The assets of the Legg Mason Australian Bond Trust are managed on a sub-advisory basis by Western Asset Management Company Pty Ltd ("Western Asset"), a subsidiary of Legg Mason, Inc. and an affiliate of Legg Mason Australia.
The Australian bond investment process is an active management approach that aims to capture incremental returns from a variety of diversified sources. This approach is supported by an array of proprietary quantitative tools.
A fundamental value based and research driven process is used in all fixed income investment decisions.
The investment process seeks to exploit: incorrect market estimations of the economic cycle, both in length and breadth, and in particular in the estimation of inflation outcomes; and market pricing of individual sectors and securities that varies from fundamental valuation relativities as determined by internal, proprietary research.
The key risk control is the diversification of investment positions at the sector, industry and individual security levels, and in the sources of risk being exploited: duration, yield curve and credit decisions.