Legg Mason Western Asset Australian Bond Trust

Transcription

1 Legg Mason Western Asset Australian Bond Trust Product Disclosure Statement 23 November 2013 Contents Page 1 About Legg Mason Asset Management Australia Limited 2 2 How the Legg Mason Western Asset Australian Bond Trust works 2 3 Benefits of investing in the Legg Mason Western Asset Australian Bond Trust 4 4 Risks of managed investment schemes 4 5 How we invest your money 5 6 Fees and costs 6 7 How managed investment schemes are taxed 7 8 How to apply 7 9 Other information 8 Legg Mason Western Asset Australian Bond Trust (ARSN ) Legg Mason Asset Management Australia Limited (ABN , AFS licence number )

2 This Product Disclosure Statement (PDS) is: (i) a summary of significant information and contains a number of references to important information (each of which forms part of the PDS); and (ii) you should consider this information before making a decision about the Legg Mason Western Asset Australian Bond Trust ( Trust ); and (iii) the information provided in the PDS is general information only, is not a recommendation to invest in the Trust and does not take into account your personal financial situation or needs; and (iv) you should obtain financial advice tailored to your personal circumstances. The offer to which this PDS relates is available only to persons receiving the PDS (electronically or otherwise) in Australia. Investments are subject to risks, some of which are outlined in this PDS. Legg Mason Asset Management Australia Limited ( Responsible Entity, we, our or us ) does not guarantee any payment of income or repayment of capital or the performance of your investment in the Trust. It is important that you understand and accept the risks before you invest in the Trust. Western Asset Management Company Pty Ltd. (Western Asset Australia) has not prepared, authorised or caused the issue of this PDS. Western Asset Australia has consented only to the inclusion in the PDS of the statements about them in the form and context in which they are included and this consent has not been withdrawn. Updated information The information in this PDS is up to date at the time of preparation. However, information relating to the Trust that is not materially adverse information is subject to change from time to time. We may update this information. For updated information about the Trust (such as performance) please consult your financial planner, call us on or visit our website We will provide you with a paper copy of any updated information without charge upon request. If there is a change in information which we consider is materially adverse we will generally issue a new PDS. 1. About Legg Mason Asset Management Australia Limited The Responsible Entity is solely responsible for the management of the Trust, which includes day-to-day administration and making investment decisions. We are part of Legg Mason Inc, one of the largest asset management firms in the world. Legg Mason Inc was established in 1899 and is listed on the New York Stock Exchange. Legg Mason Australia has delegated management of the assets of the Trust to Western Asset Australia, an affiliate based in Melbourne. Western Asset Australia has extensive experience in Australian fixed income investment management and employs a disciplined investment approach. Western Asset Australia is a related company of Western Asset Management Company, headquartered in Pasadena, USA which is part of the Legg Mason group. Western Asset Management Company is one of the world s largest fixed income investment managers. Established in 1971, the firm has developed investment capabilities across the fixed income spectrum, from cash to high yield and emerging markets debt. 1. You should read the important information about Legg Mason Asset Management Australia Limited before making a decision. Go to the About Legg Mason section of the Additional Information Booklet which is available at 2. The material relating to Legg Mason Asset Management Australia Limited may change between the time when you read the PDS and the day when you acquire the product. 2. How the Legg Mason Western Asset Australian Bond Trust works About the Trust and structure The Trust is a registered managed investment scheme that is an unlisted Australian unit trust. The Trust comprises assets which are acquired by the Responsible Entity in accordance with the investment strategy for the Trust. The Trust is governed by a constitution ( Constitution ). The terms and conditions of the Constitution are binding on each Unit holder (and all persons claiming through them). A Unit holder s interest in the Trust is represented by Units. A Unit holder has an interest in the assets of the Trust as a whole, subject to the liabilities of the Trust. A Unit holder does not have an interest in any particular asset of the Trust. Investors can acquire interests in the Trust by applying for Units and can redeem from the Trust by making a withdrawal request in relation to the Units they hold. The price at which Units are acquired ( Application Price ) or redeemed ( Redemption Price ) is determined in accordance with the Constitution. The Application Price and the Redemption Price on a Business Day are, in general terms, equal to the product of the Net Asset Value of the Trust divided by the number of Units on issue and: for the Application Price, adjusted up for transaction costs (called the buy spread ); and for the Redemption Price, adjusted down for transaction costs (called the sell spread ). Legg Mason Western Asset Australian Bond Trust 2

