies. In these vehicles.

3

r

t

m

e d

Aside fromQS Investoparticipati It should barise in whlike all othexecution.services ar

m the limited sors does not mon or interest

be noted that hich trades areher trades exec. "Quid pro qure expressly fo

scenarios in wmanage or inve in client trans

in the Firm’s re executed wicuted for the uo" arrangem

orbidden by Fir

which QS Invesest the Firm’s sactions are lim

role as sub-adth brokers tha

Firm’s clients, ments that wourm policy.

stors provides proprietary camited.

dviser for varioat may distribu are executed uld direct trad

seed capital fapital. As such

ous registered ute the funds solely with th

des to brokers

or new investh, opportunitie

investment co that the Firmhe belief that t in exchange f

ment vehicleses for the Firm

ompanies, situ manages. Th

the broker can for distributio

| 64

s or strategies,m’s

uations may ese trades, n provide bestn or other

4

t

ITEM 1

Best Exe

Unless direclient accoaccounts btransactiotransactio

QS Investocommissioreturns, Q

QS Investomanaged analysis.

Factors

While execalso considThese othe

• Re

• Exth

d

• Sp

• O

• C

• A

QS InvestoInvestors w

Approve

Broker-deaon an ongInvestors h

• C

• Ex

2 - Broke

ecution

ected otherwiounts and to dbased on theirn, or “best exn but may be

ors uses a rangons, fees and tS Investors se

ors manages e through caref

Considered

cution price ader a number er factors may

eliability and a

xecution capahe trade and t

ifficulty of exe

pecialized exp

Operational cap

onfidentiality;

Any other facto

ors does not rewhen selecting

ed Broker

alers are selecgoing basis to has established

reditworthine

xperience and

erage Pra

se by clients, determine the r ability to ach

xecution.” Bes measured ove

ge of strategie taxes, as well eks to minimi

explicit costs oful choice of e

d in the Se

nd commissio of other qualy include:

accuracy of th

bility, taking ithe nature and

ecution, etc.) a

pertise, taking

pabilities and

; and

or permitted/r

eceive client reg broker-deale

List

cted from the ensure that thd through its

ess;

d familiarity wi

ctices

QS Investors h commissions

hieve the best st execution is er time throug

es designed to as implicit cosze the total tr

of trading by nexecution strat

lection of

on rates are ofitative factors

e broker-deal

nto account td difficulty of t

and current or

into account

technology in

equired that i

eferrals from aers for trade e

Firm’s approvhe Firm only pbroker approv

th instrument

has the discret paid to them possible resul not necessarigh multiple tra

o manage transts, also knowransaction cos

negotiating cotegies, real-tim

Broker-Dea

ften importants when evalua

er;

the promptnes the trade in vi

r prevailing m

the security o

nfrastructure;

s deemed imp

any broker-deexecution.

ved broker list.partners with bval process. Br

ts within the

tion to choose. Broker-dealelt reasonably aly measured bansactions.

nsaction costs,wn as market imsts of trading.

ompetitive comme trade man

alers

t factors in selting a broker-

ss of executioiew of the ord

arket conditio

or asset class (i

portant in eva

ealers, thus clie

. Relationships broker-dealersrokers are eva

investment un

e broker-dealeers are selecte available for e by the circums

, which consis mpact. To bes

mmission ratesagement and

lecting a brok-dealer’s abilit

n, the ability tder’s characte

ons;

i.e., complexit

luating execut

ent referrals d

s with each brs that meet th

aluated based

niverse;

ers to executeed for trading each client for stances surrou

st of explicit cost preserve inv

s. Implicit cost detailed post

ker-dealer, QS ty to deliver be

to execute theristics (i.e., the

ty, familiarity,

tion quality.

do not influen

roker-dealer ahe high standa on their:

| 65

trades for in client each

unding a singl

osts, such as vestment

ts are t-trade

Investors mayest execution.

e full size of e size,

etc.);

ce QS

are evaluated ards that QS

5

e

y

• St

• Re

• A

Before QSCommitteadded to tprocedure

As a matteQS Investo

Counter

To the extenter into behalf of sbeyond thexchange-

policies anclient accoreviewing only with transactio

Evaluat

Broker peron a post-Committebasis.

No Part

QS Investoarrangemebroker-deadoes not cbroker sele

Directed

Clients mathe broker

tability and co

egulatory stan

Ability to meet

Investors begee to verify tha the list, they aes. Broker-dea

er of policy, Qors’ parent com

rparties fo

tent permitted various types

such client acchat associated -traded deriva

nd proceduresounts to count and monitori approved couns for limited

ion of Brok

rformance is r-trade basis toee provides ad

icipation in

ors does not reents. Althougalers through

consider this rection process

d Brokerag

ay retain discrer-dealers that

ontinuity of co

nding; and

specific client

gins trading wat they meet tare subject to lers can be re

QS Investors dompany.

r OTC Deri

d by the invest of OTC derivacount. Such tr with normal etive transactio

s relating to OTterparty creditng the financi

unterparties, im time periods (

ker-Dealers

reviewed on a o verify the intditional overs

n Soft Doll

eceive soft doh the Firm doe which securitesearch as a fs.

ge

etion over the may be used

overage;

t requirements

with a broker-dhe requiremen ongoing reviemoved from o

oes not trade w

vatives Tra

tment policies atives transactransactions inv exchange secuons (e.g., futu

TC derivativest risk in conneial condition amplementing c (i.e., short ma

s

continuous begrity of the oight by review

ars Arrang

llar benefits fres not participties transaction factor under th

e broker-deale to execute tra

s.

