QS Asset Allocation Funds

QS Asset Allocation Funds (“Asset Allocation Funds”) consists of four separate investment funds, each with its own investment objective and policies. Each Fund is a “fund of funds”, investing in other mutual funds and exchange-traded funds(“ETFs”),and is managed as an asset allocation program.

Each Fund is a separate investment series of Legg Mason Partners Equity Trust, a Maryland statutory trust.

Letter from the president

Dear Shareholder,

We are pleased to provide the annual report of QS Asset Allocation Funds for the twelve-month reporting period ended January 31, 2021. Please read on for a detailed look at prevailing economic and market conditions during the Funds’ reporting period and to learn how those conditions have affected each Fund’s performance.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.leggmason.com. Here you can gain immediate access to market and investment information, including:

We look forward to helping you meet your financial goals.

Sincerely,

Jane Trust, CFA

President and Chief Executive Officer

February 26, 2021

Funds overview

QS Asset Allocation Funds (the “Asset Allocation Funds”) consist of four portfolio investment options (the “Funds”), each of which is a “fund of funds” that invests in other mutual funds and exchange-traded funds (“ETFs”). The Asset Allocation Funds offer a mix of equity funds categorized according to average market capitalization (size), investing style (e.g., value, core or growth) and global exposure (e.g., U.S. and/or international stocks). The various options within the Asset Allocation Funds also offer a mix of bond asset classes, such as U.S. and foreign government debt, corporate bonds, high-yield debt and emerging market debt — each of which carries a varying degree of risk/reward potential. Each Fund is managed as an asset allocation program and seeks to achieve its investment objective by allocating its assets among mutual funds and ETFs managed by the Funds’ manager, Legg Mason Partners Fund Advisor, LLC (“Legg Mason”), and its affiliates, including other Legg Mason and Franklin Templeton investment managers, and ETFs managed by unaffiliated investment advisers (“underlying funds”). When selecting investments to fulfill a desired asset class exposure, the portfolio managers expect to allocate to Legg Mason and Franklin Templeton affiliated mutual funds and ETFs, provided that appropriate products are available. At the current time, the Funds invest primarily in affiliated mutual funds.

Q. What were the overall market conditions during the Funds’ reporting period?

A. Despite a global pandemic and economic disruptions, many of the world’s equity markets finished the twelve-month reporting period ending January 31, 2021 higher. During the first quarter of 2020, global stock markets sold off virtually across the board. Volatility for many indexes rose to levels not seen since the global financial crisis, as investors struggled to price the impact of a global economic shutdown stemming from the escalating COVID-19 pandemic. The U.S. Federal Reserve Board (the “Fed”)ⁱ deployed its entire 2008 financial crisis playbook. In early March, the Fed went beyond those interventions and the quantitative easing and alternative programs it put in place when it announced a massive aid plan providing broader, “open-ended” bond buying. The Fed also lowered its federal funds target rateⁱⁱ 150 basis points (“bps”)ⁱⁱⁱ to the “effective lower bound” of zero to 0.25%. U.S. Treasury yields fell significantly across the curve during the reporting period, but short-term interest rates dropped more than their long-term counterparts causing the yield curve^iv to steepen.

During the second quarter of 2020, global equity markets surged, recovering some of first quarter’s losses. April 2020 was the best month for U.S. stocks since 1987. Many investors cheered plans for the reopening of economies amid the COVID-19 pandemic and government officials continued pledging extraordinary measures to lessen the pandemic’s economic impact. Gold maintained its perceived safe-haven profile despite renewed risk appetite and rose to nearly an eight-year high. Intermediate U.S. Treasury yields fell modestly over the second quarter as short- and long-term yields rose.

Global equity markets continued to rise during the third quarter of 2020. Many investors were encouraged by economic data and accommodative central bank policies. Later in the quarter, sentiment was dampened by concerns about the pace and unevenness of economic recovery, U.S.-China tensions, increasing coronavirus infections, and delays in further U.S. stimulus measures. September 2020 brought a selloff of U.S. technology stocks on worries they were overvalued. To boost economic recovery and job creation, the Fed announced a new policy framework in August 2020. It is allowing for higher inflation in the short term to achieve its target over a longer-term horizon. The U.S. Treasury yield curve steepened with short-term yields moving lower while their long-term counterparts rose.

Global equity markets advanced nearly across the board for the fourth quarter of 2020. The bulk of gains occurred in November 2020 following positive coronavirus vaccine trials and Joe Biden’s win in the U.S. presidential election. Positive news appeared to outweigh concerns that economic recoveries would stall amid renewed lockdowns resulting from rising coronavirus infection rates and the identification of a new, more infectious COVID-19 strain. Sentiment was buoyed toward the end of the reporting period by the start of vaccinations, although January 2021 results were mixed. The bullish narrative began to deteriorate mid-month, given softness in incoming economic data. In addition, volatile trading in a small batch of heavily shorted companies set off hedge fund de-risking activity in the U.S. This raised broader concerns about bubbles in segments of the market. The U.S. Treasury yield curve steepened over the final quarter of 2020 and into January 2021, with short-term yields moving lower while their long-term counterparts rose.