3 The Application Price and the Redemption Price are generally determined each Business Day. The Application Price and the Redemption Price for Class A Units reflect the deduction of management fees. The Application Price and the Redemption Price will increase as the market value of the Trust s assets increases and will decrease as the market value of the Trust s assets decreases. How do you invest in the Trust? An Investor can acquire Units by making an application for Units. An application for Units is made by submitting an application form to the Responsible Entity. Application forms need to be received by the administrator, State Street, and appropriate funding provided to the Trust s nominated bank account by am on a Business Day to receive that day s Application Price. Refer Section 8 How to Apply for more information. Classes of Units The Responsible Entity may offer or withdraw classes of Units. Currently under this PDS two classes of Units are offered: Class A and Class X. Investors will usually be issued Class A Units. Class X Units are only issued to a Wholesale Eligible Investor where the management fee arrangements are separately negotiated between the Responsible Entity and the Wholesale Eligible Investor and charged separately. Accordingly the unit prices of Class X units do not include a deduction of the negotiated management fee. The unit prices of Class A reflect the deduction of management fees. The Responsible Entity has the ability to issue further classes of Units under separate PDSs or other offer documents from time to time. How do you redeem from the Trust? A Unit holder can dispose of Units by making a redemption from the Trust. A redemption is made by lodging a redemption request with the Responsible Entity. Redemption requests need to be received by us by am on a Business Day to receive that day s Redemption Price. Redemptions are typically paid within five Business days although the Constitution allows us up to 30 Business days or longer in certain circumstances. In some circumstances, Unit holders may not be able to redeem their Units within the usual period upon request. If the Trust becomes illiquid, for the purposes of the Corporations Act, then you may only redeem from the Trust in accordance with the terms of a redemption offer (if any) made by the Responsible Entity in accordance with the Corporations Act. Valuation of Trust assets and unit pricing The Trust s assets are usually valued each Business Day. Unit prices are usually calculated each Business Day. We may declare Unit prices more or less frequently or delay calculation in certain circumstances. A formal written policy has been established by us in relation to the guidelines and any relevant factors that are taken into account when exercising any discretion in calculating unit prices (including determining the value of assets and the amount of liabilities). A copy of our policy is available to investors on request free of charge. Distributions and payment methods The Trust may distribute income at the end of each month and will distribute any income at 30 June each year. We can determine to make an additional distribution from time to time. A Unit holder s entitlement to distributions of income is determined based on the number of Units held at the end of the relevant distribution period. Distributions will be paid within 60 days of the end of the relevant distribution period. Unit holders who redeem Units during a distribution period will not receive a distribution of income in respect of those Units for that distribution period. The amount of the income distributed to the Unit holder will also depend on the class of Units held by the Unit holder, to reflect the different management fee arrangements and, if applicable, performance fees for each Class. Income attributable to each Class may be impacted by the total level of fees charged to the Trust. You may use the Standing Application for Units form to elect to reinvest distributions. Reinvested distributions will be taken to be issued on the next day after the end of the relevant distribution period. The Application Price for Units issued on the reinvestment of distributions will be based on the net asset value of the Trust used to calculate the last Application Price for the relevant distribution period adjusted for certain income amounts. Distributions will be reinvested into additional Units unless otherwise directed by you. 1. You should read the important information about how the Trust works before making a decision. Go to the About the Trust section of the Additional Information Booklet which is available at 2. The material relating to the acquisition and disposal of interest in the Trust may change between the time when you read the PDS and the day when you acquire the product. There is no obligation on the Responsible Entity to make a redemption offer. The Responsible Entity anticipates that the Trust will generally be liquid. Minimum investment Unless otherwise determined by us, the minimum initial investment is $30,000. Additional investments can be made at any time. The minimum additional investment amount is $5,000. Legg Mason Western Asset Australian Bond Trust 3

4 3. Benefits of investing in the Legg Mason Western Asset Australian Bond Trust Significant features The Trust provides exposure to an actively managed portfolio of Australian bonds. Significant benefits The Trust offers a number of significant benefits: diversification across many debt issuers that would be difficult to achieve through direct investment; professional management of your investment with an experienced fund manager. This includes economic research and credit analysis, as well as active management of interest rate exposure (duration); active sector and security selection; disciplined portfolio construction; and web-based reporting that includes performance, market commentary and portfolio strategy. 4. Risks of managed investment schemes You should note: all investments carry risk; different strategies may carry different levels of risk depending on the assets that make up the strategy; assets with the highest long-term returns may also carry the highest level of short-term risk; the value of investments will vary; the level of returns will vary and future returns may differ from past returns; and returns are not guaranteed and you may lose some of your money. The laws affecting registered managed investment schemes may change in the future. Your personal risk level will vary depending on a range of factors, including, age, investment time frames, where other parts of your wealth are invested and your risk tolerance. The significant risks of investing in the Trust include: market risks, including changes in interest rates and asset prices, issuer default, unfavourable economic conditions, changes in government regulation, inflation and lack of liquidity (in this context, lack of liquidity means investments may not be readily disposed of); credit risks, including adverse market or issuer developments, and downgrades to security ratings; manager risks, including human error, system failures, poor procedures, lack of management controls, termination of the Trust, counterparty risk, changes in fees, replacement of the Responsible Entity and replacement of the Investment Manager; counterparty risks, including when a counterparty either cannot or will not meet its obligations; country risks, including adverse political, economic and social developments and change to regulatory oversight and government regulation; investment risks, including benchmark performance that is below Unit holder expectations and/or the Trust not meeting its investment objective; and the risks of implementing investment decisions using derivatives, including market risks, manager risks, counterparty risks, the risks of a derivative position unexpectedly not corresponding with the intended exposure and the risks of a derivative position inadvertently not being backed by cash, cash equivalents or securities. A derivative position that is not appropriately backed may cause the Trust to be inadvertently leveraged. Techniques used to manage risks include: extensive research; active portfolio management; risk management systems; compliance monitoring; monitoring economic factors; maintaining disciplined management controls; auditing operational procedures; and managing derivatives, including requiring derivatives to be supported by cash, cash equivalents or securities. 1. You should read the important information about investment risks before making a decision. Go to the Risks section of the Additional Information Booklet which is available at 2. The material relating to investment risks may change between the time when you read the PDS and the day when you acquire the product. 5. How we invest your money Warning: you should consider the likely investment return, the risk, and your investment timeframe when choosing whether to invest in the Trust. What is the Trust s investment objective? The Trust aims to earn a return before fees and taxes of 0.75% p.a. in excess of the UBS Australian Composite Bond Index ( Benchmark ) over rolling three year periods. The investment approach aims to capture returns from a variety of actively-managed sources, including interest rate management (duration), sector and security selection. Risk management is a core focus and is supported by credit research, diversification of holdings and investment guidelines. Legg Mason Western Asset Australian Bond Trust 4