dealer, they arnts of our bro

ew to confirm our approved

with any brok

ansactions

and guidelinetions, includinvolve potentiaurities transacres and option

s transactions ection with sucand credit ratin counterparty caturities).

basis. The lead overall best exwing best exec

gements

rom client tranpate in these ans are executehe Firm’s polic

ers the Firm usansactions in t

re evaluated boker approval that they mai list at any tim

ker-dealer affil

es applicable tng swaps, optal counterparttions that settns). QS Investo

to seek to mitch transactionng of counter credit risk exp

d portfolio maxecution procecution with ea

nsactions or earrangementsed during the cy to seek bes

ses to execute their account;

by the Firm’s G procedures. Ointain the reqe for failure to

liated with QS

to a client accions and foreity credit risk fotle shortly afteors has adopt

tigate the expns. Such policirparties, engagposure limits, a

nager of eachess. The Firm’sch lead portfo

enter into com, QS Investors normal coursst execution fo

e trades in the and/or (2) req

Governance OvOnce a broker-uirements of oo meet our fir

S Investors or

count, QS Invegn currency fo

or QS Investorer trade date aed certain risk

posure of QS Ies and procedging in such tr and engaging

h strategy revies Governance olio manager o

mmission sharins may receive re of business.or its clients or

ir account by:quiring a port

| 66

versight -dealer is our rm standards.

Legg Mason,

estors may orwards, on rs’ clients and with k managemen

nvestors’ dures include ransactions in such

ews execution Oversight on a quarterly

ng research from QS Investors r during its

(1) limiting ion or all

6

nt

n

y

trading bebroker listthe brokerbrokerageand poten

In an efforQS Investothat QS Inbrokeragethese tranthe trade

Step-out ttrades to bInvestors sbrokeragethese trad

Clients witcommissiodesignatedto the Firmclients witdoes not iorders in a

Directed bother contQS Investo

Trade A

Although same day transactioaverage exfill an agg

QS InvestoOccasiona

• A

• C

• Q

e conducted w. QS Investorsr-dealer(s) tha

e may not be antially more co

rt to achieve bors may use “svestors selects

e client to the sactions, the f

in return for a

transactions al broker-dealersselects for trade client will be es may differ

th directed bron costs in an d broker-dealem’s securities tth directed bro nclude clients an equitable m

brokerage arratractual arrangors, clients sho

Aggregatio

each client ac for multiple cn order, whichxecution priceregated order

ors generally bal exceptions m

Available cash

ompliance wi

QS Investors’ ri

with one or mos has an obligat it believes of

able to participostly than, trad

best executionstep-out” trads must agree t specified brok first broker-deall, or part, of

llow QS Invests’ expertise or de execution d executed sep from those ob

okerage may aggregated trer. Because oftrading, the Fiokerage versus with directedmanner.

angements angements at thould be fully a

n and Allo

ccount is indivlient accountsh may reduce

e and the averr, the Firm wil

bases the pro-may be based

in client accou

th client-spec

sk controls; an

ore broker-deaation to seek bffer best execpate in aggregdes executed f

n for clients thding to meet t to transfer theker-dealer. Thealer executes the commissio

tors’ traders to order flows, w

does not agreeparately by thebtained from

pay higher coransaction maf certain prederm may not es those execu

d brokerage in

d their condithe beginning oware of the p

cation

idually manags. When possi transaction coage commissil typically alloc

rata allocation on factors inc

unts;

ific guidelines

nd

alers, includin best executionution may impgated orders a for other clien

at have retainthe directed be portion of ais action is kno

s the trade, whon.

o satisfy client which can rede to participat

eir specified br an executing

ommissions thaay vary if QS Inetermined liquxecute the sated on behalf

n an aggregate

ions must be of each client potential impa

ged, QS Investble, QS Investosts. With limon paid in thecate the partia

n on each cliecluding the fo

and restrictio

ng brokers than for all client pede the Firm

and may receints.

ned discretion rokerage oblign aggregated own as a “stehile the secon

t-directed brokduce market imte in a step-ouroker-dealer (n broker-dealer

an others in anvestors steps uidity constraime number of of clients wited order, the

specified in in relationship. Bct of directed

tors will often tors generally

mited exceptione aggregated ally filled trans

nt’s order sizellowing:

ons;

t may not be trades, but th’s ability to dove execution t

over all or a pgation. In thes order that pe

ep-out” or “gid one clears a

kerage commmpact. If the eut transactionnot aggregater chosen by QS

aggregated or out a portionnts imposed b

of shares (or filthout such arr Firm strives to

nvestment ma Before enterin brokerage on

buy or sell th aggregates thns, each client order. If QS Insactions to clie

e relative to th

on the Firm’s he Firm’s inabio so. Clients th that is not as

portion of brose cases, the b

ertains to a dirive-up” transa

and settles all,

itments while executing bro, the trade fored). TransactioS Investors.

ders. For examn of the trade by QS Investorll percentage) angements. If

o generate its

nagement agrng into an agren trade execut

e same securihese transactiot will be allocanvestors cannoents on a pro-

he aggregated

| 67

approved ility to choosehat direct favorable as,

oker selection, broker-dealer rected-action. In or part, of

e matching ker-dealer QSr a directed-on costs for

mple, to a rs with respect in trades for f QS Investors separate

reements or eement with tion.

ties on the ons as a singleated the ot completely -rata basis.

d order.