Q. How did we respond to these changing market conditions?

A. For all four Funds, we employ a quantitative tactical strategy that over- and underweights certain allocations in the Funds in response to various market, economic and valuation conditions. These tactical views are updated on a quarterly basis. Throughout the reporting period we were generally flat equities vs. fixed income due to the volatile environment.

Funds overview (cont’d)

QS Growth Fund

The Fund seeks capital appreciation. The Fund organizes its investments in underlying funds into two main asset classes: the equity class (equity securities of all types) and the fixed income class (fixed income securities of all types). The portfolio managers may invest across all asset classes and strategies. Under normal market conditions, the portfolio managers will allocate between 70% to 100% of the Fund’s assets to underlying funds that invest in equity and equity-like strategies and between 0% to 30% of the Fund’s assets to underlying funds that invest in fixed income strategies. The portfolio managers may, however, allocate assets to any underlying funds in varying amounts in a manner consistent with the Fund’s investment objective. The Fund’s allocation to each asset class will be measured at the time of purchase and may vary thereafter as a result of market movements.

Performance review

For the twelve months ended January 31, 2021, Class A shares of QS Growth Fund, excluding sales charges, returned 11.84%. The Fund’s unmanaged benchmarks, the Bloomberg Barclays U.S. Aggregate Index^v, the Russell 3000 Index^vi and the Growth Composite Benchmark^vii, returned 4.72%, 20.48% and 17.98%, respectively, over the same time frame. The Lipper Mixed-Asset Target Allocation Aggressive Growth Funds Category Average^viii returned 16.35% for the same period.

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/mutualfunds.

All share class returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply or the deduction of taxes that a shareholder would pay on Fund distributions. If sales charges were reflected, the performance quoted would be lower. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

Fund performance figures reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

The portfolio managers periodically adjust the allocation of the Fund’s assets among different Legg Mason and Franklin Templeton affiliated mutual funds and ETFs and ETFs that are managed by unaffiliated investment advisers depending upon the portfolio managers’ outlook for the equity and bond markets in general, particular sectors of such markets and the performance outlook for the underlying funds. In assessing the equity and bond markets, the portfolio managers consider a broad range of market and economic trends and quantitative factors.

As of the Fund’s current prospectus dated June 1, 2020, the gross total annual fund operating expense ratios for Class A, Class C, Class R and Class I shares were 1.29%, 1.97%, 2.15% and 1.01%, respectively.

Actual expenses may be higher. For example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.

As a result of expense limitation arrangements, the ratio of total annual fund operating expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets will not exceed 0.80% for Class A shares, 1.55% for Class C shares, 0.80% for Class R shares and 0.25% for Class I shares. Total annual fund operating expenses (after waiving fees and/or reimbursing expenses, as applicable) exceed the expense cap for each class as a result of acquired fund fees and expenses. These expense limitation arrangements cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.

The manager is permitted to recapture amounts waived and/or reimbursed to a class during the same fiscal year if the class’ total annual fund operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will the manager recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual fund operating expenses exceeding the expense cap or any other lower limit then in effect.

Funds overview (cont’d)

QS Moderate Growth Fund

The Fund seeks long-term growth of capital. The Fund organizes its investments in underlying funds into two main asset classes: the equity class (equity securities of all types) and the fixed income class (fixed income securities of all types). The portfolio managers may invest across all asset classes and strategies. Under normal market conditions, the portfolio managers will allocate between 55% to 85% of the Fund’s assets to underlying funds that invest in equity and equity-like strategies and between 15% to 45% of the Fund’s assets to underlying funds that invest in fixed income strategies. The portfolio managers may, however, allocate Fund assets to any underlying funds in varying amounts in a manner consistent with the Fund’s investment objective. The Fund’s allocation to each asset class will be measured at the time of purchase and may vary thereafter as a result of market movements.

Performance review

For the twelve months ended January 31, 2021, Class A shares of QS Moderate Growth Fund, excluding sales charges, returned 10.97%. The Fund’s unmanaged benchmarks, the Bloomberg Barclays U.S. Aggregate Index, the Russell 3000 Index and the Moderate Growth Composite Benchmark^ix, returned 4.72%, 20.48% and 16.00%, respectively, over the same time frame. The Lipper Mixed-Asset Target Allocation Growth Funds Category Average^x returned 13.06% for the same period.

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/mutualfunds.