5 What does the Trust invest in? The Trust generally aims to invest within the following guidelines at the time of initiating investment decisions: Commonwealth Government & Semi- Government Bonds Supranational & Sovereign Bonds Minimum Maximum 30% 100% 0% 80% Corporate Bonds 0% 60% Mortgage & Asset Backed Securities 0% 20% Inflation Linked 0% 10% Cash Balance Interest rate duration (a measure of the sensitivity of the price of a fixed income security to a change in interest rates, expressed as a number of years) will generally be positioned within ±1.0 year of the Trust s benchmark. The intention is not to hold more than 5% of the Trust s market value in a single non-government issuer or related group of non-government issuers. The intention is not to hold more than 10% of the Trust s market value in an individual unit trust. The Trust aims to hold no more than 5% of its market value in corporate bonds issued by Australian entities in foreign currency markets. The aim is to fully hedge these positions into Australian dollars. The Trust may also use certain derivatives to implement investment decisions, to manage cash flows or to facilitate timely exposure to securities. The Trust will not hold more than 20% of its market value in net derivative exposure. The Trust does not intend to borrow. Securities lending Some of the securities held by the Trust are available to participate in a securities lending program run by an independent securities lending manager appointed by the Responsible Entity. The functions of the securities lending manager include arranging loans, negotiating terms, and managing collateral received on behalf of the Trust. The value of any collateral must exceed the value of the loan and is reviewed daily by the securities lending manager to ensure this is maintained. The securities lending manager places limits on borrower lending and continuously monitors their creditworthiness. The securities lending manager provides indemnification in the event of any borrower default. What is the suggested investor profile and minimum time frame for investment? A minimum time frame for investment of 3+ years is suggested. The Trust may be suitable for investors seeking an investment in Australian fixed Income with long term financial goals. Risk level The Responsible Entity considers the risk level of the Trust to be low to medium. The Portfolio Manager has risk control methodologies in place which aim to mitigate the overall level of risk. Performance Investment performance of the Trust is published on our internet site at Past performance is not necessarily a guide to future performance. Changing the investment objective The Responsible Entity is permitted to change how it invests the assets of the Trust at any time. If the Responsible Entity changes the investment objective of the Trust the Responsible Entity will advise Unit holders of the change. Labour standards and environmental, social and ethical considerations Labour standards and environmental, social and ethical considerations are not taken into account in the selection, retention or realisation of investments. Investment options There are no other investment options for the Trust. Switching Switching is not available for the Trust. 1. You should read the important information about how we use derivatives before making a decision. Go to the Investment Information section of the Additional Information Booklet which is available at 2. The material relating to how we invest your money may change between the time when you read the PDS and the day when you acquire the product. 6. Fees and costs Did you know? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your Trust balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such a superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask your Trust or your financial adviser. To find out more If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investment Commission (ASIC) website ( has a managed investment fee calculator to help you check out different fee options. Legg Mason Western Asset Australian Bond Trust 5

6 Type of fees or cost Amount Fees when your money moves in or out of the Trust Establishment fee Contribution fee Withdrawal fee Termination fee Management costs Class A Nil Nil Nil Nil The fees and costs for managing your investment Investment Costs: the fees charged by us for managing your investment Estimated Administration and Other Trust s Costs: the fees and costs incurred in operating the Trust %* per annum of the net asset value of the Trust referrable (inclusive of GST but less any expected RITCs) For a constant investment of $30,000 the amount in dollars is $ % per annum of the net asset value of the Trust (inclusive of GST but less any expected RITCs) For a constant investment of $30,000 the amount in dollars is $19 Indirect Cost Ratio (ICR) % ($118) * The amount of this fee can be negotiated. The information in the table above can be used to compare costs between different simple managed investment schemes. Fees and costs are deducted from the assets of the Trust and reduce the investment return to Unit holders. Example of annual fees and costs for the Trust This table gives an example of how the fees and costs for the Trust can affect your investment over a one year period. You should use this table to compare this Trust with other managed investment products. Legg Mason Western Asset Australian Bond Trust Class A Units Contribution Fees Plus Management Costs 1 Equals Cost of Trust Amount Balance of $30,000 with a contribution of $5,000 during year Nil For every additional $5,000 you put in, you will be charged $ % And, for every $30,000 you have in the Trust you will be charged $118 each year. If you had an investment of $30,000 at the beginning of the year and you put in an additional $5,000 during a year you would be charged fees of: $118 What it costs you will depend on the investment option you choose and the fees you negotiate with your fund or financial adviser 2 1 This amount reflects the ICR and is inclusive of GST after allowing an estimate for RITCs which effectively reduces the impact of GST payable in relation to certain supplies. The ICR is the ratio of the Trust s management costs that are not deducted directly from a Unit holder s account, to the Trust s total average net assets. The ICR is calculated as at 30 June You should note that this example assumes a constant investment balance of $30,000 in Class A units throughout the year. Management costs will also be charged in relation to any additional contributions you make during the year and the amount you pay will depend on the proportion of the year during which the additional contributions are invested. Please note there are no investment options in respect of this PDS. Note: This is an example. In practice, the actual investment balance of an investor will vary daily and the actual fees and expenses we charge are based on the value of the Trust, which also fluctuates daily. Differential fee arrangements We may enter into individual fee arrangements with wholesale clients (as defined in the Corporations Act) in accordance with applicable ASIC class order relief. Change in fees We may vary the fees specified at any time at our absolute discretion, without Unit holder consent, subject to the maximum fee amounts specified in the Constitution. If the variation is an increase we will give you 30 days advance written notice. The Constitution provides for the following maximum fees: for Class A units only, a management fee of 0.412% p.a. of the net asset value of the Trust ($124 for every $30,000 invested); a responsible entity fee of 0.084% p.a. of the net asset value of the Trust ($25 for every $30,000 invested); a contribution fee of 2.05% of the application amount ($615 for every $30,000 invested); a redemption fee of 2.05% of the withdrawal amount ($615 for every $30,000 invested). At the date of this PDS we do not intend to charge a contribution fee or redemption fee nor do we intend to increase the combined responsible entity fee and management fee we charge you (which is specified in the Management costs section of the fee table). We can recover out of the assets of the Trust all expenses which are properly incurred in operating the Trust including, without limitation, amounts payable in connection with custody, compliance, legal and tax consulting fees, banking, accounting and audit. Buy/Sell Spread estimate The Buy/Sell Spread is an estimate of the transaction costs that are incurred in buying and selling the underlying assets of the Trust as a result of applications and redemptions. The Application Price is adjusted up by a buy spread of 0.04% and the Redemption Price is adjusted down by a sell spread of 0.04%. We can Legg Mason Western Asset Australian Bond Trust 6

