going through a transition that we categorize as evolving opportunities.

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1 4Q 2018 Product Commentary CLEARBRIDGE SELECT FUND Aram Green Portfolio Manager Average annual total returns and fund expenses (%) as of December 31, 2018 Class A 3-mo 1-yr 5-yr 10-yr Excluding sales charges Including effects of maximum sales charges Since Incept. (09/23/13) Gross Net N/A N/A Russell N/A N/A - - Index Performance shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than the original cost. Class A shares have a maximum front-end sales charge of 5.75%.Total returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Total return figures are based on the NAV per share applied to shareholder subscriptions and redemptions, which may differ from the NAV per share disclosed in Fund shareholder reports. Performance would have been lower if fees had not been waived in various periods. Returns for less than one year are cumulative. For the most recent month-end information, please visit Gross expenses are the Fund's total annual operating expenses for the share class(es) shown. Net expenses are the Fund's total annual operating expenses for the share classes indicated and would reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund's gross expenses. These arrangements cannot be terminated prior to December 31, 2019 without the Board s consent. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the numbers shown in the table above. The Gross and Net Expenses listed include 0.02 of Acquired Fund Fees and Expenses (AFFE) that are required to be shown in the Fund s prospectus. AFFE reflects the Fund s pro rata share of fees and expenses relating to its investments in acquired funds; however, AFFE are not incurred directly by the Fund. Therefore, AFFE are not reflected in the Fund s audited financial statements or financial highlights. The Russell 3000 Index is a market-capitalization-weighted equity index maintained by the FTSE Russell that provides exposure to the entire U.S. stock market. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. Key takeaways Smaller-cap and more growth-oriented companies that are a primary focus in the portfolio suffered the widest losses in a volatile quarter. Private equity investors continue to express interest in the disruptive businesses we own, resulting in several announcements or closures of acquisitions during the quarter. We were active through the volatility, selling or trimming 10 positions and deploying the proceeds into other parts of the portfolio. Market overview and outlook Volatility rose sharply in the fourth quarter, sending U.S. equities to broad losses as investors fretted over risks related to slowing global growth, rising interest rates and peak corporate earnings. The S&P 500 Index suffered its second-worst December on record (-9.03%) to finish down 13.52% for the fourth quarter and register its first annual loss (-4.38%) since the global financial crisis. The benchmark Russell 3000 Index fell 9.31% in December, 14.30% for the quarter and 5.24% for Smaller companies underperformed larger ones as the Russell 2000 Index declined 11.88% during December to finish down INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