All share class returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply or the deduction of taxes that a shareholder would pay on Fund distributions. If sales charges were reflected, the performance quoted would be lower. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

Fund performance figures reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

The portfolio managers periodically adjust the allocation of the Fund’s assets among different Legg Mason and Franklin Templeton affiliated mutual funds and ETFs and ETFs that are managed by unaffiliated investment advisers depending upon the portfolio managers’ outlook for the equity and bond markets in general, particular sectors of such markets and the performance outlook for the underlying funds. In assessing the equity and bond markets, the portfolio managers consider a broad range of market and economic trends and quantitative factors.

As of the Fund’s current prospectus dated June 1, 2020, the gross total annual fund operating expense ratios for Class A, Class C, Class R and Class I shares were 1.24%, 1.94%, 1.96% and 0.93%, respectively.

Actual expenses may be higher. For example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.

As a result of expense limitation arrangements, the ratio of total annual fund operating expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets will not exceed 0.80% for Class A shares, 1.55% for Class C shares, 0.80% for Class R shares and 0.25% for Class I shares. Total annual fund operating expenses (after waiving fees and/or reimbursing expenses, as applicable) exceed the expense cap for each class as a result of acquired fund fees and expenses. These expense limitation arrangements cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.

The manager is permitted to recapture amounts waived and/or reimbursed to a class during the same fiscal year if the class’ total annual fund operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will the manager recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual fund operating expenses exceeding the expense cap or any other lower limit then in effect.

Funds overview (cont’d)

QS Conservative Growth Fund

The Fund seeks balance of growth of capital and income. The Fund organizes its investments in underlying funds into two main asset classes: the equity class (equity securities of all types) and the fixed income class (fixed income securities of all types). The portfolio managers may invest across all asset classes and strategies. Under normal market conditions, the portfolio managers will allocate between 35% to 65% of the Fund’s assets to underlying funds that invest in equity and equity-like strategies and between 35% to 65% of the Fund’s assets to underlying funds that invest in fixed income strategies. The portfolio managers may, however, allocate Fund assets to any underlying funds in varying amounts in a manner consistent with the Fund’s investment objective. The Fund’s allocation to each asset class will be measured at the time of purchase and may vary thereafter as a result of market movements.

Performance review

For the twelve months ended January 31, 2021, Class A shares of QS Conservative Growth Fund, excluding sales charges, returned 10.05%. The Fund’s unmanaged benchmarks, the Bloomberg Barclays U.S. Aggregate Index, the Russell 1000 Index^xi and the Conservative Growth Composite Benchmark^xii, returned 4.72%, 19.84% and 13.38%, respectively, over the same time frame. The Lipper Mixed-Asset Target Allocation Moderate Funds Category Average^xiii returned 9.88% for the same period.

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/mutualfunds.

All share class returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply or the deduction of taxes that a shareholder would pay on Fund distributions. If sales charges were reflected, the performance quoted would be lower. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

Fund performance figures reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

The portfolio managers periodically adjust the allocation of the Fund’s assets among different Legg Mason and Franklin Templeton affiliated mutual funds and ETFs and ETFs that are managed by unaffiliated investment advisers depending upon the portfolio managers’ outlook for the equity and bond markets in general, particular sectors of such markets and the performance outlook for the underlying funds. In assessing the equity and bond markets, the portfolio managers consider a broad range of market and economic trends and quantitative factors.

As of the Fund’s current prospectus dated June 1, 2020, the gross total annual fund operating expense ratios for Class A, Class C, Class R and Class I shares were 1.19%, 1.92%, 2.07% and 0.87%, respectively.

Actual expenses may be higher. For example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.

As a result of expense limitation arrangements, the ratio of total annual fund operating expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets will not exceed 0.80% for Class A shares, 1.55% for Class C shares, 0.80% for Class R shares and 0.25% for Class I shares. Total annual fund operating expenses (after waiving fees and/or reimbursing expenses, as applicable) exceed the expense cap for each class as a result of acquired fund fees and expenses. These expense limitation arrangements cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.

The manager is permitted to recapture amounts waived and/or reimbursed to a class during the same fiscal year if the class’ total annual fund operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will the manager recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual fund operating expenses exceeding the expense cap or any other lower limit then in effect.

Funds overview (cont’d)

QS Defensive Growth Fund

The Fund seeks income as a primary objective and long-term growth of capital as a secondary objective. The Fund organizes its investments in underlying funds into two main asset classes: the equity class (equity securities of all types) and the fixed income class (fixed income securities of all types). The portfolio managers may invest across all asset classes and strategies. Under normal market conditions, the portfolio managers will allocate between 15% to 45% of the Fund’s assets to underlying funds that invest in equity and equity-like strategies and between 55% to 85% of the Fund’s assets to underlying funds that invest in fixed income strategies. The portfolio managers may, however, allocate Fund assets to any underlying funds in varying amounts in a manner consistent with the Fund’s investment objective. The Fund’s allocation to each asset class will be measured at the time of purchase and may vary thereafter as a result of market movements.