7 change the Buy/Sell Spread at any time without prior notice. Calculator The Australian Securities and Investments Commission provides a fees calculator at This calculator can be used to calculate the effects of fees and costs on your investment. 1. You should read the important information about applying to invest in the Trust before making a decision. Go to the How to transact section of the Additional Information Booklet available at 2. The material relating to how to transact may change between the time when you read the PDS and the day when you acquire the product. 7. How managed investment schemes are taxed Warning: Investing in a registered managed investment scheme is likely to have tax consequences. You are strongly advised to seek professional tax advice. You should note that: the Responsible Entity and the Trust do not pay tax on behalf of Unit holders; and Unit holders are assessed for tax on any income and capital gains generated by the Trust. We recommend you seek advice from your financial or tax advisor. 1. You should read the important information about how managed investment schemes are taxed before making a decision. Go to the Taxation section of the Additional Information Booklet available at 2. The material relating to how managed investment schemes are taxed may change between the time when you read the PDS and the day when you acquire the product. 8. How to apply How to invest in the Trust To invest in the Trust, read this PDS with the Additional Information Booklet and complete the Application Form. The Additional Information Booklet and Standing Application Forms are available from our website or by calling If you are not already an investor with Legg Mason, you will be required to complete the Customer Identification Verification section of the Standing Application Form. The Responsible Entity authorises the use of this PDS by investors ( Indirect Investors ) who wish to access the Trust through an authorised master trust or wrap account, investor directed portfolio service, investor directed portfolio service-like scheme or nominee or custody service (collectively referred to as Master Trust or Wrap Service ) located in Australia. The operator of a Master Trust or Wrap Service is referred to in this PDS as the Operator and the disclosure document for a Master Trust or Wrap Service is referred to as the Master Trust or Wrap Guide. If you invest through a Master Trust or Wrap Service, your rights and liabilities will be governed by the terms and conditions of the Master Trust or Wrap Guide. Indirect Investors should apply for Units by using the Master Trust or Wrap Guide and applicable application form provided by the Operator of the Master Trust or Wrap Service. Complaints handling We have established procedures for dealing with complaints. If you are a Unit holder in the Trust (that is, you have not invested via a Master Trust or Wrap Service) and you have a complaint, you should contact us on If you have invested via a Master Trust or Wrap Service and have a concern, you should first contact the Operator of the Master Trust or Wrap Service through which you invested in the Trust. The Operator will handle your complaint in accordance with its complaint handling procedures and may, in accordance with those procedures, refer the complaint to us. If any issues remain unresolved, Unit holders can contact the Financial Ombudsman Service Limited on or at the address below: Financial Ombudsman Service Limited (FOS) GPO Box 3 Melbourne VIC 3001 FOS may not consider a dispute where the value of a person s claim exceeds $500,000. Cooling off If you are a Retail investor, after you invest in the Trust you have a period of 14 days (the cooling-off period) during which you can cancel the investment and have your funds repaid to you. The entire value of your investment may not be repaid depending on the impact of market movements, taxes, management fees, transaction costs etc. during the time you are invested in the Trust. The right to cool off does not apply to you if you invest in the Trust through a Master Trust or Wrap Service as you do not acquire the rights of a Unit holder in the Trust. If you have any questions about cooling off rights please contact your financial planner or us on You should read the important information about applying to invest in the Trust before making a decision. Go to the How to transact section of the Additional Information Booklet available at 2. The material relating to how to transact may change between the time when you read the PDS and the day when you acquire the product. Legg Mason Western Asset Australian Bond Trust 7

