Product review: Legg Mason Western Asset Macro Opportunities

Legg Mason’s new Western Asset Macro Opportunities fund is proposing to take a flexible approach to bond investing.

It will be managed by Western Asset (a subsidiary of Legg Mason), with Kenneth Leech and Prashant Chandran as portfolio managers, and its aim is to maximise total return with a volatility of 5 to 10 per cent. It will employ a liquid alternative global macro strategy through actively trading cash bonds, futures, options and other derivatives. Managers will actively manage duration, yield curve and volatility and will focus on long-term value investing.

The annual management fee will be 1.5 per cent for class A, and has a minimum investment of $1,000.

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According to Adam Gent, head of UK sales at Legg Mason, the fund comes in response to change in the current macro environment and renewed concerns over Europe and weakening expectations for economic growth in the US. He is right to highlight the current uncertainty on a macroeconomic level, so launching a flexible fund that can work with these changing conditions is key to having success in a macro space.

Although this is a bond fund, it is almost approaching a multi-asset or multi-strategy fund because it uses so many approaches. Using different asset classes and investment types to seek return sets this fund apart and if managed in the right way could be a great model to adopt in the future.

The value investing approach of buying at the bottom and anticipating growth is appropriate for a fund that is seeking big opportunities and maximum return. This combined with the flexibility required to deliver total returns over a market cycle present a potentially promising alternative to long-only bond investing.