Performance review

For the twelve months ended January 31, 2021, Class A shares of QS Defensive Growth Fund, excluding sales charges, returned 8.08%. The Fund’s unmanaged benchmarks, the Bloomberg Barclays U.S. Aggregate Index, the Russell 1000 Index and the Defensive Growth Composite Benchmark^xiv, returned 4.72%, 19.84% and 10.23%, respectively, over the same time frame. The Lipper Mixed-Asset Target Allocation Conservative Funds Category Average^xv returned 7.44% for the same period.

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/mutualfunds.

All share class returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply or the deduction of taxes that a shareholder would pay on Fund distributions. If sales charges were reflected, the performance quoted would be lower. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

Fund performance figures reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.

The portfolio managers periodically adjust the allocation of the Fund’s assets among different Legg Mason and Franklin Templeton affiliated mutual funds and ETFs and ETFs that are managed by unaffiliated investment advisers depending upon the portfolio managers’ outlook for the equity and bond markets in general, particular sectors of such markets and the performance outlook for the underlying funds. In assessing the equity and bond markets, the portfolio managers consider a broad range of market and economic trends and quantitative factors.

As of the Fund’s current prospectus dated June 1, 2020, the gross total annual fund operating expense ratios for Class A, Class C, Class C1, Class R and Class I shares were 1.22%, 1.93%, 1.72%, 2.01% and 0.97%, respectively.

Actual expenses may be higher. For example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.

As a result of expense limitation arrangements, the ratio of total annual fund operating expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets will not exceed 0.80% for Class A shares, 1.55% for

Class C shares, 1.25% for Class C1 shares, 0.80% for Class R shares and 0.25% for Class I shares. Total annual fund operating expenses (after waiving fees and/or reimbursing expenses, as applicable) exceed the expense cap for each class as a result of acquired fund fees and expenses. These expense limitation arrangements cannot be terminated prior to December 31, 2022 without the Board of Trustees’ consent.

The manager is permitted to recapture amounts waived and/or reimbursed to a class during the same fiscal year if the class’ total annual fund operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will the manager recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual fund operating expenses exceeding the expense cap or any other lower limit then in effect.

Q. What were the leading contributors to performance?

A. Taking into account the underlying funds return and their weightings within the Funds, the leading contributors to absolute performance were in the U.S. equities space, especially large capitalization stocks. Underweighting U.S. fixed income and international equities also added value.

In relative terms at the underlying manager level (i.e., relative to each underlying fund’s specific benchmark), the leading contributors were Martin Currie Emerging Markets Fund, ClearBridge Large Cap Growth Fund, ClearBridge Small Cap Growth Fund and the Brandywine GLOBAL—Global Opportunities Bond Fund (USD Hedged).

Q. What were the leading detractors from performance?

A. An allocation to value stocks in the U.S. equity space detracted for the reporting period, as did an allocation to the QS Global Dividend Fund (which is designed with a lower beta and tends to underperform in up markets). Manager selection was also a detractor. The leading underperformers versus their respective benchmarks, in addition to the QS Global Dividend Fund, were ClearBridge Appreciation Fund, ClearBridge Small Cap Fund and QS Strategic Real Return Fund.

Q. Were there any significant changes to the Funds during the reporting period?

A. There were no changes to the Funds during the reporting period.

Thank you for your investment in the QS Asset Allocation Funds. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Funds’ investment goals.

Sincerely,

QS Investors, LLC

February 10, 2021

RISKS: Equity securities are subject to market and price fluctuations. Fixed income securities are subject to interest rate, credit, inflation, and reinvestment risks. International investments are subject to certain risks of overseas investing including currency fluctuations and social, economic and political uncertainties, which could increase volatility; these risks are heightened for investments in emerging markets. Emerging market countries tend to have economic, political and legal systems that are less developed and are less stable than those of more developed countries. Investments in small- and mid-capitalization companies may involve a higher degree of risk and volatility than investments in larger, more established companies. As interest rates rise, the value of fixed income securities falls. High yield (“junk”) bonds are lower-rated issues and possess greater price volatility, illiquidity, and possibility of default than higher-rated, investment grade bonds. Each Fund, as a non-diversified fund, is permitted to invest a larger percentage of its assets in a smaller number of underlying funds than a diversified fund, which may magnify the Fund’s losses from events affecting those underlying funds.

Each Fund is a fund of funds – it invests primarily in other funds – and is subject to the risks of the underlying funds in which it invests. There are additional risks and other expenses associated with investing in other mutual funds and exchange-traded funds (“ETFs”), rather than directly in portfolio securities. In addition to the Funds operating expenses, shareholders will indirectly bear the operating expenses of the underlying funds in which each Fund invests. The Funds pay brokerage commissions in connection with the purchase and sale of shares of ETFs. In addition, each Fund indirectly bears its pro rata share of the fees and expenses incurred by the underlying funds it invests in, including management fees and other expenses. These expenses are in addition to the expenses that each Fund bears directly in connection with its own operation. Certain underlying funds may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. Also, the portfolio managers may invest in underlying funds that have a limited performance history.

