QS Asset Allocation Funds A SIMPLE, BALANCED APPROACH TO GROWTH

QS Asset Allocation Funds A SIMPLE, BALANCED APPROACH TO GROWTH For investors who prefer a simple and accessible approach to growth-oriented investing, QS Asset Allocation Funds are a smart option. Each of the four professionally managed funds can provide a portfolio with the appropriate mix of risk and potential reward for specific investment profiles. INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

WHY DIVERSIFY? Because over time, asset classes typically perform differently. The worst-performing investment one year can be the best the next, and vice versa. No one can predict which asset class will come out on top. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 26.3% 22.2% 11.8% 11.2% 5.2% 1.8% 40.5% 37.2% 26.9% 25.5% 7.8% 2.6% 17.5% 17.3% 38.8% 34.8% 13.5% 13.2% 5.7% 0.5% Highest % return 18.4% 7.0% -33.8% 31.8% 16.7% 0.4% 17.3% 33.5% 13.0% 0.0% 15.3% 5.6% -36.8% 27.2% 15.5% 0.1% 16.3% 32.5% 6.0% -0.8% 9.1% 4.7% -38.4% 19.7% 7.8% -1.5 15.3% 22.8% 4.9% -2.4% 4.8% 4.3% -0.2% -1.6% -41.5% -43.4% 5.9% 0.2% 6.5% 0.1% -4.2% -12.1% 4.2% 0.1% 0.1% -2.0% 0.0% -4.9% -3.8% -4.4% Lowest % return are represented by the Barclays U.S. Aggregate Bond Index. A bond is a debt instrument through which an investor loans money to an entity (corporate or governmental) that borrows the money for a defined period of time and typically at a fixed interest rate. are used by companies, municipalities, states, and U.S. and foreign governments to finance a variety of projects and activities. Stocks are represented by the MSCI EAFE Index. They are ownership securities of companies domiciled in larger non-u.s. countries with long-established economies. is represented by the Russell 1000 Index, which measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted earnings growth rates. is represented by the Russell 1000 Index, which measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted earnings growth rates. is represented by the Russell Midcap Index, which invests in stocks of various sizes and mixed characteristics, giving it a middle-of-the-road profile. is represented by the Russell 2000 Index. A small-cap blend strategy generally holds both growth and value stocks, to achieve gains from both styles over the long term. is represented by the Citigroup 3-Month U.S. Treasury Bill Index, which consists of negotiable debt obligations issued by the U.S. government and backed by its full faith and credit, and that have a maturity of one year or less. Investors cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Source: Legg Mason. Returns are as of December 31 of specified years. The table above is presented for informational purposes only and does not represent performance of any specific investment. Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss. 2

ELIMINATE THE GUESSWORK QS Asset Allocation Funds take the guesswork out of choosing and combining various asset types to achieve your goals. That makes them a great choice for investors who seek a simple and accessible approach to investing. Offering built-in diversification, the Funds can instantly provide an appropriate balance of risk and potential reward. They invest in a globally diversified mix of underlying assets (fixed income and equities), then dynamically manage this balance over time as market conditions change. Underlying investments may include low-cost exchange-traded funds (ETFs) that track certain markets (asset classes), as well as actively managed funds with a diverse set of strategies and investments, including alternatives (such as commodities, real estate assets and infrastructure assets). Matching risk profiles Each of the four QS Asset Allocation Funds is managed to deliver long-term capital growth against specific risk ranges, which are controlled by strategic and tactical allocations across multiple markets and asset classes. This outcome-oriented focus on long-term risk characteristics is intended to help easily select funds that appropriately match risk profiles. Don t try to time the market Some people try to get in and out of investments by guessing which way the market is headed. A much more prudent way to diversify your portfolio is by allocating assets strategically based on your investment goals, then making incremental course corrections over time. The ABCs of QS Asset Allocation Funds Aggressive to conservative Select from conservative to aggressive allocations from a high ratio of fixed income/equities for income-focused investing, to a high ratio of equities/fixed income for aggressive growth-focused investing. and stocks in one fund Each of the four Funds contains underlying mutual funds in two primary asset classes: equity and fixed income securities. A single Fund provides immediate access to investment grade and high yield bonds and domestic and international equities of all types. Control and monitoring It s easy to monitor your investments. Experienced investment managers actively track and rebalance each Fund s holdings. The portfolio s original allocation mix is continually monitored and rebalanced quarterly. The portfolio managers may allocate Fund assets to any underlying funds in varying amounts in a manner consistent with each Fund s investment objective. Each Fund s allocation to each class will be measured at the time of purchase and may vary thereafter as a result of market movements. The portfolio managers will seek to maintain a level of risk in the Fund similar to that of each Fund s composite benchmark. Alternative strategies involve highly speculative investments that employ aggressive investment strategies and carry substantial risk. There is no assurance that a recommended allocation will prove the ideal allocation in all circumstances. Asset allocation does not assure a profit or protect against a loss. 3