7

t

e

• R

In some sisituations

• C

• Tr

• Trtr

• Shin

• Pa

When tradQS Investo

When QS to reduce

As more fdirected-b

QS Investoperiodicallaccordanc

Delays in edue to var

Manage In additionmaintains (subject tomanaged investmenLMPPG an DependingdisseminatCommunimodel porCommuni

ules and regu

tuations, QS i could result f

ountries with

rades in the sa

rades in the sarading instruct

hort sales of sn order to seek

articipation in

des are not agors seeks to ha

Investors is un these costs by

ully described brokerage clien

ors confirms thly reviews partce with the Fir

executing tradrious circumsta

ed Account

n to the policie a Trade Como system limita pursuant to thnt personnel fond program sp

g on the progte the model cation Policy, rtfolios and incation Policy.

lations establi

nvestors may rom the follow

market restric

ame security t

ame security ttions;

ecurities wherk “best execut

client-directe

ggregated, theave broker-de

nable to aggrey monitoring s

above under nts in aggrega

hat broker-deatially-filled tram’s trade allo

de orders and ances and are

t Programs

es stated abovmunication Poations or unanhe same invesor implementaponsors).

ram type, upo portfolio to pr which is descstructions from

shed by an ex

not be able towing:

ctions, as is th

that are releas

that are releas

re QS investortion” or maint

d brokerage a

ey do not typicalers generate

egate trades, asecurity liquid

“Directed Broated orders.

alers follow thde allocationscation policy.

deviations froe generally not

s

ve to promoteolicy which reqnticipated evenstment model,ation at the sa

on receipt of arogram sponsribed in LMPPm LMPPG to s

xchange, mark

o or may choo

he case in som

ed to a broke

ed to the sam

rs may choosetain a specific

arrangements

cally receive the separate ord

accounts mayity and limitin

okerage,” whe

he Firm’s trades among client

om QS Investot considered t

e fair and eququires that all nts). With resp, updates to mame time as co

a model portfoors or their de

PG’s ADV Broc sponsor firms

ket or others.

ose not to agg

me emerging m

er-dealer at dif

me broker-dea

e to trade withc long-short ra

.

he same averaders equitably.

y have higher mg trade volum

enever possib

e instructions t accounts to

ors’ trade alloc trade errors.

itable treatme model portfopect to QS Invmodel portfolioommunicated

olio, LMPPG wesignees in acchure (Item 12 (or their desig

gregate orders

markets;

fferent times o

ler at the sam

h an account’satio; and

age execution.

market impacmes.

le, QS Investo

properly. In a ensure that th

cation policy m

ent of all clienolios be dissemvestors institutos will be com to other mod

will implementcordance with

2). Please notgnees) is subje

s for client acc

of the day;

me time but wi

s designated p

price. In thes

ct costs. QS Inv

ors includes tra

ddition, Comphey have been

may occur from

t accounts, Qminated simulttional client ac

mmunicated todel recipients (

t the model poh LMPPG’s Trate that comm

ect to LMPPG’

| 68

counts. These

th different

prime broker

e situations,

vestors seeks

ansactions for

pliance n conducted in

m time to time

S Investors taneously ccounts o QS Investors(including

ortfolio or ade unication of s Trade

8

n

e

When QS discussionfor a descdifferent faccount pmanager o

Cross Tr

Except undthe matchthrough aEach cross

New Iss

For most iissues offemanaged IPOs and o

Side-by-

As noted iportfolio m(“side-by-sinstances short in anpurchasingarrangemearrangemeCompliancthe approinadvertenstrategies

Errors T

In accordaaccordancregardless

Corrective

Investors serv of trading prription of LMP

from the resulrograms due t

or LMPPG.

rading

der very rare ching of buy an broker. The rs trade must b

ues

nvestment strerings. Howev by Underlying other new issu

-Side Mana

in Item 6 (Perf managers mayside managem in which QS Innother accoung a security ments, QS Invesents that are rce reviews oppriate investmnt cross trades or accounts a

That Affect

ance with firmce with applicas of the amoun

e action to reso

ves as sub-advactices applicaPPG’s trading ts obtained fo

to the timing

circumstancesd sell orders f

reason for a crbe approved b

rategies (and tver, Affiliated Fg Managers seues offerings.

agement A

formance-Basey manage longment arrangemnvestors holdsnt (or vice vers

may result in anstors has implereasonably deposite transac

ment team, if ns. In addition, appear to rece

Client Acc

m policy, any eable regulationt; gains, whe

olve errors mu

iser to LMPPGable to these a practices. Moor accounts th and implemen

, QS Investors for the same sross trade wouy Compliance

then only rare Funds and Noelected by QS

Arrangeme

ed Fees and Sg-only accounments”). Whes a long positiosa). Selling a sen increase in itemented policsigned to ens

ctions and posnecessary. The they periodicaive preferentia

counts

rror affecting ns. Any lossesere permitted,

ust be approve

G, QS Investors arrangementsdel portfolio cat are managntation of QS

s does not engsecurity in diffeuld be to benee, achieve best

ly), QS Investoon-Affiliated Fu Investors in M

nts

ide-by-Side Mnts alongside an side-by-sideon in a securitecurity short mts value. Sincecies and proceure that all of sitions in the sey also review ally review accal treatment o

a client accous incurred as a are retained

ed by Complia

s does not havs, please refer clients may exed and traded Investors mod

gage in cross terent client acefit client accot execution an

ors does not dunds in Fund-

Manager-of-M

Management) o accounts that e managementty in one acco

may result in ae certain clientedures specificf the Firm’s clie same securitie opposite trancount perform

or are being sy

unt must be rea result of a Q for the benefi

ance and man

ve trade place to Item 12 of

xperience accod by QS Investdel portfolio b

trades, which ccounts, eitheounts by redund meet all reg

directly participof-Funds, andanagers arran

of this Brochu buy securitiest arrangemen

ount while hol a decrease of t positions macally to addresents are treates for validity, o

nsactions to enmance dispersiystematically d

esolved fairly, S Investors errit of the client

nagement.

ement responsf LMPPG’s ADount performators outside of

by a sponsor, o

are generally er internally orcing trade exegulatory requi

pate in IPOs od Sleeves of clingements, may

ure, certain of s both long ants exist, thereding the same its value; convay be conflictess side-by-sideed fairly and e obtaining justnsure that theon to ensure

disadvantaged

promptly andror are reimbut in the client

| 69

sibility. For a V Brochure

ance that is f managed overlay

defined as externally ecution costs. rements.

r other new ient accounts y invest in

the Firm’s nd short may be e security versely, ed under thesee managemen equitably. tification fromere are no that no d.

d in ursed, account.

