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Name | Symbol | Market | Type |
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QS Global Equity Fund Class A (MM) | NASDAQ:CFIPX | NASDAQ | Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-06444
Legg Mason Partners Equity Trust
(Exact name of registrant as specified in charter)
620 Eighth Avenue, 49 th Floor, New York, NY 10018
(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Legg Mason & Co., LLC
100 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrants telephone number, including area code: 1-877-721-1926
Date of fiscal year end: October 31
Date of reporting period: January 31, 2013
ITEM 1. | SCHEDULE OF INVESTMENTS. |
LEGG MASON PARTNERS EQUITY TRUST
LEGG MASON ESEMPLIA EMERGING MARKETS LONG-SHORT FUND
FORM N-Q
JANUARY 31, 2013
LEGG MASON ESEMPLIA EMERGING MARKETS LONG-SHORT FUND
Schedule of Investments (unaudited) | January 31, 2013 |
SECURITY |
SHARES | VALUE | ||||||
COMMON STOCKS - 76.8% | ||||||||
CONSUMER DISCRETIONARY - 7.3% | ||||||||
Food & Staples Retailing - 1.4% |
||||||||
Wal-Mart de Mexico SAB de CV |
80,800 | $ | 261,441 | |||||
|
|
|||||||
Hotels, Restaurants & Leisure - 2.9% |
||||||||
Genting Berhad |
42,800 | 130,866 | ||||||
Sands China Ltd. |
43,800 | 220,824 | (a) | |||||
Wynn Macau Ltd. |
75,200 | 210,898 | * | |||||
|
|
|||||||
Total Hotels, Restaurants & Leisure |
562,588 | |||||||
|
|
|||||||
Multiline Retail - 1.8% |
||||||||
S.A.C.I. Falabella |
29,805 | 347,181 | ||||||
|
|
|||||||
Specialty Retail - 1.2% |
||||||||
Foschini Ltd. |
17,120 | 224,140 | ||||||
|
|
|||||||
TOTAL CONSUMER DISCRETIONARY |
1,395,350 | |||||||
|
|
|||||||
CONSUMER STAPLES - 6.9% | ||||||||
Beverages - 3.2% |
||||||||
Coca-Cola Femsa SA de CV, ADR |
1,795 | 283,753 | ||||||
Fomento Economico Mexicano SA de CV, ADR |
3,048 | 328,849 | ||||||
|
|
|||||||
Total Beverages |
612,602 | |||||||
|
|
|||||||
Food & Staples Retailing - 0.9% |
||||||||
Almacenes Exito S.A. |
2,143 | 40,074 | ||||||
Almacenes Exito S.A., GDR |
6,868 | 133,292 | (a) | |||||
|
|
|||||||
Total Food & Staples Retailing |
173,366 | |||||||
|
|
|||||||
Personal Products - 2.8% |
||||||||
Hengan International Group Co., Ltd. |
37,400 | 375,427 | ||||||
Natura Cosmeticos SA |
5,800 | 156,407 | ||||||
|
|
|||||||
Total Personal Products |
531,834 | |||||||
|
|
|||||||
TOTAL CONSUMER STAPLES |
1,317,802 | |||||||
|
|
|||||||
ENERGY - 11.9% | ||||||||
Oil, Gas & Consumable Fuels - 11.9% |
||||||||
Cairn India Ltd. |
38,507 | 234,778 | ||||||
China Shenhua Energy Co., Ltd., Class H Shares |
41,500 | 178,995 | ||||||
CNOOC Ltd. |
112,000 | 231,642 | ||||||
Ecopetrol SA, ADR |
6,013 | 380,623 | ||||||
Pacific Rubiales Energy Corp. |
18,979 | 442,792 | ||||||
PTT Public Co., Ltd. |
15,700 | 179,534 | (b) | |||||
Rosneft Oil Co., GDR |
27,096 | 238,445 | (a) | |||||
Tullow Oil PLC |
20,278 | 365,991 | ||||||
|
|
|||||||
TOTAL ENERGY |
2,252,800 | |||||||
|
|
|||||||
FINANCIALS - 22.5% | ||||||||
Commercial Banks - 20.5% |
||||||||
Agricultural Bank of China Ltd., Class H Shares |
380,000 | 206,282 | ||||||
Axis Bank Ltd. |
8,884 | 251,538 | ||||||
Banco do Brasil SA |
15,000 | 183,795 | ||||||
China Construction Bank Corp., Class H Shares |
775,870 | 669,285 | ||||||
Credicorp Ltd. |
1,768 | 277,099 | ||||||
Industrial & Commercial Bank of China Ltd., Class H Shares |
779,975 | 587,340 | ||||||
KB Financial Group Inc. |
10,900 | 389,384 | ||||||
PT Bank Mandiri |
149,000 | 138,444 | ||||||
PT Bank Rakyat Indonesia |
176,000 | 143,655 | ||||||
Sberbank of Russia |
25,715 | 93,603 | (b) | |||||
Sberbank of Russia, ADR |
39,216 | 578,436 | ||||||
Shinhan Financial Group Co., Ltd. |
10,095 | 379,631 | ||||||
|
|
|||||||
Total Commercial Banks |
3,898,492 | |||||||
|
|
See Notes to Schedule of Investments.
