Western Asset Emerging Markets Debt Fund (LWEAX) Class A

Western Asset Emerging Markets Debt Fund (LWEAX) is a taxable bond mutual fund. This emerging markets bond fund invests in debts issued by emerging markets governments or corporations.

Western Asset Emerging Markets Debt A (Ticker: LWEAX)

The Western Asset Emerging Markets Debt fund objective is to maximize total return. This fund uses its majority of assets to purchase fixed-income securities issued by governments and corporations located in emerging markets. It may invest in non-U.S. dollar denominated bonds.

Fund Profile

• Fund Inception Date: January 13, 2010
• Ticker Symbol: LWEAX (Class A)
• CUSIP: 52469L694
• Beta (3yr): 0.82
• Rank in category (YTD): 72%
• Category: Emerging Markets Bond
• Yield: 4.37%
• Capital Gains: 0%
• Expense Ratio: 1.25%
• Net Assets: $ 138.23 million
• Number of Up Years: 1 year
• Number of Down Years: 0 year
• Annual Turnover Rate: 16.00%

Updated on 6/13/2012

This Western Assets mutual fund has a dividend yield of 4.37%. Its total net assets are $138.23 million. It is under the management of Legg Mason Global Asset Management. The fund manager is Matthew C. Duda. He started managing this fund in March 2006 with its Institutional Class (SEMDX). The annual holdings turnover as of April 26, 2012 is 16%. This bond fund has an annual expense ratio of 1.25% compared to the average expense ratio in Emerging Markets Bond category of 1.27%.

This LWEAX fund has 3-star rating from Morningstar. The Class A of this fund has just been introduced to public in 2010. The total return of this fund in its first year in the market (2011) was 5.04%. The YTD return of this fund is 5.59%. The 5-year average return is 8.56%. The performance of this fund based on the load adjusted return is as follow:

• 1-year: 4.87%
• 3-year: 18.30%
• 5-year: 7.62%
• 10-year: 10.88%

Investors, who are interested to buy this fixed income fund, will need a minimum initial investment of $1,000 for brokerage account. As for brokerage (IRA) account, the minimum initial investment is $250. There is a $50 minimum subsequent investment needed. For class A, its 12b1 fee is 0.25% and its front-end sales load fee is 4.25%.

This taxable bond mutual fund can be purchased from 30 brokerages such as Ameriprise Brokerage, JP Morgan, Raymond James, Scottrade Load, Pershing Fund Center, Fidelity Institutional Funds Network, etc. The other classes of this fund are Class C (LWECX), Class FI (LMWDX), Class Institutional (SEMDX) and Class IS (LWISX).

As of March 2012, the top emerging market countries are Mexico (13.9%), Russia (13.8%), Brazil (11.8%), Venezuela (9.7%), Turkey (7.8%), Indonesia (6.7%), Peru (6.3%), Colombia (5.9%), Argentina (3.7%) and Malaysia (3.6%).

According to the fund prospectus, the principal investment risks of this emerging markets debt fund are market and interest rate risk, credit risk, foreign securities and emerging markets risk, derivatives risk, currency risk, leveraging risk, etc.

Pros & Cons

Advantages:

• Low portfolio turnover rate
• It has high yield for income

Disadvantages are:

• It is still relatively new

Disclosure: No Position