9

e t

ITEM 1

Portfoli

Accounts appropriatCompliancguidelines

Portfolio mbeen exec

PerformanCommitteconsistencstrategy, aAccounts detail by tperforman

Triggers

More freqsuch trigginterpretivstrategies.

Complia

Complianctrade basisapplicationorder entrensure tha

Investmenmonth onmanipulat

Client R

Clients gepackage p

3 - Revie

o Manage

are reviewed te for each acce also reviews, restrictions a

managers, in tcuted in accord

nce is formallyee. The Investmcy of the perfo

among other t that do not fahe Governancnce.

s for Review

uent reviews ers may includ

ve guidance fr.

ance Review

ce monitors ms through a son tests the rulry, trade allocaat market fluc

nt guidelines a a post-trade

tive trading pr

Reporting

nerally receiveprovided to the

w of Acco

r Reviews

by the Firm’s count in acco

ws each accoun and applicable

their role as tradance with tra

y reviewed moment Oversighormance with things, is revieall within a reace Oversight C

w

may be triggede: significantom regulators

ws

most client inveoftware applices coded for eation and comtuations have

nd restrictions basis. In additactices and th

e reports aboue Firm’s client

ounts

portfolio manrdance with tnt with the use regulatory re

aders, also revading instruct

onthly by portfht Committee respect to strewed on a moasonable deviaCommittee to

ered by other et market events, client reque

estment guidecation integrat each portfoliompletion of tra

not resulted

s that cannot tion, Complianhat no strategi

ut their accounts may include

nagers on a cohe client’s este of automate

equirements.

view transactioions.

folio manager reviews perfoategy objectiv

onthly basis byation of the ov better unders

events unrelatts, changes in sts for review

elines and restted with the F

o against tradindes. Complian

in any breach

be monitorednce periodicalies or account

nt(s) on a mone:

ontinuous basitablished guided tools to co

ons on a post

rs and quarterormance by invves. In additiony the Firm’s Goverall strategystand causes f

ted to perform account guid

w, and changes

trictions for cl Firm’s order mng activity durnce also review of investmen

d automaticallyly monitors trts appear to re

nthly or quart

is to ensure thelines and inv

onfirm adheren

t-trade basis to

rly by the Firmvestment stratn, performancovernance Ovy performance

for appreciable

mance or traddelines, regulas in the Firm’s

ient accounts management sy

ring the coursws post-tradet guidelines.

y are typically ading activity eceive prefere

erly basis. The

hat investmentvestment objecnce to investm

o verify that o

’s Investment tegy, attributice dispersion wersight Comm

e are reviewede differences i

ing activity. Extory reform o

s internal proc

on both a preystem. The cose of the tradie exception rep

reviewed ma to confirm th

ential treatmen

e standard rep

| 70

ts are ctives.

ment

orders have

Oversight on and the

within each mittee. d in more in

xamples of r new esses and/or

e- and post-ompliance ng day, at porting to

nually each e absence of

nt.

porting

0

• Se

• C

• To

• Su

• Pe

• Pe

• D

The naturespecializedTypically, amodified a

The informconsiders Brochure,

Upon requthe Firm e

FrequenFund/M

In the casewell as thereview proManagers

The reviewaccount re

A

A

A

The qualitinvestmenof:

Th

In

O

C

C

ecurities held,

ost and repor

otal market va

ummaries of t

erformance re

erformance at

iscussion of p

e and frequend packages or a client’s repo at any time du

mation on thesthe client’s cu clients should

uest, QS Invesexercises voting

ncy and Naanager Sel

e of a Fund-ofe Underlying Focess includes .

w process inclueview include:

A performance

A statistical ana

Additional fina

ative aspects ont advisers to U

he backgroun

nvestment pro

Organizational

lient service re

ompliance pro

including qua

rted or estimat

alue of the acc

transactions;

eturns;

ttribution relat

ortfolio perfo

ncy of reports more frequen

orting requiremuring the life o

se reports shoustodian the od receive acco

tors also provg responsibilit

ature of Aclection Adv

f-Funds arrang Funds and the analyses of th

udes both qua

attribution an

alysis of histor

ncial and econ

of the client a Underlying Fu

d and qualific

cesses;

stability and b

esources;

ocedures and

antities;

ted market va

count;

tive to benchm

rmance and/o

each client rent delivery maments are doc of the relation

ould not be coofficial record kunt statement

ides annual (oty.

count Revivisory Serv

gement, the reeir investment he overall port

antitative and

nalysis for the

rical returns an

nomic analyse

account reviewnds, as applica

cations of key

business chan

risk controls;

alue of each po

mark returns;

or market com

ceives may vaay be arrangedumented duriship.

onsidered the o keeper for eacts from their c

or more freque

iews for QSices

eview process advisers. In thtfolio as well a

qualitative ele

applicable so

nd portfolio ch

es.

w are primarilyable. Qualitat

investment pe

ges;

and

osition held;

and

mmentary.