8 9. Other information Related party transactions Subject to the Corporations Act, we and our associates may hold Units. We are also permitted by the Constitution (subject to the Corporations Act), to deal with ourself (as responsible entity of the Trust or in another capacity), an associate or any Unit holder; have an interest in any contract or transaction with ourself (as responsible entity of the Trust or in another capacity), an associate or any Unit holder and retain for our own benefit any profits or benefits derived from such contract or transaction and act in the same or similar capacity in relation to any other managed investment schemes. Unit holders rights and the Constitution Your rights as Unit holder in the Trust are governed by the Trust s Constitution and the Corporations Act. The Trust is governed by the Constitution which sets out how the Trust is to be operated. The terms of the Constitution are binding on the Responsible Entity and all Unit holders. Reports We will provide you with the following reports and information about your investment in the Trust: Transaction confirmations and distribution statements Fund annual financial report (and if applicable half yearly financial reports and continuous disclosure notices) via our website Annual Periodic and tax statements as required by the Corporations Act Other relevant reporting from time to time. Disclosing Entity If at any time the Trust becomes and continues to be a disclosing entity under the Corporations Act, it will be subject to regular reporting and disclosure obligations. We lodge copies of the following documents with ASIC to meet these requirements: the most recent Trust annual financial report, and if available, any half-yearly financial report and any continuous disclosure notice lodged after the annual financial report but before the date of this PDS. These documents may be obtained from or inspected at an ASIC Office and are available on our website at Copies will be given to investors free of charge on request. information in relation to our collection, use and disclosure of personal information. 1. You should read the important information about privacy, the operation of the Trust and the retirement of the Responsible Entity before making a decision. Go to the Additional important information section of the Additional Information Booklet available at 2. The material relating to privacy, the operation of the Trust and the retirement of the Responsible Entity may change between the time when you read the PDS and the day when you acquire the product. Interpretations and definitions: In this PDS: Business Day means a day, other than a Saturday or Sunday on which banks are open for business in Melbourne. Corporations Act means the Corporations Act 2001 (Cth). Retail Investor is an investor that does not satisfy one of the requirements to be classified as a wholesale investor. To view the wholesale investor eligibility criteria please see the How to Transact section of the Additional Information Booklet. RITC means reduced input tax credit. Trust means the Legg Mason Western Asset Australian Bond Trust. Wholesale Eligible Investor means any person who is a wholesale client for the purposes of the Corporations Act. In this PDS, all fees and costs are expressed in Australian dollars inclusive of GST less any reduced input tax credits ( RITC ). References to you or your refers to you as the reader of the PDS. Need more information? Please contact Legg Mason on freecall or visit our website at Protecting your privacy Your right to privacy is important to us. Our privacy statement is available from our website It contains important Legg Mason Western Asset Australian Bond Trust 8

9 Standing Application For units Section 1. Investor details (complete parts A and B) To (the Responsible Entity) Legg Mason Asset Management Australia Limited (ABN , australian Financial Services Licence number ) ( Legg Mason ) Part A (i) Individuals / Sole traders Investor (the Applicant ) Please complete the Customer Identification Form for Individuals and Sole traders (ii) Superannuation Funds / Trusts / Estates Individual / Corporate Trustee (the Applicant ) ACN / ARBN / ABN Please complete the Customer Identification Form for Superannuation Funds, Australian Companies and Estates (iii) Australian companies Company Name ACN / ARBN / ABN Please complete the Customer Identification Form for Superannuation Funds, Australian Companies and Estates United States Foreign Account Tax Compliance Act (FATCA) If the Applicant is either a United States citizen or resident of the United States for tax purposes, company, trust, partnership, Australian Assocaition or Regulated Cooperative, or government body, please also complete Appendix A in addition to the remainder of this Application Form (please refer to the Additional Information Booklet for further details). Part B Registered address (must not be a PO Box) Section 2. Contact details Name Address Phone - Home Mobile address consent by ticking this box you consent to Legg Mason using the above address to send information in regards to your investment. We will not divulge your address to third parties nor use it for any other purpose. Otherwise information regarding your investment(s) will be mailed to the address above. Standing application for units 1

10 Section 3. Investment information The applicant applies for units in the following trust Minimum investment $200,000, excluding those funds marked ^ income Name of trust and class or units SSAL Fund code AMount to be invested ReInvEST distribute (for investing) to nominated account Legg Mason Australian Real Income Fund^ Class A units class X units* ATA6 $ Legg Mason Australian Equity income Trust^ Class A units class X units* ATAB $ Legg Mason Australian Small Companies Trust^ Class A units class X units* ATF6 $ Legg Mason Western Asset Australian Bond Trust^ Class A units class X units* YM03 $ Legg Mason Diversified Trust^ Class A units class X units* YM25 Legg Mason Multi Asset Retirement Income Trust^ Class A units class X units* atag $ Legg Mason Australian Value Equity Trust Class A units class X units* ATX3 $ Legg Mason Australian Core Equity Trust Class A units class X units* YM01 Legg Mason Property Securities Trust Class A units class X units* YM02 $ Legg Mason Tactical Allocation Trust Class A units class X units* YM05 $ Legg Mason Batterymarch Global Equity Trust Class A units class X units* Q955 $ Legg Mason ClearBridge Global Value Equity Trust Class A units class X units* ATY1 $ Legg Mason Brandywine Global Fixed Income Trust Class A units class X units* ATY2 $ Legg Mason Brandywine Global Opportunitistic Fixed Income Trust Class A units class X units* ATY3 $ Legg Mason Western Asset Core Plus Global Bond Trust Class A units class X units* Q9C2 $ Legg Mason Global Multi Strategy Bond Trust Class A units class X units* ATF7 $ Legg Mason Western Asset Cash Plus Trust Class A units class X units* YM41 $ Legg Mason Western Asset Cash Trust class X units* YM27 $ ^ Minimum investment is $30,000. * in order to invest in Class X units, investor must meet the Wholesale eligibility requirements set out in section 4. In applying for units in any of the Trust, the applicant acknowledges and agrees that: they have received, read and understood the latest copy of the relevant PDS and Additional Information Booklet (available at to which this Application For Units relates in Australia and that this application is subject to the terms of that PDS; this application is subject to the provisions of the Constitution of the relevant Trust registered with the Australian Securities & Investments Commission; Standing application for units 2