Because these Funds have exposure to both stocks and bonds through the underlying funds in which they invest, the Funds may underperform stock funds when stocks are in favor and underperform bond funds when bonds are in favor. Each underlying fund may engage in active and frequent trading, resulting in higher portfolio turnover and transaction costs. This may lead to the distribution of higher capital gains to shareholders, increasing their tax liability. Certain of the underlying funds may sell securities short. Unlike the possible loss on a security that is purchased, there is no

Funds overview (cont’d)

limit on the amount of loss on an appreciating security that is sold short. Please see each Fund’s prospectus for a more complete discussion of these and other risks and the Funds’ investment strategies.

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

Funds at a glance (unaudited)

QS Growth Fund Breakdown† as of — January 31, 2021

 

As a Percent of Total Long-Term Investments

 

 

% of Total Long-Term Investments				Top 5 Sectors
		12.2 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Diversified US Large Cap Value Fund, Class IS Shares		Financials Health Care Information Technology Consumer Discretionary Industrials
		9.7 Legg Mason Global Asset Management Trust — QS International Equity Fund, Class IS Shares		Industrials Financials Consumer Discretionary Health Care Information Technology
		8.8 Legg Mason Partners Equity Trust — QS Global Dividend Fund, Class IS Shares		Information Technology Health Care Consumer Staples Communication Services Financials
		8.5 Legg Mason Global Asset Management Trust — Martin Currie Emerging Markets Fund, Class IS Shares		Information Technology Consumer Discretionary Financials Communication Services Materials
		6.0 Legg Mason Global Asset Management Trust — QS Strategic Real Return Fund, Class IS Shares		Investments in Underlying Funds U.S. Treasury Inflation Protected Securities U.S. Government & Agency Obligations Information Technology Financials
		5.8 Legg Mason Global Asset Management Trust — ClearBridge Small Cap Fund, Class IS Shares		Financials Health Care Industrials Information Technology Consumer Discretionary
		5.7 Legg Mason Partners Equity Trust — ClearBridge Large Cap Growth Fund, Class IS Shares		Information Technology Consumer Discretionary Health Care Industrials Communication Services
		5.3 Legg Mason Partners Equity Trust — ClearBridge Appreciation Fund, Class IS Shares		Information Technology Communication Services Health Care Financials Consumer Discretionary
		4.5 Legg Mason Partners Equity Trust — ClearBridge International Value Fund, Class IS Shares		Industrials Financials Materials Consumer Discretionary Information Technology
		4.3 Legg Mason Partners Equity Trust — ClearBridge Mid Cap Fund, Class IS Shares		Information Technology Industrials Consumer Discretionary Financials Health Care
		4.2 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Dynamic US Large Cap Value Fund, Class IS Shares		Financials Consumer Discretionary Health Care Industrials Information Technology
		3.7 Legg Mason Partners Equity Trust — QS U.S. Large Cap Equity Fund, Class IS Shares		Information Technology Health Care Consumer Discretionary Financials Communication Services
		3.2 Legg Mason Global Asset Management Trust — QS U.S. Small Capitalization Equity Fund, Class IS Shares		Health Care Information Technology Industrials Consumer Discretionary Financials
		3.0 Legg Mason Global Asset Management Trust — QS Global Market Neutral Fund, Class IS Shares		Industrials Consumer Discretionary Information Technology Financials Health Care
		2.7 Legg Mason Partners Equity Trust — ClearBridge Aggressive Growth Fund, Class IS Shares		Information Technology Communication Services Health Care Industrials Financials
		2.5 Western Asset Funds, Inc. — Western Asset High Yield Fund, Class IS Shares		Consumer Discretionary Communication Services Health Care Energy Financials
		2.4 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Alternative Credit Fund, Class IS Shares		Collateralized Mortgage Obligations Energy Consumer Discretionary Materials Asset-Backed Securities
		2.1 Western Asset Funds, Inc. — Western Asset Core Plus Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Mortgage-Backed Securities Sovereign Bonds Collateralized Mortgage Obligations

QS Asset Allocation Funds 2021 Annual Report					11

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Funds at a glance (unaudited) (cont’d)

 

% of Total Long-Term Investments				Top 5 Sectors
		1.4 Western Asset Funds, Inc. — Western Asset Macro Opportunities Fund, Class IS Shares		Corporate Bonds & Notes Sovereign Bonds U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		1.3 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Global Unconstrained Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Sovereign Bonds Collateralized Mortgage Obligations Asset-Backed Securities
		1.0 Legg Mason Global Asset Management Trust — ClearBridge Global Infrastructure Income Fund, Class IS Shares		Utilities Industrials Energy Real Estate Communication Services
		0.9 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — International Opportunities Bond Fund, Class IS Shares		U.S. Government & Agency Obligations Sovereign Bonds Corporate Bonds & Notes Collateralized Mortgage Obligations
		0.8 Legg Mason Partners Equity Trust — ClearBridge Small Cap Growth Fund, Class IS Shares		Information Technology Health Care Industrials Consumer Discretionary Consumer Staples