ary dependentd in order to bng the client

official recordch account. A

custodians on

ent) proxy vot

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s includes analhe case of a M as the various

ements. The q

ources of inves

haracteristics;

y focused on tive reviews typ

ersonnel;

t on their requbetter meet a on-boarding p

d of a client acAs described in

a regular bas

ting summary

’ Asset Allo

lyses of the apManager-of-Ms portfolio Slee

quantitative el

stment return;

and

the Underlyingpically include

uirements. Cus client’s reportprocess and m

ccount. QS Invn Item 15 (Cusis.

reports to clie

ocation an

pplicable Fundanagers arraneves and Unde

ements of the

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| 7

stomized or ting needs.

may be

vestors stody) of this

ents for whom

d

d-of-Funds as ngement, the erlying

e client

r the d assessment

1

m

Re

Such revie

QS Investooperating Fund’s inv

In the caseinstrumenappropriatapplicablethe Sleeveperformancompositio

Manage

Sponsor FQS Investinformatio

egulatory filin

ews also may i

ors may invest and performavestment objec

e of QS-Manats held withinteness of the S

e to the Sleevee’s performancnce attributionon relative to

ed Account

irms typically ors does not

on upon reque

gs.

nclude due di

t in Underlyingance history wctives.

ged Sleeves, Qn such Sleeves Sleeve’s compe and market cce relative to bn analysis to h that of the ap

t Programs

prepare and s send regulaest.

iligence discus

g Funds, includwhere QS Inves

QS Investors’ p on a daily bas

position, in lig conditions. To benchmark peelp assess por

pplicable benc

s

send regular ar account rep

ssions and per

ding QS-Advisstors determin

portfolio mansis. Such revieht of factors s

o the extent aperformance. Artfolio diversifchmark.

account statemports to such

riodic on-site v

sed Funds andnes that such

agers review sews generally f such as the invpplicable, such

As part of suchication and un

ments to clienh clients, but

visits.

d Affiliated Fu investment is

such Sleeves a focus on the cvestment objeh reviews mayh reviews, portnderstand diff

nts in Sponsor may agree

nds, that have consistent wit

and the securi continued inveective and stray include constfolio manageferences in po

r Firm investm to provide ce

| 72

e a limited th a Fund-of-

ties and otherestment

ategy ideration of

ers may utilizeortfolio

ment programsertain accoun

2

r

s. nt

ITEM 1

Client R

QS Investoprovide Qgenerally binclude a fnot by ourwill compl

If the solicconditionsInvestors’ unaffiliatestatementrelationsh

While conconsultantproposals they awarawarded minstances

QS Investodata and dmay also cgifts and epossible co

Fees RecClient

As describ11 (Code Funds cliewhich it inInvestors. include anFund’s feebetween Qin consideagreed to

4 - Client

Referrals

ors and its affiS Investors wi

based on a pe flat fee, in accr clients, who ly with the req

citors are unafs of the solicita Brochure (Fored solicitors aret and Brochureip.

sultants may ts. However, s or participated business to

mandate. Whi in the future w

ors may purch database acce contribute to c entertainmentonflicts of inte

ceived by Q

bed in Item 5 ( of Ethics, Partnt advised by nvests. Such fe In the case ofn advisory fee es and expense QS Investors aeration of the by the client a

t Referral

liates directly th client refer

ercentage of tcordance with are not assessquirements of

ffiliated with Qation arrangerm ADV, Part 2e required to e. Solicitors th

refer QS Inves some consulta

in manager s that adviser. Tile QS Investor

where the Firm

ase products ess. Additional charitable evet (subject to Qerest as a resu

QS Investor

(Fees and Comticipation or In QS Investors wees and expenf an Underlyin paid to QS Inves will includend the affiliat

Fund being in and QS Invest

ls and Ot

market the firrals. Solicitorshe investment written solicised any additi Rule 206(4)-3

QS Investors, tment, includin

2). Upon ente provide signedhat are affiliate

stors to their cants charge inv searches. Som This fee is typrs has not parm makes these

or services frolly, QS Investonts sponsored

QS Investors’ gult of these pu

rs and QS I

mpensation), Itnterest in Clien will indirectly nses are in addg Fund that isvestors. In thee an advisory fte, the affiliatecluded in the

tors, fees paid

her Comp

rm’s services. s that refer QSt advisory feestation agreemional charges.3 under the A

they must provng their compring into an ad and dated aed with QS Inv

clients, it is novestment advie consultants ically based onticipated in the types of pay

om certain conors may pay tod by clients anifts and entertrchases and c

nvestors A

tem 10 (Othernt Transaction bear the fees dition to any ins a QS-Advisede case of an Ufee paid to thee may make a model fund p by a QS-Advi

pensation

From time-to-S Investors to ns paid to QS In

ments. These f Any solicitati

Advisers Act.

vide clients wpensation fromadvisory contra acknowledgemvestors are on

t QS Investorsisers a fee to o may also chan a percentag

hese types of ayments to con

nsultants, sucho attend consund consultantstainment polic

contributions.

Affiliates fro

r Financial Indns and Persona and expenses

nvestment advd Fund, the Qnderlying Fune Affiliate. Se payment to Q

portfolio. Depesed Fund to Q

n

-time, unaffilia new clients mnvestors by thees are paid don arrangeme

ith a disclosurm QS Investorsact with QS Inment that theynly required to

s’ practice to p obtain or resprge a fee to a

ge of the inves arrangements sultants to ob

h as portfolio ultant-sponsors as well as procy). Consultan

om Someo

dustry Activitieal Trading) of s charged by tvisory fee thatS-Advised Fund that is an A

eparately, subj QS Investors oending on the

QS Investors a

ated individuaay be paid feeose clients bu

directly by QS ent QS Investo

re describing ts, and a copy onvestors, clienty received the

o disclose the n

pay referral fepond to requesn investment

stment advisor in the past, t

btain business

analytics, benred conferencovide them wnts and clients

one other t

es and Affiliati this Brochure

the Underlyingt may be paidnd’s fees and

Affiliated Fundect to an agre

out of its genee contractual and by an Affil

| 73

als and entitieses that are ut may also Investors and ors enters into

the terms and of QS ts referred by disclosure

nature of the

es to sts for adviser whenry fee for the here could be.

nchmark indexes. The Firm

with limited s could face

than a

ons) and Item, a Fund-of-

g Funds in d directly to QS expenses will , the Affiliate eement ral resources

arrangement iated Fund to

3

s

o

x

m

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a QS InvesInvestors.