11 Section 4. Wholesale eligibility to invest (Class X units) In applying for Class X units, the Applicant must be an Wholesale Eligible Investor. Wholesale Eligible Investors are wholesale clients as defined in the Corporations Act - that is, a person that meets the requirements in any one or more of paragraphs (a) to (j) below. The Applicant confirms that they qualify as a wholesale client and are eligible to hold units in the Trust(s) on the ground(s) that they: (please tick applicable box or boxes and attach supporting information): a b c d e f g h are a trustee of a superannuation fund, approved deposit fund, pooled superannuation trust or public sector superannuation scheme (within the meaning of the Superannuation Industry (Supervision) Act 1993) that has net assets of at least $10,000,000; or are applying for at least $500,000 worth of units in the Trust; or are applying for units in the Trust where the Applicant holds the same class of units in the Trust for which the Applicant has paid at least $500,000; or have or control gross assets of at least $10,000,000 (including any assets held by an associate of the Applicant or under a trust that the Applicant manages; or are a body regulated by the Australian Prudential Regulation Authority other than a trustee under paragraph (a); or are not acquiring units in the Trust in connection with a business and the Applicant has, according to a certificate given by a qualified accountant not more than 24 months before the date of the application (a copy of the certificate must accompany this application): net assets of at least $2.5 million; or a gross income for each of the last two financial years of at least $250,000 a year; or are an Australian financial services licensee; or are: a listed entity or related body corporate of a listed entity; or an exempt public authority; or a body corporate, or an unincorporated body, that: i carries on a business of investment in financial products, interests in land or other investments; and ii for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public (within the meaning of Section 82 of the Corporations Act), the terms of which are provided for in the funds subscribed to be invested for those purposes; or i are a foreign entity that, if established or incorporated in Australia, would be covered by one of the paragraphs a), d), e), g) or h) above; or j the Applicant is more than 18 years of age; in making a decision to invest in the relevant Trust they rely solely on the information and representations contained in the relevant PDS; if they do not indicate which class of units they intend to acquire, they will be issued with Class A units or, where only one class of units is offered, that class of units; if units are issued for which payment has not been received, the Applicant s units will become void and the Applicant agrees to indemnify Legg Mason and the Trust all reasonable costs, expenses and/or losses in such circumstances; where units become void because payment has not been received, the Applicant is treated as never having been issued those units; they have supplied accurate and correct information in response to and in support of this application and the Applicant has the power to invest in the Trust; and they will indemnify Legg Mason on demand for any loss suffered by Legg Mason as a result of relying on incorrect information provided by the Applicant; they irrevocably appoint Legg Mason as their attorney to redeem on the Applicant s behalf at Legg Mason s absolute discretion all or some of the units in the Trust that the Applicant holds from the day on which the Applicant ceased to be an Eligible Investor and to do all things including executing or completing any documents on the Applicant s behalf to effect such a redemption. In doing so, the Applicant agrees to indemnify Legg Mason against any loss, damages or expenses incurred by Legg Mason in acting as the Applicant s attorney. Legg Mason and the Custodian of the Trust may request, in future, additional information from the Applicant to verify the identity of the Applicant and any underlying beneficial owner of units in the Trust and the source of any payment and that, where Legg Mason or the Custodian of the Trust requests such information from the Applicant, processing of applications or withdrawals may be delayed or suspended until the requested information in a form satisfactory to Legg Mason and/or the Custodian (as the case may be) is provided by the Applicant. are obtaining the financial product for use in connection with a business employing: if the business is or includes the manufacture of goods - at least 100 people; or otherwise - at least 20 people. If the Applicant does not or cannot evidence to the satisfaction of Legg Mason that they are an Eligible Investor, Legg Mason may exercise its discretion not to issue units until it receives such satisfactory evidence or to compulsorily redeem any or all units held by the Applicant at Legg Mason s absolute discretion. Standing application for units 3

12 Section 5. Payment method How will your funds be transferred to State Street Bank & Trust Company? (Please tick one box) Cheque delivered to State Street Australia Limited, Unit Registry, Level 14, 420 George Street, Sydney NSW 2000, made payable to State Street Bank & Trust Co - [Unitholder name and SSAL Fund Code] Austraclear Austraclear number Electronic Funds Transfer (Real time gross settlement)* Bank name: Account: BIC No.: State Street Bank & Trust Company State Street Bank & Trust Company Sydney Branch - Capital Markets SB0S AU2X BSB: Account Number: *Please ensure that your Application Form has been submitted prior to making a funds transfer and that the Trust s SSAL code is included in the Reference. Transfer from the following Legg Mason Trust Section 6. Distributions If Distribute is selected in Section 2, please select the method how does the applicant wish to receive payments? (Please tick the box applicable) by cheque made payable to the Applicant*; or by bank transfer Receiving Bank (if applicable) Branch B.S.B. Account number Account name * For the Legg Mason Australian Real Income and Equity Income Trusts, this amount excludes any estimated capital component of a 30 June distribution, which will automatically be reinvested in additonal units in the Trust. Section 7. Taxation and audited financial statements Collection of the Tax File Number is authorised and its use and disclosure are strictly regulated by the tax laws and the Privacy Act. It is not an offence to not quote your Tax File Number but tax (at the highest marginal rate plus the Medicare Levy) may be taken out of your distribution. if you do not quote your Tax File Number or claim an exemption. For more information about the use of the Tax File Number please phone the Australian Tax Office. I agree to provide my Tax File Number (TFN) Yes No The applicant s TFN or exemption category Country of Residence (if not Australia for tax purposes) The Trust s audited Annual Financial Statements are accessible in a cost effective and environmentally friendly manner online at www. leggmason.com.au Please choose an option below if you would like to receive a copy of the Annual Financial Statements I / We elect to receive annual Financial statements via Printed copy If an option is not selected you will NOT be sent Annual Statements, however you may still view them online at Standing application for units 4