1
LEGG MASON ESEMPLIA EMERGING MARKETS LONG-SHORT FUND
Schedule of Investments (unaudited) (contd) | January 31, 2013 |
SECURITY |
SHARES | VALUE | ||||||
Insurance - 2.0% |
||||||||
Samsung Fire & Marine Insurance Co., Ltd. |
1,841 | $ | 372,790 | |||||
|
|
|||||||
TOTAL FINANCIALS |
4,271,282 | |||||||
|
|
|||||||
HEALTH CARE - 0.6% | ||||||||
Health Care Equipment & Supplies - 0.6% |
||||||||
Shandong Weigao Group Medical Polymer Co. Ltd., Class H Shares |
120,000 | 115,429 | ||||||
|
|
|||||||
INDUSTRIALS - 2.0% | ||||||||
Transportation Infrastructure - 2.0% |
||||||||
Companhia de Concessoes Rodoviarias |
16,100 | 166,146 | ||||||
Grupo Aeroportuario del Sureste SA de CV, ADR |
1,564 | 186,757 | ||||||
Grupo Aeroportuario del Sureste SA de CV, Series B Shares |
1,500 | 17,918 | ||||||
|
|
|||||||
TOTAL INDUSTRIALS |
370,821 | |||||||
|
|
|||||||
INFORMATION TECHNOLOGY - 9.8% | ||||||||
Communications Equipment - 1.1% |
||||||||
AAC Technologies Holdings Inc. |
54,000 | 209,583 | ||||||
|
|
|||||||
Electronic Equipment, Instruments & Components - 3.5% |
||||||||
Delta Electronics Inc. |
57,000 | 206,560 | ||||||
Largan Precision Co., Ltd. |
8,000 | 209,439 | ||||||
TPK Holding Co., Ltd. |
11,000 | 189,254 | ||||||
TPK Holding Co., Ltd. |
3,330 | 57,243 | * (a) | |||||
|
|
|||||||
Total Electronic Equipment, Instruments & Components |
662,496 | |||||||
|
|
|||||||
Semiconductors & Semiconductor Equipment - 5.2% |
||||||||
Samsung Electronics Co., Ltd. |
448 | 595,729 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. |
113,000 | 388,447 | ||||||
|
|
|||||||
Total Semiconductors & Semiconductor Equipment |
984,176 | |||||||
|
|
|||||||
TOTAL INFORMATION TECHNOLOGY |
1,856,255 | |||||||
|
|
|||||||
MATERIALS - 8.9% | ||||||||
Chemicals - 1.5% |
||||||||
Mexichem SA de CV |
49,481 | 279,811 | ||||||
|
|
|||||||
Construction Materials - 0.5% |
||||||||
Grasim Industries Ltd., Registered Shares, GDR |
1,700 | 95,965 | (a) | |||||
|
|
|||||||
Metals & Mining - 6.9% |
||||||||
Gold Fields Ltd. |
17,979 | 208,553 | ||||||
Gold Fields Ltd., ADR |
14,692 | 170,721 | ||||||
Polymetal International PLC |
17,560 | 298,554 | ||||||
POSCO |
552 | 180,718 | ||||||
Severstal, GDR |
20,095 | 250,183 | (a) | |||||
Sterlite Industries India Ltd., ADR |
24,790 | 210,467 | ||||||
|
|
|||||||
Total Metals & Mining |
1,319,196 | |||||||
|
|
|||||||
TOTAL MATERIALS |
1,694,972 | |||||||
|
|
|||||||
TELECOMMUNICATION SERVICES - 6.1% | ||||||||
Diversified Telecommunication Services - 1.4% |
||||||||
PT XL Axiata Tbk |
535,000 | 274,641 | ||||||
|
|
|||||||
Wireless Telecommunication Services - 4.7% |
||||||||
Axiata Group Berhad |
72,600 | 147,209 | ||||||
China Mobile (Hong Kong) Ltd. |
24,500 | 269,470 | ||||||
Empresa Nacional de Telecomunicaciones S.A. |
10,913 | 237,340 | ||||||
MTN Group Ltd. |
11,787 | 230,734 | ||||||
|
|
|||||||
Total Wireless Telecommunication Services |
884,753 | |||||||
|
|
|||||||
TOTAL TELECOMMUNICATION SERVICES |
1,159,394 | |||||||
|
|
|||||||
UTILITIES - 0.8% | ||||||||
Electric Utilities - 0.8% |
||||||||
Transmissora Alianca de Energia Eletrica SA |
12,300 | 145,153 | ||||||
|
|
See Notes to Schedule of Investments.