2 20.20% for the quarter. Growth stocks also trailed value stocks during the selling, as the Russell 3000 Growth Index fell 16.33% for the quarter, underperforming its value counterpart by 409 basis points. Despite these headwinds, the Select Strategy held up better than the market during the December drawdown. During spikes in volatility and credit spreads as we saw in the fourth quarter, it is not surprising for smaller companies and more growth-oriented areas of the market to underperform. We continue to find better long-term opportunities in these areas, but we acknowledge that these stocks could be out of favor for a period of time as the market adjusts to new realities and risks. Recent market action reflects a return to normalized valuations and earnings growth rates as monetary and fiscal stimulus measures are simultaneously removed from the economy. The Federal Reserve raised short-term interest rates in December, for the fourth time in 2018, as it continued a path of tightening. Meanwhile, the boost to corporate earnings from late-2017 tax reform is starting to wear off as EPS growth is forecast to decelerate and companies face tougher quarterly comparisons. The Fund was hurt during the quarter by its exposure to higher-growth, higher-beta companies, several of which carry higher levels of leverage and which were particularly punished by the market. Two holdings in the health care sector that took on additional debt to fund recent acquisitions were among the worst performers. Surgery Partners, which has conducted several small acquisitions to expand the number of surgery centers it operates, was also hurt by limited liquidity in its shares, as high private equity ownership makes the stock difficult to trade during periods of high volume and volatility. Syneos Health, meanwhile, used leverage to fund an acquisition 18 months ago that has expanded its core clinical research business to include marketing services around new drug launches. We are confident that both companies can support the amount of debt on their balance sheets, as their price recoveries to start 2019 suggest. During the quarter, the selling of equities was mostly indiscriminate, with particularly negative sentiment toward leveraged companies and certain other areas of the market dictating price movements. As a high active share manager, we utilized the volatility to our advantage by selling or making meaningful trims to 10 positions out of a portfolio of just over 60 names. We directed the proceeds of those sales across the portfolio, adding to positions in companies we consider disruptors as well as steady compounders and companies going through a transition that we categorize as evolving opportunities. About a third of our sells during the quarter resulted from takeout offers by private equity investors. These included information security provider Imperva, health care technology firm athenahealth (which has been controlled by activist investors seeking a strategic transaction), and XO Group, in the online wedding vertical. Private equity investors are assuming a more prominent role in targeting small- and mid-cap companies with dynamic growth characteristics or whose value is not being realized by current management. Private equity firms are often nimbler than publicly traded strategic acquirers in making bids and most recently have targeted software-as-a-service companies like portfolio holding MindBody, a platform for booking yoga and fitness classes that spiked nearly 70% after receiving an offer from Vista Equity Partners. MindBody and the other recent takeouts fall in the category of companies we call disruptors that account for the largest portion of the portfolio. These are companies that are upending existing markets or creating new ones with a new approach to serving customers, like MindBody, or a nextgeneration technology like the data visualization software developed by Tableau Software. In addition to taking long equity positions across three categories of companies, we also have the ability to invest in alternative asset classes and investment strategies. During the quarter we sold several stocks to cover short positions that had reached our downside target objectives. Recent results highlight the importance of risk management in the portfolio construction process. Rather than move to cash when volatility rises, we start our risk process in the initial researching and vetting of companies being considered for purchase. By thoroughly understanding the industry- and company-specific risks that could influence every position, we can build a portfolio of strong business models and diversified performance drivers mostly independent of macro factors. Information security software provider FireEye, for example, develops cutting-edge technologies to ward off cyberattacks and protect enterprises at all their vulnerable endpoints. The risk of reputational damage and customer losses from security breaches has made spending on such security measures a must for company managements. We seek to balance a company s growth dynamics with valuation sensitivity. This is another form of portfolio risk management, as it causes us to avoid areas of the market like 2

3 energy, where we do not see the potential for long-term value creation. Not owning energy proved beneficial over the last year, as the sector has faced the headwinds of declining oil prices and lower capex. We are also underweight companies in consumer staples and financials where we are not confident that companies can effectively differentiate themselves and sustain an enduring competitive advantage. Though the latter industry has experienced extreme multiple compression on fears of a credit cycle, if it does not materialize, we would expect the group to rerate. Financials is an area we are currently spending more time investigating. While the recent quarter proved difficult, we are encouraged that many of our portfolio companies that reached oversold levels have begun to rebound on what we believe are superior business models that continue to be backed by sound fundamentals. Fund highlights For the quarter ended December 31, 2018, the ClearBridge Select Fund Class A shares had a cumulative return of %, excluding the effects of sales charges. In comparison, the Fund s unmanaged benchmark, the Russell 3000 Index, returned %. On an absolute basis, the Fund had losses across all nine of the sectors in which it was invested during the quarter (out of 11 sectors total). The largest detractor from performance was the IT sector. In relative terms, overall stock selection detracted from performance, but it was partially offset by positive sector allocation. Specifically, stock selection in the health care, communication services, industrials and consumer staples sectors and an overweight to IT and an underweight to consumer staples were the primary detractors from relative results. On the positive side, stock selection in the IT sector and a lack of exposure to the energy sector contributed to performance. On an individual stock basis, the biggest detractors from absolute returns included positions in Carvana, Surgery Partners, Spotify Technology, Fortinet and Lions Gate. Imperva, MindBody, Elastic, Tableau Software and SBA were the largest contributors to absolute returns during the fourth quarter. The Fund initiated two new positions in the fourth quarter: Summit Materials, in the materials sector, and nlight, in the IT sector. We also closed 12 positions, including athenahealth, in the health care sector, XO Group, in the communication services sector, and Akamai Technologies, Imperva and IPG Photonics, in the IT sector. Top contributors In terms of individual stocks, the top contributors to Fund performance for the quarter included: Imperva (IMPV), in the IT sector, is a provider of information security solutions for databases and Web-based software applications. The stock rerated higher following an acquisition offer from private equity investor Thoma Bravo. MindBody (MB), in the IT sector, runs an online portal for booking yoga classes and related fitness appointments. The shares rerated following an acquisition offer from private equity investor Vista Equity Partners. Tableau Software (DATA), in the IT sector, is a provider of software to visualize and analyze data at the enterprise level. New pricing and packaging options for the company s core software offerings is leading to stronger adoption, and more partnership support from Microsoft boosted the stock. Bottom contributors The bottom contributors to Fund performance for the quarter included: Carvana (CVNA), in the consumer discretionary sector, operates an online platform for buying, reconditioning and efficiently distributing vehicles to where demand is highest. Fears over slowing used car sales and a competitive announcement by used car market leader CarMax weighed on the stock after a strong run-up into the fourth quarter. Surgery Partners (SGRY), in the health care sector, operates a range of standalone surgery centers across the country. Negative sentiment toward companies with higher-thanaverage debt levels hurt the stock, but we are confident that the company can manage its leverage as it continues to expand through small acquisitions. Fortinet (FTNT), in the IT sector, is a provider of network security appliances and unified threat management solutions to enterprises, service providers, and government entities worldwide. Despite a beat and raise quarter, results did not meet the Street s high expectations, causing the stock to slip. Despite the near-term pressure, Fortinet continues to gain share and expand its partnerships. 3