13 Section 8. Promotional mail / privacy promise If you consent to Legg Mason using or disclosing your personal information to provide you with information about various products offered by Legg Mason, please tick the appropriate box below. Yes, I / we consent to Legg Mason using or disclosing to other Legg Mason, Inc. entities and their service provider, my / our personal information for the purposes of providing information on investments or providing information on investments or products offered by Legg Mason or other Legg Mason, Inc. entities. i / we acknowledge that I / we may withdraw my / our consent to the use and disclosure of such personal information for marketing purposes at any time by notice in writing to GPO Box 507, Melbourne Vic Section 9. Authorised signatories The Applicant hereby authorises any (insert number of persons to act e.g. insert 2 if two persons are to act jointly) of the following persons ( Authorised Officer/s ) to make written communication or take action on the Applicant s behalf in relation to the Trust investment; and agrees that Legg Mason may act upon an instruction where it is reasonable for Legg Mason to assume that the instruction was from an Authorised Officer/s; and certifies that the true signature of each Authorised Officer is shown below opposite their name, and that this may be relied upon until it is replaced by another advice bearing a later date or is cancelled. Name Specimen signature Name Specimen signature If the Applicant authorises more than two persons to act on its behalf, please forward the full Authorised Signatories list to Legg Mason together with this form. Section 10. Declaration & signature(s) The Applicant acknowledges that an investment in the Trust(s) is not an investment, deposit or other liability of, and is not guaranteed by, Legg Mason (or any other member of the Legg Mason, Inc. group of companies). Investments are subject to risks, including possible delays in payment of withdrawal proceeds and loss of income and capital invested. Position (if applicable) Director/Sole Director Secretary trustee individual Signatory Name Signed for and on behalf of the Applicant Signature(s) dated (dd/mm/yyyy) Position (if applicable) Director Secretary trustee individual Signatory Name Signed for and on behalf of the Applicant Signature(s) dated (dd/mm/yyyy) Company Seal (if applicable) Please complete Appendix B, Customer Identification Verification Form. This must accompany your application. Standing application for units 5

14 Section 11. Adviser Only Title Dealer group name Adviser name Adviser number Adviser telephone ( ) Adviser Please tick if you would like to receive a copy of your client s transactions sent to the address shown above. Information for new advisers: Please attach copies of the following documents, applicable to your current status Licence holder - copy of AFS Licence Authorised representative - copy of your written authorisation to provide financial services on behalf of the Licensee together with a copy of the AFS Licence Standing application for units 6

15 Appendix A A. FATCA INFORMATION (UNITED STATES FOREIGN ACCOUNT TAX COMPLIANCE ACT) Underlined words are defined in the attached Guidance Notes 1. I NDIVIDUALS (including Joint Investors & Sole Traders) Are you a United States citizen or resident of the United States for tax purposes? No Yes If yes, provide the individual s United States Taxpayer Identification Number (TIN): Investor 1 Investor 2 2. E NTITIES Select ONE of the following categories and proceed to the specified subsection Companies Go to Section 2.1 Trusts (regulated & unregulated) Go to Section 2.2 Partnerships & Partners Go to Section 2.3 Australian Associations or Registered Cooperative Section [A] is complete. Government Bodies Go to Section COMPANIES Select ONE of the following categories and proceed to the specified subsection United States Company (A company created in the United States, established under the laws of the United States or a United States taxpayer) Provide the company s United States Taxpayer Identification Number (TIN) Is the company an exempt payee for United States tax purposes? Yes No Financial Institution (excluding United States Financial Institutions) (A custodian or bank, an investment entity or a specified insurance company for FATCA purposes) (a) Is the company incorporated in Australia? Yes No (b) Provide the company s Global Intermediary Identification Number (GIIN), if applicable If the company does not have a GIIN, has a GIIN been applied for but not yet issued? Yes No (c) If the company does not have a GIIN or has applied for one that has not been issued, please provide its FATCA status: 1. Deemed Compliant FFI 2. Excepted FFI 3. Exempt beneficial owner 4. Non reporting / participating FFI Section [A] is now complete for Financial Institutions Appendix A - FATCA Information 1