QS InvestoFunds mayInvestors amay be vieThese conItem 10 (O

stors Affiliate





ors’ advice to ay cause fees to

and other QS ewed as havinflicts of intere

Other Financia

may or may n


a Fund-of-Funo be paid to Q Investors Affilng certain conest, and the ml Industry Act

ot be credited



nds client to inQS Investors aniates from sucflicts of intere

manner in whicivities and Aff

d against the a


nvest in QS-Adnd other QS Inch funds will vest in providingch QS Investorfiliations) of th

advisory or ser


dvised Funds, nvestors Affilia

vary. In light og asset allocatrs mitigates thhis Brochure.

rvice fees othe




Affiliated Funates. The amo

of such fee arrtion and fund

hose conflicts o

erwise charge



plan participan

ds and Non-Aount of fees rerangements, Q selection adv

of interest, are

| 74

ed by QS


nts in

Affiliated eceived by QS QS Investors visory services.e described in

4

ITEM 1

QS Investowith a quaresponsiblinforming acts of a c

However, pursuant tfrom the cclient accoarrangemewith respecontracted

As noted iFund Manauthority gcomparabfunds or scomminglindependefinancial sAdvisers A

Where QSconfirm thquarterly ooccurring,directly froreceive dirStatementdue to diffsecurities. custodian.

4 The clientexaminatioleast annua206(4)-2 of

5 - Custo

ors does not halified custodie for settling QS Investors

client’s custod

QS Investors m to an agreeme client’s accounount if, under ents to hold aect to the trand for services a

in Item 10 (Otnagement, LLC granted to male positions heecurities. As aed funds. Sucent public accotatements are

Act.4

S Investors mahat the broker or more frequ in the client a

om its qualifierectly from thets and reports ferences in ac Clients should.

t funds and secun by an indepeally and the audf the Advisers A

ody

have physical can of their ch transactions, aof additions aian or for dire

may be deemeent with a client. QS Investo rare circumstand maintain s

nsfer or withdr and to collect

ther Financial C) acts as the ganaging memeld for other ta result, QS Invch assets are mountant regist

e delivered to

y be deemed r-dealer, bank ent account s

account durind custodian. Ieir qualified cu received from

ccounting procd contact thei

urities of whichndent public ac

dited financial stAct.

custody of funoice to take p

accepting instand withdrawaect account ex

ed to have coent to instruct rs also may beances, QS Inve

such client’s furawal of funds fees owed to

Industry Activ general partnebers of limited

types of commvestors is deem

maintained wittered with the investors of th

to have const or other qualstatements refg the period. n addition, QSustodians to am QS Investorscedures, reporir account rep

QS Investors isccountant unlestatements are d

nds or securitiepossession of ttructions fromals from the cxpenses, such

nstructive cus the client’s cue deemed to hestors is respounds and secus and securitie QS Investors

vities and Affiler or managind liability compmingled funds med to have cth a “qualifiede Public Comphe commingle

tructive custodified custodia

flecting the se A client shouS Investors urg

account statems may differ frrting dates or resentative if

s deemed to havss the comming

distributed to th

es in client acc the assets in thm QS Investors

lient account. as custodial fe

stody of client ustodian to de have constructonsible for estaurities and hases from the cli and its affiliat

iations) of thisng member ofpanies, genera may provide

constructive cud custodian” apany Accountied funds in acc

dy of the assetn of the clientcurities and old carefully revges clients to ments and reprom statement valuation met they are not r

ve custody musgled funds that he investors of t

counts. Insteaheir account. regarding the QS Investors ees and broke

assets if QS Ineduct and paytive custody oablishing and s the authorityient’s accounttes for such se

s Brochure, QSf certain commal partners of such persons ustody of the and are auditeng Oversight cordance with

ts in a client’s t’s account w

other assets heview any acco compare accoports they recets received frothodologies w

receiving acco

st be subject to hold such fund the commingled

d, each client The custodiane account asse is not responserage expense

nvestors has ty QS Investors’of the assets in maintaining cy to instruct tht in order to pervices.

S Investors (ormingled funds limited partne or entities acc assets of thosed annually by Board (“PCAOh Rule 206(4)-

account, QS ill send directleld, and all traount statemenount statemeneive from QS Iom the qualifiewith respect toounts statemen

an annual surps and securitiesd funds as requ

| 75

t contracts n is also ets and sible for the

es.

he authority ’ advisory feesn a particular custody he custodian rovide

r QS Investors . The erships, or cess to client se y an OB”). Audited-2 of the

Investors will y to the client

ansactions nts it receives nts they nvestors. ed custodian o certain nts from their

prise s are audited atuired under Rule

5

s

d

t

e

ITEM 1

QS Investoassuming similar agrclient’s acc

Most clien

Ty

Pr

B

C

Clients malimitationsagreemenset forth inof a clientExamples

• Rem

• Rein

• Re

• Re

Despite su Client guidstrategy awith clienthave on th

However, executing addition, Qsome clien

6 - Invest

ors may provid discretionary reement with count.