FOUR INVESTMENT GOALS, FOUR FUND ALLOCATIONS Real solutions for different investor objectives Each Fund is managed to deliver long-term capital growth against specific risk ranges. Conservative This mix is generally favored by investors who have a shorter time horizon and/or a lower tolerance for short-term market fluctuations. Its asset allocation is weighted more heavily toward lower-risk, current income-generating asset classes, such as bonds. 1 Conservative QS Defensive Fund 1 Share class (Symbol): A (SBCPX), B (SBCBX), C (LWLAX), I (LMGIX) 2 Balanced QS Conservative Fund 2 Share class (Symbol): A (SBBAX), B (SCBBX), C (SCBCX), I (LMEIX) Best for investors who Require current income, with long-term capital growth a secondary consideration, and/or Have a short-to-medium-term investment time horizon, and/or Can tolerate minimal risk Best for investors who Are looking for capital growth and current income, and/or Have a medium-term investment time horizon, and/or Can tolerate some risk Investment goal Achieve income as a primary objective, and longterm growth of capital as a secondary objective Asset allocation 15% 45% in underlying equity funds, 55% 85% in underlying fixed income funds Investment goal Achieve an approximate 50/50 ratio of capital growth and current income Asset allocation 35% 65% in underlying equity funds, 35% 65% in underlying fixed income funds Sector allocation (%) as of June 30, 2016 Sector allocation (%) as of June 30, 2016 U.S. Large Cap U.S. All Cap U.S. Small/Mid Cap Inflation-Sensitive Funds 62.71 International/Global Fixed Income Funds 8.54 0.24 U.S. Large Cap 0.19 2.21 U.S. All Cap 17.99 7.48 U.S. Small/Mid Cap 6.46 3.48 41.74 Inflation-Sensitive Funds 12.21 12.36 International/Global 6.32 Fixed Income Funds 18.07 1 Prior to April 1, 2016, this Fund was known as QS Legg Mason Defensive Fund. Prior to June 1, 2015, this Fund followed different investment policies and strategies under the name QS Legg Mason Lifestyle Allocation 30%. 2 Prior to April 1, 2016, this Fund was known as QS Legg Mason Conservative Fund. Prior to June 1, 2015, this Fund followed different investment strategies under the name QS Legg Mason Lifestyle Allocation 50%. 4 Sector allocations are subject to change at any time. Percentages are based on total portfolio. This information is provided for information purposes only and should not be construed as a recommendation to purchase or sell any security. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility.

Access to Legg Mason s entire affiliate fund family provides access to funds with complementary risk/return patterns and a diverse source of alpha. Pairing different active managers gives the QS Asset Allocation Funds greater potential for growth while keeping the Funds overall risk characteristics in line with existing benchmarks. Aggressive This mix is generally favored by investors who have a longer time horizon and/or a higher tolerance for short-term market fluctuations. Its asset allocation is weighted more heavily toward higher-risk, long-term growth-oriented asset classes, such as stocks. 3 4 QS Moderate Fund 3 Share class (Symbol): A (SCGRX), B (SGRBX), C (SCGCX), I (LLAIX) Aggressive growth QS Fund 4 Share class (Symbol): A (SCHAX), B (SCHBX), C (SCHCX), I (LANIX) Best for investors who Are focused primarily on long-term capital growth, and/or Have a medium-to-long-term investment time horizon, and/or Can tolerate market fluctuations over time Best for investors who Are focused solely on growth of capital, and/or Have a long-term investment time horizon, and/or Can tolerate potentially significant market fluctuations over time Investment goal Achieve long-term capital growth Asset allocation 55% 85% in underlying equity funds, 15% 45% in underlying fixed income funds Investment goal Achieve capital appreciation Asset allocation 70% 100% in underlying equity funds, 0% 30% in underlying fixed income funds Sector allocation (%) as of June 30, 2016 Sector allocation (%) as of June 30, 2016 U.S. Large Cap U.S. All Cap 21.05 U.S. Small/Mid Cap Inflation-Sensitive Funds International/Global 22.97 Fixed Income Funds 6.36 0.12 27.91 5.45 16.13 U.S. Large Cap U.S. All Cap U.S. Small/Mid Cap 27.99 Inflation-Sensitive Funds International/Global 6.40 Fixed Income Funds 4.61 21.49 32.62 6.67 0.22 These risks are magnified in emerging markets. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. Fixed income securities are subject to interest rate, credit, inflation and reinvestment risk. As interest rates rise, the value of fixed income securities falls. In addition to the Fund s operating expenses, you will indirectly bear the operating expenses of the underlying funds. Please refer to the next page for additional risk information. 3 Prior to April 1, 2016, this Fund was known as QS Legg Mason Moderate Fund. Prior to June 1, 2015, the Fund followed different investment policies and strategies under the name QS Legg Mason Lifestyle Allocation 70%. 4 Prior to April 1, 2016, this Fund was known as QS Legg Mason Fund. Prior to June 1, 2015, the Fund followed different investment policies and strategies under the name QS Legg Mason Lifestyle Allocation 85%. 5