2
LEGG MASON ESEMPLIA EMERGING MARKETS LONG-SHORT FUND
Schedule of Investments (unaudited) (contd) | January 31, 2013 |
* | Non-income producing security. |
(a) | Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees, unless otherwise noted. |
(b) | Security is valued in good faith in accordance with procedures approved by the Board of Trustees (See Note 1). |
# | Aggregate cost for federal income tax purposes is substantially the same. |
Abbreviations used in this schedule:
ADR | American Depositary Receipts | |
GDR | Global Depositary Receipts |
See Notes to Schedule of Investments.
3
LEGG MASON ESEMPLIA EMERGING MARKETS LONG-SHORT FUND
Schedule of Investments (unaudited) (contd) | January 31, 2013 |
| As a percentage of total investments. Please note that Fund holdings are as of January 31, 2013 and are subject to change. |
See Notes to Schedule of Investments.
4
Notes to schedule of Investments (unaudited)
1. Organization and Significant Accounting Policies
Legg Mason Esemplia Emerging Markets Long-Short Fund (the Fund) is a separate diversified investment series of Legg Mason Partners Equity Trust (the Trust). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company.
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (GAAP).
(a) Investment valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investments fair value. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Funds Board of Trustees.
The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North American Fund Valuation Committee (the Valuation Committee). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Funds pricing policies, and reporting to the Board of Trustees. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuers financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.
For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Trustees quarterly.
The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.
GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:
|
Level 1 quoted prices in active markets for identical investments |
|
Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments) |
5
Notes to schedule of Investments (unaudited) (continued)
The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Funds assets and liabilities carried at fair value:
ASSETS |
||||||||||||||||
DESCRIPTION |
QUOTED PRICES
(LEVEL 1) |
OTHER SIGNIFICANT
OBSERVABLE INPUTS (LEVEL 2) |
SIGNIFICANT
UNOBSERVABLE INPUTS (LEVEL 3) |
TOTAL | ||||||||||||
Long-term investments: |
||||||||||||||||
Common stocks: |
||||||||||||||||
Energy |
$ | 2,073,266 | $ | 179,534 | | $ | 2,252,800 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Financials |
4,177,679 | 93,603 | | 4,271,282 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other common stocks |
8,055,176 | | | 8,055,176 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks |
406,611 | | | 406,611 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Purchased options |
46,400 | | | 46,400 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total long-term investments |
$ | 14,759,132 | $ | 273,137 | | $ | 15,032,269 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Short -term investments |
| 677,000 | | 677,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investments |
$ | 14,759,132 | $ | 950,137 | | $ | 15,709,269 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Other financial instruments: |
||||||||||||||||
Total return swaps |
| $ | 500,489 | | 500,489 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 14,759,132 | $ | 1,450,626 | | $ | 16,209,758 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES |
|
|||||||||||||||
DESCRIPTION |
QUOTED PRICES
(LEVEL 1) |
OTHER SIGNIFICANT
OBSERVABLE INPUTS (LEVEL 2) |
SIGNIFICANT
UNOBSERVABLE INPUTS (LEVEL 3) |
TOTAL | ||||||||||||
Other financial instruments: |
||||||||||||||||
Total return swaps |
| $ | 537,752 | | $ | 537,752 | ||||||||||
|
|
|
|
|
|
|
|
| See Schedule of Investments for additional detailed categorizations. |
For the period ended January 31, 2013, as a result of fair value pricing procedures for international equities utilized by the Fund, certain securities have transferred in and out of Level 1 and Level 2 measurements during the period. The Funds policy is to recognize transfers between levels as of the end of the reporting period. At January 31, 2013, securities valued at $57,243 were transferred from Level 2 to Level 1 within the fair value hierarchy.
(b) Repurchase agreements. The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Funds holding period. When entering into repurchase agreements, it is the Funds policy that its custodian or a third party custodian, acting on the Funds behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.