As a Percent of Total Long-Term Investments

% of Total Long-Term Investments				Top 5 Sectors
		11.2 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Diversified US Large Cap Value Fund, Class IS Shares		Financials Health Care Information Technology Consumer Discretionary Industrials
		10.5 Western Asset Funds, Inc. — Western Asset Core Plus Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Mortgage-Backed Securities Sovereign Bonds Collateralized Mortgage Obligations
		9.0 Legg Mason Partners Equity Trust — QS Global Dividend Fund, Class IS Shares		Information Technology Health Care Consumer Staples Communication Services Financials
		6.5 Legg Mason Global Asset Management Trust — Martin Currie Emerging Markets Fund, Class IS Shares		Information Technology Consumer Discretionary Financials Communication Services Materials
		6.1 Legg Mason Global Asset Management Trust — QS Strategic Real Return Fund, Class IS Shares		Investments in Underlying Funds U.S. Treasury Inflation Protected Securities U.S. Government & Agency Obligations Information Technology Financials
		5.4 Legg Mason Partners Equity Trust — ClearBridge Large Cap Growth Fund, Class IS Shares		Information Technology Consumer Discretionary Health Care Industrials Communication Services
		5.3 Legg Mason Global Asset Management Trust — QS International Equity Fund, Class IS Shares		Industrials Financials Consumer Discretionary Health Care Information Technology
		4.6 Legg Mason Partners Equity Trust — ClearBridge Appreciation Fund, Class IS Shares		Information Technology Communication Services Health Care Financials Consumer Discretionary
		4.3 Western Asset Funds, Inc. — Western Asset Core Bond Fund, Class IS Shares		Corporate Bonds & Notes Mortgage-Backed Securities U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		4.2 Western Asset Funds, Inc. — Western Asset High Yield Fund, Class IS Shares		Consumer Discretionary Communication Services Health Care Energy Financials
		3.6 Legg Mason Global Asset Management Trust — ClearBridge Small Cap Fund, Class IS Shares		Financials Health Care Industrials Information Technology Consumer Discretionary
		3.6 Legg Mason Global Asset Management Trust — QS Global Market Neutral Fund, Class IS Shares		Industrials Consumer Discretionary Information Technology Financials Health Care
		3.2 Legg Mason Partners Equity Trust — QS U.S. Large Cap Equity Fund, Class IS Shares		Information Technology Health Care Consumer Discretionary Financials Communication Services
		3.1 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Dynamic US Large Cap Value Fund, Class IS Shares		Financials Consumer Discretionary Health Care Industrials Information Technology
		2.7 Legg Mason Global Asset Management Trust — QS U.S. Small Capitalization Equity Fund, Class IS Shares		Health Care Information Technology Industrials Consumer Discretionary Financials
		2.6 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Alternative Credit Fund, Class IS Shares		Collateralized Mortgage Obligations Energy Consumer Discretionary Materials Asset-Backed Securities
		2.5 Legg Mason Partners Equity Trust — ClearBridge International Value Fund, Class IS Shares		Industrials Financials Materials Consumer Discretionary Information Technology

QS Asset Allocation Funds 2021 Annual Report					13

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Funds at a glance (unaudited) (cont’d)

 

% of Total Long-Term Investments				Top 5 Sectors
		2.3 Legg Mason Partners Equity Trust — ClearBridge Aggressive Growth Fund, Class IS Shares		Information Technology Communication Services Health Care Industrials Financials
		2.0 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — International Opportunities Bond Fund, Class IS Shares		U.S. Government & Agency Obligations Sovereign Bonds Corporate Bonds & Notes Collateralized Mortgage Obligations
		2.0 Legg Mason Partners Equity Trust — ClearBridge Mid Cap Fund, Class IS Shares		Information Technology Industrials Consumer Discretionary Financials Health Care
		1.5 Legg Mason Partners Equity Trust — ClearBridge Small Cap Growth Fund, Class IS Shares		Information Technology Health Care Industrials Consumer Discretionary Consumer Staples
		1.4 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Global Unconstrained Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Sovereign Bonds Collateralized Mortgage Obligations Asset-Backed Securities
		1.4 Western Asset Funds, Inc. — Western Asset Macro Opportunities Fund, Class IS Shares		Corporate Bonds & Notes Sovereign Bonds U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		1.0 Legg Mason Global Asset Management Trust — ClearBridge Global Infrastructure Income Fund, Class IS Shares		Utilities Industrials Energy Real Estate Communication Services