4 Top 10 equity holdings (%) SBA Communications Corp 3.2 ServiceNow Inc 3.1 Russell 3000 Index is an unmanaged index of the 3,000 largest U.S. companies. S&P 500 Index is an unmanaged index of roughly 500 stocks that is generally representative of the performance of larger companies in the U.S. Shopify Inc 2.9 Ross Stores Inc 2.8 Advance Auto Parts Inc 2.5 Cornerstone OnDemand Inc 2.4 Fortinet Inc 2.3 Syneos Health Inc 2.2 Copart Inc 2.2 Adobe Inc 2.1 Sector allocation (%) Information Technology 36.3 Consumer Discretionary 13.2 Health Care 11.8 Communication Services 7.7 Industrials 7.4 Real Estate 6.1 Consumer Staples 2.6 Financials 1.5 Materials 1.1 Other 0.0 Utilities 0.0 Energy 0.0 Cash/Other 12.3 Percentages are based on total portfolio as of quarter end and are subject to change at any time. For informational purposes only and not to be considered a recommendation to purchase or sell any security. Definitions and additional terms: Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. Active share is a measure of the percentage of stock holdings in a manager's portfolio that differ from the benchmark index. A basis point (bp, or bps) is equal to 1/100th of 1%, or 0.01%. Capital expenditures ( capex ) are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. Russell 2000 Index is comprised of the 2,000 smallest companies in the Russell 3000 Index. Russell 3000 Growth Index is a market capitalization-weighted index based on the Russell 3000 index. The Russell 3000 Growth Index includes companies that display signs of above-average growth. 4

5 Brandywine Global Clarion Partners ClearBridge Investments EnTrustPermal Martin Currie QS Investors RARE Infrastructure Royce & Associates Western Asset leggmasonfunds.com Youtube.com/leggmason Legg Mason is a leading global investment company committed to helping clients reach their financial goals through long-term, actively managed investment strategies. A broad mix of equities, fixed income, alternatives and cash strategies invested worldwide A diverse family of specialized investment managers, each with its own independent approach to research and analysis What should I know before investing? Over a century of experience in identifying opportunities and delivering astute investment solutions to clients Equity securities are subject to price fluctuation and possible loss of principal. Smalland mid-cap stocks involve greater risks and volatility than large-cap stocks. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Fixed income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls. High-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. As a non-diversified fund, the Fund is permitted to invest a higher percentage of its assets in any one issuer than a diversified fund, which may magnify the Fund s losses from events affecting a particular issuer. Past performance is no guarantee of future results Any information, statement or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as, investment advice, a forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional. Portfolio holdings and sector allocations may not be representative of the portfolio manager's current or future investment and are subject to change at any time. ClearBridge Investments, LLC and Legg Mason Investor Services, LLC are subsidiaries of Legg Mason, Inc Legg Mason Investor Services, LLC. Member FINRA, SIPC CBAX /19 BEFORE INVESTING, CAREFULLY CONSIDER A FUND S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. YOU CAN FIND THIS AND OTHER INFORMATION IN EACH PROSPECTUS, AND SUMMARY PROSPECTUS, IF AVAILABLE, AT PLEASE READ THE PROSPECTUS CAREFULLY. 5