(c) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.
6
Notes to Schedule of Investments (unaudited) (continued)
(d) Foreign investment risks. The Funds investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.
(e) Written options. When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the premium received is recorded as a realized gain. When a written call option is exercised, the difference between the premium received plus the option exercise price and the Funds basis in the underlying security (in the case of a covered written call option), or the cost to purchase the underlying security (in the case of an uncovered written call option), including brokerage commission, is recognized as a realized gain or loss. When a written put option is exercised, the amount of the premium received is subtracted from the cost of the security purchased by the Fund from the exercise of the written put option to form the Funds basis in the underlying security purchased. The writer or buyer of an option traded on an exchange can liquidate the position before the exercise of the option by entering into a closing transaction. The cost of a closing transaction is deducted from the original premium received resulting in a realized gain or loss to the Fund.
The risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. The risk in writing an uncovered call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.
(f) Swap agreements. The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes. The use of swaps involves risks that are different from those associated with other portfolio transactions.
Swap contracts are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon termination of the swap agreement. Collateral, in the form of restricted cash or securities, may be required to be held in segregated accounts with the Funds custodian in compliance with the terms of the swap contracts. Securities posted as collateral for swap contracts are identified in the Schedule of Investments.
The Funds maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. As of January 31, 2013, the Fund did not hold any credit default swaps.
For average notional amounts of swaps held during the period ended January 31, 2013, see Note 3.
Total return swaps
The Fund enters into total return swaps for investment purposes. Total return swaps are agreements to exchange the return generated by one instrument for the return generated by another instrument. For example, the agreement to pay a predetermined or fixed interest rate in exchange for a market-linked return based on a notional amount. To the extent the total return of a referenced index or instrument exceeds the offsetting interest obligation, the Fund will receive a payment from the counterparty. To the extent it is less, the Fund will make a payment to the counterparty.
(g) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions, where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Funds investment manager attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the investment manager. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.
The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Funds net assets or NAV over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.
As of January 31, 2013, the Fund held total return swaps with credit related contingent features which had a liability position of $537,752. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties. As of January 31, 2013, the Fund had posted with its counterparties cash and/or securities as collateral to cover the net liability of these derivatives amounting to $3,380,000, which could be used to reduce the required payment.
7
Notes to schedule of Investments (unaudited) (continued)
(h) Security transactions. Security transactions are accounted for on a trade date basis.
2. Investments
At January 31, 2013, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:
Gross unrealized appreciation |
$ | 2,653,180 | ||
Gross unrealized depreciation |
(220,838 | ) | ||
|
|
|||
Net unrealized appreciation |
$ | 2,432,342 | ||
|
|
During the period ended January 31, 2013, written option transactions for the Fund were as follows:
Number of
Contracts |
Premiums | |||||||
Written options, outstanding as of October 31, 2012 |
400,000 | $ | 70,000 | |||||
Options written |
| | ||||||
Options closed |
(200,000 | ) | (48,000 | ) | ||||
Options exercised |
| | ||||||
Options expired |
(200,000 | ) | (22,000 | ) | ||||
|
|
|
|
|||||
Written options, outstanding as of January 31, 2013 |
| | ||||||
|
|
|
|
At January 31, 2013, the Fund held the following open swap contracts:
TOTAL RETURN SWAPS |
||||||||||||||||||||
SWAP COUNTERPARTY |
NOTIONAL
AMOUNT |
TERMINATION
DATE |
PERIODIC
PAYMENTS MADE BY THE FUND |
PERIODIC PAYMENTS
RECEIVED BY THE FUND |
UPFRONT
PREMIUMS PAID (RECEIVED) |
UNREALIZED
APPRECIATION (DEPRECIATION) |
||||||||||||||
Goldman Sachs | $ | 294,806 | 1/13/14 |
Monthly Federal
Funds Effective Rate |
Yapi ve Kredi Bankasi AS | | $ | 13,144 | ||||||||||||
Goldman Sachs | 295,834 | 1/13/14 |
Monthly Federal
Funds Effective Rate |
Turkiye Halk Bankasi AS | | 6,939 | ||||||||||||||