As a Percent of Total Long-Term Investments

% of Total Long-Term Investments				Top 5 Sectors
		17.3 Western Asset Funds, Inc. — Western Asset Core Plus Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Mortgage-Backed Securities Sovereign Bonds Collateralized Mortgage Obligations
		12.3 Western Asset Funds, Inc. — Western Asset Core Bond Fund, Class IS Shares		Corporate Bonds & Notes Mortgage-Backed Securities U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		9.2 Legg Mason Partners Equity Trust — QS Global Dividend Fund, Class IS Shares		Information Technology Health Care Consumer Staples Communication Services Financials
		6.2 Legg Mason Global Asset Management Trust — QS Strategic Real Return Fund, Class IS Shares		Investments in Underlying Funds U.S. Treasury Inflation Protected Securities U.S. Government & Agency Obligations Information Technology Financials
		5.7 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Diversified US Large Cap Value Fund, Class IS Shares		Financials Health Care Information Technology Consumer Discretionary Industrials
		5.4 Western Asset Funds, Inc. — Western Asset High Yield Fund, Class IS Shares		Consumer Discretionary Communication Services Health Care Energy Financials
		5.1 Legg Mason Partners Equity Trust — ClearBridge Appreciation Fund, Class IS Shares		Information Technology Communication Services Health Care Financials Consumer Discretionary
		4.7 Legg Mason Partners Equity Trust — ClearBridge Large Cap Growth Fund, Class IS Shares		Information Technology Consumer Discretionary Health Care Industrials Communication Services
		3.9 Legg Mason Global Asset Management Trust — Martin Currie Emerging Markets Fund, Class IS Shares		Information Technology Consumer Discretionary Financials Communication Services Materials
		3.6 Legg Mason Partners Equity Trust — QS U.S. Large Cap Equity Fund, Class IS Shares		Information Technology Health Care Consumer Discretionary Financials Communication Services
		3.3 Legg Mason Global Asset Management Trust — QS Global Market Neutral Fund, Class IS Shares		Industrials Consumer Discretionary Information Technology Financials Health Care
		2.8 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Global Opportunities Bond Fund (USD Hedged), Class IS Shares		U.S. Government & Agency Obligations Sovereign Bonds Corporate Bonds & Notes Collateralized Mortgage Obligations Asset-Backed Securities
		2.6 Legg Mason Global Asset Management Trust — QS U.S. Small Capitalization Equity Fund, Class IS Shares		Health Care Information Technology Industrials Consumer Discretionary Financials
		2.5 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Alternative Credit Fund, Class IS Shares		Collateralized Mortgage Obligations Energy Consumer Discretionary Materials Asset-Backed Securities
		2.2 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Dynamic US Large Cap Value Fund, Class IS Shares		Financials Consumer Discretionary Health Care Industrials Information Technology
		2.2 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — International Opportunities Bond Fund, Class IS Shares		U.S. Government & Agency Obligations Sovereign Bonds Corporate Bonds & Notes Collateralized Mortgage Obligations
		2.2 Legg Mason Global Asset Management Trust — ClearBridge Small Cap Fund, Class IS Shares		Financials Health Care Industrials Information Technology Consumer Discretionary

QS Asset Allocation Funds 2021 Annual Report					15

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Funds at a glance (unaudited) (cont’d)

 

% of Total Long-Term Investments				Top 5 Sectors
		1.6 Legg Mason Partners Equity Trust — ClearBridge Small Cap Growth Fund, Class IS Shares		Information Technology Health Care Industrials Consumer Discretionary Consumer Staples
		1.5 Legg Mason Partners Equity Trust — ClearBridge Mid Cap Fund, Class IS Shares		Information Technology Industrials Consumer Discretionary Financials Health Care
		1.5 Legg Mason Partners Equity Trust — ClearBridge Aggressive Growth Fund, Class IS Shares		Information Technology Communication Services Health Care Industrials Financials
		1.5 Western Asset Funds, Inc. — Western Asset Macro Opportunities Fund, Class IS Shares		Corporate Bonds & Notes Sovereign Bonds U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		1.5 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Global Unconstrained Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Sovereign Bonds Collateralized Mortgage Obligations Asset-Backed Securities
		1.0 Legg Mason Global Asset Management Trust — ClearBridge Global Infrastructure Income Fund, Class IS Shares		Utilities Industrials Energy Real Estate Communication Services
		0.1 Legg Mason Partners Equity Trust — ClearBridge International Value Fund, Class IS Shares		Industrials Financials Materials Consumer Discretionary Information Technology
		0.1 Legg Mason Global Asset Management Trust — QS International Equity Fund, Class IS Shares		Industrials Financials Consumer Discretionary Health Care Information Technology

