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Fund Highlights Legg Mason US Smaller Companies Fund

Big Opportunities can be found in Small Places

Legg Mason US Smaller Companies Fund

250

S&P

Invests in a portfolio of approximately 100 small-cap companies featuring high quality characteristics such as strong balance sheets, high ROIC and 200 excess cashflow Focuses on companies with market capitalisations below US$5 billion Weighted average market cap 1.41 billion (as at 31 August 2011) Experienced investment team: 100 Whitney George 30 years industry experience Lauren Romeo 19 years industry experience
50 150

Rus

Leg

Aug 04

Aug 05

Aug 06

Aug 07LeadAug 08 Manager 09 Aug Portfolio

Lauren Romeo

Whitney George Aug 10 Aug 11 CIO & Co-Porfolio Manager

Royce is near synonymous with small caps. Who else would run 14 different smallcap funds? More importantly, who else could run them this well? The firm has strong longterm performance, low costs, and long manager tenure,
Morningstar, March 2011

Outstanding Performance*
% 150 Legg Mason US Smaller Companies Fund Benchmark (Russell 2000) S&P 500

100

85.40% 53.75% 41.03%

50

Batterymarch Brandywine Global ClearBridge Advisors Esemplia Global Currents Legg Mason Capital Management Legg Mason Hong Kong Permal Royce & Associates Western Asset Management

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*Performance Source: Legg Mason as at 31 August 2011. Cumulative NAV to NAV with net income reinvested without initial charges but reflecting annual management fees, based in GBP for class A shares. Past performance is not indicative of future returns please see the disclaimer overleaf. Launch date: 29 March 2004.

FOR PROFESSIONAL USE ONLY.

Small Company Universe - Its Much Bigger Than You Think

Small companies are a large, diverse and expanding sector in the US equity market, the entry point for many winners of the future. Combined with this broad opportunity set, smallcap stocks have historically provided strong investment returns as the markets rebound. All factors point to a more positive outlook for this asset class.

The expanding universe of small companies, including the entrance of new companies, spinoffs and IPOs, makes this universe an evergreen source of investment opportunities. In addition to its sheer size, the small company universe is also known for its long-term investment results. This sector now accounts for approximately 5,000 companies with a total market capitalisation of around US$6 trillion across a broad diversification of industries and sectors.* Small-Caps offer powerful potential for reversion-to-mean returns. Specialist US small-cap manager Royce & Associates, part of Legg Mason, believes that the outlook for small-cap equities remains very solid, and expects leadership rotation and periodic corrective phases, during which quality-oriented companies should assume leadership.

Legg Mason US Smaller Companies Fund: Market Cap Breakdown*

80 70 60 50 40 30 20 10 0 Less than 500 m 500m to 2.5 bn 13.73% 6.90% 0.69% 2.5 bn Over 5 bn to 5 bn 74.72%

* Source: Royce & Associates as at 31 August 2011.

The Royce & Associates Advantage

Royce & Associates is a wholly owned investment management subsidiary of Legg Mason Inc.. Smaller company investing has been Royces only business for almost 40 years and throughout this time, has used the same disciplined value approach to build smaller company portfolios with the goal of delivering above average, long term performance. Size of team: 34 investment professionals dedicated to US small and micro cap investing gives Royce broad based coverage in this sector of the market.* Focus and experience: Smaller-cap stocks are generally less widely covered by investment analysts, which creates opportunity for experienced small-cap investors like Royce. Royces size, experience and dedicated focus on smaller companies gives them the knowledge they require to identify pockets of opportunity across the universe of around 5,000 small and micro cap stocks. Stable investment approach: Time-tested approach, developed over almost 40 years, which adheres to a strict buy-sell discipline, regardless of market movements and trends. ISIN/SEDOL numbers (Class A Acc. GBP): GB0034100932/3410093.

Royce & Associates is affiliated with Legg Mason through common control and ownership by Legg Mason, Inc. Legg Mason provides its clients with access to Royce & Associates primarily through its range of Irish and UK authorised funds in which Royce & Associates serves as investment manager or sub-investment manager. The Legg Mason US Smaller Companies Fund is a sub-fund of Legg Mason Funds ICVC, an umbrella fund established as an investment company with variable capital, and is authorised in the UK by the Financial Services Authority as an undertaking for collective investment in transferable securities. This document does not constitute an invitation to invest. The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested. Fluctuations in exchange rates can affect the value of the Fund and the income from it. This Fund is offered solely to non-US investors under the terms and conditions of the Funds current prospectus please refer to the Simplified Prospectus and Prospectus documentation, which describe the full risk factors associated with these Funds. This Fund may acquire shares in companies with relatively small market capitalisations and may involve a higher degree of risk. Issued and approved by Legg Mason Investments (Europe) Limited, registered office 210 Bishopsgate, London, EC2M 3AB. Registered in England and Wales, Company No. 1732037. Authorised and regulated by the Financial Services Authority. Client Services +44 (0)20 7070 7444. Past performance is no guide to future returns and may not be repeated. This document is for use by asset managers, fund distributors and authorised intermediaries. Not for use by private individuals. September 2011 Ref: 7262