16 Non-Financial Public Company (excluding United States companies) (Public companies are companies whose name does NOT include the word Pty or proprietary; generally listed companies) Non-Financial Proprietary Company (excluding United States companies) (Proprietary companies are companies whose name ends with Proprietary Ltd or Pty Ltd; also known as private companies) Does the company derive more than 50% of its gross income from passive investment activities (for example rent, interest & dividends ) or does more than 50% of the entity s assets produce or are held for the production of passive investment income? Yes No If Yes, are any of the beneficial owners, through one or more shareholdings of more than 25% of the company s issued capital, United States citizens or residents of the United States for tax purposes Yes No If yes, provide the name, address and United States Taxpayer Identification Number (TIN) of each beneficial owner who is a United States citizen or resident of the United States for tax purposes. Addresses are only required if they have not already been provided in this form. If there are more than 3 United States persons, provide the details of the additional United States persons on a separate sheet. Full given name(s) United States Person 1 United States Person 2 United States Person 3 Full given name(s) Full given name(s) Surname Surname Surname United States TIN United States TIN United States TIN Residential Address (PO Box is NOT acceptable) Residential Address (PO Box is NOT acceptable) Residential Address (PO Box is NOT acceptable) State State State Country Country Country Section [A] is now complete for Non-Financial Proprietary Companies] 2.2. TRUSTS Select ONE of the following categories and provide the information requested for that category Australian Regulated Superannuation Fund (including Self-Managed Superannuation Funds, APRA regulated super funds, government super funds or pooled superannuation trusts). Financial Institution or a Trust with a Trustee that is a Financial Institution (excluding United States Trusts) (A trust that is primarily established for custodial or investment purposes or a Trust that has a Trustee that is a Financial Institution in its own right, including Managed Investment Schemes) (a) Is the Trust registered in Australia? Yes No (b) Provide the Trust or Trustee s Global Intermediary Identification Number (GIIN), if applicable: If the trust or trustee does not have a GIIN, has a GIIN been applied for but not yet issued? Yes No (c) If neither the Trust or the Trustee has a GIIN nor has applied for one, please provide the Trust s FATCA status: 1. Deemed Compliant FFI 2. Excepted FFI 3. Exempt beneficial owner 4. Non participating FFI Deceased Estates (excluding United States Deceased Estates) Appendix A - FATCA Information 2

17 United States Trust (A trust created in the United States, established under the laws of the United States or a United States taxpayer) Provide the Trust s United States Taxpayer Identification Number (TIN) Is the Trust an exempt payee for United States tax purposes? Yes No Other Trusts (excluding United States Trusts) (Trusts that are not Australian Regulated Super Funds, United States Trusts, Financial Institutions or do not have Financial Institution Trustees) Does the Trust derive more than 50% of its gross income from passive investment activities (for example rent, interest & dividends ) or does more than 50% of the entity s assets produce or are held for the production of passive investment income? If No, Section [A] is now complete for Other Trusts Yes No If Yes, are any of the Trust beneficiaries, trustees or settlors United States citizens or residents of the United States for tax purposes? Yes No If the Trustee is a company, are any of this company s beneficial owners, through one or more shareholdings of more than 25% of the company s issued capital, United States citizens or residents of the United States for tax purposes? Yes No If Yes, provide the name, address and United States Taxpayer Identification Number (TIN) of each beneficiary, trustee, settlor or beneficial owner who is a United States citizen or resident of the United States for tax purposes. Addresses are only required if they have not already been provided in this form. If there are more than three (3) United States persons, provide the details of the additional United States persons on a separate sheet. United States Person 1 United States Person 2 United States Person 3 Full given name(s) Full given name(s) Full given name(s) Surname Surname Surname United States TIN United States TIN United States TIN Residential Address (PO Box is NOT acceptable) Residential Address (PO Box is NOT acceptable) Residential Address (PO Box is NOT acceptable) State State State Country Country Country 2.3. PARTNERS & PARTNERSHIPS (Select ONE of the following categories and provide the information requested for that category) United States Partnership (A partnership created in the US, established under the laws of the United States or a United States taxpayer) Provide the Partnership s United States Taxpayer Identification Number (TIN) Is the Partnership an exempt payee for United States tax purposes? Yes No Appendix A - FATCA Information 3

18 Financial Institution Partnership (excluding United States Partnerships) (A Custodian or bank, an investment entity or a specified insurance company for FATCA purposes) (a) Is the Partnership registered in Australia? Yes No (b) Provide the Partnership s Global Intermediary Identification Number (GIIN), if applicable: If the Partnership does not have a GIIN, has a GIIN been applied for but not yet been issued? Yes No (c) If the partnership does not have a GIIN, please provide its FATCA status: 1. Deemed Compliant FFI 2. Excepted FFI 3. Exempt beneficial owner 4. Non participating FFI Other (Partnerships that are not United States or Financial Institution partnerships) Does the entity derive more than 50% of its gross income from passive investment activities (for example rent, interest & dividends ) or does more than 50% of the entity s assets produce or are held for the production of passive investment income? If No, Section [A] is now complete for Other Trusts; Yes No If Yes, are any of the partners United States citizens or residents of the United States for tax purposes? Yes No Provide the name, address and United States Taxpayer Identification Number (TIN) of each partner who is a United States citizen or resident of the United States for tax purposes. Addresses are only required if they have not already been provided in this form. If there are more than three (3) United States partners, provide the details of the additional United States partners on a separate sheet. Full given name(s) United States Partner 1 United States Partner 2 United States Partner 3 Full given name(s) Full given name(s) Surname Surname Surname United States TIN United States TIN United States TIN Residential Address (PO Box is NOT acceptable) Residential Address (PO Box is NOT acceptable) Residential Address (PO Box is NOT acceptable) State State State Country Country Country 2.4. GOVERNMENT BODY (Select ONE of the following categories and provide the information requested for that category) United States Government Body (A Government Body created in the United States, established under the laws of the United States or a United States taxpayer) Provide United States Taxpayer Identification Number (TIN) Non United States Government Body Appendix A - FATCA Information 4