As a Percent of Total Long-Term Investments

% of Total Long-Term Investments				Top 5 Sectors
		23.3 Western Asset Funds, Inc. — Western Asset Core Plus Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Mortgage-Backed Securities Sovereign Bonds Collateralized Mortgage Obligations
		21.4 Western Asset Funds, Inc. — Western Asset Core Bond Fund, Class IS Shares		Corporate Bonds & Notes Mortgage-Backed Securities U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		7.9 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Global Opportunities Bond Fund (USD Hedged), Class IS Shares		U.S. Government & Agency Obligations Sovereign Bonds Corporate Bonds & Notes Collateralized Mortgage Obligations Asset-Backed Securities
		7.3 Legg Mason Partners Equity Trust — QS Global Dividend Fund, Class IS Shares		Information Technology Health Care Consumer Staples Communication Services Financials
		6.8 Western Asset Funds, Inc. — Western Asset High Yield Fund, Class IS Shares		Consumer Discretionary Communication Services Health Care Energy Financials
		6.2 Legg Mason Global Asset Management Trust — QS Strategic Real Return Fund, Class IS Shares		Investments in Underlying Funds U.S. Treasury Inflation Protected Securities U.S. Government & Agency Obligations Information Technology Financials
		4.8 Legg Mason Partners Equity Trust — ClearBridge Appreciation Fund, Class IS Shares		Information Technology Communication Services Health Care Financials Consumer Discretionary
		3.6 Legg Mason Global Asset Management Trust — QS Global Market Neutral Fund, Class IS Shares		Industrials Consumer Discretionary Information Technology Financials Health Care
		3.4 Legg Mason Partners Equity Trust — QS U.S. Large Cap Equity Fund, Class IS Shares		Information Technology Health Care Consumer Discretionary Financials Communication Services
		2.9 Legg Mason Partners Equity Trust — ClearBridge Large Cap Growth Fund, Class IS Shares		Information Technology Consumer Discretionary Health Care Industrials Communication Services
		2.5 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Alternative Credit Fund, Class IS Shares		Collateralized Mortgage Obligations Energy Consumer Discretionary Materials Asset-Backed Securities
		1.5 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Global Unconstrained Bond Fund, Class IS Shares		Corporate Bonds & Notes U.S. Government & Agency Obligations Sovereign Bonds Collateralized Mortgage Obligations Asset-Backed Securities
		1.5 Western Asset Funds, Inc. — Western Asset Macro Opportunities Fund, Class IS Shares		Corporate Bonds & Notes Sovereign Bonds U.S. Government & Agency Obligations Collateralized Mortgage Obligations Asset-Backed Securities
		1.3 Legg Mason Global Asset Management Trust — QS U.S. Small Capitalization Equity Fund, Class IS Shares		Health Care Information Technology Industrials Consumer Discretionary Financials
		1.3 Legg Mason Global Asset Management Trust — Martin Currie Emerging Markets Fund, Class IS Shares		Information Technology Consumer Discretionary Financials Communication Services Materials
		1.1 Legg Mason Partners Equity Trust — ClearBridge Small Cap Growth Fund, Class IS Shares		Information Technology Health Care Industrials Consumer Discretionary Consumer Staples
		1.0 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Dynamic US Large Cap Value Fund, Class IS Shares		Financials Consumer Discretionary Health Care Industrials Information Technology

QS Asset Allocation Funds 2021 Annual Report					17

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Funds at a glance (unaudited) (cont’d)

 

% of Total Long-Term Investments				Top 5 Sectors
		1.0 Legg Mason Global Asset Management Trust — BrandywineGLOBAL — Diversified US Large Cap Value Fund, Class IS Shares		Financials Health Care Information Technology Consumer Discretionary Industrials
		1.0 Legg Mason Global Asset Management Trust — ClearBridge Global Infrastructure Income Fund, Class IS Shares		Utilities Industrials Energy Real Estate Communication Services
		0.1 Legg Mason Partners Equity Trust — ClearBridge International Value Fund, Class IS Shares		Industrials Financials Materials Consumer Discretionary Information Technology
		0.1 Legg Mason Global Asset Management Trust — QS International Equity Fund, Class IS Shares		Industrials Financials Consumer Discretionary Health Care Information Technology

Funds expenses (unaudited)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; service and/or distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested on August 1, 2020 and held for the six months ended January 31, 2021.

Actual expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

Funds expenses (unaudited) (cont’d)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; service and/or distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested on August 1, 2020 and held for the six months ended January 31, 2021.

Actual expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; service and/or distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested on August 1, 2020 and held for the six months ended January 31, 2021.

Actual expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

Funds expenses (unaudited) (cont’d)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; service and/or distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested on August 1, 2020 and held for the six months ended January 31, 2021.

Actual expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

Funds performance (unaudited)

All figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.

Funds performance (unaudited) (cont’d)

QS Growth Fund

Historical performance

Value of $10,000 invested in

Class A and C Shares of QS Growth Fund vs. Benchmark Indices† — January 2011 - January 2021

All figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.

Prior to June 1, 2015, the Fund followed different investment policies and strategies under the name QS Legg Mason Lifestyle Allocation 85%.

Funds performance (unaudited) (cont’d)