nts grant QS In

ype and amou

rices at which

roker-dealers

ommissions p

ay elect to set s, on activity wt between QSn the fund’s p relationship b

of such guide

estrictions or pmay be held in

estrictions on n an account;

estrictions or p

estrictions on

uch restrictions

delines may imnd may lead tts, QS Investoheir accounts.

some client a trades in theiQS Investors mnts. In these ci

tment Dis

de investment authority over the client tha

nvestors discre

unt of securitie

to transact;

selected for tr

paid to broker-

limitations onwithin their acS Investors andprospectus or o but may be ch

lines may incl

prohibitions o an account;

the amount o

prohibitions o

brokers that c

s, QS Investor

mpede QS Inve to performancrs discusses th

ccounts may br accounts or

may provide inircumstances,

scretion

advisory servr a client accot sets forth th

etionary autho

es purchased

rade execution

-dealers.

n this discretiocount. Guideld the client. In other offeringhanged througude:

on the types of

of securities, is

on the investm

can be used to

s typically con

estors’ ability ce dispersion ahe potential im

be considered when they hanvestment adv clients retain

ices on either unt, QS Investe nature and

ority over their

and sold;

ns; and

onary authorityines may be s

n the case of ag document. Gghout the life

f securities, iss

ssuers, asset c

ment practices

o execute tran

nsiders these a

to manage ac among a groumpact that cer

d non-discretioave the discretvice, trade reco full investmen

a discretionartors enters int extent of QS

r accounts, inc

y by placing g set forth in the a client that is Guidelines are of the relation

suers, asset cla

classes, industr

that may be u

nsactions in an

accounts to be

ccounts similarup of like accortain client-ma

onary, generaltion to reject Qommendationnt and trading

ry or non-discto a written inInvestors’ disc

cluding the fo

guidelines, ince investment m a commingle generally estanship at a tim

asses, industr

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used in an acc

n account.

e discretionary

rly to others wounts. Prior to andated guide

lly when clientQS Investors’ tns and/or portg discretion ov

retionary basinvestment macretionary auth

ollowing decisi

luding restrict management d fund, guideablished at thee of the client

ies/sectors or

r countries tha

count; and

y.

within an inves entering into elines or restric

ts are responstrade recommfolio researchver their accou

| 76

s. Before nagement or hority over the

ions:

tions and or advisory elines may be e beginning t’s choosing.

countries that

at may be held

stment agreements ctions may

sible for mendations. In

services to unts.

6

e

t

d

Manage In additionportfolios a sub-advi As sub-adshall includas follows

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QS Investo(security sePrograms not have sPrograms.

ed Account

n to full-discre for use in maisor.

visor to LMPPde Discretiona:

iscretionary Miscretion and ortfolios to spf the sponsors

on-Discretionon-discretionaor implementa

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with respect to

ors has discretelection discre as derived fro

securities selec QS Investors

t Programs

etionary mananaged accoun

G, QS Investoary Model-Bas

Model-Based P LMPPG forwaponsors or thes or their desig

ary Model-Basary investmentation, subject t

mented Prograplements inve client accoun

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s

gement servicnt programs d

ors anticipates sed Programs

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sed Programst recommenda to the discreti

ms. Programsestment instrunts, subject to

rity to determirdance with thvisory agreem

on with respecve trading disc

ces, QS Investoirectly throug

participating and Non-Disc

grams of sponnt instructions or implementa

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of sponsors ictions furnish any implemen

ne the securithe strategy sel

ment entered inct to client acccretion under

ors may enterh sponsors or

in various typcretionary Mod

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| 77

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| 78

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| 79

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| 80

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| 8

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| 82

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Form ADV Part 2B Brochure Supplement –

SAA

July 16, 2018

880 Third Avenue 7th Floor New York, NY 10022 212.886.9200 t 212.886.9201 f http://www.qsinvestors.com

This Brochure Supplement provides information about Adam J. Petryk, Thomas

Picciochi, Ellen Tesler, and Robert Yu Ming Wang that supplements the QS Investors’

Form ADV Part 2A Brochure. You should have received a copy of the Brochure.

Please contact your account representative if you did not receive QS Investors’

Brochure or if you have any questions about the contents of this Supplement.

http://www.qsinvestors.com/

Adam J. Petryk, CFA®

President QS Investors, LLC

Item 2 – Educational Background and Business Experience

Adam J. Petryk, CFA1, born in 1971, holds a BS in Computer Engineering and an MS in Electrical Engineering from the University of Waterloo (Canada).

Adam joined Batterymarch Financial Management, Inc. (“Batterymarch”) in 2007 as Global Investment Strategist and Senior Portfolio Manager. In 2008, he was named Senior Director and Global Investment Strategist of Batterymarch’s Global Developed Markets investment team. Adam became Deputy Chief Investment Officer and Senior Portfolio Manager in 2010, as well as Co-Head of Batterymarch’s Developed Markets investment team. He was promoted to Chief Investment Officer in 2012, with overall responsibility for all of Batterymarch’s developed and emerging markets portfolios. In 2014, upon Batterymarch’s integration with QS Investors, LLC (“QS Investors”) and Legg Mason Global Asset Allocation, LLC, Adam began serving as Head of Multi-Asset and Solutions for all three firms. The three firms were fully integrated under QS Investors effective April 1, 2016. In July 2018, Adam was named President of QS Investors.

Adam has 22 years of investment industry experience.

Item 3 – Disciplinary Information

None.

Item 4 – Other Business Activities

None.

Item 5 – Additional Compensation

Adam does not receive any additional compensation other than the compensation he receives for the services he provides on behalf of QS Investors.