Morgan Stanley & Co. Inc. | 149,351 | 10/2/14 |
Monthly Federal
Funds Effective Rate |
Asustek Computer Inc. | | (10,915 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 298,865 | 12/19/13 |
Monthly Federal
Funds Effective Rate |
Total Access Communication
Public Co., Ltd. |
| 389 | * | |||||||||||||
Morgan Stanley & Co. Inc. | 930,436 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Magnit | | (286,701 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 6,647 | 10/6/14 | Magnit |
Monthly Federal Funds
Effective Rate |
| 325,579 | ||||||||||||||
Morgan Stanley & Co. Inc. | 284,505 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
CITIC Securities Co., Ltd. | | (106,519 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 149,672 | 10/2/14 |
Monthly Federal
Funds Effective Rate |
LG Chem Ltd. | | 9,854 | ||||||||||||||
Morgan Stanley & Co. Inc. | 205,879 | 10/2/14 |
Monthly Federal
Funds Effective Rate |
China Steel Corp. | | (13,895 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 225,140 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Corpbanca | | (51,686 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 261,800 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Minera Frisco SAB de CV | | (3,821 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 188,597 | 10/11/13 |
Monthly Federal
Funds Effective Rate |
X5 Retail Group NV | | 27,097 |
8
Notes to Schedule of Investments (unaudited) (continued)
Morgan Stanley & Co. Inc. | 295,437 | 10/2/14 |
Monthly Federal
Funds Effective Rate |
Charoen Pokphand Foods
Public Co., Ltd. |
| (20,198 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 314,875 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Powszechna Kasa
Oszczednosci Bank Polski SA |
| 16,881 | ||||||||||||||
Morgan Stanley & Co. Inc. | 317,206 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Bank Pekao SA | | 7,015 | ||||||||||||||
Morgan Stanley & Co. Inc. | 323,979 | 10/19/13 |
Monthly Federal
Funds Effective Rate |
Cia. Hering | | 38,638 | ||||||||||||||
Morgan Stanley & Co. Inc. | 290,111 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
PetroChina Co., Ltd. | | (17,927 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 197,946 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Sany Heavy Equipment
International Holdings Co., Ltd. |
| 10,989 | ||||||||||||||
Morgan Stanley & Co. Inc. | 195,026 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Zhuzhou CSR TImes Electric
Co., Ltd. |
| (13,248 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 272,738 | 12/12/13 |
Monthly Federal
Funds Effective Rate |
Fresnillo PLC | | 43,964 | ||||||||||||||
Morgan Stanley & Co. Inc. | 596,859 | 10/20/14 |
Monthly Federal
Funds Effective Rate |
Brasil Foods SA | | (9,390 | ) | |||||||||||||
Morgan Stanley & Co. Inc. | 1 | 10/6/14 |
Monthly Federal
Funds Effective Rate |
Corpbanca | | (3,452 | ) | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 6,095,710 | | $ | (37,263 | ) | ||||||||||||||
|
|
|
|
|
|
|
Percentage shown is an annual percentage rate. |
|
Periodic payments made/received by the Fund are based on the total return of the referenced entity. |
* |
Swap contract is valued in good faith in accordance with procedures approved by the Board of Trustees (See Note 1). |
3. Derivative instruments and hedging activities
GAAP requires enhanced disclosure about an entitys derivative and hedging activities.
The following is a summary of the Funds derivative instruments categorized by risk exposure at January 31, 2013.
Primary Underlying Risk |
Purchased
options, at value |
Swap contracts,
at value |
Total | |||||||||
Equity Risk |
$ | 46,400 | $ | (37,263 | ) | $ | 9,137 | |||||
|
|
|
|
|
|
During the period ended January 31, 2013, the volume of derivative activity for the Fund was as follows:
Average
Market
Value |
||||
Purchased options |
$ | 28,350 | ||
|
|
|||
Written options |
14,000 | |||
|
|
|||
Average
Notional
Balance |
||||
Total return swap contracts |
$ | 10,246,485 | ||
|
|
| At January 31, 2013, there were no open positions held in this derivative. |
9
ITEM 2. | CONTROLS AND PROCEDURES. |
(a) | The registrants principal executive officer and principal financial officer have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the 1940 Act)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934. |
(b) | There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrants last fiscal quarter that have materially affected, or are likely to materially affect the registrants internal control over financial reporting. |
ITEM 3. | EXHIBITS. |
Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Legg Mason Partners Equity Trust | ||
By | / S / R. J AY G ERKEN | |
R. Jay Gerken | ||
Chief Executive Officer | ||
Date: |
March 26, 2013 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | / S / R. J AY G ERKEN | |
R. Jay Gerken | ||
Chief Executive Officer | ||
Date: |
March 26, 2013 |
By | / S / R ICHARD F. S ENNETT | |
Richard F. Sennett | ||
Principal Financial Officer | ||
Date: |
March 26, 2013 |
1 Year QS Global Equity Fund Class A (MM) Chart |
1 Month QS Global Equity Fund Class A (MM) Chart |
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