UNDERLYING FUNDS, EXPERIENCED MANAGERS Each of the QS Asset Allocation Funds draws from the expertise of seasoned investment managers. Global value investing Legg Mason BW Diversified Large Cap Fund Volatility-managed QS Global Dividend Fund 5 Global quantitative equity QS International Equity Fund 6 QS U.S. Large Cap Equity Fund 7 Small-cap equity Royce Fund Quality-focused equity ClearBridge Aggressive Fund ClearBridge Appreciation Fund ClearBridge Mid Cap Fund 8 ClearBridge Small Cap Fund ClearBridge International Fund Inflation-sensitive QS Strategic Real Return Fund 9 Fixed income Western Asset Core Bond Fund Western Asset Core Plus Bond Fund Western Asset High Yield Fund Western Asset Macro Opportunities Fund The key to long-term success in multi-strategy equity investing is selecting highquality companies through rigorous research and analysis. Scott Glasser Co-Chief Investment Officer ClearBridge Investments Our successful approach emphasizes the pursuit of both growth and income as we seek to invest in companies with sustainable and growing dividend streams. Stephen Lanzendorf, CFA Portfolio Manager QS Investors Our success in fixed income investing is driven by three essential elements: a teambased approach to management, a deep bench of investment professionals, and a long-term fundamental value approach. Ken Leech Chief Investment Officer Western Asset 5 Prior to April 1, 2016, this Fund was known as QS Batterymarch Global Dividend Fund. 6 Prior to April 1, 2016, this Fund was known as QS Batterymarch International Equity Fund. 7 Prior to April 1, 2016, this Fund was known as QS Batterymarch U.S. Large Cap Equity Fund. 8 Prior to January 4, 2016, this Fund was known as ClearBridge MidCap Core Fund. 9 Prior to April 1, 2016, this Fund was known as QS Legg Mason Strategic Real Return Fund. Each underlying fund may engage in active and frequent trading, resulting in higher portfolio turnover and transaction costs. As a non-diversified fund, it is permitted to invest a higher percentage of its assets in any one issuer than a diversified fund, which may magnify the fund s losses from events affecting a particular issuer. Certain of the underlying funds may engage in short selling, which is a speculative strategy that involves special risks. Unlike the possible loss on a security that is purchased, there is no limit on the amount of loss on an appreciating security that is sold short. The model used to manage a fund s assets provides no assurance that the recommended allocation will either maximize returns or minimize risks. There is no assurance that a recommended allocation will prove the ideal allocation in all circumstances. Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses, and have a potentially large impact on fund performance. 6

A MULTI-ASSET SPECIALIST INVESTMENT MANAGER The investment manager of the QS Asset Allocation Funds is QS Investors, a global equity and multi-asset class solutions manager with over $23 billion * in assets under management. QS Investors counts thoughtful asset allocation and innovative risk management as two of its core competencies. With significant experience in managing multi-asset class portfolios, the firm employs a consultative approach to global asset management an approach that includes: Market awareness Dynamically weights opportunities in response to changing conditions in economy and world markets Risk management Combines quantitative research with analysis of behavioral investing patterns to construct diversified portfolios designed to mitigate risk and smooth returns Management team QS Investors portfolio management team, with long-term investment experience, is responsible for day-to-day management of funds. Adam Petryk, CFA Head of Investment Solutions Industry since Holds a BS in Computer Engineering from the University of Waterloo, Ontario, Canada and an MS in Electrical Engineering from the University of Waterloo. Thomas Picciochi Head of Multi-Asset Portfolio Management Implementation Holds a BA from University of Miami and an MBA from University of Miami Industry since Industry since 1996 1987 1999 Ellen Tessler Portfolio Manager, Member of Portfolio Management Implementation Group Holds a BBA and MBA from Pace University * As of June 30, 2016. 7

Brandywine Global Clarion Partners Legg Mason is a leading global investment company committed to helping clients reach their financial goals through long-term, actively managed investment strategies. ClearBridge Investments EnTrustPermal Martin Currie QS Investors RARE Infrastructure Over $741 billion* in assets invested worldwide in a broad mix of equities, fixedincome, alternatives and cash strategies A diverse family of specialized investment managers, each with its own independent approach to research and analysis Over a century of experience in identifying opportunities and delivering astute investment solutions to clients Royce & Associates Western Asset leggmason.com * As of June 30 2016. 2016 Legg Mason Investor Services, LLC, member FINRA, SIPC. Legg Mason Investor Services, LLC and all investment managers mentioned are subsidiaries of Legg Mason, Inc. 608365 QSIN117252 7/16 BEFORE INVESTING, CAREFULLY CONSIDER A FUND S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. YOU CAN FIND THIS AND OTHER INFORMATION IN EACH PROSPECTUS, AND SUMMARY PROSPECTUS, IF AVAILABLE, AT WWW.LEGGMASON.COM. PLEASE READ THE PROSPECTUS CAREFULLY.