Item 6 – Supervision

Adam reports to Janet Campagna, Chief Executive Officer, who can be reached at 212- 886-9200. In addition to peer and committee review, oversight of Adam’s activities may include, but is not limited to:

• Periodic meetings to review QS Investors’

overall business and the management and performance of client accounts as well as less formal reviews as needs dictate;

• Reliance on portfolio guidelines compliance monitoring performed by compliance professionals; and

• Reliance on a comprehensive internal compliance program.

1 Qualification as a Chartered Financial Analyst (CFA)® charterholder requires: (i) A bachelor’s degree from an accredited institution or equivalent education or work experience; (ii) Successful completion of all three exam levels of the CFA program; (iii) 48 months of acceptable professional work experience in the investment decision-making process; (iv) Fulfillment of local society requirements, which vary by society; and (v) Entry into a Member’s Agreement, a Professional Conduct Statement and any additional documentation requested by the CFA Institute. CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.

1

Thomas A. Picciochi, CAIA®

Portfolio Manager and Head of Multi-Asset Portfolio Management QS Investors, LLC


Thomas Picciochi, CAIA 1, born in 1963, holds a BA and an MBA in Finance from the University of Miami.

Thomas is a Portfolio Manager and is the Head of Multi-Asset Portfolio Management. In 2014, upon QS Investors, LLC’s (“QS Investors”) integration with Batterymarch Financial Management, Inc. and Legg Mason Global Asset Allocation, LLC, he began serving as Portfolio Manager and Head of Multi-Asset Portfolio Management for all three firms. The three firms were fully integrated under QS Investors effective April 1, 2016.

Prior to joining QS Investors in 2010, he served as Senior Portfolio Manager at Deutsche Asset Management from 1999- 2010.

Thomas has 31 years of investment industry experience.


None.


None.

Item 5 – Additional Compensation Thomas does not receive any additional compensation other than the compensation he receives for the services he provides on behalf of QS Investors.


Thomas reports to Robert Wang, Chief Operating Officer – Head of Portfolio Management, who can be reached at 212-886-9200. In addition to peer and committee review, oversight of Thomas’s activities may include, but is not limited to:

• Periodic meetings to review QS

Investors’ overall business and the management and performance of client accounts as well as less formal reviews as needs dictate;



1 The Chartered Alternative Investment Analyst (CAIA) designation is a globally recognized credential which evidences completion of the

CAIA program. The program is comprised of a two-tier exam process with a focus on alternative asset classes, asset allocation, trading strategies, and risk management. Please visit http://www.caia.org for additional information.

2

http://www.caia.org/

Ellen Tesler Portfolio Manager QS Investors, LLC


Ellen Tesler, born in 1977, holds a BBA in Management and an MBA in Finance from Pace University.

Ellen is a Portfolio Manager for QS Investors, LLC (“QS Investors”). In 2014, upon QS Investors’ integration with Batterymarch Financial Management, Inc. and Legg Mason Global Asset Allocation, LLC, she began serving as Portfolio Manager for all three firms. The three firms were fully integrated under QS Investors effective April 1, 2016.

Prior to joining QS Investors in 2010, she was Portfolio Manager (2003-2010) and Quantitative Analyst (2000-2003) at Deutsche Asset Management.

Ellen has 19 years of investment industry experience.


None.


None.

Item 5 – Additional Compensation Ellen does not receive any additional compensation other than the compensation she receives for the services she provides on behalf of QS Investors.


Ellen reports to Thomas Picciochi, CAIA1, Head of Multi-Asset Portfolio Management, who can be reached at 212- 886-9200. In addition to peer and committee review, oversight of Ellen’s activities may include, but is not limited to:





1 The Chartered Alternative Investment Analyst (CAIA) designation is a globally recognized credential which evidences completion of the

CAIA program. The program is comprised of a two-tier exam process with a focus on alternative asset classes, asset allocation, trading strategies, and risk management. Please visit http://www.caia.org for additional information.

3

http://www.caia.org/

Robert Yu Ming Wang Chief Operating Officer – Head of Portfolio Management QS Investors, LLC


Robert Wang, born in 1960, holds a BS in Economics from the Wharton School of the University of Pennsylvania.

Robert is the Chief Operating Officer and Head of Portfolio Management at QS Investors, LLC (“QS Investors”). In 2014, upon QS Investors’ integration with Batterymarch Financial Management, Inc. and Legg Mason Global Asset Allocation, LLC, he began serving as Head of Portfolio Management for all three firms. The three firms were fully integrated under QS Investors effective April 1, 2016. In 2015, Robert was named Chief Operating Officer.

Prior to joining QS Investors in 2010, he served as Head of Quantitative Portfolio Management and Trading (1999-2010) and Fixed Income Portfolio Manager (1995-1999) at Deutsche Asset Management.

Robert has 36 years of investment industry experience.


None.

Item 4 – Other Business Activities Robert is registered as an Associated Person and a Principal with the National Futures Association in connection with QS Investors’ registration as a Commodity Trading Adviser

(CTA). An Associated Person is an individual permitted to solicit funds on behalf of a CTA, which allows Robert to discuss investment strategies involving commodity interests with clients and prospects. He spends no more than a limited amount of his time in such discussions and receives no commissions or other sales-based compensation in connection with those efforts.

Item 5 – Additional Compensation

Robert does not receive any additional compensation other than the compensation he receives for the services he provides on behalf of QS Investors.


Robert reports to Janet Campagna, Chief Executive Officer, who can be reached at 212-886-9200. In addition to peer and committee review, oversight of Robert’s activities may include, but is not limited to:





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Transcript of 1. Legg Mason Private Portfolio Group, LLC Form ADV Part 2A … · Supplement dated October 16,...